In Re Midwest Milk Monopolization Litigation

510 F.Supp. 381 (1981)

In re MIDWEST MILK MONOPOLIZATION LITIGATION.

Robert B. ALEXANDER et al., Plaintiffs,

v.

The NATIONAL FARMERS ORGANIZATION, INC., et al., Defendants,

v.

ASSOCIATED MILK PRODUCERS, INC., et al., Counterclaim Defendants.

JPML Docket No. 83. Civ. No. 19191-1.

United States District Court, W. D. Missouri, W. D.

January 29, 1981.

*382 *383 *384 Harry P. Thomson, Jr., George E. Leonard, Shughart, Thomson & Kilroy, Kansas City, Mo., for Mid-Am.

Sydney Berde and Richard M. Hagstrom, Sydney Berde, P. A., St. Paul, Minn., for CMPC.

Donald M. Barnes, Arent, Fox, Kintner, Plotkin & Kahn, Washington, D. C., Colvin A. Peterson, Jr., Watson, Ess, Marshall & Enggas, Kansas City, Mo., for AMPI.

William A. Carey, Barnett, Alagia & Carey, Washington, D. C., for ARSPC.

Worth Rowley, Washington, D. C., for NFO.

MEMORANDUM OPINION, FINDINGS OF FACT AND CONCLUSIONS OF LAW OF PHASE I, PHASE II AND PHASE III AND ORDERS TO CLERK

VOLUME I OF TWO VOLUMES, containing:

Complete Table of Contents for both volumes Pages 385 to 462, inclusive.

TABLE OF CONTENTS

VOLUME I

PHASE I

PAGE

Introduction 385

PHASE I FINDINGS OF FACTS 385

Ultimate Facts Regarding NFO Membership

Contract as a Tying Arrangement 407

Ultimate Facts Regarding NFO's

Unfair Trade Practices 410

Robinson-Patman Factual Findings 414

Ultimate Facts Regarding NFO

Violation of Missouri Law 415

Ultimate Factual Findings in

Support of the Plaintiff's Damages 416

PHASE I CONCLUSIONS OF LAW 417

Discussion of NFO's Proposed Conclusions of

Law Regarding its Alleged Antitrust

Exemption 423

Conclusions of Law Regarding Alleged Illegal

Boycott 426

Conclusions of Law Regarding NFO Membership

Agreement as a Tying Arrangement 427

Conclusions of Law Regarding NFO's

Alleged Unfair Trade Practices 429

Conclusions of Law in Regard to

Mid-Am's Robinson-Patman Claim 431

Conclusions of Law in Regard to

NFO's Alleged Violation of Missouri Law 432

Conclusions of Law in Regard to

Plaintiff's Damages 434

PHASE II PAGE

PHASE II FINDINGS OF FACT—Introduction 434

I. The Case and the Parties 436

II. Trade and Commerce:

Milk Marketing in General

A. Grade A Milk 436

B. Supply and Assembly Patterns 437

C. Federal Milk Marketing

Regulations in General 438

D. Class II Pricing: The M-W Series 439

E. Class I Prices 439

F. Blend Prices 440

G. Class I Utilization 440

H. The Pooling and the

Producer-Settlement Fund 440

I. Cooperative Qualification 441

J. Geographic Marketing Areas 442

K. Cooperatives and Premiums 443

III. Early Days of the Alleged Conspiracy

A. The Formation, Scope and Purposes

of Associated Dairymen, Inc. 443

B. Mergers 444

Percentages of Milk Pooled by AMPI

and Mid-Am on Various Federal Orders 448

C. ADI Establishes a Standby Pool 449

D. AMPI/Mid-Am Alleged Agreements

Not to Compete 452

E. Additional Merger Data 453

F. CACF 453

G. Some Alleged Early Efforts Allegedly

to Eliminate Outsiders 453

IV. NFO's Alleged Capability in Dairy

A. NFO Formation and Purpose 454

B. NFO's Recruiting Efforts 454

C. NFO Membership Structure 454

D. NFO Marketing Structure 455

E. Master Contracts 455

F. The Holding Action 455

G. NFO Revamps Dairy Department 455

H. Supply Contracts 456

I. NFO Decides to Enter Direct

Marketing of Milk 456

J. NFO Allegedly Calls Upon Experience

Marketing Hogs, Cattle, Grain 457

K. NFO Milk Allegedly Attractive

to Handlers 457

L. NFO Focuses Grade A Dairy

Program in Midwest 457

M. NFO Allegedly Preaches Gospel

to Non-Members 457

N. Interest in NFO Grade A Milk

Marketing Allegedly Grows 457

O. NFO's Claims Regarding "Poisoning

NFO's Well and Trying to Get It to

Join the Club" 458

P. Conclusion 458

V. The Southwest

A. Texas 458

B. Oklahoma 462

C. Missouri 467

VI. Chicago 476

VII. Minnesota 487

*385

PAGE

VIII. Nebraska 494

IX. Kansas and Northwest Missouri 496

X. Alleged Suppression of Evidence 499

PHASE II CONCLUSIONS OF LAW 501

PHASE III FINDINGS OF FACT

A. Background and Parties 504

B. NFO Programs and Policies

Before 1969 506

C. 1969 Meetings Between NFO and

Cooperative Leaders 508

D. NFO's Alleged Efforts to Coerce or

Destroy Regional Cooperatives 509

E. Alleged Misrepresentation 517

F. Alleged Misrepresentation to

USDA and IRS 518

G. Alleged Bad Faith Counterclaim 524

Discussion of NFO's Phase III

Proposed Findings of Fact 525

PHASE III CONCLUSIONS OF LAW 527

ORDERS TO THE CLERK IN REGARD TO

THE ENTRY OF JUDGMENTS 528

JOHN W. OLIVER, Senior District Judge.

Introduction

For the convenience of the Court and counsel for the parties, the trial of this complex litigation was divided into three parts consistently referred to as Phase I, Phase II and Phase III. For further convenience the various parties were and are referred to as follows:

National Farmers' Organization, Inc., as "NFO."

Mid-America Dairymen, Inc., as "Mid-Am."

Associated Milk Producers, Inc., as "AMPI."

Central Milk Producers Cooperative as "CMPC."

Associated Reserve Standby Pool Cooperative as "ARSPC."

Phase I of this case involves Mid-Am's claim as plaintiff against NFO as defendant for alleged violations of Section 1 of the Sherman Act, Section 2(c) of the Robinson-Patman Act, and Section 274.260 R.S.Mo. 1969. Mid-Am claimed actual damages in the amount of $1,989,350.00, to be trebled, and its attorneys' fees and costs. In accordance with the findings of fact and conclusions of law separately made and stated in connection with Mid-Am's Phase I claim against NFO, an order will be entered directing that judgment be entered against Mid-Am on its Phase I claim and in favor of NFO.

Phase II of this case involves NFO's counterclaim against Mid-Am, CMPC, ARSPC, for alleged violations of Sections 1 and 2 of the Sherman Act and Sections 3 and 7 of the Clayton Act. NFO sought equitable relief and damages in the amount of $14,064,068.76, to be trebled, and its attorneys' fees and costs. In accordance with the findings of fact and conclusions of law separately made and stated in connection with NFO's Phase II counterclaim against Mid-Am, CMPC, and ARSPC, an order will be entered directing that judgment be entered against NFO on its Phase II counterclaim and in favor of Mid-Am, CMPC, and ARSPC.

Phase III of this case involves AMPI's claims against NFO and nineteen individual NFO members and/or employees for alleged violations of Sections 1 and 2 of the Sherman Act and certain provisions of the Agricultural Fair Practices Act of 1967. AMPI sought equitable relief and claimed damages in the amount of $9,145,003.83, to be trebled, and its attorneys' fees and costs. In accordance with the findings of fact and conclusions of law separately made and stated in connection with AMPI's Phase III claim against NFO, an order will be entered directing that judgment be entered against AMPI on its Phase III claim and in favor of NFO.

PHASE I FINDINGS OF FACTS

A.

Court Exhibit I is a stipulation of 3,206 agreed facts with respect to Mid-Am's claim against NFO. While Mid-Am filed a 289 page document entitled "Plaintiff's Post-Trial Proposed Findings of Fact," which contained 2,224 separate paragraphs of proposed findings of fact, Mid-Am simultaneously filed its "Proposed Findings of Ultimate Facts and Proposed Conclusions of *386 Law," 52 pages in length and containing 239 separate paragraphs of proposed ultimate factual findings. That filing fully sets forth Mid-Am's basic factual and legal theories in support of Mid-Am's liability claims against NFO. NFO's filing entitled "Defendant's Post-Trial Proposed Findings of Fact and Conclusions of Law," 35 pages in length, contains 206 separate proposed factual findings to support NFO's various defenses to Mid-Am's claims.

Both Mid-Am's proposed findings of ultimate facts and NFO's post-trial proposed findings of fact rely in large part on particular paragraphs of Court Exhibit I, the stipulation of agreed facts. Indeed, Mid-Am, for the most part, actually quotes particular paragraphs of the stipulation as a particular paragraph of a proposed finding of ultimate fact. NFO, on the other hand, elected to cite and paraphrase rather than quote many of the stipulated paragraphs. While Mid-Am consistently and quite routinely denied the accuracy of NFO's paraphrase of the various paragraphs of the stipulation, Mid-Am did, as it must, agree that the various paragraphs cited by NFO in support of its proposed findings of fact were true and accurate factual statements.

Careful study of the findings proposed by both parties established that each party in a great many instances either quoted or cited exactly the same paragraph of the stipulation of agreed facts to support one of their respective proposed findings of fact. Each party, of course, either quoted or cited other particular paragraphs of the stipulation in support of other proposed findings which were not quoted or cited by the other party.

It is apparent that all questions concerning the accuracy of NFO's paraphrase of a particular paragraph of the stipulation will be eliminated if the Court makes its finding of fact in the exact language of the paragraph of the stipulation which NFO cited in support of a particular finding proposed by NFO. It is also apparent that all questions concerning the accuracy of Mid-Am's paraphrase of particular paragraphs of the stipulation in various of its proposed findings of ultimate fact which are denied by NFO will be eliminated if we make findings in the exact language of the stipulation which are cited and relied upon by Mid-Am in support of any particular denied proposed finding.

By following the above procedure it will be apparent that both parties will have available for likely appellate review all agreed factual data from the stipulation which both sides will have either quoted or cited to support proposed findings based on particular paragraphs of the stipulation. Because NFO commendably admitted all except a relatively small number of Mid-Am's proposed findings of ultimate facts, we shall make all findings proposed by Mid-Am in its filing which have been admitted by NFO and insert additional paragraphs from the stipulation which NFO either quoted or cited in support of findings proposed by NFO. We shall also insert additional paragraphs from the stipulation which Mid-Am cited and relied upon to support particular findings of ultimate fact which it proposed but which were denied by NFO.

For purposes of clarity, the paragraphs of the stipulation which we will insert will carry an appropriate paragraph number which will show that it is an inserted paragraph of the stipulation which either Mid-Am or NFO either quoted or cited in support of one of its proposed findings of fact. We will not, of course, repeat or renumber the numerous paragraphs of the stipulation which both sides either quoted or relied upon to support a particular paragraph of their respective proposed findings.

The facts that will be found in part I of this opinion will therefore reflect facts which both sides will have agreed in their stipulation to be true and accurate factual statements. As will be apparent from later portions of this memorandum opinion, the real disputes in regard to Phase I of this litigation, for the most part, present legal questions and relate, on the facts, to questions of what inferences should be drawn from stipulated and undisputed underlying factual circumstances.

*387 B.

We find the following facts:

ULTIMATE FACTS ON ISSUES OF ILLEGAL BOYCOTT [1]

1. This action involves claims by the plaintiff that the defendant violated Section 1 of the Sherman Act, 15 U.S.C. § 1 . In addition thereto plaintiff asserts that the defendant violated Section 2(c) of the Robinson-Patman Act, 15 U.S.C. § 13 (c) and Section 274.260, R.S.Mo.1969.

2. The activities complained of include alleged attempts by the defendant to force the plaintiff, its predecessors, and other dairy cooperatives to sign Master Contracts pursuant to which NFO members would allegedly be guaranteed a specific price for their milk; a milk holding action in 1967 which was sponsored by the defendant for the alleged purpose of inducing dairy cooperatives to sign Master Contracts; withdrawals of milk from plaintiff and its predecessors by dairy farmers at the defendant's encouragement, for the alleged purpose of inducing the plaintiff to sign a Milk Supply Contract allegedly guaranteeing defendant's members a greater return for their milk than other dairy cooperative members.

3. Plaintiff, Mid-Am and its predecessors have been engaged in marketing the milk of their dairy farmer members in interstate commerce since at least the early 1960's. (Stip. 104)

4. NFO is a national membership organization with state, county and district units established at various locations throughout the United States. (Stip. 10)

5. In the milk industry milk is usually sold from the farm to either an independent bottler or manufacturer, or to a bottling or manufacturing facility operated by a cooperative association. (Stip. 138)

6. Dairy cooperatives handling fluid milk (Grade A — approved milk) dispose of their member's milk either by sales to handlers or cooperative's fluid milk processors or to the cooperative's own manufacturing facilities or the manufacturing facilities of other independent or cooperative organizations. (Stip. 140)

7. As a result of NFO's activities it was able to obtain Master Contracts and Milk Supply Contracts from many cooperatives and proprietary plants located throughout the Middle West. (Stip. 193, 479-561)

8. The 1967 Milk Holding Action was sponsored by the defendant NFO and resulted in milk being withheld and dumped on the ground in Missouri, Iowa, Nebraska, Minnesota and elsewhere. (Stip. 348, 356, 372, 375, 379, 388, 389, 395, 396)

9. [Mid-Am's proposed finding of ultimate fact No. 9 was expressly denied by NFO. It stated:

9. NFO's activities in 1969, 1970, and 1971 to induce members of Mid-Am to withdraw their milk from Mid-Am in an effort to force Mid-Am into signing a Milk Supply Contract involved both a withdrawal of milk from Mid-Am and the shipment of that milk from Missouri farms to buyers in Oklahoma and Texas. (Stip. 95, 96, 98, 99, 663, 700, 702)

In order to remove any doubt about the accuracy of Mid-Am's paraphrase of the cited paragraphs of the stipulation, we reject the finding proposed in paragraph 9 and, in lieu thereof, make additional findings and insert additional paragraphs in our *388 findings of fact in the exact language of the paragraphs of the stipulation which have been cited and relied upon by Mid-Am to support its denied proposed finding of ultimate fact.

The same insertion of additional paragraphs from the stipulation will be followed in connection with other denied and rejected paragraphs of Mid-Am's proposed findings of ultimate fact which are based on paragraphs of the stipulation.

Additional paragraph "9-95" will indicate that in lieu of making Mid-Am's denied proposed finding No. 9, the Court is making and inserting additional findings in the language of the paragraphs of the stipulation which Mid-Am has cited to support its proposed finding. "9" identifies the number of Mid-Am's denied proposed finding; "95" identifies the paragraph 95 of the stipulation.

We shall follow this same numerical practice in connection with all other Mid-Am denied and rejected proposed findings of ultimate fact which are based on particular paragraphs of the stipulation.]

9-95. Beginning in February, 1970, NFO shipped milk produced in Missouri to Midwest Creamery, Ponca City, Oklahoma. (Ct. Exh. # 1, ¶ 95)

9-96. At various times since February, 1970, NFO shipped milk produced in Wisconsin to Midwest Creamery, Ponca City, Oklahoma, and milk produced in Missouri to Boswell Dairy, Fort Worth, Texas. (Ct. Exh. # 1, ¶ 96)

9-98. In May, 1971, NFO shipped Missouri-produced milk to Midwest Creamery, Ponca City, Oklahoma. (Ct. Exh. # 1, ¶ 98)

9-99. NFO has from time to time shipped milk produced in Missouri to Packett Dairy, O'Fallon, Illinois.

9-663. On July 19, 1969, NFO entered into a Milk Supply Contract with Midwest Creamery of Ponca City, Oklahoma. (I Avila Exhibit 2) (Boxley Ex. 6)

9-700. The Mountain Grove Reload facility was established in late January or early February, 1970, and began to ship milk to Midwest Creamery, Ponca City, Oklahoma. (Ct. Exh. # 1, ¶ 700)

9-702. Beginning in late February, 1970, milk was shipped directly from the NFO Jefferson City Reload facility to Midwest Creamery, Ponca City, Oklahoma.

