The opinion
STATE OF MAINE so SUPERIOR COURT
KNOX; ss. 5g CIVIL ACTION NO.
CV-00-015
foe KNOT EE oe
NATHAN PEASE, THOMAS= <2 2 }2 055 ;
WORCESTER, ALAN S.
JOHNSON, and THOMAS
WORCESTER,
Plaintiffs
DECISION A RDER
JASPER WYMAN & SON,
ALLEN’S BLUEBERRY
FREEZER, INC., CHERRYFIELD
FOODS, INC., and MERRILL
BLUEBERRY FARMS, INC.,
Defendants
DONALD L. GARBRECHT
LAW LIBRARY
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The matter is before the court on the defendants’ motions for summary judgment,
and the plaintiffs’ motion for reconsideration for class certification.” For the following +
reasons, the motion for reconsideration for class certification is allowed and the motions
for summary judgment are denied.
BACKGROUND
1. Characteristics of the Wild Blueberry Industry in Maine
Blueberries are native to North America, and the great majority of the world’s
blueberry supply comes from this continent. The blueberry industry has two
components: wild (“low bush”) blueberries and cultivated (“high bush”) blueberries. The
plaintiffs are four Maine wild blueberry farmers who sell their berries to the defendants,
who then process the berries for commercial sale.
Wild blueberries are harvested from “low bush” blueberry plants’ which grow wild
only in a relatively small geographic area consisting of portions of Maine, other areas in
northern New England, and eastern Canada. The rocky soil, uneven topography, and
' The “low bush” plant is different from the “high bush” blueberry plant, which is used to farm and raise
cultivated blueberries. “Low bush” blueberry plants hug the ground, follow the topography of the
particular field in which the plant is found, and produce fruit biennially, while “high bush” blueberry plants
grow vertically, are planted in rows like other farm-raised products, and produce fruit annually.
Moreover, wild blueberries are smaller in size, deeper in color, and much stronger and sweeter in taste than
cultivated blueberries.
two-year growing cycle’ are factors which, according to the defendants, impede the
commercial production of the wild blueberry plant. The wild blueberry itself is fragile,
with the volume and quality of the fruit deteriorating as soon as it is picked from the
bush, if not sooner. For that reason, a very small portion of Maine’s blueberry crop is
sold in the fresh market. Fresh market sales of wild blueberries are mostly unorganized
and involve sales to individuals and local food retailers, and sales from roadside stands.’
Approximately 55-65% of Maine wild blueberries go to processors for commercial
use. Fresh wild blueberries must be processed shortly after being picked, and because of
their highly perishable nature, they cannot be transported long distances. Thus, the
relevant geographic market for Maine wild blueberries is limited to production in Maine
and, at the most, parts of eastern Canada.
The fragility of the Maine blueberry also makes it susceptible to degradation from its
environment,’ and the actual handling and storage from the time it is picked until it
? The growing cycle of the “low bush” blueberry plant spans two-years. It typically grows in the following
pattern:
The plant is picked of the fruit of the first harvest;
The plant is pruned to the ground, leaving only the root system (the primary method of pruning is
to burn the entire blueberry field, although some recent innovations allow some plants to be
mowed if the topography of the field permits);
e Over the ensuing two years of the growing cycle, the land is managed primarily with fertilizers,
herbicides, and weed removal;
When shoots of the plant reappear, the plant is monitored for disease or pest infestation;
During the spring of the second year, beehives are placed throughout the field in order to facilitate
pollination of the blueberry plant, which is necessary if the plant is to bear fruit;
e After pollination occurs, the plants and fruit are managed for problems such as dehydration, weed
control, pest infestation, and disease;
e The wild blueberry typically matures to ripeness sometime during late July or August of the
second year.
> The lack of an important fresh market outlet for Maine wild blueberries is, allegedly, an important
factor that distinguishes Maine’s wild blueberry production from the production of cultivated blueberries in
other states. The percentage of cultivated blueberry production allocated to the fresh market has been
stable over time, with approximately 45% of the cultivated blueberry crop going to the fresh market. The
fact that cultivated blueberries have a fresh market outlet, according to the defendants, is a key factor in
explaining why the price paid to growers of cultivated blueberries for processing uses often exceeds the
grower price paid for fresh wild blueberries.
‘ According to the defendants, the Maine wild blueberry is particularly vulnerable to environmental factors
(e.g., rain/drought, heat/frost, hail, wind, foraging animals, etc.) during the final stages of the biennial
growing cycle. These environmental factors can greatly reduce the volume and quality of the berry, if not
destroy the fruit entirely, even if whoever managed the field and the plant correctly called all of the
decisions made up to that point in the growing cycle. The risks and uncertainties associated with such
reaches the processor, who may use any of the following methods to prepare the fruit for
commercial use: the “individually quick frozen” (the “IQF’”) process (a process by which
the blueberries are frozen for commercial use), drying, pureeing, grinding, or crushing.”
According to the defendants, the cost of processing fresh wild blueberries is more than
the cost of processing fresh cultivated blueberries because of the wild blueberry’s high
perishability.
According to the defendants, companies which process Maine wild blueberries exist
in ahighly competitive market. There are more than 500 wild blueberry growers in
Maine, and excluding foreign companies, there are approximately ten processors or other
purchasers of fresh wild blueberries in Maine. The plaintiffs assert, however, that the
four named defendants process approximately 85% of all wild blueberries grown in
Maine.°
The defendants pay a “field price” for the blueberries. The field price is the amount
paid for unprocessed blueberries delivered to processors or their agents in the field.
According to the plaintiffs, the field price is the principal, and in most cases the sole,
component of the price the defendants pay to growers for their wild blueberries. See
Supplemental Report of Dr. Solow, p. 3. Between 1996 and 1999, the field price ranged
between $.40 and $.55 per pound.’
environmental factors vary from growing area to growing area, as well as with the topography and solar
orientation of each field.
5 Each defendant uses the IQF process.
® This percentage can be broken down in the following manner:
Cherryfield and Wyman’s share approximately 60-65% of the market
Allen’s has approximately 10% of the market
Merrill has approximately 10% of the market
7 The following is Dr. Solow’s breakdown of field prices paid by each defendant to growers, and the
percentage of transactions at the specified field price.
Year Allen’s Cherryfield Wyman’ s Merrill’s
1996 $.55 (90%) $.55 (97%) $.55 (97%) $.55 (93%)
1997 $.40 (84%) $.43 (80%) $.43 (97%) $.40 (96%)
1998 $.45 (88%) $.45 (82%) $.45 (97%) $.40 (85%)
1999 $.50 (87%) $.50 (84%) $.50 (98%) N/A
Supplemental Report of Dr. Solow, Table 1.
The plaintiffs allege that the defendants do not reveal the field price until after the
processors have received the growers’ blueberries, and that at the time of delivery
growers do not know what price they will receive for the blueberries. The plaintiffs
further allege that the defendants wait to set the price they will pay the growers until after
the defendants have already entered into contracts to resell most of the blueberries.* In
_ October or later, approximately two months or more after they have received the
growers’ blueberries, the defendants reveal the field price, i.e., the price they will pay for
a pound of blueberries loaded on a truck in the field. The plaintiffs allege that the
defendants set the field price without negotiating with the growers, and that they set the
field price by agreement among themselves.
The defendants have paid some growers a premium in addition to the field price.
Solow Supp. Report, p. 7. Dr. Solow explains:
An analysis of these premiums indicates that they are basically a volume bonus;
that is, primarily larger sellers such as cooperatives get the premiums, and the size
of the premium per pound increases as the grower’s volume increases. Because
these premiums appear to be based on volume and because they constitute a
relatively small portion of the overall payment to the growers, it appears the same
bonuses would have been paid with or without the alleged conspiracy. Hence, the
The following is Dr. Sexton’s breakdown of the volume-weighted average field prices paid by
three of the defendants to growers between 1996 and 1999.
