Antitrust Law Daily Wrap Up, ANTITRUST—D. Minn: Midwest grocers can seek certification of narrower classes in suit against wholesalers, (Aug 25, 2015)

By Jeffrey May, J.D.

In an action against grocery wholesalers SuperValu, Inc. and C&S Wholesale Grocers, Inc. for allegedly conspiring to allocate customers and territories, operators of retail grocery stores in the Midwest that were customers of SuperValu can seek certification of narrower, distribution-center-based classes, the federal district court in Minneapolis has ruled. However, the court refused to revisit the issue of certification of a class of New England retailers (In re Wholesale Grocery Products Antitrust Litigation, August 20, 2015, Montgomery, A.).

The case against SuperValu and C&S—the largest full-line wholesalers in the country—has bounced up and down between the district court and the U.S. Court of Appeals in St. Louis for years. Claims were brought on behalf of two broad putative classes: (1) a “Midwest” class of retailers who purchased products primarily from SuperValu; and (2) a “New England” class of retailers who purchased such products or services primarily from C&S. Both classes included a subclass of retailers who were party to an arbitration agreement with a defendant.

The district court first disposed of the so-called arbitration plaintiffs’ claims, and the Eighth Circuit reversed and remanded with instructions that the lower court consider whether certain plaintiffs’ arbitration agreements were enforceable under a successor-in-interest” theory. The lower court subsequently ruled that arbitration was not compelled under a successor-in-interest theory. These arbitration subclasses were excluded from the classes that the plaintiffs sought to certify.

The district court denied certification of both proposed classes and granted summary judgment to the defendants. The plaintiff representing the Midwest class (D&G Inc.) appealed; however, the plaintiff that represented the New England class (DeLuca’s Corporation) did not. The Eighth Circuit affirmed the denial of certification of the Midwest class, but vacated the denial of D&G’s request for leave to pursue certification of a narrower class. The appellate court did not address any claims related to the proposed New England class.

In its current opinion, the court decided that D&G will be allowed to pursue claims on behalf a narrower class of SuperValu customers in the Midwest who were supplied by a Champaign, Illinois, distribution center and used the specific pricing formula. The plaintiffs in a new putative class action lawsuit, which was brought on behalf of Wisconsin grocers who were parties to arbitration agreements with SuperValu, as well as SuperValu customers supplied from two Wisconsin distribution centers, would be permitted to seek class certification.

Statute of limitations. The class action tolling doctrine protected both the individual and class claims of the plaintiffs seeking to represent Wisconsin retailers from the four-year statute of limitations set forth in the Clayton Act, the court decided. Under the class action tolling doctrine established in Am. Pipe & Constr. Co. v. Utah, the applicable statute of limitations is tolled during the pendency of a class action for all members of the putative class, the court explained.

With respect to the individual claims, the rights of the arbitration subclass continued to be protected by the broader class during class certification. Moreover, allowing the claims on behalf of the Wisconsin retailers would not amount to allowing plaintiffs to reargue the issue of class certification by filing new but repetitive class action lawsuits. The Wisconsin plaintiffs sought to certify the same type of distribution-center based Midwest classes that the court was already considering at the direction of the Eighth Circuit.

New England plaintiffs. Complaining New England retailers will not get a “second bite at the class-certification apple,” the court ruled. Denial of class certification with respect to the New England plaintiffs was not appealed. The court rejected an argument that DeLuca’s failure to appeal the denial of class certification for a New England class did not preclude the pursuit of a narrower class of Boston area grocers because D&G, the representative of the proposed Midwest class, adequately represented all of the plaintiffs’ interests when it appealed the interlocutory ruling. D&G’s arguments on appeal were limited to D&G and the Midwest market; it did not address the New England Plaintiffs, the court explained. Moreover, the arbitration plaintiffs’ dismissal from the case during the time that certification of a New England class was sought and denied was not a sufficient basis for once again litigating certification of a New England class.

The court also denied a motion to intervene filed by Colella’s Super Market, Inc. for the purposes of seeking certification of a revised class of “Boston area” grocers with 15 or fewer stores. It ruled that Colella’s motion to intervene was untimely. The defendants would be prejudiced if Colella’s was allowed to intervene and request certification of a narrower New England class. The defendants would be required to relitigate class certification and summary judgment issues that were not appealed.

The case is No. 09-MD-2090 ADM/TNL.

Attorneys: Edward T. Dangel, III (Dangel & Mattchen, LLC) for Colella’s Super Market, Inc. W. Joseph Bruckner (Lockridge Grindal Nauen PLLP), Richard B. Drubel (Boies, Schiller & Flexner LLP), and Daniel A. Kotchen (Kotchen & Low LLP) for Midwest Plaintiffs. Stephen P. Safranski (Robins Kaplan LLP) for SuperValu, Inc. Todd A. Wind (Fredrikson & Byron, PA) and Christopher J. MacAvoy (Baker Botts LLP) for C&S Wholesale Grocers, Inc.

Companies: Colella’s Super Market, Inc.; SuperValu, Inc.; C&S Wholesale Grocers, Inc.; DeLuca’s Corp.; D&G Inc.

Cases: Antitrust MinnesotaNews