10. Mid-America Dairymen, Inc., is a co-operative marketing association incorporated July 1, 1968 under Chapter 17-1601 of the Cooperative Marketing Act of the State of Kansas, engaged in collectively marketing fluid grade (Grade A) milk on behalf of its members and manufacturing into finished dairy products the surplus fluid grade milk and non-fluid grade milk of its members. (Stip. 1, 4, Tr. 909-927)

11. NFO is a not-for-profit non-stock membership corporation organized in 1955 under Chapter 504 of the Iowa Code. (Stip. 9)

12. NFO's national organization has its principal office in Corning, Iowa and in accordance with NFO's by-laws numerous state, district and county units have been chartered. (Stip. 9, 10, P. Ex. 9)

13. Although originally organized as a protest organization to oppose the federal government's agricultural policy as it existed in 1955, NFO in 1957 amended its Articles of Incorporation to add as an object and purpose of the corporation bargaining collectively on non-pecuniary basis for prices, terms and conditions of sale and delivery and payment for its members agricultural products. (Tr. 124-125; Stip. 18)

14. NFO's By-Laws adopted in 1970 recite that a purpose and objective of NFO is "to unite into one organization ... all farmers engaged in the production of agricultural commodities." (Stip. 158)

14A. By the terms of its By-Laws, NFO is expressly forbidden "to enter into, or engage in any business in behalf of or in the name of the organization, of the sort commonly engaged in by corporations for profit." By-Laws, Art. II, S 5. (Ct. Exh. # 1, ¶ 37) [2]

*389 14 B. The organization, until dissolved, is prohibited from making dividends or distributions in property to its members or officers. Articles, Art. III. (Ct. Exh. # 1, ¶ 38)

14 C. The marketing assistance activities are not engaged in for the production of income. (Ct. Exh. # 1, ¶ 43)

14 D. NFO's By-Laws prohibit it from engaging "in any business in behalf of or in the name of the organization, of the sort commonly engaged in by corporations for profit." (Ct. Exh. # 1, ¶ 44)

14 E. NFO has no net earnings and it makes no distributions of any kind from net earnings to its members. (Ct. Exh. # 1, ¶ 46)

15. NFO has engaged in some limited marketing services and assistance in its milk bargaining program while confining its activities in other commodities to strictly bargaining for the price and terms of sale. (Stip. 54, 47, 70, 30)

16. At the time NFO developed its collective bargaining approach, a membership agreement was adopted and since 1957 or 1958, those persons desiring to become a member of NFO have signed the membership agreement. (Stip. 26, 146, 148)

17. In pursuing its collective bargaining for its members NFO requires the participants to sign what are called supplemental agreements which documents are an indication of participation and gives NFO information concerning the amount of agricultural production which its member is authorizing NFO to bargain for. (P. Ex. 108)

18. Basic to the NFO bargaining concept are contracts with buyers which ultimately NFO hopes will reflect the farmer's cost of production plus a reasonable profit. (Stip. 27, 163, 164, 171, 204)

19. One of the purposes of NFO is to affect the price for which agricultural commodities are sold to processors, in all agricultural commodities. (Stip. 170)

20. In order to obtain contracts containing prices and terms which NFO desires, the NFO bargaining strategy includes the holding of products off the market ("holding actions") and picketing. Like a strike in the labor field, a holding action allows NFO and its members to proceed from a position of strength to bargain with buyers of farm commodities to establish favorable prices and other terms and conditions of sale. (Stip. 19, 20, 21, 25)

21. [Mid-Am's proposed finding of ultimate fact No. 21 was expressly denied by NFO. It stated:

21. In pursuing collective bargaining in milk, NFO commenced by soliciting dairy farmers to join NFO and sign an NFO membership agreement. (Stip. 188, 189)

In accordance with the procedure and practice described under paragraph 9, above, we make findings as agreed to in the stipulation in lieu of Mid-Am's proposed finding of ultimate fact No. 21. New paragraphs 21-188 and 21-189 need not, however, be inserted because our findings 32 and 33, infra, are in the precise language of paragraph 188 and 189 of the stipulation.]

22. In the early 1960's NFO developed what were known as "master contracts;" one contract to be entered into with buyers and processors of fluid grade (Grade A) milk and another contract to be entered into with milk plants receiving raw milk for conversion into manufactured products such as butter, milk powder and cheese. (Stip. 27, P. Ex. 93a and 93b, Tr. 68-71)

*390 23. NFO chose to negotiate master contracts in milk with what NFO considered to be the first buyer of raw milk. (Stip. 208, 200, 201, 259)

24. The first buyer might be a privately owned bottling plant or manufacturing plant, or a dairy cooperative comprised of dairy farmer members who owned the assets and shared earnings on a patronage basis. (Stip. 137, 138, 139, 140, 256, 259)

24 A. Milk is usually sold from the farm (whether sold as an independent producer or marketing association member) to either an independent bottler or manufacturer, or to a bottling or manufacturing facility operated by a cooperative association. (Ct. Exh. # 1, ¶ 137)

24 B. Immediately after it is collected from the farms, the raw (unpasteurized) milk is normally transported by the hauler to reloads, distributing plants, bottling plants or manufacturing plants for processing and packaging, manufacture or reshipment. (Ct. Exh. # 1, ¶ 138)

24 C. Independent fluid buyers ("handlers") customarily purchase their milk either from a milk cooperative or marketing association or from independent dairy farmers, and on occasion from another independent fluid milk business. (Ct. Exh. # 1, ¶ 139)

24 D. Fluid milk cooperatives dispose of their members' milk either by sales to handlers or cooperative fluid milk processors or to the cooperative's own manufacturing facilities or the manufacturing facilities of other independent or cooperative organizations. (Ct. Exh. # 1, ¶ 140)

25. NFO's ultimate goal and purpose is to bargain collectively for all farmers and all agricultural commodities. (Stip. 158)

26. In order to induce the dairy cooperatives, including plaintiff's predecessors, to execute master contracts guaranteeing NFO dairy farmer members a higher price for their milk irrespective of the profitability of the cooperative, NFO threatened the cooperatives with the withdrawal of NFO members and their milk if the contract wasn't signed. (Tr. 180, 237-348, 361)

27. Specific threats were made to Mid-Am predecessors, North Star-Lakes Region in Fergus Falls, Minnesota; Square Deal Milk Producers in Highland, Illinois; Producers Creamery Company of Springfield, Missouri; Nemaha Cooperative Creamery, Sabetha, Kansas, followed by a withdrawal of producers and their milk when the cooperatives refused to sign a master contract. (Tr. 347-348, 585)

28. During the mid 1960's, NFO sought to have dairy cooperatives that had signed master contracts join together in a common marketing agency known as Nation Wide Milk Products to jointly market milk and dairy products. (Stip. 150, 154, 190, 200, 284, 285, 286, 287, 290, 295)

29. In order to begin forming the marketing agency in common in milk, in the early 1960's NFO approached the larger milk cooperatives, including those in the Chicago, Twin Cities, Des Moines, Omaha, and Kansas City areas. (Stip. 184)

29 A. In the early 1960's, the marketing agency in common concept suggested by NFO was that the co-ops would establish one organization so that the milk of the organization's member co-ops could be marketed through one organization to gain bargaining strength. (Ct. Exh. # 1, ¶ 179)

29 B. In the early 1960's, the common marketing agency envisioned by NFO would itself determine what the price of its milk would be and when that milk would be sold. (Ct. Exh. # 1, ¶ 181)

30. In proposing a marketing agency in common to the larger cooperatives in 1959, or 1960, possibly 1961, there were two or three meetings between NFO personnel and dairy cooperative personnel. (Stip. 185)

31. In 1959 or 1960 none of the large cooperatives undertook to form or join a marketing agency in common. (Stip. 187)

32. As a result of statements made by the dairy leaders at their meeting in Minneapolis between NFO and the large dairy cooperatives in 1959 or 1960, Staley became convinced that NFO was going to have to organize in the milk field because he did not agree with the cooperatives and their leaders' *391 philosophy of pricing milk to buyers. (Stip. 188)

33. In the early 1960's, NFO meant by "organizing in the dairy field," getting membership agreements signed. (Stip. 189)

34. NFO met continued resistance from the dairy cooperatives to signing contracts guaranteeing some dairy farmers a specific price for their milk delivered to the cooperative. (Stip. 296, 186, 187)

35. In late 1962, NFO was attempting to negotiate a Master Contract for milk with TCMPA. (Stip. 222)

36. TCMPA declined to sign the Master Contract of NFO. (Tr. 168)

37. TCMPA began to receive pressure from its own patrons seeking to force TCMPA to sign the Master Contract of NFO. (Tr. 168)

38. During 1963 and 1964 Twin Cities had approximately 300 termination notices which stated that the reason the producer was terminating was that Twin Cities had not signed an NFO Master Contract. (Tr. 178)

39. In 1963 many members of the TCMPA Board of Directors were present at a meeting at the YMCA in Minneapolis with Albin Rust, Dairy Director of NFO, Erhard Pfingsten, Vice President of NFO, Leroy Swaber of NFO and TCMPA patron, and Leroy Lindenfelder, another TCMPA patron.

Rust stated at the meeting:

You so-and-so's (TCMPA) better sign an NFO contract or we're going to break TCMPA; you have given us the run-around long enough, we've had enough excuses from TCMPA, and if TCMPA does not sign an NFO Master Contract TCMPA is going to lose a lot of producers, because we have plenty of plants that we are signing. TCMPA's producers will be diverted to those plants and TCMPA will end up without any milk." (Tr. 180) [3]

40. The March, 1963 meeting of the TCMPA representatives at the YMCA was not an official Board meeting; a Board meeting was later held where the Rust presentation was reviewed and the decision was made that in view of what Rust had stated at the meeting, TCMPA was not going to attempt to proceed to negotiate further with NFO. (Tr. 180, 181)

41. In February, 1964 there was a meeting of the Square Deal Cooperative Board of Directors with NFO personnel, including Roland Waters, Dairy Commodity Director from Corning, Iowa, for NFO, Vincent Klosterman, local NFO representative and Clarence Korte of NFO. (Tr. 281-282)

42. The Square Deal Board of Directors meeting was in session, when Schaufelberger's secretary informed him that some people outside the office wanted to talk to Schaufelberger; Schaufelberger went to the door and Waters and Klosterman said *392 to Schaufelberger that they were presenting Square Deal with a list of names and the demand that Square Deal milk producers sign the NFO Master Contract. (Tr. 282-283) [4]

43. Klosterman and Korte were brought into the Board meeting and had a list which they said were names of NFO producers who were going to cancel from Square Deal if it did not sign an NFO Master Contract. (Tr. 347-348; 361)

44. Schaufelberger replied that he would present the request to the Board of Directors and give them an answer. (Tr. 283)

45. The Square Deal Board of Directors considered the demand of Waters and Klosterman that Square Deal sign an NFO Master Contract, both the Grade A Master Contract and the Manufacturing Grade Contract. (Tr. 283)

46. The Board of Directors at Square Deal considered the NFO Master Contracts for at least an hour, and decided that Square Deal could not sign the Contracts. (Tr. 284)

47. The NFO representatives were very unhappy that Square Deal would not sign the NFO Master Contract. (Tr. 284)

48. In addition to the three NFO representatives that presented the Master Contract to the Square Deal Board, a group gathered in the street in front of the Square Deal office. (Tr. 284)

49. After the Master Contract was presented to the Square Deal Board of Directors by Klosterman, Korte and Waters, the Board thanked them for being there and asked them to excuse themselves while the Board met in executive session; after the Board decided not to sign the NFO Master Contract, Schaufelberger and Hanman went to the front door where a large crowd congregated in the street, blocking traffic. (Tr. 364-365)

50. The crowd was milling around in the street. (Tr. 365-366)

51. Schaufelberger went back to the front door of the Square Deal plant and announced as a large group gathered in the street, that the Square Deal was not going to sign an NFO Master Contract. (Tr. 284)

52. When Schaufelberger announced that Square Deal was not going to sign the Contract, some members of the crowd jeered or booed. (Tr. 285)

53. After Schaufelberger announced that Square Deal would not sign the NFO Master Contract, Klosterman became angry and said that "NFO is going to continue to take away the members of Square Deal until Square Deal has to take the sign off the door." (Tr. 299-300; 362-366; 888)

54. In the months following that occurrence, approximately 250 producers did terminate their membership in Square Deal. (Tr. 370-371)

55. In 1963, NFO representatives, including Albin Rust, presented a Master Contract to the Nebraska-Iowa Co-op Board of Directors. (Stip. 239) [5]

*393 56. The Nebraska-Iowa Co-op Board members were asked to sign an NFO Master Contract in 1963. (Stip. 240)

57. The Nebraska-Iowa Board members rejected an NFO Master Contract in 1963. (Stip. 241)

58. Harold Johnson testified that "NFO was always threatening." (Tr. 585)

59. The Fergus Dairy Board of Directors voted to sign an NFO Master Contract for milk on May 18, 1964. (Stip. 246)

60. On April 27, 1964, Francis Henry and Don Henry, members of Nemaha County Dairy Committee of NFO, contacted the Nemaha Cooperative Creamery. (Stip. 247)

61. In April, 1964, Francis Henry and Don Henry attempted to negotiate an NFO Master Contract with Nemaha Cooperative Creamery. (Stip. 248)

62. Francis Henry and Don Henry threatened to pull NFO members' milk away from Nemaha Cooperative Creamery if the Co-op refused to sign a Master Contract. The NFO representatives indicated that the milk pulled away from Nemaha Co-op would be shipped to plants that had signed NFO contracts. (Trial Stipulation)

63. In 1964, Norbert Connor and some other NFO members ceased to deliver their milk to Viroqua Cooperative Creamery within about two months after Viroqua refused to discuss signing a Master Contract. (Stip. 278)

64. One of the reasons Norbert Connor ceased to deliver his milk to Viroqua in 1964 was because of its refusal to discuss signing a Master Contract with NFO. (Stip. 279)

65. Some time in the early 1960's, Brush Hollow Cheese signed an NFO Master Contract. (Stip. 280)

66. In 1964 Norbert Connor moved his milk from Viroqua to Brush Hollow Cheese because Brush Hollow had signed an NFO Master Contract. (Stip. 281)

67. Some other NFO members moved their milk to Brush Hollow Cheese from Viroqua Cooperative Creamery in 1964 at the same time Connor moved his milk. (Stip. 282)

68. Staley and Shafer met with co-op leaders in 1964 at the Fort Des Moines Hotel; present were representatives of Omaha-Nebraska Co-op; Pure Milk of Chicago; Twin City Milk Producers, Pure Milk of Kansas City, Sioux Valley Milk Producers, and Des Moines Cooperative Creamery. (Stip. 260)

69. Oran Lee Staley asked the cooperatives to sign Master Contracts with NFO during the meeting at the Fort Des Moines Hotel in 1964. (Stip. 262)

70. At the Fort Des Moines Hotel meeting in 1964, Staley discussed the general objectives of the NFO and his hope that cooperatives such as the Des Moines Cooperative Dairy would support these objectives. (Stip. 263)

71. Staley commented at the Fort Des Moines Hotel meeting in 1964 attended by NFO and various cooperatives that local cooperatives could not perform bargaining services well enough to obtain a reasonable price for milk at the producer level in the way an organization that was national in scope, like NFO, could. (Stip. 264)

72. At the Fort Des Moines Hotel meeting in 1964, Staley discussed the marketing agency in common, and indicated that NFO wanted all of the co-ops present to join the marketing agency in common, and that NFO would bargain for the price of the producers' milk, and the co-ops would continue to do the processing. (Stip. 265)

73. [Mid-Am's proposed finding of ultimate fact No. 73 was expressly denied by NFO. It stated:

73. In March, 1967 NFO called its milk holding action for the purpose of obtaining contracts for its dairy farmer members and for the purpose of encouraging dairy cooperatives to join the marketing agency in common proposed by NFO. (Stip. 319, 321, 317, 322, 341, 405)

In accordance with the procedures we have established above, in lieu of making the finding in the language proposed by Mid-Am, we find the facts as agreed to by the parties in the paragraphs of the stipulation which Mid-Am cited in support of its proposed finding No. 73.]

*394 73-319. On page 13 of the December, 1960 NFO Reporter, the following paragraph is found:

The purpose of this holding action must be to increase dairy prices at the farm level, prevent expected dairy price drops; establish contracts that would give stability in the future, and to hope that the pressure exerted would necessitate cooperatives joining in a marketing agency in common that could effectively bargain with big milk handlers nationwide at the processor level.

73-321. [See Finding 75, infra, which is a finding made in the exact language of paragraph 321 of the stipulation.]

73-317. In 1967, Oras Kanerva, Assistant to the NFO Dairy Department Director, believed that it would be easier to obtain Master Contracts during a period of time when buyers were short of milk as a result of a Milk Holding Action.

73-322. During the Milk Holding Action, Oras Kanerva was a member of the NFO Board of Directors. (Kanerva, p. 10-11)

73-341. Some NFO members presented Master Contracts for milk to some cooperative and proprietary companies during the course of the Milk Holding Action.

