WINN-DIXIE STORES, INC. v. EASTERN MUSHROOM MARKETING COOPERATIVE, INC.

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

WINN-DIXIE STORES, INC., et al., :

Plaintiffs, : CIVIL ACTION

:

v. :

:

EASTERN MUSHROOM MARKETING :

COOPERATIVE, et al., : No. 15-6480

Defendants. :

MEMORANDUM

Schiller, J. February 5, 2021

The Eastern Mushroom Marketing Cooperative (EMMC) and its members and affiliates—

including Defendant M. Cutone Mushroom Co., Inc.—are accused of unlawfully colluding to

inflate the price of fresh agaricus mushrooms. Before the Court is Defendant Cutone’s Motion for

Partial Summary Judgment, which argues that its liability for participation in the alleged antitrust

conspiracy is limited because it withdrew from the EMMC during the conspiracy period. For the

following reasons, the Court will grant the motion and limit Cutone’s potential liability to damages

attributable to the conspiracy’s conduct before September 1, 2002.

I. FACTUAL BACKGROUND

This case involves alleged price-fixing and supply control in the market for fresh agaricus

mushrooms. Plaintiffs seek damages from all Defendants, including Cutone, for their payment of

artificially inflated prices for mushrooms as a result of a conspiracy among the EMMC and its

members. Defendants allegedly agreed to inflate the price of mushrooms by setting minimum

prices and decommissioning various mushroom farms in order to reduce mushroom supply. (See

First Am. Compl. ¶¶ 1-3.) Plaintiffs assert that Cutone was an EMMC member during the

conspiracy period, January 1, 2001 through December 31, 2008. (Id. ¶ 41; see Court’s Mem. of

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April 8, 2019 at 13, Doc. No. 121.) Plaintiffs allege that Cutone specifically participated in the

alleged conspiracy by: (1) agreeing to form and join the EMMC; (2) attending numerous EMMC

meetings to discuss mushroom prices and agreeing to set minimum prices; (3) complying with

EMMC’s minimum pricing policy; (4) attending an EMMC meeting to discuss controlling the

supply of mushrooms; and (5) agreeing to pay an assessment and to charge each EMMC member

an assessment in furtherance of supply control. (First Am. Compl. ¶¶ 41, 129, 194-96, 259, 289.)

Cutone does not dispute that it joined the EMMC by signing a membership agreement in

January 2001. (Def.’s Statement of Undisputed Material Facts (SUMF) ¶ 8.) However, Cutone

argues that it communicated its resignation from the EMMC effective September 1, 2002, thereby

withdrawing from the alleged anti-competitive conspiracy.

Mario Cutone, Jr., President of Cutone Mushroom, sent Cutone’s first letter of resignation

to the EMMC on March 4, 2002. (Def.’s SUMF ¶ 9; Def.’s Ex. C.) In addition to informing the

EMMC of Cutone’s termination of membership, the letter stated: “Due to current circumstances

we can no longer be bound to the rules and regulations of the cooperative. Although we will not

be members, we fully intend to adhere to the pricing structure unless we are forced to alter it by

other growers.” (Def.’s Ex. C.) This letter also sought return of Cutone’s $5,000 escrow and

$100,000 balance of the capital assessment. (Id.)

Mario Cutone, Jr. submitted a second letter of resignation to the EMMC on May 20, 2002.

(Def.’s SUMF ¶ 10; Def.’s Ex. D.) The second letter of resignation stated that Cutone was

terminating its membership with EMMC, and again included the statement: “Due to current

circumstances we can no longer be bound to the rules and regulations of the cooperative.” (Def.’s

Ex. D.) The May 20 letter did not include any reference to an intent to adhere to the minimum

pricing structure or request any return of funds. (Id.)

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Mario Cutone, Jr. submitted a third letter of resignation to EMMC on June 19, 2002. (Def.’s

SUMF ¶ 11; Def.’s Ex. E.) The third letter of resignation included identical language to the second

letter, except that it also requested that EMMC, “send an acknowledgment for the termination of

our membership.” (Def.’s Ex. E.)