Year Allen’s Cherryfield Wyman’s
1996 560 516 569
1997 420 435 482
1998 462 A59 535
1999 514 507 594
Sexton Report, Table 6.
® The following is Dr. Solow’s chart showing the median price received by wild and cultivated blueberry
processors per pound between 1996 and 1999:
Year Wild Blueberry price/pound Cultivated Blueberry price/pound
1996 1.13 1.08
1997 97 .90
1998 1.11 81
1999 1.15 .88
alleged unlawful depression of the field price, which impacted every grower
whether or not it also received a bonus, would have caused all growers to receive
less for their blueberries than they would have received absent the alleged anti-
competitive conduct.
2. The Experts
Both the plaintiffs and defendants have submitted the opinions of experts, Dr. Solow
and Dr. Sexton, respectively. Both Dr. Sexton and Dr. Solow describe the processing
sector of the Maine wild blueberry industry as a loose oligopsony.’ Apart from that, the
two experts disagree substantially over whether the defendants are engaging in
anticompetitive behavior.
a. Dr. Solow
Dr. Solow concludes “(a) that the wild blueberry industry appears to be operating
in a fashion consistent with the plaintiffs’ price-fixing and market allocation allegations;
[and] (b) that the alleged conspiracy would have impacted all members of the class, in
that it would have caused all blueberry growers to receive less for their blueberries from
the defendant processors than they would have received absent the alleged conspiracy . . .
An oligopsony is “[a] market condition in which purchasers are so few that the actions of any one of
them can affect price and hence the costs that competitors must pay.” WEBSTER’S II] NEW RIVERSIDE
UNIVERSITY DICTIONARY 819 (1988). As Dr. Solow explains:
[an] oligopsony differs from pure monopsony in that no single firm can determine the market price
because each is faced with one or more rivals capable of having a significant effect on total
purchases. [Further, i]t differs from competition in that each of the oligopsonists recognizes that
its price and purchasing choices will affect the profitability of its rivals’ decisions, and will
engender responses from those rivals that must be taken into account when evaluating the
profitability of alternative strategies, including pricing and purchases. Agreements among
oligopsonists to coordinate their pricing, purchasing or other strategies, or to refrain from
competing for suppliers’ business, can allow them to approximate the monopsony outcome in the
market. With such agreements, oligopsony also leads to an inefficient allocation of resources and
a wealth transfer from producers to buyers in the same way that monopsony does.
Supplemental Report of Dr. Solow, p. 5.
“[An] oligopsony can lead to collusion among the few buyers in a market, with results similar to
those produced by [a] monopsony.” Roger D. Blair and Jeffrey L. Harrison, Antitrust Policy &
Monopsony, 76 Cornell L. Rev. 297, 308 (1991). “[C]ollusive monopsony [(oligopsony)} has the same
deleterious effects on social welfare as does pure monopsony: too few resources will be employed. Abused
suppliers are hurt by a collusive restraint that reduces the price their output commands. Moreover, since
the suppliers provide less of their product, the quantity produced of the final good must also decline.” Id.
.” Supplemental Report of John Solow, pp. 2-3 (“Solow Supp. Rep.”). Solow supports
his conclusions with the following.
i. Failure to Solicit Growers
First, while the defendants “generally indicate a desire to expand their
businesses,” they admit that they do not solicit each others’ growers. For example, “[o]n
at least one occasion, a grower’s switching from Allen’s to Cherryfield led an executive
from Allen’s to angrily question an executive of Cherryfield as to whether the latter was
soliciting growers. Cherryfield’s executive, however, reassured the executive of Allen’s
that his company does not actively go after growers.” Id. at 8. Also, “[i]n at least one
year, following a poor crop in Canada due to frost, a Canadian buyer approached Maine
growers offering a higher price for their blueberries, but the American processors did not
raise their prices in response.” Id. “In fact, the evidence indicates that very few growers
change processors from year to year, a fact that the processors readily admit.” Solow
concludes that these examples are an indication that the field price is not determined “by
the processors bidding against each other for the crops of the growers.” Id. at 8.
Although representatives of the defendant processors have indicated that they
have to match any higher price offered to growers by another processor, these are
meaningless statements because no Maine processor attempts to hire growers
away from other processors by offering a higher price. In fact, the smaller
defendant processors . . . have on occasion paid a slightly lower field price than
the larger defendant processors . . . with no apparent effect on their purchases.
Id. at 8-9.
ii. Similarity in Field Prices
Second, “[t]he defendants’ respective field prices have had a high degree of
similarity.” Id. at 6. Seen. 10. “{E]ven though the evidence is limited, it appears that
the field price is determined by price leadership, in which field prices are announced by
Cherryfield and then closely matched by the other processors.” Id. at 9.
Representatives of Wyman and Merrill admitted that they are not the first to
announce. See id, at 9. Further, “Allen and Merrill jointly own Coastal Blueberries, a
company that purchases wild blueberries on behalf of those two processors at a price set
by Allen. Thus, Allen implicitly sets the price paid for some of the blueberries received
by Mermill, and there is a channel of communication on price between Allen and Merrill.”
Id. at 9. “On the other hand, Mr. John L. Bragg, who sets the field price for Cherryfield,
states that at the time he sets the field price he does not know what the other processors
- are paying.” Id.
iii. Comparison with the Cultivated Blueberry Market
Third, Solow finds that “[a] reasonable point of comparison is the price that
cultivated blueberry growers receive for their blueberries.” Id.
In a competitive market, one would expect the wild blueberry growers to receive
at least as much for their fruit as cultivated growers. This conclusion is based on
several reasons. First, wild and cultivated blueberries are substitutes, and the wild
and cultivated blueberry segments of the industry view each other as such. The
more the market views two products as substitutes, the closer they should be in
price. As substitutes to at least some degree, wild and cultivated blueberries
should be similarly priced.
Second, while wild and cultivated blueberries are substitutes, they are not
perfect substitutes. There are differences between the two products; in particular,
wild blueberries have quality advantage over cultivated blueberries. Wild
blueberries have a deeper color and are claimed to be sweeter and more flavorful
and to hold their shape better in some uses. In a competitive market those
differences would result in a higher price for wild blueberries compared to
cultivated blueberries.
Id. at 9-10 (emphasis original).
“Tf the market for unprocessed wild blueberries were competitive, economic
theory predicts a similar pricing disparity between wild and cultivated blueberries as
exists in the market for processed blueberries, all else equal. That is, one would expect
unprocessed wild blueberries to enjoy a similar price premium over unprocessed
cultivated blueberries. Economic theory tells us that if the market for unprocessed
blueberries were competitive, the growers of the higher quality wild blueberries would
receive a higher price for their crops than the growers of the lower quality cultivated
blueberries.” Id. at 10-11.
© Solow provides a chart of the prices paid to growers of wild and cultivated blueberries by processors
between 1996 and 1999:
Year Wild Cultivated
1996 57 76
1997 43 64
1998 46 48
Dr. Solow opines that the “[pJossible alternative explanations of these facts . . .
are not consistent with the facts of the industry.” Id. at 11. First, “[i]f competition
determined the prices of processed and unprocessed blueberries, those prices would be
determined by the forces of supply and demand. Generally, higher demand and lower
supply lead to higher prices, and lower demand and higher supply lead to lower prices.”
Id., at p. 11.