73-405. [See finding 86, infra, which is a finding made in the exact language of paragraph 405 of the stipulation.]

74. It was the belief of some members of NFO's dairy department in early 1967 the plants would be more anxious to sign master contracts if their milk supply diminished or increased as a result of NFO activity. (Stip. 316, 317, 268)

75. In 1967, it was Oras Kanerva's belief that it was the intent of the NFO Dairy Department, by diminishing volumes of milk, to put pressure on plants to sign Master Contracts and therefore become prospective members of NFO's proposed agency in common. (Stip. 321)

76. NFO dairy leaders in 1967 knew that if a dairy holding action was to have any effect in large portions of the country, a substantial volume of Grade A milk would have to be withheld from purchasers on the market. (Stip. 332)

77. NFO encouraged dairy farmers who were NFO members to withhold their milk from the market and encouraged other dairy farmers to sign an NFO membership agreement and then withhold their milk from the market. This latter encouragement was done even though the NFO membership agreement specifically excluded from its terms commodities which the farmer had under contract to others at the time of joining NFO. (Stip. 26, 327, 332, 333, 335, 336, 337, 338, P. Ex. 226)

78. Square Deal Milk Producers and Producers Creamery Company of Springfield, Missouri had written membership and marketing contracts with the dairy farmers delivering milk to them during 1967. These agreements committed the dairy farmer member to market all of his milk produced on his farm through the cooperative association. (D. Ex. 1083, Tr. 938, 953)

79. The NFO dairy department believed that the holding action would be more effective if NFO had a substantial number of its members in milk cooperatives. (Stip. 312)

80. NFO leaders knew in 1967 that some milk cooperatives in the Middle West had written membership and marketing agreements with some of their members. (Stip. 333, 249, 250, 251, 252)

81. During the 1967 milk holding action NFO members picketed some co-op and proprietary milk plants, and some NFO members and some non-members of NFO withheld their milk from the market. (Stip. 339, 377, 400, 402, 336)

82. [Mid-Am's proposed finding of ultimate fact No. 82 was expressly denied by NFO. It stated:

82. The milk holding action commenced on March 15, 1967 and lasted a month to six weeks. (Stip. 310, 311, 344)

In lieu of making the finding in the language proposed by Mid-Am, we make substitute findings in the language of the paragraphs of the stipulation relied upon by Mid-Am.]

*395 82-310. The Milk Holding Action was sponsored by the NFO, Inc.

82-311. The NFO Milk Holding Action commenced at 4:00 p. m., on March 15, 1967.

82-344. The NFO Holding Action of 1967 lasted a month to six weeks. (Shafer, p. 255)

83. During the milk holding action, milk was withheld from Twin City Milk Producers Association, Des Moines Cooperative, Nebraska-Iowa Cooperative, Sanitary Milk Producers, Nemaha Cooperative Creamery and Fergus Dairy, all predecessors of the plaintiff. (Stip. 348, 356, 364, 375, 388, 389)

84. Pickets were placed at Twin City Milk Producers Association and Producers Creamery Company's Cabool, Missouri plant during the NFO holding action. (Stip. 377, 400)

85. [Mid-Am's proposed finding of ultimate fact No. 85 was expressly denied by NFO. It stated:

85. During the holding action NFO representatives attempted to negotiate master contracts with Mid-Am predecessors. (Stip. 355)

In accordance with the procedure and practice described under paragraph 9, above, we make the findings agreed to in the stipulation in lieu of Mid-Am's proposed finding of ultimate fact No. 85.]

85-355. While milk was being withheld during the 1967 NFO Holding Action, NFO Master Contracts were presented to the Des Moines Milk Cooperative. (R. Nelson, p. 573, L. 9-13)

86. Some of the stated purposes of the 1967 Milk Holding Action were to raise the price of milk paid to dairy farmers and to strengthen NFO's bargaining position, which would help NFO to write contracts which would assure better milk prices for farmers in the future. (Stip. 405)

87. The purpose of the NFO Holding Action of 1967 was to hold milk until contracts which fixed the price of milk could be signed. (Tr. 87-88)

88. [Mid-Am's proposed finding of ultimate fact No. 88 was expressly denied by NFO. It stated:

88. NFO's own economic expert, Nathan, admitted that the NFO Holding Action of 1967 was a boycott if the purpose was to hold milk until contracts could be signed. (Tr. 1343)

NFO's denial, based on the ground that the witness was not competent to testify in regard to the legal conclusion stated, is sustained. NFO was given a continuing objection to all questions which called for the expression of a legal conclusion by this witness. (Tr. 1340) NFO's objection is sustained and we therefore refuse to make the finding of ultimate fact as proposed by Mid-Am in paragraph 88.]

89. At the time of the Milk Holding Action, NFO wasn't even engaged in marketing or selling milk. (Stip. 411)

90. Even though NFO did obtain a number of master contracts from proprietary and cooperative dairy plants during the period 1960 through the 1967 Holding Action, NFO did not attempt to activate these contracts as the required percentage of milk necessary to activate them was never achieved. (Stip. 193, 196, 197)

91. [Mid-Am's proposed finding of ultimate fact No. 91 was expressly denied by NFO. It stated:

91. While maintaining the goal of activating master contracts, NFO inaugurated a program after the 1967 holding action of Milk Supply Contracts whereunder NFO would encourage its dairy farmer members to deliver their milk to dairy plants signing such a contract. (Stip. 423, 430-435, 445, 447-451, 475)

In accordance with the procedure and practice described under paragraph 9, above, we make the findings agreed to in the stipulation in lieu of Mid-Am's proposed finding of ultimate fact No. 91.]

91-423. During the latter days of the 1967 NFO Milk Holding Action, Shafer, Sinclair and others began to prepare documents for the implementation of the NFO Phase II "Store and Hold" Program.

91-430. In order to effectuate the Phase II — Store and Hold Program, NFO members *396 were requested to sign a document known as the "Milk Processing & Sales Agreement," Form 7-3-39. (Ochsner p. 797-798)

91-431. The NFO Store and Hold Program was never implemented successfully. (Ochsner, p. 806)

91-432. The Milk Processing & Sales Agreement (Form 7-3-39) was signed by an NFO member and authorized NFO to negotiate on the member's behalf with a manufacturing plant for the receipt, manufacturing and storing of the finished product in conjunction with the NFO Store and Hold Program.

91-433. As part of the Store and Hold Program, the farmer members of NFO were asked to sign a document known as "Authorization to Plant Operator," Form 7-3-38.

91-434. The Authorization to Plant Operator was signed by the NFO member and delivered to a manufacturing plant for the purpose of indicating to the plant the willingness of the NFO member to participate in the Store and Hold Program and to indicate that the particular producer had authorized a deduction of $.03 per cwt. from any payment due him from the manufacturing plant to go to NFO, Inc.

91-435. NFO's dairy program immediately following the Store and Hold was known to some as "Phase II with a Plus."

91-445. In 1968 NFO went to a Supply Contract Program in milk.

91-447. In 1968 and 1969 in order for the NFO member who was shipping his milk to a plant that had signed an NFO Phase II Milk Supply Contract to participate in the contract price he had to sign some form of an NFO agreement — Milk Processing and Sales Agreement Form 7-3-39, Authorization to Plant Operator Form 7-3-38, Milk Sales Agreement Form 7-3-39A.

91-448. If an NFO member had not signed an NFO supplemental milk sales agreement, that member was not considered to be participating in a Phase II Milk Supply Contract and was not counted by a processor or handler under such a contract and no additional sum was paid for his milk.

91-449. In 1968 and early 1969, Henry Ochsner contacted milk processors in Wisconsin for the purpose of negotiating NFO Phase II Milk Supply Contracts. (Ochsner, p. 770)

91-450. Negotiation of Phase II Milk Supply Contracts commenced in or about 1968 after NFO decided to stop attempting to negotiate Master Contracts in Milk. (Ochsner, p. 775-76)

91-451. Most of the Supply Contracts negotiated by NFO in 1968 and early 1969 contained a provision stating that "for services rendered" buyers shall pay the sum of _____ cents per cwt. in addition to the base price under the contract. (Ochsner, p. 799)

91-475. It has been NFO's policy to encourage NFO members to support plants that have signed Phase II Milk Supply Contracts with NFO. (Connor, p. 1028-1031)

92. [Mid-Am's proposed finding of ultimate fact No. 92 was expressly denied by NFO. It stated:

92. Common to the milk supply contracts was a provision that the receiving plant would pay NFO members the same base amount for their milk as all other dairy farmers delivering to the plant, plus an additional sum of money per hundred weight of milk delivered under the guise of payment "for services rendered." (Stip. 479-560, 451)

Paragraph 451 of the stipulation is already set forth as finding 91-451, supra. Paragraphs 479 to 560 of the stipulation need not be set forth as separate findings. Those paragraphs of the stipulation simply reproduce particular paragraphs of numerous contracts which NFO negotiated in 1969 and 1970 (one contract, reproduced in paragraph 560, was negotiated in 1972).

We find and conclude that the provisions of those contracts do not support finding No. 92 as proposed by Mid-Am. The contracts say nothing about the price to be paid non-NFO members. Nor do they provide that NFO members be paid more for *397 their milk than non-NFO members. We find that all the other evidence relied upon by Mid-Am, including but not limited to the trial testimony of witnesses Powell and Nathan cited by Mid-Am in its reply to NFO's denial, is insufficient to support Mid-Am's proposed finding No. 92. We therefore refuse to make that proposed finding but incorporate paragraphs 479 to 560, inclusive, of the stipulation as a part of our findings of fact by this reference.]

93. In presenting these milk supply contracts to dairy cooperatives, NFO sought to have the cooperatives continue to market the milk either in fluid form or as manufactured dairy products and to recognize NFO as the bargaining agent for its members insofar as the price to be received by NFO members from the cooperative was concerned. (Tr. 931, 941) (Stip. 592, 598, 607)

94. [Mid-Am's proposed finding of ultimate fact No. 94 was expressly denied by NFO. It stated:

94. Many dairy cooperatives, including Mid-Am and some of its predecessors, resisted the NFO milk supply contracts on the basis that it caused them to discriminate among their dairy farmer patrons without reasonable justification, that such discriminatory payments would result in all members of the cooperative joining NFO solely for the purpose of obtaining a higher price than other patrons and on the further ground that the cooperative members had already granted bargaining rights to the cooperative for the dairy farmers' milk.

Mid-Am did not initially cite any portion of the record to support its proposed finding 94. When NFO denied that there was any factual basis for the proposed finding of discrimination, Mid-Am cited the portions of the contracts stipulated in paragraphs 481 to 560 of the stipulation. Mid-Am thereafter replied by citing the same pages of testimony of witnesses Powell and Nathan which Mid-Am cited in reply to its attempt to support its proposed finding 92, added a citation to page 167 of witness Birdsall's trial testimony, and directed attention to the Robinson-Patman portions of its post-trial brief.

We have reviewed the additional supporting data cited by Mid-Am and adhere to our similar finding made in regard to plaintiff's proposed finding 92, namely, that Mid-Am has not carried the burden of proving the fact of discrimination as proposed in Mid-Am's proposed finding of ultimate fact 94.]

95. Norbert Connor, Alan Skroch, Cletis Timmerman, and Henry Ochsner, NFO employees, attended the meeting with Mr. Schultz and other representatives of the Wisconsin State Department of Agriculture in June, 1969. (Stip. 593) [6]

96. The Wisconsin Department of Agriculture sent a letter dated October 1, 1969 to each dairy plant licensed in Wisconsin stating that payment under NFO Phase II Milk Supply Contracts of a sum "for services rendered" would probably constitute a violation of the plant operator's duties under Section 100.22, Wisconsin Statutes, and could therefore jeopardize their state license to operate a dairy plant. (Stip. 581)

97. The Wisconsin Department of Agriculture sent a letter to Mr. Kenneth L. Olsen, Manager, Western Wisconsin Dairies Cooperative, Blair, Wisconsin, on September 16, 1969, stating that the Department would take the position that payments made "for services rendered" pursuant to NFO Phase II Milk Supply Contracts would constitute a price discrimination by the dairy plants under Section 100.22, Wisconsin Statutes. (Stip. 582)

98. In September, 1969, the Wisconsin Department of Agriculture gave its opinion to NFO that the problem for the Wisconsin dairy plants with the NFO Phase II Milk Supply Contracts under the Wisconsin statutes could be remedied by a specific and *398 clear provision indicating that NFO was purchasing the milk from the producer and, in fact, taking legal title to the milk of its members prior to resale pursuant to the Phase II Milk Supply Contract. (Stip. 583)

99. In late 1969 and early 1970, several meetings were held between NFO representatives, including Ed Graf, and representatives of the Wisconsin Department of Agriculture concerning the possible effect of the NFO Phase II Milk Supply Contracts on the requirements for dairy plants licensed by the State of Wisconsin. (Stip. 594)

100. The matter under discussion between representatives of NFO and the Wisconsin Department of Agriculture related to the provisions of the NFO Phase II Milk Supply Contracts which provided for a sum to be paid for "services rendered," which provision, under the Department's interpretation of the contract, might result in an individual dairy plant paying different prices to NFO members and non-NFO members. (Stip. 595)

101. During meetings between NFO representatives and the Wisconsin Department of Agriculture prior to February 10, 1970, one proposal discussed and given tentative approval by the Department of Agriculture was the creation of a third party legal entity to purchase the milk from NFO producers pursuant to a specific purchase agreement. (Stip. 596)

102. Prior to February 10, 1970, possible solutions to the questions raised by the Wisconsin Department of Agriculture, including the possibility of establishing a third party legal entity to purchase and resell the milk of NFO member-producers, were discussed by NFO members and staff employees at various meetings including county meetings throughout the State of Wisconsin. (Stip. 597)

103. NFO considered the proposal for a third party legal entity to purchase and resell its members' milk in part because in 1969 and early 1970, the NFO did not want to purchase milk from its members but wanted to remain a bargaining association negotiating for the sale of its members' milk and other agricultural commodities. (Stip. 598)

104. In late 1969 and early 1970, NFO was discussing establishment of a third party legal entity to purchase and sell the milk from NFO members in Wisconsin because NFO was not a processing organization and did not want to go into business. (Stip. 599)

105. Ricardo Avila attended at least one of the conferences between NFO leaders and the Wisconsin Department of Agriculture relating to the NFO Phase II Milk Supply Contracts in Wisconsin. (Stip. 600)

106. The Attorney General of Wisconsin was of the opinion that dairy plants who had signed NFO Phase II Milk Supply Contracts might violate Wisconsin Statute 100.22 by paying without justification different prices to the producers supplying milk to the contracting plant. (Stip. 601)

107. On February 10, 1970, the Wisconsin Department of Agriculture advised NFO that the Attorney General of Wisconsin had concluded that even if a third party legal entity purchased NFO member milk and resold it to dairy plants operating under an NFO Supply Contract, in his opinion those dairy plants would still not be in compliance with the licensing provisions of Wisconsin law. (Stip. 590)

108. In September, 1969, it was the tentative opinion of the Minnesota Department of Agriculture pending completion of a legal investigation that performance by dairy plants under the NFO Phase II Milk Supply Contract might violate Minnesota Statute 32.11 pertaining to discrimination in the purchase of milk provided there had been economic injury to someone. (Stip. 602)

109. In April, 1969 MPI turned down the NFO Supply Contract and in June, 1969, Turtle Lake Co-op, Five Star Co-op and Mid-Am refused to sign a supply contract. (Stip. 603-612)

110. [Mid-Am's proposed finding of ultimate fact No. 110 was expressly denied by NFO. It stated:

*399 110. In late 1969 Ed Graf, director of the NFO Dairy Department, reported to the NFO Board of Directors that he had been unsuccessful in achieving NFO's goal of marketing NFO's members' milk through cooperative dairy associations and requested permission to set up milk reload stations to gain flexibility in bargaining. (Stip. 638, 650, 652)

In accordance with the practice above established, and in lieu of the proposed finding, we make supplemental findings of fact based on the cited paragraphs of the stipulation:]

110-638. Prior to January, 1970, Graf reported to the NFO Board of Directors that the NFO was unable to achieve its goal by marketing members' milk through existing cooperative dairy associations or its predecessors, and as a consequence, it was necessary for NFO to formulate a reload marketing system.

110-650. The principle of marketing milk through reloads was to establish the flexibility to ship milk outside the local area where it had previously been purchased.

110-652. As a result of the flexibility of being able to ship milk out of the local area, NFO, in establishing the Mountain Grove reload, had as one of its purposes to increase interest in bidding for the milk in the Missouri area where the milk was normally purchased.