On the same date Cutone sent its third letter of resignation, counsel for EMMC sent a letter

to Mario Cutone acknowledging Defendant Cutone’s “notice, given prior to June 15, 2002, of your

desire to withdraw as a member of the EMMC.” (Def.’s SUMF ¶¶ 12-13; Def.’s Ex. F.) The

EMMC letter stated that Cutone’s termination of membership in the EMMC was effective

September 1, 2002, pursuant to the terms of EMMC Membership Agreement. (Def.’s Ex. F.) The

EMMC letter further stated that Cutone’s membership in the EMMC remained valid until

September 1, 2002, and that it remained “responsible as a member as per all terms of the

Membership Agreement and Bylaws and all policies adopted thereunder.” (Id.)

After its resignation from the EMMC, Cutone did not consider itself bound by the EMMC

minimum pricing requirements, nor did the EMMC or its members ask Cutone to continue to

adhere to the EMMC’s minimum pricing policy. (Def.’s SUMF ¶¶ 14-15; Def.’s Ex. B, Michael

Cutone Dep. 235:3-236:6.)1 Cutone seeks partial summary judgment on the grounds that it

withdrew from the EMMC as of September 1, 2002, and therefore, cannot be liable to Plaintiffs

for any damages incurred as a result of purchases after that date.

In opposition, Plaintiffs argue that Cutone’s withdrawal was ineffective because Cutone

1 Plaintiffs object to reliance on this testimony, arguing that it would be inadmissible at trial

because it was in response to leading questions. See Fed. R. Civ. P. 56(c)(2). Objections to the

form of the questions were not stated on the record at the deposition, and are therefore waived. See

Oberlin v. Marlin Am. Corp., 596 F.2d 1322, 1328 (7th Cir. 1979) (citing Fed. R. Civ. P.

32(d)(3)(B)). Regardless, the Court disagrees that this objection would render the testimony

inadmissible under Fed. R. Evid. 611.

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intended to continue complying with the EMMC’s minimum pricing policy after it resigned from

the EMMC. (Pl.’s Resp. in Opp’n to Def.’s Mot. at 5-7, 9-11.) Plaintiffs cite to the March 4, 2002

resignation letter as evidence of this intent, as well as the class action deposition testimony of

Michael Cutone, who acted as the Rule 30(b)(6) witness for Defendant Cutone. (Pl.’s Ex. 4,

Michael Cutone Dep.) When asked about the resignation letters’ reference to EMMC “rules and

regulations,” Michael Cutone testified that his brother, Mario Cutone, “didn’t attend a lot of

meetings, so I don’t know what he meant by that. I don’t know the rules or regulations, you know.

I don’t know what he meant by that.” (Id. at 170:23-171:3.) When asked why the sentence

concerning minimum pricing in the March 4, 2002 resignation letter does not appear in the May

20, 2002 resignation letter, Michael Cutone testified, “my brother, these are written at different

times. He probably just wrote the letter at different times, didn’t look at his other letter. I don’t

know.” (Id. at 233:20-24.) As to whether Cutone continued to follow the EMMC pricing structure

after its resignation from EMMC, Michael Cutone testified, “I don’t know. I don’t know whether

I could—It probably would show on the invoices what we sold....” (Id. at 172:2-4.) In response to

the question whether Cutone attempted to adhere to minimum pricing after its resignation from

EMMC to benefit the industry, Michael Cutone testified that, “We did what we had to do to stay

in business, but there was [sic] accounts that I’m sure we had to go down on.” (Id. at 174:25-

175:7.)