Second, the defendants’ argument that the reason wild blueberries generally get
less money is that it costs more to process wild blueberries than it is to process cultivated
blueberries is false. Dr. Solow explains:
A comparison of the available data on the non-purchasing costs of processed wild
and cultivated blueberries indicates that non-purchasing costs of processed
blueberries are higher for wild blueberries. Table 5" compares the costs of
processed blueberries, excluding the cost of acquiring the blueberries themselves,
for three of the defendants and a processor of cultivated blueberries (Sakuma
Brothers Processing, Inc.). That analysis shows the non-purchasing costs of
processed wild blueberries to be no higher than, and in fact somewhat lower than,
the non-purchasing cost of processed cultivated blueberries.
Id., at p. 12.
1999 50 66
"Company 1998 ($/Ib.) 1999 ($/Ib.)
Defendants
Merrill Blueberry Farms $.16 $.29
Cherryfield Foods, Inc. $.26 $.28
Jasper Wyman & Sons $.26 a+
Average $.21 $.28
Cultivated Processor
Sakuma Brothers Processing, Inc. $.38 $.29
Solow Supp. Rep., Table 5.
Incidentally, Dr. Sexton challenges the appropriateness of comparing the defendants to Sakuma
Brothers:
Certainly, examining one cultivated blueberry processor is not sufficient to render judgements
[sic] as to the relative costs of processing cultivated vs. wild blueberries. This conclusion applies
especially to Sakuma Brothers because their volume of processed blueberries is much lower than
all but the smallest defendant processor, thus making it unlikely that they are able to exploit the
available economies of size in processing. Moreover, Sakuma’s processing operation includes a
variety of fruit products, raising serious issues of how indirect costs were allocated among its
various enterprises.
Sexton Report at 15.
For these three reasons, Dr. Solow concludes that “[b]ased on all of the presently
available data and evidence, the significantly lower prices for unprocessed wild
blueberries is evidence of a lack of competition among wild blueberry processors, the
very absence of competition that would result from a conspiracy to fix the prices paid,
allocate growers among processors, or otherwise agree to suppress competition among
processors in the market for unprocessed wild blueberries.” Id. at 13.
b. Dr. Sexton
Dr. Sexton opines that, for the following reasons, “[t]he pattern of pricing
behavior observed for Maine wild blueberries is not consistent with the allegation of
price fixing and appears to be consistent with normal competition in a market of this ,
type”:
e due to the high perishability of the Maine wild blueberry, its
price is determined in a localized geographic market that
includes Maine and at least parts of Eastern Canada (EC).
Cultivated blueberry prices are similarly determined in
localized geographic markets in their respective production
areas.
e Wild blueberries are a perennial crop. Supply of a perennial
crop in any harvest period is determined by decisions made
years previously, in terms of development of available acreage,
and by weather conditions. Supply is unresponsive or inelastic
to price.
e The market conditions for the procurement of raw blueberries
in Maine and EC can be described as a loose oligopsony.. . .
e Under the aforementioned market conditions, the grower price
will be determined by (i) the strength of demand... for the .
finished products, (ii) the size of the available wild blueberry
harvest . . . (iii) the size of the harvest of cultivated blueberries,
(iv) the magnitude of per-unit processing costs, (v) inventories
of processed blueberry products carried forward from the
previous year, and (vi) the relative bargaining power of
growers and processors.
e Grower prices for wild blueberries cannot be compared directly
with grower prices for cultivated blueberries because price in
each case is determined in distinct geographic markets.
e Grower prices for cultivated blueberries used in processing will
tend to be higher than grower prices for wild blueberries .. .
because a substantial fresh market outlet exists for cultivated
blueberries that does not exist for wild blueberries.
e An additional factor that adversely affects the farm price for
wild blueberries relative to processed berries is the greater
shrink that occurs for wild berries due to differences in harvest
practices.
e The pattern of pricing behavior observed for Maine wild
blueberries is not consistent with the allegation of price fixing
and appears to be consistent with normal competition in a
market of this type.
Expert Report of Richard Sexton, pp. 1-2 (“Sexton Report”).
i. Agreement not to Solicit Growers
“Long-term relationships between a grower and a processor/handler as exist in
Maine’s blueberry industry are a common feature of agricultural markets. Both
economic and cultural phenomena can explain the behavior quite independently of any
explicit scheme to allocate market areas.” Sexton Report at 10,41. As Dr. Sexton
explains:
any processor’s production capacity is limited. The processor will seek
commitments for production from growers that enable the processor to efficiently
utilize the capacity, both with respect to volumes delivered and timing of delivery.
*** Small differences among growers as to timing of ripening of their crop can
be important considerations to a processor in terms of insuring a balanced
delivery of product over the harvest period. As noted, geographic location is also
important. Processors will normally seek to acquire product grown in close
proximity to their processing facilities. A processor who has arranged to receive
production to efficiently manage his/her plant, both with respect to volume and
timing, will not normally be in position to acquire additional production even if it
is offered. In addition, the blueberry processors in Maine often take responsibility
for doing the field work for many of their growers, especially the smaller ones.
This fact puts an additional premium on securing grower patrons within a
compact geographical area to economize on time spend [sic] transporting
equipment and work crews between farm sites.
Id. at 10, ] 42. “From my experiences working with several agricultural industries, I
have observed that producers often tend to be very loyal to their processor/handler and,
thus, refrain from seeking alternative marketing opportunities. This loyalty may not be to
the processor per se, but, rather, to an employee of the processor, such as a fieldman or
delivery person. Processor/handlers in turn seek to foster stable, long-term relationships
with growers and earn the reputation among growers of being a reliable handler who
provides a secure ‘home’ for their production.” Id. at 11, ] 43.
10
ii. Similarity in Prices
Sexton states that Solow’s statement that similarity in prices among the
processors is evidence of price-fixing is wrong because “identical prices among buyers
are also generated from other economic models of a market, including noncollusive
oligopsony with undifferentiated products and perfect competition.” Sexton Report at 10,
q 40. First, Sexton concludes that each processor employs a different pricing strategy,
which is not consistent with a price-fixing arrangement. See id. at 13, ] 50.
Second, although Solow states that the field price for Maine wild blueberries is
determined under a price leadership arrangement wherein prices are announced by
Cherryfield, “[p]rice leadership is not uncommon in first-handler markets for agricultural
products.” Id. at 13,951. “In my experience, it arises primarily when there is a
dominant processor/handler in the industry.” Id. “Because the dominant firm probably
has the most information about market conditions, using a dominant firm’s price as a
basis for establishing its own price is probably an efficient way for smaller firms to
establish price.” Id.
iii. Comparison with the Cultivated Blueberry Market
Sexton provides five explanations as to why “cultivated blueberries . . . do not
substitute as inputs into the production of processed blueberry products,” and why one
cannot compare the wild and cultivated blueberry markets:
(First,] first-handler markets for a commodity that is grown in multiple geographic
areas may not be integrated in the sense that no transshipment of the raw commodity
occurs between the different growing areas, and prices in the different geographic
locations fluctuate somewhat independently. In other words, the farm price in these
situations is determined by supply and demand conditions in each local growing
region, and prices in different regions may vary considerably.
Sexton Report at 3, { 7.
[Second,] available supply at any given harvest period is determined primarily by (a)
planting decisions made years ago, and (b) weather conditions during the growing
season.... For commodities that are not readily storable in their unprocessed form
due to perishability, these conditions imply collectively that the supply is essentially
perfectly inelastic with respect to the market price, i.e., the supply is fixed without
regard to the price received.
Id. at 3, J 9.
ll
{Third is the] seasonality in supply and/or demand. |*** Growers who are able to
time harvest to coincide with periods when demand is high relative to supply will
receive a higher price than growers whose harvest comes on to the market when
supply is large relative to demand. Seasonality is an important factor in explaining
large regional differences in the grower price for cultivated blueberries.
Id. at 3, { 10.