111. The first NFO dairy reload was opened in Mountain Grove, Missouri in late January or early February, 1970. (Stip. 640, 651, 700)

112. NFO opened its Jefferson City, Missouri reload in February, 1970. (Stip. 641)

113. NFO opened its Springfield, Missouri reload in January, 1971. (Stip. 780)

114. In opening the Mountain Grove reload and the Jefferson City, Missouri reload and Springfield, Missouri reloads, NFO solicited dairy farmer members of Mid-Am in Central and Southwest Missouri to cease delivering their milk to Mid-Am and to permit NFO to direct the shipment and sale of their milk. (Stip. 669, 670, 671, 679, 694, 695, 698, 710, 711)

115. Numerous dairy farmers in Missouri and several in Illinois left Mid-Am in 1970 and early 1971 in order to move their milk under the NFO milk program. (P. Ex. 97, 98, 99, 201)

116. These dairy farmers commenced delivery of their milk to plants pursuant to NFO's direction.

117. Some of these dairy farmers may have failed to give timely notice of termination of their membership and marketing contracts with Mid-Am. [7]

118. In early 1971 a letter was prepared by NFO legal counsel and distributed by NFO employees among some of the dairy farmers who had left Mid-Am.

119. These letters of termination may have been ineffective as the dairy farmers involved may have already been in breach of their contracts with Mid-Am at the time the notices were mailed to Mid-Am.

120. The live witnesses Stacey, Douglas and Forbes testified that they left Mid-Am to go into the NFO milk program. Each was generally unconcerned about giving any notice of termination to Mid-Am. There is not sufficient factual data in the record to determine whether those three persons and, particularly, whether the unidentified "dairy farmers" mentioned in findings 115, 116 and 117 were or were not under legal duty to give Mid-Am any written *400 notice of termination before electing to ship their milk through NFO.

121. [Mid-Am's proposed finding of ultimate fact No. 121 was expressly denied by NFO. It stated:

121. NFO employees working in Missouri in 1970 and 1971 knew that virtually all of the grade A dairy farmers in Central and Southwest Missouri belonged to Mid-Am. (Stip. 670, 694, 698)

In lieu of Mid-Am's proposed finding of ultimate fact No. 121, we find the facts as agreed to by the parties in the paragraphs of the stipulation which Mid-Am cited in support of its proposed finding No. 121:]

121-670. In September, 1969, all of the NFO members producing Grade A milk in Wright County, Missouri that T. Forbes knew were shipping their milk through Mid-Am.

121-694. In late 1969 or early 1970 when Hills was contacting dairy farmers who were NFO members, Hills was aware that all Grade A dairy farmers in the Mountain Grove area were shipping their milk through Mid-Am.

121-698. In late 1969, Hills believed that most of the dairy farmers from the Mountain Grove area who attended the NFO organizational meetings had marketing commitments with Mid-Am.

122. [Mid-Am's proposed finding of ultimate fact No. 122 was expressly denied by NFO. It stated:

122. NFO's employees contacted these dairy farmers and encouraged them to deliver their milk to plants which NFO had agreements with and these same employees worked under the stated policy that they were not to bring up the question of whether or not these dairy farmers had membership and marketing agreements with Mid-Am or anyone else. (Stip. 685, 693, 696)

In lieu of Mid-Am's proposed finding of ultimate fact No. 122, we find the facts as agreed to by the parties in the paragraphs of the stipulation which Mid-Am cited in support of its proposed finding No. 122:]

122-685. In early 1970, Bruemmer did not initiate discussion concerning cooperative membership agreements with milk producers as long as the producer contacted by him had signed an NFO membership agreement prior to the time that Bruemmer contacted the producer.

122-693. In late 1969 or early 1970, Hills did not initiate discussion concerning cooperative membership agreements with milk producers as long as the producer contacted by him had signed an NFO membership agreement prior to the time that Hills contacted the producer.

122-696. From late 1969 through early 1971, Ralph Bruemmer and Herman Hills did not initiate discussion of cooperative membership agreements with milk producers whose milk was being sought for NFO's dairy program as long as the producer contacted had signed an NFO membership agreement prior to the time he was contacted.

123. Many dairy farmers were contacted by NFO employees and within a matter of days these same dairy farmers ceased delivering their milk to Mid-Am. (Stip. 1247, 1374, 1250, 1375, 1262, 1400, 1265, 1402, 1266, 1403, 720, 721, 1409) [The stipulated facts show that a matter of several weeks, rather than "a matter of days, " was involved.]

124. NFO knew that Mid-Am had agreements of some kind with its producer members as even NFO developed a written contract for marketing milk under federal milk marketing orders. (Stip. 671, 694, 698, 870, 871, 872, 886)

125. NFO's purpose in setting up milk reload stations in Central and Southwest Missouri was to establish flexibility to ship milk out of the local area where it had previously been purchased and to increase interest in bidding for the milk where it was normally purchased. (Stip. 650, 652)

126. The normal purchaser of this milk had been Mid-Am.

127. [Mid-Am's proposed finding of ultimate fact No. 127 was expressly denied by NFO. It stated:

*401 127. NFO never changed its goal of bargaining with milk marketing cooperatives and the Missouri reloads were only a part of its plan to accomplish this goal. (Stip. 638, 47, 70, 163) (Tr. 930-931)

In lieu of Mid-Am's proposed finding of ultimate fact No. 127, we find the facts as agreed to by the parties in the paragraphs of the stipulation which Mid-Am cited in support of its rejected proposed finding No. 127. We further find that pages 930-931 of witness Hanman's testimony do not support Mid-Am's proposed finding.]

127-638. [See Finding 110-638 above.]

127-47. NFO's principal activity is collective bargaining, not marketing. (Tax Protest)

127-70. NFO's milk marketing activities take the form they do only because the Federal Milk Order program requires a qualified association of producers to conduct a specified degree of "marketing" activities; NFO performs only those marketing activities absolutely required by the government for qualified milk operations, and its marketing assistance activities are far less than those engaged in by most qualified associations representing milk producers; and milk operations represented only a small percentage of NFO's overall activities during the period 1970-1972.

127-163. A goal of NFO is contracts, such as are referred to in the Membership Agreement, Article VI, Section 1, which are contracts with processors.

128. In 1970 NFO offered to sell milk to customers of Mid-Am located in Springfield, Missouri and Fayetteville, Arkansas at lower prices than the then existing Mid-Am price. (Stip. 1197, 1198, 1199, 1200, 1201, 1202)

129 to 131. [Mid-Am's proposed findings of ultimate fact as proposed in paragraphs 129 to 131, inclusive, were expressly denied by NFO. Those three paragraphs, all of which relate to the October, 1970 meeting in John Gage's law office, state:

129. In October, 1970, after many members of Mid-Am had already breached their Membership and Marketing Agreements with Mid-Am, NFO and Mid-Am officials met to discuss the problem of contract breaches by Mid-Am producers. (Tr. 929-931, 736-740, 742)

130. At this meeting NFO indicated that it would get out of marketing and let Mid-Am market the milk of the Missouri NFO dairy farmers if Mid-Am would recognize NFO's bargaining rights by entering into a discriminatory milk supply contract paying NFO members more money for their milk than Mid-Am's non-NFO members. (Tr. 739-740, 930-932)

131. When Mid-Am refused to enter in such a contract with NFO, NFO's representatives indicated that they intended to destroy Mid-Am and pick up the pieces. (Tr. 739-741, 931)

Mid-Am's "post-trial proposed findings of fact" contained many more paragraphs relating to the October, 1970 meeting in John Gage's law office than were proposed in its "proposed findings of ultimate facts and proposed conclusions of law." NFO, in Appendix B to NFO's post-trial answer brief, admitted a substantial number of the findings of fact thus proposed by Mid-Am in its post-trial proposed findings of fact. We therefore make additional findings of undisputed fact in lieu of the rejected findings proposed in paragraphs 129 to 131.

Those facts will be numbered "129-1249;" "129-1250," etc., to indicate paragraph 129 of Mid-Am's proposed findings of ultimate fact and paragraphs 1249 and 1250, etc., respectively, of the paragraphs of Mid-Am's post-trial proposed findings of fact which were admitted by NFO. We make those additional findings before further footnote discussion of the October, 1970 meeting in John Gage's office.]

129-1249. In October, 1970, a meeting was held in John Gage's office in Kansas City; present were Graf and Shafer for NFO, Johnson, Hanman, Powell and Gage for Mid-Am.

129-1250. In 1970, Powell attended a meeting in the office of John Gage, attorney for Mid-Am, in which matters between NFO and Mid-Am were discussed. (Tr. 736)

*402 129-1251. Gage was attorney for Mid-Am. (Tr. 737)

129-1252. Graf was dairy Marketing Director of NFO or some title similar to that. (Tr. 737)

129-1253. Shafer was a representative of NFO. (Tr. 737)

129-1254. Mid-Am called the meeting. (Tr. 737, 738)

129-1255. Gage led off the meeting, explaining Mid-Am's mergers, and Mid-Am's policy in relation to marketing Grade A milk, which was to get the highest price possible for the producers at the farm. (Tr. 738)

129-1256. The meeting was called to discuss apparent conflicts between Mid-Am and NFO with respect to the marketing rights of certain dairy farmers located in central, southern, and southwest Missouri. (Tr. 930)

129-1257. One issue involved was whether or not those members had delegated their marketing and bargaining rights to Mid-Am or to NFO. (Tr. 930)

129-1258. The purpose of the October, 1970 meeting was to discuss the conflicting views of Mid-Am and NFO in regard to the marketing rights of certain dairy farmers who happened to be members of both organizations. (Tr. 982)

129-1259. Shafer did most of the talking for NFO, and explained NFO's goals. (Tr. 738, 739)

129-1260. A discussion in regard to what NFO was trying to do as far as marketing and bargaining took place. (Tr. 930, 931)

129-1261. There was a discussion as to what Mid-Am was trying to do in marketing and bargaining. (Tr. 931)

129-1266. At the Gage office meeting in October, 1970, Shafer took the position on behalf of NFO that NFO had "prior membership rights" by virtue of the fact that certain producers had signed NFO Membership agreements prior to the time they had signed their marketing Agreements with Mid-Am (Tr. 113); during the trial NFO did not attempt in any way to establish either the fact that any producer had a prior membership agreement with NFO, or that the NFO Membership Agreement granted any kind of marketing right in the milk of the individual producer.

129-1267. Gage stated that Mid-Am could not pay NFO members an additional fee for their milk and under the law, has to treat all producers alike. (Tr. 739)

129-1269. Mid-Am's "problem in the country" was the solicitation by NFO of Mid-Am membership to violate their Mid-Am agreements and immediately going with NFO. (Tr. 742)

129-1273. NFO's position at the October, 1970 meeting disputed Mid-Am's claim to the marketing rights on two grounds: first, that some particular dairy farmers had in fact terminated any legal obligation they had with Mid-Am and, secondly, that some dairy farmers had, in fact, entered into what NFO viewed as a prior contractual agreement with NFO before they had signed with Mid-Am. (Tr. 983, 984)

129-1274. At the October, 1970 meeting held at Gage's office the Mid-Am representatives refused to sign an NFO Supply Contract.

129-1275. At the October, 1970 meeting at the Gage office, Shafer cannot recall any discussion of Mid-Am wanting to find a way to get along with NFO. (Tr. 143)

129-1276. Shafer cannot recall but would not say specifically that an NFO Supply Contract was not mentioned at the meeting. (Tr. 121-122)

129-1277. Mid-Am's response was that Mid-Am couldn't legally follow NFO's suggestion. (Tr. 931)

129-1278. At the October, 1970 meeting held at Gage's office Shafer said that NFO had "been a burr under the saddle of the co-ops and it would just have to continue to be."

129-1279. Shafer admits at that meeting that he stated that NFO would continue to be a "burr under the saddle" of Mid-Am, but cannot remember any other kind of a statement made by him. (Tr. 114, 118, 119)

*403 129-1280. Shafer said that NFO had been a burr under the cooperatives saddle and NFO felt there was no alternative but to continue to be the burr under the saddle. (Tr. 740)

129-1281. Hanman recalls Shafer using the phrase "being a burr under the saddle." (Tr. 931, 932)

129-1282. Hanman believed that Shafer was referring to the co-op's saddle. (Tr. 931, 932)

129-1284. Shafer does not deny stating that if the regional cooperative marketing structure were torn into pieces, NFO would pick up the pieces. (Tr. 119) [8]

130. [Covered by findings under paragraph 129 above.]

131. [Covered by findings under paragraph 129 above.]

132. In early 1971 NFO began to offer milk to customers of Mid-Am located in St. Louis, Missouri at lower prices than the then existing Mid-Am price. (Stip. 1203, 1204, 1205, N/S 2563, 2564, 2573)

133. NFO's principal activity is collective bargaining, not marketing. (Stip. 47)

134. NFO's marketing activities are not an end in themselves, but rather the means by which it accomplishes its purpose. (Stip. 52)

135. [Mid-Am's proposed finding of ultimate fact No. 135 was expressly denied by NFO. It stated:

135. The NFO plan with respect to the dairy industry was designed to interrupt the existing business relationships of the cooperatives and their members and, ultimately, to eliminate the cooperatives from the market of representing dairy producers.

Mid-Am's proposed finding was not initially supported by any reference to the stipulation of the parties or by the citation *404 of any portion of the trial record. Mid-Am's suggestion in its reply brief that the argument Mid-Am presented in the first seven pages of its post-trial brief supports its finding of ultimate fact as proposed in paragraph 135 is untenable. We have considered all of the evidence in the case "as a whole" (p. 1 of Mid-Am's post-trial brief) and have examined all of "the pieces of the jigsaw." We find and conclude that the evidence adduced in the case does not support the proposed finding. We therefore refuse to make the finding as proposed.]

136. The NFO did not undertake itself to market or sell milk or milk products for its members, as functioning cooperatives do.

137 to 145. [Mid-Am's proposed findings of ultimate facts Nos. 137 to 145, inclusive, are all expressly denied by NFO. Those proposed findings state:

137. The accomplishment of the NFO objectives with respect to bargaining with dairy cooperatives over prices to be paid to cooperative members would have had profound effect on the dairy cooperatives involved.

138. The restriction or loss of their authority over the pricing and selling of the milk and milk products produced by their members and the manner in which the net proceeds were to be returned to their members concerned the very essence of their operations and organization as cooperative marketing associations.

139. Success by NFO in removing from cooperative associations authority over prices paid to producers and prices received for milk and milk products sold would have eliminated such associations as bargaining agents for producers, thereby achieving NFO's stated purpose with respect to bargaining for all producers of all agricultural commodities, i.e., "all farmers."

140. Since the NFO objective of obtaining contracts from dairy cooperatives would result in the elimination of such cooperatives as bargaining agents for dairy producers with substitution of the NFO as their bargaining agent, the 1967 Milk Holding Action was a coercive group boycott instigated by the NFO.

141. Such a planned purpose and effect of eliminating competitive bargaining agents for dairy producers renders this activity a per se illegal combination in violation of Sherman 1.

142. The 1967 Milk Holding Action was not a competitive effort.

143. NFO did not engage in the selling or marketing of milk in the Holding Action; the purpose of such movement or dumping and resulting non-delivery of milk during this period was to put greater pressure on certain cooperative associations to sign NFO Master Contracts and to join Nationwide.

144. The NFO 1967 Milk Holding Action did not constitute a reasonable and legitimate attempt by the NFO to develop its own marketing and bargaining program in the competitive field that existed among associations representing dairy farmers.

145. Instead it comprised a scheme for elimination of many such cooperatives, including predecessor cooperatives of Mid-Am, as bargaining agents in achieving what would obviously have been a takeover of the entire dairy bargaining field if NFO had been successful.

None of Mid-Am's proposed findings in paragraphs 137 to 145 were initially supported by any reference to the stipulation of the parties or by the citation of any portion of the trial record. In Appendix A to its reply brief Mid-Am cites the same seven pages of that reply brief upon which it relied in its effort to support its proposed findings 131 and 135. In addition, Mid-Am directed attention to some additional pages of its post-trial brief in support of its proposed findings No. 138 and 140 to 145 and suggests that the proposition stated in proposed finding No. 139 is "supported by the entire record." We have considered all the additional data and find and conclude that none of the findings proposed in paragraphs 137 to 145 are supported by the record. We therefore reject and refuse to make any of the findings of ultimate fact as proposed in those paragraphs.]

*405 146. NFO officials decided in late 1967 or early 1968 to commence a bargaining program which included the presentation to dairy cooperatives of a "Phase II NFO Milk Supply Contract."

147. The consequences of not signing such a Supply Contract was [sic] that should another dairy plant in the area sign such a contract, NFO would encourage NFO members to voluntarily withdraw and shift their milk from the non-signing cooperative and into the signing plant.