Cutone filed a Reply Memorandum which included the Affidavit of Mario Cutone, III in

Support of the Motion for Partial Summary Judgment. According to Mario Cutone’s affidavit, he

and his father, Mario Cutone, Jr., who is now deceased, ran the business of Defendant Cutone,

decided to join the EMMC, and set the price of the mushrooms that Cutone sold to retail and food

service customers. (Ex. A to Def.’s Reply Mem., Aff. of Mario Cutone, III in Supp. of Mot. ¶¶ 3-

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5.) Michael Cutone ran the family’s mushroom growing operation, M&V Enterprises, Inc. (Id. ¶¶

1-2.) Mario Cutone, III and his father “never had any intention to follow EMMC pricing policies

following [Cutone’s] resignation from EMMC.” (Id. ¶ 10.) Before September 1, 2002, Mario

Cutone, III and his father had received the EMMC minimum price list on a regular basis. (Id. ¶

14.) After September 1, 2002, they no longer received the minimum price list from EMMC and

did not learn about the EMMC minimum price list indirectly from any other source. (Id. ¶¶ 15-

16.) As a result, Mario Cutone, III and his father “never followed EMMC prices after September

1, 2002,” because they were “no longer under any obligation to attempt to do so,” and they “did

not know what those prices were.” (Id. ¶ 17.) Mario Cutone, III and his father “had no further

communication from EMMC after [September 1, 2002].” (Id. ¶ 19.)

II. STANDARD OF REVIEW

Summary judgment is appropriate when there is no genuine dispute of material fact and

the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986). Material facts are those “that could affect the

outcome” of the proceeding, and “a dispute about a material fact is ‘genuine’ if the evidence is

sufficient to permit a reasonable jury to return a verdict for the non-moving party.” Lamont v. New

Jersey, 637 F.3d 177, 181 (3d Cir. 2011). “The party moving for summary judgment has the burden

of showing that there is no genuine issue of material fact, and once the moving party has sustained

this burden, the opposing party must introduce specific evidence showing that there is a genuine

issue for trial.” Williams v. Borough of W. Chester, Pa., 891 F.2d 458, 464 (3d Cir. 1989) (citing

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). In reviewing the record, “a court must view

the facts in the light most favorable to the nonmoving party and draw all inferences in that party’s

favor.” Armbruster v. Unisys Corp., 32 F.3d 768, 777 (3d Cir. 1994). The court may not, however,

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make credibility determinations or weigh the evidence in considering motions for summary

judgment. Anderson, 477 U.S. at 255.

III. DISCUSSION

The Court will grant Cutone’s partial motion for summary judgment because Cutone

severed ties from the EMMC effective September 1, 2002 and ceased to act in furtherance of the

EMMC’s goals after its resignation. However, the Court cannot determine on the record before it

whether Cutone is liable for any damages for Plaintiffs’ purchases after September 1, 2002. In

order to determine the scope of Cutone’s liability for damages, Plaintiff will bear the burden at

trial of proving what damages are attributable to conduct of the conspiracy prior to Cutone’s

withdrawal.

A. Withdrawal as an Affirmative Defense to an Antitrust Conspiracy

Federal antitrust law follows the common law doctrine of joint and several liability for co-

conspirators. See Texas Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630, 646 (1981). A

defendant who participated in a conspiracy can be liable for antitrust damages “even if the plaintiff

only purchased from the defendants’ co-conspirators and not from the defendant itself.” In re

Processed Egg Prod. Antitrust Litig., 392 F. Supp. 3d 498, 513 (E.D. Pa. 2019); see Bogosian v.

Gulf Oil Corp., 561 F.2d 434, 448 (3d Cir. 1977). Thus, in a lawsuit for federal antitrust violations,

“each member of a conspiracy is liable for all damages caused by the conspiracy’s entire output.”

Paper Sys. Inc. v. Nippon Paper Indus. Co., 281 F.3d 629, 632 (7th Cir. 2002).

Defendants accused of antitrust conspiracy in violation of the Sherman Act can raise

withdrawal from the conspiracy as a defense. See United States v. U.S. Gypsum Co., 438 U.S. 422,

464-65 (1978); Toledo Mack Sales & Serv., Inc. v. Mack Trucks, Inc., 530 F.3d 204, 223 n.13 (3d

Cir. 2008). Withdrawal from a conspiracy allows a conspirator to avoid continuing liability for the

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entire conspiracy’s conduct. Smith v. United States, 568 U.S. 106, 111 (2013). Withdrawal is an

affirmative defense, and therefore, the burden of proof rests with the defendant. Id. at 113.