[Fourth, cJultivated blueberry prices for processing are influenced to an important
extent by the existence of the parallel fresh market for cultivated berries, which is
not present to any important degree for wild berries.
[U]nder any form of competition the presence of a fresh market will raise
the price of blueberries utilized in processing. The fact that cultivated blueberries
have a fresh market outlet that is a premium market relative to the processing
market is a key factor to understanding why the) grower price of cultivated
blueberries for processing uses often exceeds the grower price of wild blueberries.
Id. at 8, J 34, and 9, { 38.
[Fifth is the] differences in how shrink is handled in the two industries. Shrink is
the difference in product volume at the farm and usable product volume received
by the processor. Principal components of shrink are (i) materials other than
actual product that become mixed with the product during the harvest process and
(ii) spoilage. Because wild blueberries grow near to the ground and are often
harvested with a hand raking technique, the harvest produces a relatively large
volume of material other than berries. Perishability of the wild blueberry causes
additional shrinkage due to spoilage incurred in transporting the product from
field to processing facility. *** The shrink for cultivated blueberries used in
processing is comparable to the shrink for wild blueberries when mechanical
harvesting is used. However, most producers of cultivated berries operate sorting
lines, including optical scanners, which remove most of the waste material.
Cultivated blueberry growers are paid in most cases on tonnage that has been
sorted and, thus, most waste material has been removed. Wild blueberry growers,
conversely, are paid on the tonnage that leaves the field, i.e., tonnage that contains
the shrink material.
Id. at 9, { 39.
3. Procedural Posture
In February 2000, the plaintiffs filed this complaint, which has since been
amended, alleging that the “[dJefendants and their co-conspirators have entered into and
engaged in a continuing combination and conspiracy to suppress competition by
artificially lowering, fixing, maintaining or stabilizing the prices of unprocessed wild
blueberries.” Second Amended Complaint { 30. They further allege that “the
12
combination and conspiracy engaged in by defendants and their co-conspirators is an
unreasonable restraint of the trade and commerce of this State in violation of 10 M.R.S.A.
§ 1101.” Id. “In furtherance of their conspiracy, defendants and their co-conspirators
engaged in a wide range of anti-competitive activities, the purpose and effect of which
was to pay Class members artificially low prices for their wild blueberries. These
activities included the following:
a. defendants agreed among themselves to fix the prices they paid for wild
blueberries at artificially low prices;
b. defendants announced and paid artificially low prices for the Class’s wild
blueberries;
c. defendants allocated growers among themselves by, among other things,
agreeing not to solicit each other growers;
d. defendants adopted the same basic pricing methods: setting and paying a field
price without prior negotiation with any grower; waiting to pay the field price
until after defendants had entered into contracts to re-sell most of the wild
blueberries; and paying the same or similar field prices as each other;
e. defendants collectively set the field price each year during meetings at the
Holiday Inn in Ellsworth, Maine, or elsewhere;
f. at least one defendant threatened to boycott any grower that sold or planned to
sell wild blueberries to a processor in Canada.”
Second Amended Complaint J 31. “The unlawful combination or conspiracy has had the
following effects, among others:
a. price competition among defendants and their co-conspirators in the purchase
of wild blueberries from growers has been artificially restrained;
b. prices for wild blueberries paid to growers by the defendants and their co-
conspirators have been fixed, lowered, maintained or stabilized at artificially
low and non-competitive levels;
c. growers of wild blueberries have been deprived of the benefit of free and open
competition in the sale of wild blueberries.”
Id. at { 32. In December 2001, the defendants each moved for summary judgment.” The
court heard oral argument on these motions on June 7, 2002.
12 While Cherryfield, Wyman, and Allen each submitted their own motions for summary judgment,
Merrill Blueberry Farms submitted a letter stating that it joined in the other three defendants’ Motions for
Summary Judgment.
13
DISCUSSION
A. Plaintiffs’ Motion for Reconsideration
The court now addresses the plaintiffs’ Motion for Reconsideration of this court’s
earlier decision regarding their Petition for Class Certification. The plaintiff responded to
the court’s decision denying certification by filing a Motion to Amend to Remedy the
Defects in the court’s decision. There is nothing improper with the plaintiffs’ Motion to
Amend to address the concerns set out in the court’s earlier decision. This court allowed
the plaintiff’s Motion to Amend to add additional plaintiffs and granted the plaintiff's
Motion for Reconsideration.
Upon reconsideration, the plaintiffs’ Motion for Class Certification is hereby
granted. The court finds that the plaintiffs did address the problems with the posture of
their case by adding the additional plaintiffs. This court did not reconsider the other
findings and conclusions of the court set out in the order dated January 24, 2001, except
for the issue surrounding typicality. This court finds that the plaintiffs meet the legal
requirements to be certified as a class action.
B. Defendants’ Motions for Summary Judgment
1. Summary Judgment Standard in Antitrust Cases
One of the bones of contention between the parties is the proper standard to apply
for summary judgment motions in antitrust cases.
Procedurally, summary judgments are no different in antitrust cases than they are
in other civil matters. 8 JULIAN VON KALINOWSKI, ANTITRUST AND TRADE REGULATION
§ 167.01 (2d ed. 2001) (hereinafter “KALINOWSKI”). See Eastman Kodak Co. v. Image
Technical Services, Inc., 504 U.S. 451, 468 (1992). In Maine, “[t]o survive a defendant’s
motion for summary judgment, a plaintiff must produce evidence that, if produced at
trial, would be sufficient to resist a motion for a judgment as a matter of law. A plaintiff
3 The plaintiffs’ claims are brought pursuant to 10 MLR.S.A. § 1101, which states that ‘fe]very contract,
combination in the form of trusts or otherwise, or conspiracy, in restraint of trade or commerce in this State
is declared to be illegal.” There is no Law Court decision addressing summary judgment in these types of
cases. The First Circuit has, however, held that the Maine antitrust statutes parallel the Sherman Act, and
that those types of claims should be analyzed according to the doctrines developed in relation to federal
law. Davric Maine Corp. v. Rancourt, 216 F.3d 143, 149 (1* Cir. 2000); Tri-State Rubbish, Inc. v. Waste
Management, Inc., 998 F.2d 1073, 1081 (1* Cir. 1993). Moreover, the language used in the Maine statute
is almost identical to the language used in the Sherman Act. The court will, therefore, use federal cases
addressing the summary judgment standard in antitrust cases as a guide.
14
must establish a prima facie case for each element of the cause of action.” Stanton Vv.
University of Maine System, 2001 ME 96, { 6, 773 A.2d 1045, 1048-1049 (citations and
quotation omitted). As noted earlier, the plaintiffs bring this action pursuant to 10
M.R.S.A. § 1101, which provides that “[e]very contract, combination in the form of trusts
or otherwise or conspiracy, in restraint of trade or commerce in this State is declared to
be illegal.” Thus, in order to establish a prima facie case, the plaintiffs must show: (1)
that the defendants entered into a contract, combination, or conspiracy, (2) which
restrained trade or commerce in Maine, and (3) that they were injured thereby for each
allegation. See 10 M.R.S.A. §§ 1101, 1104.
The main question is whether the plaintiffs have prima facie evidence which
would allow them to overcome a motion for summary judgment. The plaintiffs may
produce either direct evidence that the defendants engaged in such anti-competitive
behavior, or circumstantial evidence from which a reasonable factfinder could conclude
that the defendants engaged in such conduct. See In re Citric Acid Litigation, 191 F.3d
1090, 1093 (9" Cir. 1999).