148. Cooperatives must be organized for the "mutual benefit" of their members and as such distribute all gains and losses among the total membership on a patronage basis.

149 and 150. [Mid-Am's paragraphs 149 and 150 are expressly denied by NFO. Those two paragraphs stated:

149. To agree to the terms of the NFO Phase II Milk Supply Contract required a departure from cooperative principles and the fiduciary relationship between the entity and its owner-members requiring mutuality and equality of treatment.

150. In attempting to negotiate NFO Supply Contracts with the dairy cooperatives, NFO was not trying to compete with the cooperatives, but rather to eliminate the cooperatives from their fundamental obligation of returning net proceeds equitably among members and to replace the cooperatives as bargaining agents.

Neither paragraph 149 nor 150, as originally proposed, cited or relied upon either the stipulation of the parties or the transcript of the trial. The pages of witness Powell's testimony cited in Appendix A of Mid-Am's reply brief to support those two paragraphs, in our judgment, fall far short of doing so. We therefore reject and refuse to make the findings as proposed in Mid-Am's paragraph 149 and 150.]

151. Whitmore Transport Company paid the rent on the NFO Mountain Grove Reload until February 16, 1971.

152. Billy Stacey, while a Mid-Am hauler and member, rented the NFO Springfield Reload in July, 1970. (Stip. 966, 978)

153. Pete Taves, an employee of Food Consultants, Inc., attended meetings in Central and Southwestern Missouri where dairy farmers were told about the NFO Dairy Program. (Stip. 673, 674, 675)

154 to 159. [Mid-Am's findings of ultimate facts as proposed in its paragraphs 154 to 159 commence with the language that "NFO combined with [various] outsiders" who allegedly shared and participated in NFO's alleged "concerted group boycott" and alleged "illegal price fixing." We refuse to make the proposed findings because we do not believe that the paragraphs of the stipulation cited to support those findings can fairly be said to do so. We therefore refuse to make the proposed findings. We shall, however, find as facts the paragraphs of the stipulation which Mid-Am cited in support. The findings we make from the stipulation will be made only once in connection with Mid-Am's proposed finding 154 in light of the fact that paragraphs 155 to 159 rely upon exactly the same paragraphs of the stipulation.

The findings of ultimate fact proposed by Mid-Am which we reject and refuse to make state:

154. NFO combined with other corporations, Southwest Milk Producers, Whitmore Transport Company, Food Consultants, Inc., and Midwest Creamery, Inc., to induce or attempt to induce members of Mid-Am to refuse to ship their milk to Mid-Am in violation of their milk marketing agreements, which constituted a concerted group boycott. (Stips. 673-679, 663-667, 634, 635, 629, 623-628, 823, 976)

155. NFO combined with other corporations, Southwest Milk Producers, Whitmore Transport Company, Food Consultants, Inc., and Midwest Creamery, Inc., to induce or attempt to induce Mid-Am members to breach their milk marketing agreement with Mid-Am, which constituted a concerted group boycott. (Stips. 673-679, 663-667, 634, 635, 629, 623-628, 823, 976)

*406 156. NFO combined with other corporations, Southwest Milk Producers, Whitmore Transport Company, Food Consultants, Inc., and Midwest Creamery, Inc., to induce or attempt to induce Mid-Am members to market their milk through NFO, which marketing constituted illegal price fixing. (Stips. 673-679, 663-667, 634, 635, 629, 623-628, 823, 976)

157. NFO combined with persons not agents or employees of NFO, including Harold Whitmore, Pete Taves and Billy Stacey, to induce or attempt to induce members of Mid-Am to refuse to ship their milk to Mid-Am in violation of their milk marketing agreements with Mid-Am, which constituted a concerted group boycott. (Stips. 673-679, 663-667, 634, 635, 629, 623-628, 823, 976)

158. NFO combined with persons not agents or employees of NFO, including Harold Whitmore, Pete Taves and Billy Stacey, to induce or attempt to induce members of Mid-Am to breach their milk marketing agreements with Mid-Am, which constituted a concerted group boycott. (Stips. 673-679, 663-667, 634, 635, 629, 623-628, 823, 976)

159. NFO combined with persons not employees of NFO, including Harold Whitmore, Pete Taves and Billy Stacey, to induce or attempt to induce Mid-Am members to market their milk through NFO, which marketing constituted illegal price fixing. (Stips. 673-679, 663-667, 634, 635, 629, 623-628, 823, 976)]

154-673. In 1969 Midwest hired Pete Taves to help Midwest obtain a supply of Grade A milk.

154-674. In July of 1969, an NFO dairy committee met with Wilbert Rackers, Doyle Keirn (Midwest) and Pete Taves in Springfield, Missouri. (W. Rackers, p. 17-18)

154-675. In July, 1969, the NFO Cole County Dairy Bargaining Committee and Ric Avila met with Doyle Keirn of Midwest Creamery in Jefferson City, Missouri. (Bruemmer II, p. 15)

154-676. The Midwest/NFO contract of July 19, 1969 was ratified by 39 of 44 NFO producers attending a meeting in July or August, 1969 at St. Thomas, Missouri.

154-677. Graf received a letter dated September 15, 1969 from the Texas Health Department indicating completion of farm inspections of NFO producers with an attached list of dairy producers whose farms had been inspected.

154-678. Henry Rackers, a former milk hauler, who had indicated a willingness to haul milk (farm pick up) for NFO members, was in attendance at a Cole County meeting in September, 1969.

154-679. On June 4, 1974, T. Forbes believed that at NFO organizational meetings held in September and November, 1969, in Cabool and Houston, Missouri, that NFO members having Mid-Am membership agreements and who were in attendance at those meetings were advised to cancel their Mid-Am agreements.

154-663. [See finding of fact 9, supra.]

154-664. Under the Midwest Creamery/NFO July 19, 1969 contract, Midwest could purchase between 3,225,000 pounds and 5,000,000 pounds of Grade A milk and any additional milk by mutual consent of both parties.

154-665. To the extent that Midwest Creamery was able to divert any Grade A milk beyond its Class I bottling needs from its plant to Page Dairy, Midwest Creamery was able to generate a profit of $.10 per cwt. on the diverted milk.

154-666. The Midwest/NFO contract of July 19, 1969 provided that the over-the-road hauler would receive $.50 per cwt. on all milk hauled under the contract.

154-667. The over-the-road hauler during 1970 hauling milk under the Midwest/NFO July 19, 1969 contract was Whitmore Transport, Inc.

154-634. Each National Commodity Trust is a separate entity from NFO., Inc.

154-635. NFO, Inc. is not a beneficiary of the National Commodity Trusts.

154-629. Some NFO officials, including President Oren Lee Staly, used the term "Trust Accounts" and "Custodial Accounts" interchangeably.

*407 154-623. The Dairy Trust of NFO is not marketing milk. (Staley p. 702) (Application for Exemption Tax Status, Document No. 974192-199)

154-624. The NFO Dairy Trust does not bargain for the sale of milk. (Staley p. 705) (Document No. 974192)

154-625. The NFO Dairy Trust does not process milk. (Staley p. 705) (Document No. 974192)

154-626. The NFO Dairy Trust does not handle or sell milk. (Staley p. 705) (Document No. 974192)

154-627. The NFO Dairy Trust was established solely for the purpose of receiving, managing and distributing funds resulting from collective bargaining sales by NFO, Inc. (Settler) on behalf of participating members, (Beneficiaries)

154-628. The trustees are authorized by Declaration of Trust to collect, receive, account for and manage all funds for the sale of dairy products, and after deducting marketing expenses, blending or reblending expenses and such additional authorized deductions by written agreement, remitting the net proceeds to the beneficiaries.

154-823. On some of the occasions where the NFO pay price to producers was not competitive with other groups paying farmers for raw milk, the General Fund of NFO paid some of the marketing expenses, thereby leaving more money available in the Dairy Trust to increase the producer pay price.

154-976. The equipment which was installed in the NFO Springfield reload station by Billy Stacey was purchased by an organization identified as the Southwest Milk Producers. (Stacey p. 75)

155 to 159, inclusive. [Paragraphs 155, 156, 157, 158 and 159 cite and rely upon the same paragraphs of the stipulation as those paragraphs identified in paragraph 154 and therefore are not here repeated.]

ULTIMATE FACTS REGARDING NFO MEMBERSHIP CONTRACT AS A TYING ARRANGEMENT

160. To implement the NFO collective bargaining program, NFO and its members enter into a Membership Agreement under which NFO is given the exclusive right to negotiate for and/or collectively bargain in respect to members' commodities (except for those under contract at the time of signing) for contracts with processors covering selling price and other conditions of disposal. (Stip. 26)

161. NFO does not collectively bargain for, or give marketing assistance to, anyone other than its members. (Stip. 45)

162. NFO is one of the very few bargaining agencies for farmers producing wheat, corn, milo, soybeans, and other major cash grains. (Stip. 75)

163. NFO is active in every major grain producing area of the country, with bargaining programs for its members in those areas; NFO's procurement area for grain is co-extensive with the main grain producing areas of the country; NFO's sales area, as a bargaining agent is world-wide, NFO having represented its members in sales to such diverse countries as Libya, Japan, and Saudi Arabia. (Stip. 76)

164. The functions performed by NFO under the Supply Contract arrangements for meat and grain consisted primarily of negotiating the terms of the Collective Bargaining Agreement. (Stip. 30)

165. Because of the requirements for qualification under the Federal Milk Order programs, when NFO began to move its members' milk, it operated differently from the way it operated in grain or livestock and in so doing performed a considerably broader range of functions than in grain or livestock. (Stip. 1153)

166. Staley Deposition Exhibit 6, NFO Membership Agreement of Oren Lee Staley, is the same form of Membership Agreement that NFO has used since autumn, 1958; except that the provision for dues and fees has increased from $25 annually to $75 annually. (Stip. 1165)

167. Even though the dairy farmer who is not a member of NFO has a cooperative marketing contract for his milk with another *408 organization, NFO will still ask that individual to become a member of NFO by signing a Membership Agreement. (Stip. 159)

168. In 1974 at the NFO National Convention, President Staley, in a speech to the membership, stated that NFO was out to block or unite enough production, 30%, under control of NFO members, so that those members can hold meetings across the nation, and name their price, and if the price wasn't paid, to hold the production. (Stip. 162)

169. Since 1958, NFO has stated that its underlying and primary purpose has been to obtain for producers of agricultural products their cost of production plus a reasonable profit, and NFO has sought, among other things, to get enough producers to join NFO and put together enough production to realize this purpose. (Stip. 164)

170. In 1968 and to date, it was and is a goal of NFO to contact every farmer, including every dairy farmer, in the United States and ask him or her to become a member of NFO. (Stip. 173)

171. Since the early 1970's it has been NFO's belief that in order to fulfill its purpose of collective bargaining for agriculture, its members must block their production together in NFO and move their commodities through the NFO Nationwide Collection, Dispatch and Delivery System. (Stip. 440)

172. In late 1969, either Avila or Scott told Forbes that the NFO membership agreement took precedence over the Mid-Am membership agreement as far as the right to market milk if the NFO agreement had been signed first. (Stip. 671)

173 to 183. [Each of the paragraphs in this group of proposed Mid-Am findings are stated in the exact language of the paragraph of the stipulation cited in support. NFO therefore admits, as it must, the truth of each paragraph but objects that such admitted factual data is irrelevant. While we agree that the proposed findings do not establish a factual basis which supports Mid-Am's tying arrangement claim, we shall make the findings as proposed in this group of proposed findings in the language of the stipulation so that the record is clear that we have considered the factual data stated in those paragraphs of the stipulation, together with all other facts and circumstances in our process of finding and concluding that Mid-Am's tying arrangement arguments are untenable.

We shall make additional "tying arrangement" findings of fact as proposed by NFO in paragraphs 105 to 113 of its proposed finding of fact in the course of our discussion of what conclusions of law should be made in regard to Mid-Am's tying arrangement claim.]

173-1155. NFO, as bargaining agent, has arranged for the sale of in excess of $100,000,000 grain for its members annually since 1969. (Tax protest)

174-1156. NFO, as bargaining agent, has arranged for the sale of members' livestock in amounts no less than $100,000,000 annually. (Tax protest)

175-91. NFO reported on Form DA-24 to the United States Department of Agriculture that as of September 30, 1973, NFO had the following number of Grade A producers pooled on the following Federal Orders:

Order No. Market A Producers

1 Boston 218

2 New York-New

Jersey 185

4 Middle Atlantic 45

15 Connecticut 9

30 Chicago 565

32 Southern Illinois 38

33 Ohio Valley 407

Wisconsin 71

36 Eastern Ohio and

Western

Pennsylvania 366

40 Southern Michigan 100

46 Louisville-Lexington-Evansville 173

49 Indiana 27

62 St.

Louis-Ozarks-Wisconsin 84

Minnesota 50

Missouri 146

64 Greater Kansas City 4

68 Minneapolis-St. Paul

(MN) 496

98 Nashville 114

106 Oklahoma-Nebraska 10

*409

Order No. Market A Producers

Missouri 33

126 North Texas 25

136 Great Basin 8

(Unregulated) 7

137 Eastern Colorado 14

(Unregulated) 21

___

Total Grade A Producers—

DA-24 Form, Sept. 30,

1973 3,216

176-92. NFO reported on Form DA-24 for the fiscal year ended September 30, 1973 to the United States Department of Agriculture that, in addition to the Grade A active producers by individual markets set out on that DA-24 Form, NFO had other members in 134 plants who were participating in its dairy program.

177-1157. The service of NFO in bargaining for the sale of meat and grain is unique. (Staley p. 720)

178-1158. NFO's service in bargaining for the sale of grain and meat is beneficial to farmers. (Staley p. 720)

179-1159. NFO's service in bargaining for the sale of grain and meat is desirable for farmers. (Staley p. 720)

180-1160. In NFO's opinion, NFO activities have contributed to increasing the producer's proceeds in the sale of grain.

181-1161. In NFO's opinion, NFO activities have contributed to increasing the producers' proceeds in the sale of hogs.

182-1162. In NFO's opinion, NFO activities have contributed to increasing the producers' proceeds in the sale of cattle.

183-1170. NFO has on occasion had an upward effect on the price for meat received by producers.

184. The NFO "Think Thirty" program is an attempt by NFO to organize the producers who control 30% of all agricultural production in the United States, including dairy production, and to get those producers to move that production through the NFO collection, dispatch and delivery system. (Stip. 160)

185. In December, 1974, or January, 1975, the NFO instituted its THINK 30 program. (Stip. 161)

186. The primary purpose of NFO is to give farmers an opportunity to unite so that they can compete with large companies and achieve cost of production plus a reasonable profit. (Stip. 165)

187. NFO now believes that it would take about 30% of total national production in order for farmers to be able to price their products. (Stip. 169)

188. Since the early 1970's, NFO has believed that in order for its members to obtain the cost of production plus a reasonable profit a sufficient number of producers of agricultural commodities must block their production together in NFO and move that production through the NFO Nationwide Collection, Dispatch and Delivery System. (Stip. 439)

189. If a farmer member of NFO doesn't market all of his commodities which he can market through NFO, he is not doing all that he can to help attain the ultimate purpose of NFO, cost of production plus a reasonable profit. (Stip. 441)

190. If a dairy farmer member of NFO doesn't market all of his dairy commodities which he can market through NFO, he is not doing all that he can to help attain the ultimate purpose of NFO, cost of production plus a reasonable profit. (Stip. 442)

191. NFO did not act as a principal in 1968 sales of its members' grain and livestock; in connection with such sales, NFO performed, among other services, the service of bargaining for the contractual price at which the members' commodities would be sold. (Stip. 1151)

192. In connection with the sale of an NFO members' grain or livestock, NFO, acting as agent and not as principal, negotiates the terms of the sale and otherwise assists the farmer who owns the grain or livestock. (Stip. 1152)

193. NFO did not bargain for the sale of grain for non-members; in order to become a member, a producer must sign an NFO Membership Agreement. (Stip. 1163)

*410 194. NFO does not bargain for the sale of livestock for non-members; in order to become a member, a producer must sign an NFO Membership Agreement. (Stip. 1164)

195. Between May 15, 1969 and November 10, 1969, NFO claims to have raised the Minnesota-Wisconsin series price from four dollars and twenty-eight cents ($4.28), when the first Supply Contract was signed, to four dollars and fifty-eight cents ($4.58) with no raise in government support price during that time, i.e., a raise in the general price level of thirty cents in less than six months. (Shafer, p. 2750-276) (Stip. 1169)

ULTIMATE FACTS REGARDING NFO'S UNFAIR TRADE PRACTICES

196 to 201. [Mid-Am's proposed findings of ultimate facts as proposed in paragraphs 196 to 201 are expressly denied by NFO. Those paragraphs state:

196. NFO conspired with other corporations, persons and entities to eliminate Mid-Am.

197. NFO induced and intimidated other corporations, persons and entities to join in its plot to destroy Mid-Am.

198. NFO employees and employers of Food Consultants, Inc. (Pete Taves) and representatives of Midwest Creamery called on dairy farmer members of Mid-Am and persuaded them to change and ship their milk with NFO.