“Mere cessation of activity in furtherance of an illegal conspiracy does not necessarily

constitute withdrawal.” United States v. Steele, 685 F.2d 793, 803 (3d Cir. 1982). Rather, the

defendant must present evidence of an affirmative act demonstrating withdrawal, “typically either

a full confession to the authorities or communication to his co-conspirators that he has abandoned

the enterprise and its goals.” Id. at 803-04. “Affirmative acts inconsistent with the object of the

conspiracy and communicated in a manner reasonably calculated to reach co-conspirators have

generally been regarded as sufficient to establish withdrawal or abandonment.” U.S. Gypsum, 438

U.S. at 464-65.

A defendant can establish a prima facie showing of withdrawal from a conspiracy if the

defendant completely severs its relationship with the enterprise, gives notice to co-conspirators

that it disavows the purpose of the conspiracy, or acts inconsistent with the object of the

conspiracy. United States v. Antar, 53 F.3d 568, 583 (3d Cir. 1995), abrogated on other grounds

by Smith v. Berg, 247 F.3d 532 (3d Cir. 2001). Once a defendant has made a prima facie showing

of withdrawal, “the burden shifts to the plaintiff to rebut the defendant’s prima facie showing,

which it may do either by challenging the defendant’s prima facie evidence or by presenting

evidence that the defendant engaged in conduct in furtherance of the conspiracy subsequent to its

alleged withdrawal.” In re NBR Antitrust Litig., Civ. A. No. 03-1898, 2005 WL 8179727, at *3

(W.D. Pa. July 18, 2005), report and recommendation adopted, Civ. A. No. 03-1898, 2005 WL

8179731 (W.D. Pa. Sept. 28, 2005) (citing Antar, 53 F.3d at 582 (3d Cir. 1995)). In the context of

a business enterprise dedicated to illegal activity, “withdrawal as a matter of law from the

conspiracy… may be demonstrated by the retirement of a coconspirator from the business,

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severance of all ties to the business, and consequent deprivation to the remaining conspirator group

of the services that constituted the retiree’s contribution to the fraud.” United States v. Lowell, 649

F.2d 950, 955 (3d Cir. 1981) (footnote omitted).

In Antar, the defendant could not establish a withdrawal defense where he retained stock

in the enterprise after resignation, and therefore, had not severed all ties with the conspiracy

because he “continued to receive the fruits of the fraud.” 53 F.3d at 583 (3d Cir. 1995). Likewise,

in Lowell, although the defendant had resigned from the business enterprise, evidence of a phone

call with conspirators after his retirement was an act in furtherance of the conspiracy sufficient to

defeat a finding of withdrawal. 649 F.2d at 958 (3d Cir. 1981). On the other hand, in United States

v. Steele, the Third Circuit found withdrawal as a matter of law where the defendant resigned from

the corporate enterprise, and there was no evidence of any ongoing connection to the bribery

conspiracy after his resignation. 685 F.2d at 804 (3d Cir. 1982).

In the context of a price-fixing conspiracy, the Third Circuit has approved a jury instruction

that stated, “[a] defendant may also withdraw from a price fixing conspiracy by notifying his

alleged co-conspirators of his intent to withdraw.” United States v. Cont’l Grp., Inc., 603 F.2d 444,

466 (3d Cir. 1979). Simply ending participation in price-fixing activity is not necessarily sufficient

to show withdrawal. See id. (upholding district court’s rejection of proposed jury instruction that

resuming competitive activity would constitute withdrawal but stating that resumption of

competitive activity could demonstrate withdrawal); In re NBR Antitrust Litig., 2005 WL 8179727,

at *4 (defendant “cannot be said to have withdrawn from the conspiracy simply because it no

longer had the motivation or opportunity to fix prices.”). The Eleventh Circuit has found

withdrawal from a price-fixing conspiracy at the summary judgment stage where the defendant

sold its business, thereby severing ties with the conspiracy, effectively communicated its

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retirement to co-conspirators through the media, and “did nothing more to assist or participate in

the price-fixing activities of other entities.” Morton’s Mkt., Inc. v. Gustafson’s Dairy, Inc., 198

F.3d 823, 839 (11th Cir. 1999), amended in part, 211 F.3d 1224 (11th Cir. 2000).