“Direct evidence . . . must be evidence that is explicit and requires no inferences
to establish the proposition or conclusion being asserted.” In re Baby Food Antitrust, 166
F.3d 112, 118 (3% Cir. 1999). “[W]ith direct evidence the fact finder is not required to
make inferences to establish facts.” Id. (quotation and citation omitted). The plaintiffs in
this case cannot rely on direct evidence to demonstrate a prima facie illegal restraint of
trade case.
In the absence of direct evidence, the plaintiffs must present evidence from which
the existence of an agreement or conspiracy can be inferred — i.e., circumstantial
evidence. In re High Fructose Corn Syrup Antitrust Litigation, 2002 WL 1315285, at *2
(7" Cir. June 18, 2002); Petruzzi’s IGA v. Darling-Delaware, 998 F.2d 1224, 1230 (3
Cir. 1993). “[I]n drawing [] inferences from underlying facts, a court must remember
that often a fine line separates unlawful concerted action from legitimate business
practices.” Petruzzi’s, 998 F.2d at 1230. Thus, “in antitrust cases, care must be taken to
ensure that inferences of unlawful activity drawn from ambiguous evidence do not
14 Section 1104 allows persons injured by conduct declared illegal under section 1101 to bring an action,
such as this one, and collect damages. See 10 M.R.S.A. § 1104.
15
infringe upon the defendants’ freedom.” Id. (citation and quotation omitted). To
understand exactly what inferences may be drawn from circumstantial evidence in an
antitrust case up for summary judgment, it is necessary to look to the United States
Supreme Court case of Matsushita Elec. Ind. Co. v. Zenith Radio, 475 U.S. 574 (1986).
Although in summary judgment motions “the inferences to be drawn from the
underlying facts . . . must be viewed in the light most favorable to the party opposing the
motion,” “antitrust law limits the range of permissible inferences from ambiguous
evidence in a § 1 case.” Matsushita, 475 U.S. at 587-588. Thus, “conduct as consistent
with permissible competition as with illegal conspiracy does not, standing alone, support
an inference of antitrust conspiracy.” Id. at 588. “To survive a motion for summary
judgment . . . a plaintiff seeking damages for a violation of § 1 must present evidence
‘that tends to exclude the possibility that the alleged conspirators acted independently.
Id. at 588, quoting Monsanto Co. v. Spray-Rite Corp., 465 U.S. 752, 764 (1984). The
plaintiff must show “that the inference of conspiracy is reasonable in light of the
competing inferences of independent action or collusive action that could not have
harmed [the plaintiff].” Id. (citation omitted). Moreover, “if the factual context renders
(the plaintiffs’ ] claim implausible — if the claim is one that simply makes no economic
sense — [the plaintiffs] must come forward with more persuasive evidence to support their
claim than would otherwise be necessary.” Id. at 586. “The Court’s requirement in
Matsushita that the plaintiffs’ claims make economic sense did not introduce a special
burden on the plaintiffs facing summary judgment in antitrust cases.” Eastman Kodak
Company v. Image Technical Services, Inc., 504 U.S. 451, 468 (1992). “Matsushita
demands only that the nonmoving party’s inferences be reasonable in order to reach the
jury, a requirement that was not invented, but merely articulated, in that decision.” Id.
Most importantly, the court must keep in mind that “[t]he [Matsushita] Court
warned that permitting the inference of conspiratorial behavior from evidence consistent
with both lawful and unlawful conduct would deter pro-competitive conduct — an
especially pernicious danger in light of the fact that the very purpose of the antitrust laws
is to promote competition.” In re Citric Acid Litigation, 191 F.3d 1090, 1095 (9" Cir.
1999).
16
Most “[f]ederal courts have interpreted Matsushita to require a two-part test for
summary judgment.[’*] Under this test, the court first determines if the plaintiff’ s
evidence is ‘ambiguous’ — that is, if the evidence is of conduct that is ‘as consistent with
permissible competition as with illegal conspiracy.’” Alakayak v. British Columbia
Packers, Ltd., 2002 WL 1150730, at *13 (Alaska May 31, 2002), quoting Matsushita. “If
so, the plaintiff only avoids summary judgment if it submits some evidence that tend[s] to
exclude the possibility that the defendants acted independently.” Id. “[W]hen the
plaintiffs’ theory of conspiracy does rely entirely on circumstantial evidence, Matsushita
requires that this evidence ‘be evaluated in its factual context’ to see if the summary
judgment record as a whole provides a specific factual basis that, if accepted as true,
would ‘tend to exclude the possibility’ that the alleged conspirators acted
independently.’” Id., at * 13.
The court must apply this summary judgment framework “whenever the plaintiff
cannot establish every element of its case without asking the court to draw an inference in
his favor.” In re Citric Acid Litigation, 191 F.3d 1090, 1095 (9" Cir. 1999).
2. Antitrust Law
“Every contract, combination in the form of trusts or otherwise, or conspiracy, in
restraint of trade or commerce in this State is declared to be illegal.” 10 M.R.S.A. §
1101. Although the usual price-fixing situation is one in which sellers conspire to fix
prices, purchasers, such as the processors in this case, may also violate 10 MLR.S.A. §
1101. Antitrust acts “appl[y] to abuse of market power on the buyer side — often taking
the form of monopsony or oligopsony.” Todd v. Exxon Corporation, 275 F.3d 191, 201
(2™ Cir. 2001). “The [Sherman] Act does not confine its protection to consumers, or to
purchasers, or to competitors, or to sellers. Nor does it immunize the outlawed acts
because they are done by any of these. The [Sherman] Act is comprehensive in its terms
and coverage, protecting all who are made victims of the forbidden practices by
15 These courts include: Clorox Co. v. Sterling Winthrop. Inc., 117 F.3d 50, 55 (2 Cir. 1997); Inre Baby
Food Antitrust Litigation, 166 F.3d 112, 124 (3™ Cir. 1999); Laurel Sand & Gravel, Inc. v. CSX Transp..
Inc., 924 F.2d 539, 543 (4" Cir. 1991); Stewart Glass & Mirror, Inc. v. U.S. Auto Glass Discount Centers,
Inc., 200 F.3d 307, 312 (5" Cir. 2000); Super Sulky, Inc. v. U.S. Trotting Ass’n, 174 F.3d 733, 739 (6" Cir.
1999); Serfecz v. Jewel Food Stores, 67 F.3d 591, 599 7 Cir. 1995); Blomkest Fertilizer v. Potash of
Saskatchewan, 203 F.3d 1028, 1032 (8* Cir. 2000); In re Citric Acid Litigation, 191 F.3d 1090, 1094 (gt
Cir. 1999); Gibson v. Greater Park City Co., 818 F.2d 722, 724 (10 Cir. 1987); Delong Equipment Co. vy.
Washington Mills Abrasive Co., 887 F.2d 1499, 1508 (11" Cir. 1989).
17
whomever they may be perpetrated.” Mandeville Island Farms, Inc. v. American Crystal
Sugar Co., 334 U.S. 219, 236 (1948) (dealing with oligopsony).
There are three elements the plaintiffs must demonstrate in order to defeat the
defendants’ motion for summary judgment: (1) the defendants entered into a contract,
combination, or conspiracy, (2) that restrained trade or commerce, and (3) the plaintiffs
were injured thereby.
a. Price-Fixing Agreement
i. Contract, Combination, or Conspiracy
One of the first issues is whether there is sufficient evidence demonstrating that
the defendants actually formed an agreement to fix the prices paid to wild blueberry
growers. The plaintiffs’ price-fixing claim seems to be based on a theory of “conscious
parallelism,” which is described as “the process, not in itself unlawful, by which firms in
a concentrated market might in effect share monopoly power, setting their prices at a
profit-maximizing, supra-competitive level by recognizing their shared economic
interests and their interdependence with respect to price and output decisions.” Brooke
Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 227 (1993). “In other
words, conscious parallelism is the practice of interdependent pricing in an [oligopsonist]
market by competitor firms that realize that attempts to [increase] prices [paid for a
product] usually reduce revenue without increasing any firm’s market share, but that
simple price leadership in such a market can readily increase all competitors’ revenues.”