199. Non-NFO members conspired with NFO to participate in the 1967 NFO holding action which was an attempt by NFO to force predecessors of Mid-Am to relinquish their bargaining rights to NFO.

200. Between 1962 and 1966, numerous meetings between NFO employees and members were held with cooperatives (predecessors of Mid-Am), the purpose of which were to force those cooperatives into signing NFO Master Contracts. The Master Contracts had as their sole purpose and function eliminating cooperatives from bargaining for their members' milk and inserting NFO as the collective bargaining agent for the producers, with their cooperative. (Tr. 390-395)

201. In 1967 NFO instigated the Milk Holding Action, the purpose of which was to get cooperatives to sign NFO Master Contracts. (Tr. 87-88)

Mid-Am did not initially cite or rely upon any portion of the stipulated facts to support any of the findings proposed in paragraphs 196 to 201. We have read and considered all other data elsewhere cited and relied upon by Mid-Am in support of those proposed findings. We find and conclude that the other data cited is insufficient to support Mid-Am's proposed findings and therefore refuse to make the findings as proposed.]

202. In 1968 and 1969 NFO signed numerous NFO Supply Contracts with manufacturing plants. (Stip. 927, 934, 937, 942, 953, 959, 964, 969, 971 and 977)

203. [Mid-Am's proposed finding of ultimate fact No. 203 was expressly denied by NFO. It stated:

203. The purpose of the Supply Contracts was to force plants to allow NFO to be the bargaining agent. The NFO Supply Contracts resulted in producers switching their milk from the plants to which they had previously shipped to plants signing the NFO Milk Supply Contracts. (Stip. 911 [471], 1080 [566], 1095-1095a [574-575])

In accordance with the procedure and practice above established, in lieu of the findings proposed by Mid-Am in rejected paragraph 203, we make additional findings in the language of the paragraphs of the stipulation cited and relied upon by Mid-Am in support of the findings proposed in that paragraph. It is to be noted that we have added the stamped paragraph numbers in brackets after Mid-Am's citation to the typewritten paragraph numbers in order to avoid apparent confusion:]

203-911 [471]. The signing of the Phase II NFO Milk Supply Contracts in early 1969 caused some movement of milk to contracting plants from producers who previously shipped to other processors. (Scott, p. 921-922)

*411 203-1080 [566]. NFO personnel believed that the implementation of the Phase II Supply Contracts in Minnesota and Wisconsin would cause a general rise in the prices paid to producers by contracting processors and that such a price rise would attract additional supplies of milk to the contracting processor.

203-1095 [574]. In negotiating Phase II Milk Supply Contracts, it was intended that NFO members would supply the contracting processor with milk as provided by the Contract.

203-1095a [575]. In those instances where NFO was successful in negotiating a Phase II Milk Supply Contract with a processor, other processors located nearby who had not signed an NFO Phase II Supply Contract might lose the milk of NFO members previously being shipped to them to the contracting processor.

204. In mid-1969, Mid-Am refused to sign an NFO Supply Contract. (Stip. 1151, 1155) [Ct. Exh. # 1, ¶¶ 601, 612]

205. [Mid-Am's proposed finding of ultimate fact No. 205 was expressly denied by NFO. It stated:

205. In order to force Mid-Am to sign the NFO Milk Supply Contracts, NFO decided to move into the marketing of milk. NFO's marketing activities are not an end in themselves, but rather the means by which NFO accomplished its purposes. (Stip. 98)

In accordance with the procedure and practice above established, in lieu of the findings proposed by Mid-Am in rejected paragraph 205, we make additional findings in the language of the paragraph of the stipulation cited and relied upon by Mid-Am in support of the finding proposed in that paragraph:]

205-98. [See finding 9, supra. ]

206. NFO's purpose and principal activity is collective bargaining. (Stip. 91, 92) [Ct. Exh. # 1, ¶ 47]

207. [Mid-Am's proposed finding of ultimate fact No. 207 was expressly denied by NFO. It stated:

207. NFO's move into "marketing" was not done for the purpose of becoming a marketing competitor of Mid-Am, but solely to force Mid-Am to sign an NFO Supply Contract, the sole and only purpose of which was to eliminate Mid-Am from the marketing of representing producers.

Mid-Am did not initially cite or rely upon any portion of the stipulated facts to support the findings proposed in paragraph 207. We have read and considered all data cited by Mid-Am in Appendix A to Mid-Am's reply brief in support of that proposed finding. We find and conclude that the data to which reference was made are insufficient to support Mid-Am's proposed finding and therefore refuse to make the finding as proposed.]

208. [Mid-Am's proposed finding of ultimate fact No. 208 was expressly denied by NFO. It stated:

208. As part of its "marketing" program, NFO engaged in a program of solicitation of Mid-Am's producer members, inducing them to breach their marketing contracts with Mid-Am, in violation of Section 1, Sherman Act, and state law of various states. (Stip. 1243 [669]; 1244 [670]; 1286 [703]; 1275 [694]; 1275(a) [695]; 1361(a) [741]; 1293 [706]; 1296 [709]; 1300 [711]; 1301 [712]; 1302 [713]; 1303 [714]; 1304 [715]; 1308 [719]; 1310 [720]; 1312 [722]; 1314 [724]; 1315 [725]; 1316 [726]; 1318 [728]; 1319 [729]; 1576 [814]; 1577 [815]; 1578 [816]; 1579 [817]; 1583 [818]; 2685 [1248]; 2693 [1253]; 2714 [1267]; 2715 [1268]; 2716 [1269]; 2717 [1270]; 2718 [1271]; 2719 [1272]; 2633 [1221]; 2635 [1222]; 2637 [1223]; 2639 [1224]; 2641 [1225]; 2643 [1226]; and many more).

In accordance with the procedure and practice above established, we reject the finding proposed by Mid-Am in paragraph 208, and in lieu thereof, we make additional findings in the language of the paragraphs of the stipulation cited and relied upon by Mid-Am in support of the finding proposed. The stamped paragraph numbers have been added in the same pattern as paragraph 203, above:]

*412 208-1243 [669]. In the fall of 1969, in Missouri, T. Forbes contacted dairy farmers who were shipping their Grade A milk through Mid-America concerning the proposed NFO marketing program.

208-1244 [670]. In September, 1969, all of the NFO members producing Grade A milk in Wright County, Missouri, that T. Forbes knew were shipping their milk through Mid-Am.

208-1286 [703]. Between the fall of 1969 and March of 1970, T. Forbes called on some NFO producers and attempted to persuade them to market their milk with NFO.

208-1275 [694]. In late 1969 or early 1970 when Hills was contacting dairy farmers who were NFO members, Hills was aware that all Grade A dairy farmers in the Mountain Grove area were shipping their milk through Mid-Am.

208-1275(a) [695]. In late 1969 or early 1970, Herman Hills believed that most Grade A dairy farmers shipping their milk through Mid-Am had membership agreements with Mid-Am.

208-1361(a) [741]. From July, 1969 until July, 1970, on behalf of the NFO Dairy Department, Welch estimated that approximately 25 NFO members who were milk producers in Central Missouri had milk available, some of whom were probably shipping through Mid-Am.

208-1293 [706]. Some time between July, 1970 and December, 1971, T. Forbes talked with some milk producers who were shipping milk through Mid-Am.

208-1296 [709]. Some of the producers T. Forbes called on as a field man for NFO were not NFO members and were shipping their milk through Mid-Am.

208-1300 [711]. On August 31, 1970, T. Forbes, as a field man for NFO, called on five milk producers who were shipping their milk through Mid-Am on that date, the purpose being to acquire more milk to be shipped in the NFO Dairy Program.

208-1301 [712]. On August 31, 1970, Leonard Grimes, who on that date was shipping with Mid-Am told T. Forbes he would be willing to ship with NFO.

208-1302 [713]. On August 24, 1970, T. Forbes called on two producers shipping through Mid-Am, the purpose being to acquire more milk to be shipped in the NFO Dairy Program.

208-1303 [714]. On August 27, 1970, T. Forbes called on Ray Hobbs, a Grade A milk producer shipping with Mid-Am, the purpose being to acquire more milk to be shipped in the NFO Dairy Program.

208-1304 [715]. On August 28, 1970 Forbes called on Messrs. Sparlin, Clouse, Dudley, Houseley and Turner, all milk producers who were marketing through Mid-Am on that date, to tell them what the NFO milk marketing program had to offer, in the way of price. (Forbes, p. 188-189)

208-1308 [719]. On September 8, 1970 T. Forbes called on Leonard Grimes, who on that date was shipping his milk with Mid-Am.

208-1310 [720]. On September 8, 1970, T. Forbes called on George Duerney, who on that date was shipping his milk with Mid-Am.

208-1312 [722]. On September 8, 1970, T. Forbes called on Lefal Brown, who on that date was shipping his milk with Mid-Am.

208-1314 [724]. On September 8, 1970, T. Forbes called on Ronald Hanby, and asked him to ship milk with NFO.

208-1315 [725]. On September 8, 1970, Hanby was shipping his milk with Mid-Am.

208-1316 [726]. The week of September 14 through 18, 1970, T. Forbes called on Messrs. Short, Freeman, Cantrell and Nichols, all of whom were shipping milk with Mid-Am at that time.

208-1318 [728]. The week of September 14 through 18, 1970, T. Forbes called on Robert Cager, who on that date was shipping his milk through Mid-Am.

208-1319 [729]. The week of September 21 through 26, 1970, T. Forbes called on Freeman, Adams, Lawrence, and Riley, who were all at that time shipping their milk through Mid-Am.

*413 208-1576 [814]. During the week of March 21, 1970, Bruemmer called on Ed and Anton Kempher about shipping their milk through NFO Dairy Program.

208-1577 [815]. During the week of May 9, 1970, Bruemmer contacted milk producers Ed Kempher, Anton Kempher, Lawrence Wiebers, Stanley Bernskoetter and Clarence Wiebers. (Bruemmer, p. 403)

208-1578 [816]. During the week of May 9, 1970, Bruemmer visited farmers Lawrence Scheullen, Jerome Leubbring, Frank Swartzer and Lo-Mo Guernsey Farm.

208-1579 [817]. During the week ending May 30, 1970, Bruemmer visited farmers Victor Bruemmer, Leonard Kempher, Lawrence and Leo Leubbring, Jerome Leubbring, Fred Swartzer, Pat Hirtges and Wisted.

208-1583 [818]. During the week ending June 6, 1970, Bruemmer contacted Ed Kempher, Lawrence Wilbur and Stanley Bernskoetter about the start of shipping milk the following week in the NFO program. (Bruemmer, p. 416)

208-2685 [1248]. During the week of March 21, 1970, Breummer took Texas Health Inspectors around to inspect Jerry Voss for the health certificates required for shipping milk to Texas. (Breummer, p. 374)

208-2693 [1253]. During the week of March 21, 1970, Breummer took Texas Health Inspectors around to inspect William Schullen for shipment of milk to Texas through the NFO. (Breummer, p. 374)

208-2714 [1267]. During the week of March 14, 1970, Breummer got a commitment from Anton Kempher to move milk to Texas through the NFO. (Breummer, p. 370-371)

208-2715 [1268]. During the week of March 21, 1970, Breummer contacted Ed and Anton Kempher about moving their milk to NFO. (Breummer, p. 376)

208-2716 [1269]. During the week of May 9, 1970, Breummer contacted Ed and Anton Kempher. (Breummer, p. 403)

208-2717 [1270]. During the week ending June 20, 1970, Breummer contacted Ed Kempher about moving milk. (Breummer, p. 414-415)

208-2718 [1271]. During the week ending June 6, 1970, Breummer contacted Ed Kempher about the start, the following week, of milk shipments through the NFO. (Breummer, p. 416)

208-2719 [1272]. Breummer met with Ed and Anton Kempher during the week ending June 27, 1970 about moving milk in the NFO program. (Breummer, p. 418)

208-2633 [1221]. On January 21, 1970, Hills talked to John Watterson, Mansfield, Missouri, Wright County. (Hills, Exh. 42)

208-2635 [1222]. On January 23, 1970, Hills talked to John Lee Ellis, Hartville, Missouri, Wright County. (Hills, Exh. 44)

208-2637 [1223]. On January 22, 1970, Hills talked to Billy Clouse, Mansfield, Missouri, Wright County. (Hills, Exh. 43)

208-2639 [1224]. On January 21, 1970, Hills talked to Ray McCrite, Mansfield, Missouri, Wright County. (Hills, Exh. 42)

208-2641 [1225]. On January 22, 1970, Hills talked to Ted Forbes, Mansfield, Missouri, Wright County. (Hills, Exh. 43)

208-2643 [1226]. On January 24, 1970, Hills talked to Dean Ellis, Hartville, Missouri, Wright County. (Hills, Exh. 45)

[209. Mid-Am's proposed finding of ultimate fact No. 209 was expressly denied by NFO. It stated:

209. NFO engaged in price-cutting activities in selected Mid-Am markets. (Tr. 932-936; 1011-1022; 1050-1055)

NFO implicitly conceded that the evidence shows that NFO cut prices in the St. Louis-Ozarks market. We accordingly find, without, however, finding or concluding that such action was illegal under the circumstances, that:]

209. NFO engaged in price-cutting activities in the St. Louis-Ozarks market.

210. NFO, in order to obtain qualification as a recognized cooperative by USDA, submitted an application to the Dairy Division in March, 1970. (Stip. 1708, 1713, 1713(a) [Ct.Exh. # 1, ¶¶ 859, 863, 864]

*414 211. [Mid-Am's proposed finding of ultimate fact No. 211 was expressly denied by NFO. It stated:

211. NFO submitted a substantial amount of false and misleading evidence in order to obtain the qualification from the USDA. (Stip. 1742-1743 [880-881], 1752 [886], 1755 [888], 1757 [889])

In accordance with the procedure and practice described above, including the paragraph numbering problem, we make the findings agreed to in the stipulation in lieu of Mid-Am's proposed finding of ultimate fact No. 211:]

211-1742 [880]. The Milk Sales Agreements which had been signed by NFO members prior to the time of NFO's 1970 Application for Qualification did not contain a provision giving "NFO full power and authority in its own name to collect the entire amount due for milk delivered."

211-1743 [881]. NFO has never collected in its own name and commingled with its own funds amounts due from the sale of its members' milk.

211-1752 [886]. At the time of the initial filing of NFO's March, 1970 Application for Qualification of Cooperative Milk Marketing Association with the United States Department of Agriculture, NFO cited and submitted only NFO Form 7-3-39AR in response to question C-1 as the document giving NFO the "full authority in the sale of its members' milk."

211-1755 [888]. Section 7 C.F.R. § 900.353 provides, among other things, that: "The association must: ... (c) have full authority in the sale of its members' milk."

211-1757 [889]. The U.S.D.A. Dairy Division Application for Qualification Form DA-25 in Section C, question 1, requests the applicant association to identify the document or documents which give the association full authority in the sale of its members' milk.

212. NFO never reported to the IRS that NFO had begun to engage in marketing milk in 1970. (Stip. 1663, 1838-1841) [9] [Ct. Exh. # 1, ¶¶ 838, 936-939]

213. Graf, head of the NFO Dairy Department, welcomed accusations of destroying Mid-Am because it showed NFO was achieving its goal. (Ex. 31)

214. Mid-Am Board President Bill Powell testified at the 1970 confrontation between representatives of NFO and Mid-Am in John Gage's office that Gordon Shafer of NFO stated clearly and unequivocally NFO's intent was to destroy Mid-Am. (Tr. 740, 741)

215. As far back as 1963, NFO was trying to get Mid-Am predecessor TCMPA to sign an NFO Master Contract.

216. [Mid-Am's proposed finding of ultimate fact No. 216 was expressly denied by NFO. It stated:

216. Another threat of destruction of a Mid-Am predecessor was made in 1964, when Mid-Am [sic] representatives evidenced a clear intent to destroy Square Deal. (Tr. 284, 285, 299-300, 362-366)

We reject the finding proposed by Mid-Am because it assumes that there was a "threat of destruction" and "a clear intent to destroy Square Deal in 1964." The evidence, in our judgment, does not support such a finding.]