B. Cutone’s Evidence of Withdrawal

Cutone has put forward unrefuted evidence that it resigned from membership in the

EMMC, and thereby severed ties with the alleged conspiracy to fix prices and control the supply

of mushroom sales, effective September 1, 2002. Cutone submitted three different letters of

resignation to the EMMC. (Def.’s SUMF ¶¶ 9-11; Def.’s Exs. C-E.) Each of the resignation letters

announced Cutone’s resignation from the EMMC and stated that Cutone could “no longer be

bound to the rules and regulations of the cooperative.” (Def.’s Exs. C-E.) Counsel for the EMMC

acknowledged receipt of these resignation letters and confirmed that Cutone’s resignation from

the EMMC was effective September 1, 2002. (Def.’s SUMF ¶¶ 12-13; Def.’s Ex. F.) Cutone’s

resignation letters are affirmative notice to the alleged co-conspirators, communicated in a manner

reasonably calculated to reach the EMMC members, that Cutone was acting inconsistent with the

objective of the conspiracy.

Cutone also presents Mario Cutone, III’s affidavit to prove that it did not continue to act in

furtherance of the conspiracy after its resignation from the EMMC. Mario Cutone avers that he no

longer received the minimum price list from EMMC and did not learn about the EMMC price list

indirectly from any other source after September 1, 2002. (Ex. A to Def.’s Reply Mem. ¶¶ 15-16.)

As a result, Cutone never followed EMMC prices after September 1, 2002. (Id. ¶ 17.) Cutone also

had no further communication from EMMC after its resignation. (Id. ¶ 19.) Taken together,

Cutone’s resignation letters and the affidavit of Mario Cutone, III are sufficient to meet Defendant

Cutone’s prima facie burden to prove that it withdrew from the alleged conspiracy effective

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September 1, 2002 by severing all ties with the EMMC.

Plaintiffs present no evidence in opposition that raises a genuine dispute of material fact as

to Cutone’s withdrawal. Plaintiff does not point to any facts in the record to show that Cutone

undertook acts in furtherance of the conspiracy, or continued to receive benefits from the

conspiracy’s operations, after it resigned from the EMMC.

Plaintiffs rely upon the March 4, 2002 resignation letter to argue that there is a genuine

dispute of fact whether Cutone’s resignation from EMMC was an effective withdrawal from the

conspiracy. (Pl.’s Resp. in Opp’n to Def.’s Mot. at 5, 9-11.) Specifically, Plaintiffs point to the

statement: “Although we will not be members, we fully intend to adhere to the pricing structure

unless we are forced to alter it by other growers.” (Def.’s Ex. C.) The Court does not find this

sentence alone sufficient to raise a genuine dispute of fact, for two reasons. First, the sentence is

equivocal about Cutone’s intentions; it states that Cutone intends to adhere “unless it is forced to

alter” that intention, but it does not specify what behavior by other growers would cause it to alter

its intention. Second, this sentence was not repeated in Cutone’s two subsequent resignation letters

dated May 20 and June 19, 2002. (Def.’s Ex. D-E.)

If Cutone had continued to adhere to the EMMC minimum pricing structure after its

resignation, this could be an act in furtherance of the goals of the conspiracy, which would prevent

Cutone from proving its withdrawal as a matter of law. But Cutone has presented the affidavit of

Mario Cutone, III affirming that it did not continue to follow the EMMC pricing policy after its

resignation. (Ex. A to Def.’s Reply Mem. ¶ 17.) Plaintiffs, meanwhile, have failed to put forward

any admissible evidence that tends to dispute Cutone’s assertion.

Plaintiff also relies upon the deposition testimony of Michael Cutone. But Michael

Cutone’s testimony regarding Cutone’s resignation letters is not supported by any actual

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knowledge and therefore, would not be admissible evidence at trial. Michael Cutone did not author

the resignation letters. The letters are signed by Mario Cutone. (Def.’s Exs. C-E.) Michael Cutone

also testified that he did not have any knowledge about the EMMC resignation letters or its pricing

after resignation. When asked about Defendant Cutone’s resignation from the EMMC, Michael

Cutone testified that he did not know: (1) what was meant by the statement in the resignation letters

about rules and regulations; (2) why the content of the May 20 letter differed from the March 4

letter; and (3) whether Cutone adhered to the EMMC minimum pricing policy after its resignation.