City of Tuscaloosa v. Harcros Chemicals, Inc., 158 F.3d 548, 570 (11" Cir. 1998).
In this case, the plaintiffs point out, and the evidence shows, that the processors’
prices were roughly equivalent, and were in a tight range, during the alleged conspiracy.
Moreover, the plaintiffs’ expert has concluded that the “low prices Maine wild blueberry
farmers receive for their berries (compared to unprocessed blueberry prices) demonstrates
a lack of competition among the defendants.” Plaintiffs’ Opposing Brief, p. 26. “This
establishes only that the producers consciously paralleled each other’s prices.” Blomkest
Fertilizer v. Potash of Saskatchewan, 203 F.3d 1028, 1032 (8" Cir. 2000). However,
“Telvidence that a business consciously met the pricing of its competitors does not prove
a violation of the antitrust laws.” Id. at 1032-1033, citing Theatre Enterprises, Inc. v.
Paramount Film Distrib. Corp., 346 U.S. 537, 540-41 (1954). “Particularly when the
18
product in question is fungible . . . courts have noted that parallel pricing lacks probative
significance.” Jd. Thus, “[a]n agreement is properly inferred from conscious parallelism
only when certain ‘plus factors’ exist.” Id.
“A plus factor refers to the additional facts or factors required to be provided as a
prerequisite to finding that parallel price action amounts to a conspiracy,” id., and “are
necessary conditions for the conspiracy inference.” In re Baby Food Antitrust, 166 F.3d
112, 122 (3% Cir. 1999). “The requirement of ‘plus factors’ is necessary because
consciously parallel behavior alone leaves the circumstantial evidence of collusion in
equipoise; consciously parallel behavior by oligopolists does not itself support an
inference of agreement, or ‘a meeting of the minds,’ any more strongly than it supports
an inference of legal price maintenance or leadership. Thus, this requirement ensures that
unilateral or procompetitive conduct is not punished or deterred.” City of Tuscaloosa v.
Harcros Chemicals, Inc., 158 F.3d 548, 571 (11" Cir. 1998).
“A plaintiff has the burden to present evidence of consciously paralleled pricing
supplemented with one or more plus factors.” Blomkest, 203 F.3d at 1033 (emphasis
supplied). “The mere existence of plus factors, however, is not necessarily sufficient for
the plaintiff to survive summary judgment. For a case to reach the jury, the plus factors
evidence must tend to exclude the possibility of independent action.” Merck-Medco
Managed Care, Inc. v. Rite Aid Corp., 22 F.Supp.2d 447, 469 (D.Md. 1998).
The plus factors may include evidence demonstrating that the defendants: (1)
acted contrary to their economic interests, (2) were motivated to enter into a price-fixing
conspiracy, In re Baby Food, 166 F.3d at 122; Petruzzi’s, 998 F.2d at 1242, (3) exchange
of price information and opportunity to meet, and (4) a large number of inter-defendant
communications, Todd, 275 F.3d at 198, Wallace v. Bank of Bartlett, 55 F.3d 1166, 1168
(6" Cir. 1995).
(a) Defendants Acted Contrary to their Economic Interests
“One prominent ‘plus factor,’ to which antitrust plaintiffs often take recourse, is a
showing that the defendants’ behavior would not be reasonable or explicable (7.e., not in
their legitimate economic self-interest) if they were not conspiring to fix prices or
otherwise restrain trade — that is, that the defendants would not have acted as they did had
they not been conspiring in restraint of trade.” City of Tuscaloosa, 158 F.3d at 572.
19
“However, where there is an independent business justification for the defendants’s [sic]
behavior, no inference of conspiracy can be drawn.” Blomkest, 203 F.3d at 1037.
The plaintiffs submit that they have met this “plus factor.” First, they assert that
despite the defendants’ general desire to expand their businesses, they admit they do not
solicit each other’s growers. Secondly, none of the defendants raise their prices in order
to lure growers to their facilities.
The defendants state that their actions are explained by legitimate business
reasons. Wyman’s Brief, p. 18.
Of the blueberries Wyman’s does not grow itself, it purchases most of these
berries from large growers and growers’ cooperatives, taking advantage of the
administrative ease of dealing with fewer entities, and benefiting from the
economies of scale. By dealing primarily with large growers and cooperatives,
Wyman’s receives a substantial volume of berries, gains more control over
deliveries, eases administrative burden, etc., for all of which it pays a premium. If
other processors raise the prices paid to their growers, Wyman’s raises its prices,
in order to retain its growers. Wyman’s negotiates individually with each grower
or cooperative, adjusting the prices it pays growers in response to the size and
quality of the crop that year, the amount of inventory left over from previous
years, the market for processed fruit, and the nature of the relationship Wyman’s
has with each grower.
Moreover, the evidence indicates that Wyman’s actions are inconsistent
with the Plaintiffs’ conspiracy theory, because Wyman’s would not benefit if the
conspiracy alleged by Plaintiffs actually existed. Wyman’s negotiates contracts
with cooperatives that base payment on the field price plus a set amount, with a
guaranteed floor. These contracts are typically for a term of two or three years.
Because the field price plus the set amount must exceed the floor amount,
Wyman’s may be obligated under these contracts to pay a substantially higher
amount than the price paid by other processors. *** For example, under
Wyman’s contract with Pleasant River Co-op, it is obligated to pay its field price
plus 10¢, with a guaranteed minimum of 45¢. A field price that drops to 25¢,
accordingly, would obligate Wyman’s to pay 45¢ while its competitors paid only
25¢, a 80% premium over the field price. A grower payment of 80% above the
field price could hardly reflect an agreement to fix prices.
Wyman’s Brief, pp. 18-19. Cherryfield states that the processors do bid against each
other for crops of growers who bargain collectively.
“Tt is quite likely that [oligopsonists] acting independently might [buy] at the
same . . . price as their competitors because the firms are interdependent and competitors
would match any [higher] price .... Therefore, they quickly learn that [paying higher]
price[s] . . dofes] not increase market share and go back to their noncompetitive pricing.”
20
Petruzzi’s IGA v. Darling-Delaware, 998 F.2d 1224, 1244 (3 Cir. 1993). “It is[,
however, ] one thing for competitors all to charge the same price, as a perfectly
competitive market could lead them to do so. It is quite another for competitors all to
refrain from soliciting each other’s accounts.” Petruzzi’s, 998 F.2d at 1246. See Areeda,
Antitrust Law J 1420d, at 123-124 (noting that refusal to bid in an oligopoly situation is
not inevitable, but cannot be sustained without some enforcement mechanism).
(b) Motivation to Enter into a Price-Fixing Conspiracy
The plaintiffs assert several items in support of this “plus factor.” First,
Cherryfield’s and Wyman’s CEOs viewed cooperation among the wild blueberry
processors as crucial to their ability to successfully compete against processors of other
fruits. Second, the plaintiffs submitted a note from Flanagan (of Wyman’s) in May 1998
to Bragg (of Cherryfield) stating that Wyman “enjoys competing against” Cherryfield
“on our terms, not on the terms of people who see their interests served by pitting us
against one another.” Plaintiffs’ Opp. p. 9. Third, the head of Cherryfield believed that
the wild blueberry industry could successfully compete against other fruits only if the
wild blueberry processors and other market participants worked together. Plaintiffs’
Opp. p. 9.