ROBINSON-PATMAN FACTUAL FINDINGS

217. [See finding 91, supra. ]

218. [Mid-Am's proposed finding of ultimate fact No. 218 was expressly denied by NFO. It stated:

218. NFO Milk Supply Contract provisions were stipulated between the parties and they included a provision requiring the purchaser to pay NFO dairy farmers the same price for milk as other dairy farmer sellers delivering to the contracting plant, plus an additional sum characterized as being "for services rendered." (Stip. 451, 454, 455, 927)

*415 In accordance with the procedure and practice above established, in lieu of the findings proposed by Mid-Am in rejected paragraph 218, we make additional findings in the language of the paragraphs of the stipulation cited and relied upon by Mid-Am in support of the findings proposed in those paragraphs:]

218-451. [See finding 91, supra. ]

218-454. In some instances the Phase II Milk Supply Contracts were negotiated by Marketing Area Dairy Bargaining Committees comprised of NFO members themselves producers and in negotiating the sum of money to represent payment for "services rendered" the Committee would negotiate for as large a sum as they could reasonably expect to receive for the services intended to be performed. (Ochsner, p. 783)

218-455. In some instances members of the NFO Dairy Department staff together with NFO dairy farmers or NFO Area Dairy Bargaining Committees attempted to negotiate Milk Supply Contracts and in such negotiations attempted to obtain as large a sum of money for "services rendered" as they could reasonably expect to get for the services intended to be performed.

218-927. In making the determination of qualification of NFO, the Dairy Division found that the NFO as an organization was selling milk to handlers rather than the individual producers who were marketing milk through the NFO.

219. Payments were made to NFO producers pursuant to the terms of some of the NFO Milk Supply Contracts. (Stip. 461, 567, 579)

220. The sum charged "for services rendered" was not a cost justified sum. (Tr. 105; Stip. 456, 457, 458)

221. The amount charged "for services rendered" was negotiated in each instance between NFO and the contracting buyer. (Tr. 105; Stip. 473)

222. The additional amount "for services rendered" went to the individual dairy farmer supplying milk under the NFO contract rather than to NFO. (Tr. 108; Stip. 468)

ULTIMATE FACTS

NFO VIOLATION OF MISSOURI LAW

223. Mid-Am had valid milk marketing agreements with its members. (P. Ex. 200)

224 through 226. [Mid-Am's proposed findings of ultimate fact No. 224 through 226 were expressly denied by NFO. Those paragraphs stated:

224. NFO solicited members of Mid-Am to breach their milk marketing agreements with Mid-Am. (P. Ex. 104, 107; Tr. 729-730, 691-694; 700-705)

225. NFO solicited members of Mid-Am to withhold their milk from Mid-Am in violation of their milk marketing agreements with Mid-Am. (Tr. 694, 704-705, 717, 730)

226. NFO solicited members of Mid-Am to market their milk through NFO instead of Mid-Am in violation of their milk marketing agreements with Mid-Am. (Tr. 694, 704-705, 717, 730)

Mid-Am initially cited and relied only on deposition and trial testimony to support the findings proposed in its paragraphs 224 to 226. In Appendix A to its reply brief, however, Mid-Am cited and relied upon various pages of its post-trial brief which, in turn, cited and relied upon various paragraphs of the stipulation.

On pages 62-63 of its post-trial brief, for example, Mid-Am argued that "NFO solicited numerous Mid-Am dairy farmers in Missouri to breach their Mid-Am contracts, in absolute, clear violation of Missouri law (Mo.Rev.Stat. § 274.260)." To support that argument, Mid-Am cited exactly the same paragraphs of the stipulation which we found as additional facts in connection with Mid-Am's rejected paragraph 208 above. We find and conclude that the cited testimony and the cited paragraphs of the stipulation, all of which we have carefully considered, do not support the findings of ultimate fact proposed in Mid-Am's paragraphs 224, 225, and 226. We therefore reject those findings as proposed.]

*416 227. NFO engaged in solicitation of members of Mid-Am in part through the use of form letters prepared by NFO, distributed by NFO, collected by NFO, and mailed en masse by NFO, which implicitly recognized the existence of milk marketing agreements with Mid-Am. (Stip. 760-788, 1290-1306)

228. NFO engaged in solicitation of members of Mid-Am in part by conducting mass meetings throughout the State of Missouri, at which any and all dairy farmers in attendance, most of whom had milk marketing agreements with Mid-Am, were urged to cease doing business with Mid-Am and to instead market their milk through NFO. (Stip. 657, 658, 659, 679, 691, 698)

229. NFO engaged in solicitation of members of Mid-Am in part through individual meetings with dairy farmers, most of whom had milk marketing agreements with Mid-Am, at which the farmer was urged to cease doing business with any marketing organization, including Mid-Am, and to begin marketing milk through NFO. (Stip. 694, 695, 698, 669, 811-818)

230. NFO knew that many of the dairy farmers solicited by NFO members and employees to market their milk through NFO had milk marketing agreements with Mid-Am. (Stip. 698, P. Ex. 104, 107)

231. [Mid-Am's proposed finding of ultimate fact No. 231 was expressly denied by NFO. It stated:

231. NFO induced the following Missouri dairy farmers to break their marketing contracts with Mid-Am:

John Watterson, Billy Clouse, Ray McCrite, Johnnie Lee Ellis, Ray Watterson, Jim Watterson, Ted Forbes, Cogdill Dairy Farm, Russell Hamby, Victor Wells, H. H. Dold, Charley Clinton, Mason Johnson, J. E. Ragain, Edna and Stafford Bennet, Fay and John Ellis, Charles Allen, Kenneth Schrader, Dude Degase, Joe Tabor, Raymond Homer, Jim Frye, Clarence Goldsberry, Bill Buhler, T. L. Jordan, Carl Ray, Bryan Prock, Audie Evans, Oscar and Elsa Denny, Noland Turner, R. J. and Helen Clary, Wallace G. Thornhill, Walter Stephenson, Harold Welch, George Durney, L. M. Chapman, Earl Shaddy, Allen Mallonee, Richard McLaughlin, H. A. Crumpley, Harley Blansit, Faye Hyder, Paul and Nina Burnett, John E. Atkinson, Virgil Thompson, Robert N. Leeper, L. V. Cobb, Irwin H. Baker, Bob L. Aleshire, K. L. Duckworth, J. E. Whitner & Son, Dale and John Short, Frank Tompkins, Morris Harker, E. E. McCowan, Carol Ann Freeman, Larry Dennis, Dean Ellis, Lewis Comstock, Reid Heathman, Charles Heathman, Keith Heathman, Lowell Skinner, Hershel Coats, Donald Wayne Allen, Lloyd and Larry Skelley, Gary and Dane Lewis, and Homer Bates.

We reject Mid-Am's proposed finding of ultimate fact as proposed in paragraph 231. Additional findings of fact as to the subject matter of paragraph 231 will be made in connection with our discussion of the reasons why we reject Mid-Am's proposed conclusions of law in regard to NFO's alleged violation of State law.]

232. Mid-Am was incorporated under the Kansas Cooperative Marketing Act on July 1, 1968 and qualified to do business in the State of Missouri. (Stip. 1, 3, P. Ex. 211)

ULTIMATE FACTUAL FINDINGS IN SUPPORT OF THE PLAINTIFF'S DAMAGES

233. Mid-Am is an agricultural marketing cooperative incorporated under the laws of the State of Kansas and therefore has the capacity to sue in its own name.

234 through 239. [Mid-Am's proposed findings of ultimate fact Nos. 234 through 239 were expressly denied by NFO. They stated:

234. Mid-Am was damaged in its property as a result of NFO's interference with the valid milk marketing agreements of Mid-Am's members.

235. Mid-Am was damaged in its business or property as a result of the diversion of milk of Mid-Am members to NFO.

236. Mid-Am was damaged in its business or property as a result of its failure *417 to receive the 4 cents per hundredweight "capital retain" fee and the 6 cents per hundredweight administrative fee due to Mid-Am under the valid milk marketing agreements of Mid-Am's members.

237. The amount of damages caused to Mid-Am as a result of lost capital retain and administrative fees is not less than $252,786.00.

238. Mid-Am was damaged in its business or property as a result of having to meet NFO's prices in NFO's sales of milk illegally obtained from Mid-Am's members.

239. The amount of damages caused to Mid-Am from profits lost as a result of having to meet NFO's predatory prices is in excess of $1,736,564.00.

We reject the findings proposed by Mid-Am in paragraphs 234 through 239 for the reason that we have found and concluded that Mid-Am failed to adduce sufficient evidence to carry the burden of proof on the issues of liability presented in Phase I of this case. Had we been required to reach the question of damage we would have found and concluded that Mid-Am's damage evidence was insufficient to support the findings proposed in paragraphs 234 through 239 of its proposed findings of ultimate fact.]

PHASE I CONCLUSIONS OF LAW

Discussion of Mid-Am's Proposed Conclusions of Law In Regard to NFO's Alleged Illegal Boycott

Mid-Am set forth 35 separate conclusions of law on pages 25 to 30 of plaintiff's proposed findings of ultimate facts and proposed conclusions of law, which it proposed in connection with the issues of alleged illegal boycott. Mid-Am's separate proposed conclusions were not numbered. We shall therefore make reference to the various conclusions proposed by Mid-Am by referring to the first conclusion proposed in the first paragraph on page 25 as "25-1;" the conclusion proposed in the second paragraph on page 25 as "25-2;" etc.

The first conclusion proposed by Mid-Am stated:

25-1. Evidence of other acts of a kindred character of a party may establish the party's intent or motive in the particular act directly in question.

That abstract principle of law was, as Mid-Am's post-trial brief suggests, recognized by the Eighth Circuit in Kansas City Star v. United States, 240 F.2d 643 (8 Cir. 1957). Mid-Am's second proposed conclusion, based upon language from Judge Wyzanski's opinion in Union Leader Corp. v. Newspapers of New England, Inc., 180 F.Supp. 125 (D.C.Mass.1959), stated:

25-2. In a situation where it is inevitable that only one competitor can survive, the evidence which shows the use, or contemplated use, of unfair means is the very same evidence which shows the existence of an exclusionary intent.

Both of the first two conclusions of law proposed by Mid-Am accurately state abstract principles of law. But the conclusion proposed in 25-1 assumes that Mid-Am has carried the burden of proving some sort of "acts of a kindred character" by NFO against persons other than Mid-Am which should be considered in support of Mid-Am's claim that NFO acted with illegal intent or motive against Mid-Am. And the conclusion proposed in 25-2 assumes that Mid-Am has carried the burden of proving that "only one competitor can survive" in the various competitive situations involved in this case.

We shall not state either of the two abstract conclusions of law proposed by Mid-Am in 25-1 and 25-2 because we do not believe that either principle of law has any application to the factual circumstances established by the evidence adduced in Phase I of this case.

Mid-Am, in a somewhat similar manner, proposed two abstract conclusions relating to boycotts and one in regard to price-fixing. Those three abstract conclusions proposed by Mid-Am state:

25-4. Group boycotts or joint refusals to deal are illegal per se under Section 1 of the Sherman Act.

29-27. Concerted group boycotts which have as their purpose forcing a *418 party to accede to desired trade practices are illegal per se under Section 1 of the Sherman Act.

27-17. Price-fixing is per se illegal under Section 1 of the Sherman Act, whether the agreement has been put into effect or not.

NFO does not dispute the general proposition that boycotts and price-fixing, if proven, violate Section 1 of the Sherman Act. The real dispute between the parties is a factual dispute and presents the question of whether Mid-Am carried the burden of proving factual circumstances in regard to which the abstract principles of law accurately stated in Mid-Am's proposed conclusions 25-4, 29-27, and 27-17 should be applied. The remainder of Mid-Am's 35 proposed allegedly illegal boycott conclusions are based upon similar factual assumptions which reflect what Mid-Am believes it established by the greater weight of the credible evidence. The same sort of question is presented in regard to whether Mid-Am carried the burden of proving the facts assumed in regard to those proposed conclusions of law.

The first section of Mid-Am's post-trial brief is devoted to what is essentially a factual argument in regard to how Mid-Am would have the Court consider "NFO's entire course of conduct." Mid-Am commenced that argument with the assertion that "[t]he primary goal of NFO, the purpose for which it was organized, was to establish a monopoly in bargaining for the sale of agricultural products for farmers" and that "NFO recognized at the outset that this meant the control or replacement of any effective dairy competition." Mid-Am would have this Court find and conclude that NFO actually knew what it was doing when it somewhat belatedly became interested in dairy farmers and in the marketing of milk.

Mid-Am's basic factual argument is that "the evidence viewed as a whole clearly establishes the one concept of NFO and the unified course of conduct" of NFO was designed to "eliminate the cooperatives from being the collective bargaining agent for their own members" and that such action would, in turn, cause the cooperatives to "be eliminated from bargaining and be replaced by NFO." Mid-Am's general and quite basic factual theory is contained in Mid-Am's proposed conclusion 25-3 which states that:

25-3. NFO leaders intended that only NFO would survive as the bargaining agent for dairy farmers and that this meant elimination of dairy cooperatives from bargaining as a direct result if NFO succeeded in signing and activating its Master Contracts.

In its post-trial brief, Mid-Am summarized its "course of conduct" argument by stating that "from the very early '60's NFO's entire course of conduct in dairy has been directed at one goal ... the elimination of all cooperatives" and that such alleged conduct was consistent with the purpose stated in NFO's By-Laws, namely, " To unite into one organization, regardless of religion, race, creed, color or nationality, all farmers engaged in the production of agricultural commodities." [Mid-Am's emphasis]

The By-Law relied upon by Mid-Am is contained in paragraph 158 of the stipulation of facts. That stipulation, however, contains many other paragraphs which establish that NFO's course of conduct in regard to the dairy cooperatives was not at all directed toward their elimination. For example, paragraph 152 of the stipulation states that "In the early 1960's, the concept of a marketing agency in common was designed by NFO for the marketing of milk and dairy products, because dairy producers were organized in co-ops to a significant degree." It was further stipulated in paragraph 157 that "In the early and mid-1960's NFO sought the formation by the existing dairy cooperatives of a marketing agency in common that would be effective in marketing and pricing their products." Paragraph 177 of the stipulation stated that "[I]n the early 1960's NFO proposed that the existing milk cooperatives get together and form a marketing agency in common" (emphasis ours).

*419 NFO's purpose in proposing that the existing cooperatives get together was made clear by paragraphs 179 and 180 of the stipulation. The parties agreed in paragraph 179 that "[i]n the early 1960's the marketing agency in common concept suggested by NFO was that the co-ops would establish one organization so that the milk of the organization's member co-ops could be marketed through one organization to gain bargaining strength." Paragraph 180 of the stipulation provided "[I]n the early 1960's NFO recommended the marketing agency in common because dairy farmers had organized so many bargaining groups that they were dividing, rather than uniting, their bargaining power." [10]

The parties further stipulated that "none of the large cooperatives undertook to form or to join a marketing agency in common" (paragraph 187 of the stipulation) as NFO had proposed. The basic underlying factual circumstances concerning NFO's quite unsuccessful efforts to persuade existing dairy cooperatives to sign NFO Master Contracts; NFO's abandonment of that effort; NFO's sponsorship of the 1967 Milk Holding Action; NFO's 1968 attempt to develop an effective Supply Contract program; and, finally, NFO's establishment and operation of its "reload stations," are not in factual dispute. Mid-Am would have this Court view the quite chaotic history of NFO's various and separate efforts "to raise the price of milk paid to dairy farmers and to strengthen NFO's bargaining position," as the parties stipulated was one of the purposes of the 1967 Holding Action (see paragraph 405 of the stipulation), as "different expedients" to accomplish NFO's alleged primary goal of elimination of all existing dairy cooperatives. Mid-Am argues that "although different expedients were adopted from time to time when it was found one particular expedient would not accomplish the overall purpose, ... NFO engaged in a single course of conduct to accomplish this one purpose ... to impair, control or eliminate effective competition."

We quite agree that the record establishes that NFO adopted what Mid-Am would call "different expedients" in its uncharted adventure into the field of marketing the milk of its members. And we agree that the record shows that the various "expedients" may not have accomplished the purpose NFO had in mind when a particular "expedient" was adopted. But we do not believe that it can fairly be said that there is any real factual dispute about the purposes of the various "expedients."

We have already made reference to paragraph 405 of the stipulation in which it was agreed that one of the purposes of the 1967 Holding Action was "to raise the price of milk to dairy farmers ... which would help NFO to write contracts which assure better milk prices for farmers in the future." In a quite similar manner, the parties stipulated in paragraph 204 of the stipulation that "through 1967, NFO believed that its Master Contracts were tools through which dairy farmers could obtain the cost of production plus a reasonable profit for their milk."