(Pl.’s Ex. 4, Michael Cutone Dep. 170:20-171:6; 171:21-172:13; 233:14-24.) Plaintiffs also rely

on Michael Cutone’s testimony concerning EMMC minimum pricing after Cutone’s resignation

that the company, “did what we had to do to stay in business, but there was [sic] accounts that I’m

sure we had to go down on.” (Id. at 174:25-175:7.) Plaintiffs argue that a fair inference from this

testimony is that Cutone continued to adhere to the EMMC pricing policy after its resignation. The

Court disagrees. This testimony does not create a genuine dispute of material fact as to whether

Cutone continued to act in furtherance of the conspiracy after its resignation from the EMMC.

Cutone has shown that it resigned from EMMC effective September 1, 2002,

communicated its resignation to its co-conspirators, and severed all ties with the conspiracy

through that resignation. Plaintiffs have presented no admissible evidence in opposition that raises

a genuine dispute of material fact concerning Cutone’s withdrawal. Thus, the Court finds that

Cutone withdrew from the alleged conspiracy, effective September 1, 2002, as a matter of law.

C. Impact on Damages

Having concluded that Cutone withdrew from the conspiracy effective September 1, 2002,

the remaining question for the Court is what impact this determination has on Cutone’s potential

liability for damages. Cutone asks this Court to limit damages against it to Plaintiffs’ purchases

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made before September 1, 2002. However, on the current record, the Court cannot determine

whether any damages Plaintiffs incurred after September 1, 2002 were attributable to the

conspiracy’s conduct prior to that date.

A conspiracy “to maintain high and stable prices” is a continuing conspiracy, in that it

requires continuous cooperation of the conspirators to keep up the result. United States v. U.S.

Gypsum Co., 600 F.2d 414, 417 (3d Cir. 1979) (citing United States v. Kissel, 218 U.S. 601, 607

(1910)). In the context of a continuing antitrust conspiracy, a new cause of action accrues “each

time a plaintiff is injured by an act of the defendants….” Zenith Radio Corp. v. Hazeltine Research,

Inc., 401 U.S. 321, 338 (1971). Thus, in a price-fixing conspiracy that raises prices over a period

of years, a cause of action accrues each time a customer purchases a product at the artificially

inflated price. Klehr v. A.O. Smith Corp., 521 U.S. 179, 189 (1997) (quoting 2 P. Areeda & H.

Hovenkamp, Antitrust Law ¶ 338b, p. 145 (rev. ed. 1995)).

Damages caused by an antitrust conspiracy are not always suffered at the time of the

conspirators’ agreement. See Zenith, 401 U.S. at 339. “[I]f a plaintiff feels the adverse impact of

an antitrust conspiracy on a particular date, a cause of action immediately accrues to him to recover

all damages incurred by that date and all provable damages that will flow in the future from the

acts of the conspirators on that date.” Id. “A conspirator is liable for the damages caused by its

unlawful conduct, even if they are sustained after the unlawful conduct ceases.” Law v. Nat’l

Collegiate Athletic Ass’n, 5 F. Supp. 2d 921, 934 (D. Kan. 1998).

“[E]ven upon withdrawal, a defendant remains liable for his previous agreement and for

his own and his co-conspirators’ previous acts in furtherance of the conspiracy….” United States

v. Kushner, 305 F.3d 194, 198 (3d Cir. 2002); accord Smith, 568 U.S. at 111 (“Withdrawal

terminates the defendant’s liability for postwithdrawal acts of his co-conspirators, but he remains

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guilty of conspiracy.”); Morton’s Mkt., 198 F.3d at 837 (“The ex-conspirator remains liable,

however, for his previous agreement and all damages inflicted by the acts he committed prior to

his withdrawal.”).