(c) Exchange of Price Information and Opportunity to Meet
The plaintiffs assert several facts in support of this “plus factor.” First, several
defendants’ decision-making employees testified that two of the defendants, Allen and
Merrill, have met annually to discuss the field price of wild blueberries, Allen and Merrill
jointly own Coastal Blueberries. Second, three of the four defendants, Cherryfield,
Allen, and Wyman, traveled throughout Europe together annually, as members of the
North American Blueberry Export Council (““NABEC”), to jointly negotiate the price at
which they would sell their processed blueberries to overseas corporations. The plaintiffs
argue that this provided ample opportunity to discuss field prices. Third, testimony that
Wyman’s CEO asked one owner of Merrill why another owner of Merrill “would ever
pay more for the blueberry crop than other processors.” Plaintiffs’ Opp. p. 6-7. “This
extraordinary testimony is susceptible of almost no reasonable explanation except that
Wyman’s perceived Merrill as breaching a pricing agreement among the defendants.”
Plaintiffs’ Opposing Brief, p. 22. In other words, Wyman’s was “polic[ing] the
21
conspiracy.” Plaintiffs’ Opposing Brief, p. 23. Fourth, there were communications about
prices in other circumstances as well — Bragg of Cherryfield sent Flanagan of Wyman a
note advising Flanagan not to drive down the price of processed wild blueberries in
Europe by quoting a lower price than Cherryfield. Cherryfield’s effort to convince its
competitor not to compete on price is consistent with Cherryfield’s participation in an
agreement with Wyman’s and the other defendants to fix the field price.
The defendants counter those assertions by stating: first, “[t]he plaintiffs lack any
evidence that the Defendants ever discussed or otherwise communicated with each other
the prices to be paid to growers.” Wyman’s Brief, p. 16. Second, “[t]here is no evidence
that the processors exchanged pricing information in advance with each other,” and
“t]here is no evidence that Defendants discussed with each other any decisions to match
each other’s field prices.” Id. at pp. 16-17; Allen’s Brief, pp. 18-19.
“[C]ourts generally reject conspiracy claims that seek to infer an agreement from
communications despite a lack of independent evidence tending to show an agreement
and in the face of uncontradicted testimony that only informational exchanges took
place.” In re Baby Food Antitrust, 166 F.3d 112, 133 (3 Cir. 1999) (citation and
quotation omitted). “[E]vidence of social contacts and telephone calls among
representatives of the defendants was insufficient to exclude the possibility that the
defendants acted independently. *** [Such evidence of ‘opportunity’ should be
accorded little, if any, weight. Company personnel do not often operate in a vacuum or
‘plastic bubble’; they sometimes engage in the longstanding tradition of social
discourse.” Id.
“Mere exchanges of information, even regarding price, are not necessarily illegal,
in the absence of additional evidence that an agreement to engage in unlawful conduct
resulted from, or was a part of, the information exchange.” Mitchael v. Intracorp. Inc.,
179 F.3d 847, 859 (10" Cir. 1999). In this case, there is additional information. There
were two incidents where one defendant questioned why another defendant quoted a
higher price for blueberries.
(d) Large Number of Inter-defendant Communications
“Courts have held that a high level of communications among competitors can
constitute a plus factor which when combined with parallel behavior, supports an
22
inference of conspiracy.” Blomkest, 203 F.3d at 1033 (plaintiffs’ evidence of
communications, including meetings at trade shows and conventions, price verification
calls, and discussions regarding foreign export association, bore no relationship to price
increases in question). But, “there must be evidence that the exchanges of information
had an impact on pricing decisions.” Id. at 1034.
The plaintiffs assert that the following support this plus factor. Wyman’s
president specifically instructed an employee to complain to Merrill that Mermill’s price to
growers was too high. Specifically, Wyman’s CEO instructed the employee to tell
Richard Merrill, an officer and part owner of Merrill, that Wyman’s was “tear ass” at
Merrill for paying more than the other defendants for wild blueberries. Plaintiffs’ Opp. p.
6. Also, there is testimony that Wyman’s CEO asked one owner of Merrill why another
owner “would ever pay more for the blueberry crop than other processors.” Plaintiffs’
Opp. p. 6-7.
ii. Restraint of Trade
The next question is whether the defendants’ alleged price fixing agreement
restrained trade. Section 1 cases are divided into types: “per se” and “rule of reason.” In
re Baby Food Antitrust Litigation, 166 F.3d 112, 117-118 (3 Cir. 1999). “A per se
offense is defined as an agreement in which the practice facially appears to be one that
would always or almost always tend to restrict competition and decrease output.” 1
KALINOWSKI, § 12.02 [1]. In “per se” cases, the standard “presumes that the
questionable conduct has anticompetitive effects without comprehensive inquiry into
whether the concerted action produced adverse, anticompetitive effects.” In re Baby
Food, 166 F.3d at 118.
“Rule of reason” cases use “a case-by-case method that involves consideration of
all of the circumstances of a case to decide whether certain concerted action should be
prohibited because it amounts to an anti-competitive practice. The analysis to be applied
depends on the essence of concerted action in dispute.” Id.
The plaintiffs’ allegation of a price-fixing agreement is a “per se” offense. See 1
KALINOWSKI § 12.02 [2][a] (Price-fixing between competitors (horizontal price-fixing) 1s
a per se antitrust violation); United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 223
(1940) (“Under the Sherman Act a combination formed for the purpose and with the
23
effect of raising, depressing, fixing, pegging, or stabilizing the price of acommodity . .
is illegal per se.”); L. Ray Packing Co. v. Commercial Union Ins., 469 A.2d 832, 834
(Me. 1983). .
b. Agreement not to Solicit Each Others’ Growers
i. Contract, Combination, or Conspiracy
The first question is whether the plaintiffs have submitted sufficient evidence to
demonstrate the existence of an agreement among and between the defendants not to
solicit each other’s growers. “Allocation of markets in violation of antitrust laws
typically involves an agreement not to compete for customers, not to sell in the same
geographic area, or not to sell a similar product.” Deloach y. Philip Morris Companies,
Inc., 2001 WL 130221, at * 8, n. 12 (M.D.N.C.).
The plaintiffs submit several facts in support of their allegation that the
defendants had a market allocation agreement. First is the testimony of Ragnar Kamp,
Cherryfield’s Operations Manager. In his deposition, he stated that he was “criticized by
Allen’s, a supposed competitor, for trying to lure away one of Allen’s customers.””®
Plaintiffs’ Opposing Brief, p. 23. According to the plaintiffs, this testimony “is
susceptible of almost no interpretation other than that there was an agreement among the
defendants not to solicit each other’s growers. Id.
Second, at one time there was a document that described Allen’s efforts to assure
itself that Cherryfield had not begun soliciting Allen’s growers. Neither Allen nor
Cherryfield, however, has been able to locate this correspondence.
© He specifically stated at the deposition:
Q: Was it your perception that [Mr. Roy Allen of Allen’s Blueberry Freezer] felt
as though you shouldn’t go after his grower?
A: Well, I guess he feels we shouldn’t go after his growers, yes, and I wanted to
make him understand that we don’t actively go after growers.
Q: Did he seem angry when you talked to him?
A: After — when he finished up and he understood that we had not, he was okay
with it, I guess.
Q: Did you have any concerns about anything that Roy Allen would do as a
result of his mistaken belief that you had solicited one of his growers?
A: Not in particular, but I mean he could have tried to actively go out and solicit
every grower we had and it would just create unrest and —I don’t know — a lot
more phone calls, I would imagine. I don’t know. It’s more a matter of I didn’t
like what I was being accused of, I guess.”
24
Third, the defendants have admitted that they do not solicit each other’s growers.
According to the plaintiffs, “the admissions of the defendants and their expert that they
do not solicit each other’s growers despite the need for a steady supply of blueberries and
unused processing capacity, is more than sufficient for a jury to find that the defendants
had an agreement not to solicit each other’s growers.” Plaintiffs’ Opposing Brief, pp. 23-
24.
