Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Cal.: Motion to compel production of confidential documents denied in milk price fixing litigation, (Jun 3, 2014)

By Linda O’Brien, J.D., LL.M.

In a class action by consumers of milk and dairy products against diary producers for violations of state antitrust laws, the federal district court in Fresno has denied the plaintiffs’ motion to compel production of documents from a third party milk processing cooperative (Edwards v. California Dairies, Inc., May 30, 2014, Boone, S.).

Consumers of milk and other dairy products filed a putative class action suit against various dairy producers and cooperatives, alleging that the producers engaged in a conspiracy to prematurely slaughter cows in order to artificially increase milk prices by decreasing the supply of milk. The plaintiffs sought production of certain documents from California Dairies, Inc. (CDI), a milk processing cooperative, pursuant to a subpoena.

The court found that the potential hardship to a non-party in producing commercially sensitive trade secret information outweighed the plaintiffs’ need for the requested information. Milk and milk product prices paid for the production of raw milk are regulated by the Federal Milk Marketing Orders (FMMO), which sets the minimum prices that a producer receives for raw milk. To show damages for the artificial increase in the over-order prices that were above the minimum prices set by the FMMO, the plaintiffs contended that CDI should be required to produce the invoices showing the services charges above the FMMO minimum to establish the over-order premiums that CDI received as a result of the alleged conspiracy.

The court noted that the plaintiffs conceded that the requested information was a trade secret or commercially sensitive information. The information sought was proprietary data that could cause harm to CDI if released to competitors and could be used to undercut their milk prices and pricing formulas. Moreover, the plaintiffs had access to data for other jurisdictions and data on more than one-third of the market share in California from the defendants in the class action litigation. Thus, they could not justify imposing a burden on CDI to produce the commercially sensitive information, the court concluded.

The case is No. 1:14-mc-00007-SAB.

Attorneys: Elaine Teresa Byszewski (Hagens Berman Sobol Shapiro, LLP) for Matthew Edwards. Deborah A. Coe (Baker Manock & Jensen, PC) for California Dairies, Inc.

Companies: California Dairies, Inc.

Cases: Antitrust CaliforniaNews