The Eleventh Circuit and the Seventh Circuit have stated that where a continuing

conspiracy is alleged, a former conspirator could be held liable for the acts of co-conspirators even

after withdrawal. See Morton’s Mkt., 198 F.3d at 837 n.22 (“Since a continuing conspiracy is

alleged as one crime, a conspirator is still liable for the crimes of his co-conspirators even after his

withdrawal, so long as he is sued during the limitations period.”); United States v. Read, 658 F.2d

1225, 1233 n.4 (7th Cir. 1981) (“Dropping out during the limitations period does not absolve a

defendant. He is still liable for the agreement and acts committed before he withdraws. Since a

continuing conspiracy is alleged as one crime, he is also liable in effect for the crimes of his co-

conspirators even after his withdrawal.”). Neither of those opinions assessed the scope of the

damages that could be incurred if a defendant effectively withdrew from a continuing conspiracy

during the limitations period and new conspiratorial activity occurred after its withdrawal.

Nevertheless, the Court finds that once a defendant has withdrawn from a continuing conspiracy

its liability should only extend to damages caused by the conspiracy’s conduct prior to withdrawal.

Even in a continuing conspiracy, a defendant should not be liable for damages attributable only to

new acts of the conspiracy, which were taken after that defendant’s withdrawal. The Eleventh

Circuit’s amendment to its opinion in Morton’s Market supports this interpretation. The amended

opinion clarified that if the defendant’s withdrawal from the price-fixing conspiracy was within

the limitations period, the defendant “would be liable for any price-fixing activity prior to its

withdrawal.” Morton’s Mkt., Inc. v. Gustafson’s Dairy, Inc., 211 F.3d 1224 (11th Cir. 2000).

Moreover, the purpose of the withdrawal defense is to mitigate harm by encouraging

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conspirators to withdraw. See Morton’s Mkt., 198 F.3d at 839 n.26. If withdrawal could not limit

the extent of a defendant’s liability for its co-conspirators’ future conduct, there would be little

incentive for a conspirator to withdraw from an ongoing conspiracy. Requiring a former antitrust

conspirator to remain liable for post-withdrawal acts of the continuing conspiracy would be

antithetical to the purpose of the defense.

The Court concludes that Cutone Mushroom’s potential liability is limited to damages

caused by acts of the conspiracy that were taken prior to Cutone’s withdrawal. The question of

what damages flow from the alleged conspiracy’s activity prior to September 1, 2002 remains. On

this question, genuine issues of material fact are outstanding.

The Court can envision scenarios in which damages incurred through purchases after

September 1, 2002 are attributable to the Defendants’ conspiratorial actions taken before that date.

For example, if Winn Dixie purchased mushrooms from a conspirator in October 2002 at a price

that was negotiated pursuant to the EMMC minimum pricing standards set in April 2002, damages

related to those October sales could arguably flow from actions of the conspiracy taken prior to

Cutone’s withdrawal. See US Airways, Inc. v. Sabre Holdings Corp., 938 F.3d 43, 69 (2d Cir.

2019) (“each supracompetitive price charged…was not an overt act of its own, but a manifestation

of the prior overt act of entering into the 2006 contract.”). On the other hand, if Winn Dixie

negotiated its purchase price for mushrooms in October 2002 based upon higher minimum pricing

standards, which were set by the EMMC on or after September 1, 2002, then damages related to

those sales might not be properly attributable to Cutone. Such damages may have been caused by

new acts of the conspiracy, of which Cutone was no longer a part. Thus, questions of material fact

regarding causation and damages remain, which the Court cannot decide on this motion for

summary judgment. At this stage, the Court holds only that Cutone’s withdrawal from the alleged

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conspiracy limits its potential liability to damages caused by the conspiracy’s conduct before

September 1, 2002. It will be Plaintiffs’ burden to prove to the finder of fact what damages flow

from acts of the alleged conspiracy taken prior to Cutone’s withdrawal.

IV. CONCLUSION

For the foregoing reasons, Defendant Cutone Mushroom’s Motion for Partial Summary

Judgment is granted. An Order consistent with this Memorandum will be docketed separately.

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