Fourth, defendants have provided no documents showing solicitation of another
processor’s growers. As Cherryfield puts it: “in order to be successful, processors must
be assured of sufficient supply, either by producing berries from their own land or
purchasing them from others.” Given this fact, however, there is evidence demonstrating
that none of the defendants attempted to solicit other processors’ growers. Ironically, the
evidence also indicates that at least some of the processors were not operating at capacity
during the damages period, and thus could have processed more berries.
Fifth, although the larger processors paid more, not too many growers switched.
In 1997 and 1998, the smaller defendant processors, Allen’s and Merrill, paid a slightly
lower field price than the larger defendant processors, Cherryfield and Wyman’s.
According to the plaintiffs, this had no effect on their number of purchases.
The defendants counter with several assertions. First, Mr. Kamp did not say in
his deposition that there was an agreement to allocate market share among the
defendants, he said that it is not Cherryfield’s practice to engage in solicitation. As he
explained, “we try to let our good service and so and so forth get growers to come to us.”
Cherryfield Brief, p. 17. Moreover, the defendants’ allege that the plaintiffs “have
acknowledged that they are free to sell whatever berries come from their land to
whomever they choose.” Allen’s Brief, p. 21.
“Tt is quite likely that [oligopsonists] acting independently might [buy] at the
same .. . price as their competitors because the firms are interdependent and competitors
would match any [higher] price.... Therefore, they quickly learn that [paying higher]
price[s] . . do[es] not increase market share and go back to their noncompetitive pricing.”
Petruzzi’s IGA v. Darling-Delaware, 998 F.2d 1224, 1244 (3 Cir. 1993). “It is[,
however,] one thing for competitors all to charge the same price, as a perfectly
competitive market could lead them to do so. It is quite another for competitors all to
25
refrain from soliciting each other’s accounts.” Petruzzi’s, 998 F.2d at 1246. See Areeda,
Antitrust Law J 1420d, at 123-124 (noting that refusal to bid in an oligopoly situation is
not inevitable, but cannot be sustained without some enforcement mechanism).
ii. Restraint of Trade
An allegation of market allocation is a per se offense. See 1 KALINOWSKI § 14.02
(“Horizontal market divisions are generally treated as per se offenses.” Courts “have
consistently held horizontal market divisions to be per se unlawful . . . .”); U.S. v. Topco
Associates, Inc., 405 U.S. 596, 608 (1972) (“One of the classic examples of a per se
violation of § 1 is an agreement between competitors at the same level of the market
structure to allocate territories in order to minimize competition. *** This court has
reiterated time and time again that horizontal territorial limitations are naked restraints of
trade with no purpose except stifling of competition).
3. Conclusion
The ultimate question here is whether there is enough evidence, considered as a
whole, for a reasonable jury to find that the defendants and the co-conspirators have
entered into and engaged in a continuing combination of conspiracy to suppress
competition by artificially lowering, fixing, maintaining or stabilizing the prices of
unprocessed wild blueberries or engaged in an unreasonable restraint of trade and
commerce of this state in violation of 10 M.R.S.A. § 1101.
The court must therefore ask what inferences are to be drawn from the individual
pieces of evidence and from the evidence as a whole, including the statistical evidence
from the competing experts. In construing the evidence favorable to the plaintiff, the
court holds that there is sufficient evidence to support the plaintiff's contentions
preventing the granting of the defendants’ motions for summary judgment. This is so
even applying the defendants’ arguments that Maine law requires “plus factors.” The
court denies the defendants’ motion for summary judgment applying their requested view
of the standard for summary judgment in these types of cases.
26
THE DOCKET ENTRY IS:
The plaintiffs’ Motion for Reconsideration for Class Certification is ALLOWED.
The defendants’ Motion for Summary Judgment is DENIED.
DATED: Julys’/, 2002
27
2/28/00
Date Filed Knox
cVv-00-015
County
Action Other Statutory Actions
Anti Trust - Class Action
NATHAN PEASE, JR., ALAN S.JOHNSON,
CARL CUNNINGHAM, JR., and THOMAS
WORCKESTER, On Behalf of Themselves
and All Others Similarly ~° ~~
Situated,
Docket No.
FUSTLCE-MARSANO--SPECTAELY
ASSTENED- ON- 6723700 Recused 6/18/01
JUSTICE JABAR SPECIALLY
ASSIGNED ON 11/21/01.
a
JASPER WYMAN & SON;
MERRILL BLUEBERRY FARMS, INC.;
ALLEN'S BLUEBERRY FREEZER, INC.,$
and CHERRYFIELD FOODS, INC.,
Plaintiff’s Attorney
William D. Robitzek, Esq.
PO Box 961
Lewiston ME 04243-0961
784-3576
Defendant’s Attorney,
=pantet-Av-Piteggi;-Esq. (Merrill Blueberry
-Philip K. Clarke, esas
Farms, Inc.,
PO Box. 917 (W/D 1/30/01)
Bangor ME 04402-0917 942-4644
Jerrol A. Crouter, Esq. (Cherryfield Foods)
PO Box 9781
Portland ME 04104-5081 772-1941
DEFENDANT'S ATTORNEYS >
Melissa A. Hewey, Esq. (Cherryfield Foods) panes T, kilbreth, Esq. (Jasper Wyman&Sons)
PO Box 9781 Portland, ME 04112-0568 774~4000
Portland ME 04104 772-1941 Michael M McAleer, Esq. (Allen's Blueberry
Date of Daniel A, Pileggi, Esq PO Box 1401 Freezer)
PO Box 723 (Merrill Blueberry) eeze
Entry Ellsworth,ME 04605 667-7121 Bangor ME 04402-1401 947-4501
729] ~Philip D. Buckley, Esq. (Same Address)
2/29/00 An DIMOIAN Aamntinine 2 ry Sheet filed.
PLAINTIFF'S ATTORNEY ry
Michael D. Hausfeld, Esq. | .
2/29/00 -Daniel A. Small, Esq. ttorney Robitzek.
-Charles E. Tompkins, Esq.
3/15/00 -Leslie C. Esposito, Esq. 2s filed:
1100 New York Ave, New. ved through Michael Hill, Esq. on 3/8/00; and
West Tower, Suite .
te etincton DC 20005-3965 hough John Duncan on 3/9/00
202- 4O8- 4600
3/16/00 -Coleman R. Rosenfield, =Esqu 2 on Summons filed:
HC 33 Box 404 R. (Pro Hac 2,, served through Eugene Merrill on 3/8/00.
Spruce Head ME 04859 Vice):
3/20/00 ust ed KRELULLL UL dervice on Summons filed:
-Allen's Blueberry Freezer, Inc., served through Roy P. Allen, II on 3/13/00.
3/27/00 Answer and Affirmative Defenses filed by Attorneys Pileggi and Clarke on
behalf of Merrill Blueberry Farms, Inc.
3/28/00 Answer of Defendant Cherryfield Foods, Inc. filed by Attorney Crouter.
3/29/00 Answer of Defendant Jasper Wyman & Son filed by Attorney Kilbreth.
3/29/00 Amended Answer and Affirmative Defenses filed by Attorneys Pileggi and
Clark,
4/5/00 On 4/4/00, Answer and Affirmative Defenses of Defendant, Allen's
Blueberry Freezer, Inc., filed by Attorney McAleer.
4/6/00 Scheduling Order filed:
Discovery Deadline is December 6, 2000.
Dated: 4/6/00
Studstrup, J
Copy mailed to Attorneys Robitzek, Pileggi, Clarke, Crouter, Kilbreth
and McAleer.