NFO's stipulated expectation that the 1967 Holding Action would actually raise *420 the price of milk was never realized. Nor was its stipulated belief that its Master Contract program would actually enable dairy farmers to obtain "the cost of production plus a reasonable profit" ever confirmed. But those facts do not support Mid-Am's proposed finding that both those separate efforts — or "expedients," to use Mid-Am's language — were but parts of a "single course" of NFO conduct, all of which was directed to an alleged "primary goal" to eliminate all existing dairy cooperatives.

Indeed, the record would come closer to supporting a set of findings that NFO became a victim of its own propaganda and that its ignorance and inexperience in the dairy field required it to experiment with one unsound idea after another in its effort to keep and save face with those of its members who may have read the overly optimistic articles which were quite regularly published in the NFO Reporter.

It is, of course, not necessary to make any finding or state any conclusion other than to state our considered view that Mid-Am did not carry the burden of proving the factual assumptions upon which its proposed conclusion 25-3 is based; namely, that "NFO leaders intended that only NFO would survive" and that this meant "elimination of dairy cooperatives from bargaining as a direct result if NFO succeeded in signing and activating its Master Contracts."

We have stated our reasons for refusing to make Mid-Am's proposed conclusion 25-3 in considerable detail because what we have stated in connection with that proposed conclusion is generally applicable to the substantial number of additional conclusions of law which Mid-Am proposed in regard to the 1967 Milk Holding Action which, of course, took place before Mid-Am was even organized.

Mid-Am's proposed conclusion of law 25-6 and 25-7 stated:

25-6. The NFO Milk Holding Action constituted a concerted group boycott.

25-7. The activities of NFO, its members and employees in persuading, forcing, or coercing dairy farmers to boycott predecessors of Mid-Am during the 1967 Milk Holding Action constituted a concerted group boycott. [11] Mid-Am presented three conclusions of law, 26-12, 25-5, and 26-15, which are based on the factual assumption that NFO designed the 1967 Milk Holding Action to force then existing cooperatives to sign NFO Master Contracts in order "to eliminate predecessors of Mid-Am from the market of representing their members." Mid-Am's proposed conclusion 26-12 stated:

26-12. The activities of NFO, its members and employees in attempting to induce predecessors of Mid-Am to sign NFO Master Contracts during the 1967 Milk Holding Action constituted a concerted group boycott to eliminate predecessors of Mid-Am from the market of representing their members. [12]

*421 Mid-Am proposed three additional conclusions of law in connection with the 1967 NFO Milk Holding Action, Mid-Am's 28-19 stated:

28-19. NFO, with its members and employees, in the 1967 NFO Milk Holding Action, created and participated in a concerted group boycott and group refusal to deal in persuading milk producers to fail to perform their contracts and to refuse to have normal business relations with their milk marketing cooperatives, including predecessors of Mid-America, and thereby violated Section 1 of the Sherman Act. [13]

All of the conclusions of law proposed in connection with the 1967 Milk Holding Action relate to alleged acts and conduct of NFO that took place before Mid-Am came into existence. Mid-Am contends that evidence of NFO's sponsorship of the 1967 Milk Holding Action is relevant and significant under the "acts of kindred character" principle stated in Kansas City Star v. United States, 240 F.2d 643 (8 Cir. 1957).

We find and conclude that the conclusions of law proposed by Mid-Am in the 1967 Milk Holding Action group of proposed conclusions of law under discussion may not properly be made for the reason that even if it be assumed that the "kindred character" theory should be applied in this case, we are satisfied that Mid-Am failed to adduce sufficient evidence to support the factual findings which the trier of the facts must find before the various proposed 1967 Milk Holding Action conclusions of law may properly be made.

The unidentified "dairy farmers" mentioned in this group of proposed conclusions of law had the right, in the absence of an illegal agreement, to sell or to refuse to sell their milk to anyone or to no one, for good cause or for no cause whatever. The evidence does not establish that the dairy farmers who withheld their milk from the market during the relatively short period of time involved in the 1967 Milk Holding Action did so because they were either "forced" or "coerced" to do so. And certainly the evidence adduced does not support any inference that the purpose of the 1967 Milk Holding Action was "to eliminate the cooperatives." Rather, it must be said in this case, as the Eighth Circuit said of the group of defendants in Johnson v. J. H. Yost Lumber Co., 117 F.2d 53, 62 (8 Cir. 1941), who were described as the "supplier defendants," that there was no substantial evidence adduced in this case that the dairy farmers went "beyond the simple refusal to sell their goods for reasons which were sufficient to them and which appeal to one as having a substantial basis in reason."

The same thing must be said about Mid-Am's failure to adduce sufficient evidence to prove that the dairy farmers were induced or that NFO attempted to induce those dairy farmers to fail to perform their contracts or to refuse to deal with predecessors of Mid-Am. In short, we find and conclude that Mid-Am's 1967 Milk Holding Act group of proposed conclusions of law should and will not be made.

Mid-Am proposed four additional conclusions of law in regard to the NFO Master Contracts. Those four, Mid-Am's 26-13, 26-14, 27-16, and 27-18, are based on the implicit factual assumptions (1) that the NFO Master Contracts were, in fact, price fixing agreements and (2) that cooperatives which actually signed an NFO Master Contract did so involuntarily. The four proposed conclusions of law stated:

26-13. The NFO Master Contracts were agreements which actually stated a fixed price to be paid to NFO Members (i. *422 e., $6.05 per CWT for Grade A milk and $5.00 per CWT for manufacturing grade milk), and were therefore illegal price fixing agreements.

26-14. NFO induced or attempted to induce predecessors of Mid-Am to sign NFO Master Contracts.

27-16. Cooperatives that signed NFO Master Contracts did not do so voluntarily.

27-18. The fact that the NFO Master Contracts were never activated has no bearing upon whether these contracts were illegal price-fixing agreements.

We find and conclude that the NFO Master Contracts which the record shows were in fact signed by particular cooperatives were not, in fact, price fixing agreements. We further find and conclude that the evidence adduced does not support any finding of fact or legal conclusion that any cooperative did not voluntarily sign any particular NFO Master Contract.

Mid-Am proposed a large number of conclusions of law in regard to the NFO Supply Contract. The first four of those conclusions, 28-21, 28-22, 28-23, and 28-24, include and are based on factual assumptions which relate to both "Mid-Am and some of its predecessor cooperatives." Those proposed conclusions of law stated:

28-21. NFO attempted to induce Mid-Am and some of its predecessor cooperatives to sign an NFO Supply Contract.

28-22. The means used by NFO to induce or attempt to induce Mid-Am and some of its predecessor cooperatives to sign NFO Supply Contracts included threats of withdrawal of milk, actual withdrawal of milk and solicitation of cooperative members to breach their contracts. [14]

We find and conclude that the means used by NFO to induce or to attempt to induce Mid-Am and some of its predecessors (including but not limited to Fergus Dairy Cooperative) did not violate the antitrust laws of the United States.

Five of Mid-Am's proposed conclusions, 29-28 to 29-33, inclusive, relate directly to alleged NFO activities directed solely to Mid-Am. [15] Those proposed conclusions stated:

29-28. The activities of NFO, its members and employees in inducing dairy farmer members of Mid-Am to refuse to ship milk to Mid-Am was for the purpose of persuading or inducing Mid-Am to sign an NFO Supply Contract.

29-29. The activities of NFO, its members and employees in inducing dairy farmer members of Mid-Am to breach their milk marketing contracts with Mid-Am constituted a concerted group boycott.

29-30. The activities of NFO, its members and employees in inducing dairy farmer members of Mid-Am to refrain from normal business relations with Mid-Am constituted a concerted group boycott.

*423 29-31. The actions of NFO, its members and employees in inducing dairy farmer members of Mid-Am to boycott Mid-Am constituted a concerted group boycott.

29-32. The activities of NFO, its members and employees in attempting to induce Mid-Am to sign an NFO Supply Contract constituted a concerted group boycott, the purpose of which was to force, persuade or coerce Mid-Am to accede to trade practices desired by NFO, that is, to sign an NFO Supply Contract.

29-33. The activities of NFO, its members and employees in attempting to induce Mid-Am to sign an NFO Supply Contract constituted a concerted group boycott, the purpose of which was to eliminate Mid-Am from the market of representing its members.

The five proposed conclusions relating specifically to Mid-Am may not properly be made because the record, in our judgment, does not contain a sufficient factual basis to support the conclusions of law as proposed.

The remainder of Mid-Am's proposed conclusions of law, four in number, are reiterations of other proposed conclusions already discussed. They stated that:

30-34. The refusal of NFO and its members to deal with Mid-America and the threat and actual withdrawal by NFO and its members of milk from Mid-Am in an effort to force Mid-Am to sign an NFO Supply Contract and the combination and conspiracy by NFO with other cooperatives which signed NFO Supply Contracts, to fix the price at which milk was sold and to allocate markets and to jointly refuse to deal with Mid-Am to sign an NFO Supply Contract, violated Section 1 of the Sherman Act. [16]

30-35. The actions of NFO, its members and employees in an unlawful combination with each other and with non-exempt, proprietary corporations including haulers, milk brokers, bottling plants, and manufacturing plants in persuading and attempting to persuade Mid-Am constituted a combination and conspiracy to induce a group boycott and group refusal to deal in violation of Section 1, Sherman Act ( 15 U.S.C. § 1 ).

Mid-Am's proposed conclusion 30-34 is based upon the assumption that the evidence supports a finding that a "combination and conspiracy" in fact existed between NFO "and other cooperatives which signed NFO Supply Contracts." Mid-Am's proposed conclusion 30-35 is based on the factual assumption that the undisputed factual circumstances concerning NFO's relationship with such "outsiders," as Harold Whitmore of Whitmore Transport Company, Pete Taves, Billy Stacey, Southwest Milk Producers, and Midwest West Creamery, Inc., constituted "a group boycott and group refusal to deal in violation of Sherman 1." We find and conclude that Mid-Am failed to carry the burden of proving a sufficient factual basis for the proposed conclusions of law and therefore conclude that neither may properly be made under all the facts and circumstances of this case.

Discussion of NFO's Proposed Conclusions of Law Regarding Its Alleged Antitrust Exemption

While NFO followed the pattern established by Mid-Am's proposed findings of ultimate facts and proposed conclusions of law by responding directly to Mid-Am's proposed findings and conclusions in regard to "Illegal Boycott;" the alleged "Tying Arrangement;" and the other headings originally suggested by Mid-Am, NFO's first section of its proposed findings of fact and conclusions of law were submitted under a *424 "General" heading. That heading proposed 34 findings of fact which, for the most part, were accurate paraphrases of the various paragraphs of the stipulation of facts agreed to by the parties. The first two general conclusions of law proposed by NFO under its "general" heading presented questions in regard to NFO's claim of exemption from the antitrust laws under the Capper-Volstead and Clayton Acts. Similar claims of antitrust exemption were presented by Mid-Am, CMPC, and ARSPC in Phase II of this case and were again presented by NFO in Phase III.

Application of other principles of law to the facts and circumstances of each claim involved in each of the three Phases of this litigation makes it unnecessary for this Court to reach and therefore to decide whether any of the parties would be entitled to claim an antitrust exemption under the Capper-Volstead and Clayton Acts. Because each and every party has presented their respective claims of antitrust exemption with equal vigor, we deem it appropriate to indicate our view of the rationale which we believe we would have been under duty to apply had we found it necessary to reach and decide the merits of any claim of antitrust exemption made by any of the parties in any of the three Phases of this litigation. Indeed, the various stipulations of fact and various of the responses to proposed findings of fact made in connection with the various claims of antitrust exemption in each Phase of this case establish that the factual base upon which each party predicates its respective claim of exemption is virtually undisputed. This Court's indication of its view of the legal question presented may therefore be helpful to any appellate court which might determine that the merits of the antitrust exemption question presented should be reached and decided.

In order to get the questions of law presented in appropriate focus, we note that NFO proposed as its first two conclusions of law the following:

1. NFO is an association of producers of agricultural commodities as defined by the Capper-Volstead Act, 7 U.S.C. §§ 291-292 and Section 6 of the Clayton Act, 15 U.S.C. § 17 , and is entitled to the exemption from the antitrust laws conferred by those acts.

2. NFO did not lose its status as an association of producers under the Capper-Volstead and Clayton Acts merely by accepting dues from one religious organization and 25 individuals who allegedly were not farmers during the entire period of time covered by their dues payments, and allowing its full-time employees to remain as active members. [17]

The Supreme Court had not handed down National Broiler Marketing Assn. v. United States, 436 U.S. 816 , 98 S.Ct. 2122 , 56 L.Ed.2d 728 (1978), at the time the parties filed their principal Phase I post-trial briefs and their respective Phase I proposed findings *425 of fact and proposed conclusions of law. Both sides, however, recognized before National Broiler Marketing Assn. was decided that there was language in Case-Swayne Co. v. Sunkist Growers, Inc., 389 U.S. 384 , 88 S.Ct. 528 , 19 L.Ed.2d 621 (1967), particularly when that case is read in light of the result reached in the earlier case of Sunkist v. Winckler & Smith Co., 370 U.S. 19 , 82 S.Ct. 1130 , 8 L.Ed.2d 305 (1962), which suggested that questions of fact concerning the membership of an organization which claims a Capper-Volstead exemption could be of great, if not controlling, importance.

If this Court were reading and applying the principles stated in the two Sunkist cases on a totally clean slate, we would have, of course, paid appropriate attention and given appropriate weight to footnote 6 on page 390 of 389 U.S., footnote 6 on page 532 of 88 S.Ct. of Sunkist II, which concluded that the majority of the Court of Appeals for the Ninth Circuit had erroneously held that any question of non-grower participation had been "resolved sub silento in favor of Sunkist in Sunkist Growers, Inc. v. Winckler & Smith Citrust Products Co., 370 U.S. 19 [ 82 S.Ct. 1130 , 8 L.Ed.2d 305 ] (1962)." [18] Had we reached the merits of the antitrust exemption question presented, however, we would not be writing on a clean slate.

We are convinced that lower federal courts would be required to recognize that both the majority and concurring opinions in National Broiler Marketing Association, supra, made almost talismanic application of what Case-Swayne Co. v. Sunkist Growers said about the impact that non-producer members had on an otherwise exempt organization. In express reliance upon that case, the majority opinion in National Broiler Marketing Assn. concluded that in order for a cooperative "to enjoy the limited exemption of the Capper-Volstead Act, and, as a consequence, to avoid liability under the antitrust laws for its collective activity, all its members must be qualified to act collectively." 436 U.S. at 822 , 98 S.Ct. at 2127 . [Emphasis the Court's]. The Court held that a cooperative organization that included only one member who was not a "farmer" as a member of the cooperation was "not entitled to the limited protection of the Capper-Volstead Act." Id. at 828-829 , 98 S.Ct. at 2130-2131 . [19]

Until National Broiler Marketing Assn. was decided in 1978, we believe that NFO probably would have had the best of any argument that would have sustained NFO's Capper-Volstead exemption. Except for that most recent Supreme Court decision, we believe that NFO would have been able to successfully argue that Mid-Am's argument against exemption was "factually predicated upon mere record-keeping formalities—the mere presence on the membership list of names of individuals who, by express by-law provision, had been stripped of all vestiges of membership" (NFO's post-trial brief, page 9).

In spite of the fact that the evidence established that NFO did little to keep an accurate list of its members and in spite of the fact that NFO apparently attempted to collect dues from persons who may have been ineligible for membership, there is no evidence in this case that any of the non-producer members of NFO had anything to do with the establishment of NFO's general policies or with NFO's involvement in the marketing of milk. Except for National Broiler Marketing Assn., we probably would have given favorable consideration to NFO's argument that the factual circumstances *426 presented in this case, when viewed from an economic viewpoint, are distinguishable from Sunkist II and that the principles stated in Sunkist I were applicable to this case.

We have concluded, however, and not without considerable reluctance, that we would not have been free to distinguish National Broiler Marketing Assn. in light of the apparent rationale of that case. We believe that National Broiler Marketing Assn. requires that the Capper-Volstead exemption be narrowly construed by all lower federal courts and that such narrow construction further requires that a cooperative association which wishes to claim a Capper-Volstead exemption must take appropriate action to police its membership to the end that not "even one," 436 U.S. at 828 , 98 S.Ct. at 2130 , of its members is a non-producer, i. e., a person who is not engaged in the production of agricultural products.

Under the undisputed factual circumstances, NFO made no effective effort to enforce its by-law with the result that a small number of non-producers were in fact considered as members of NFO. Under the strict and narrow construction we believe is required by the most recent and controlling Supreme Court case, had we reached and decided the merits of the question presented, we would have rejected NFO's proposed Capper-Volstead Act conclusions of law.

Discussion of NFO's Proposed Conclusions of Law Regarding Alleged Illegal Boycott

Our discussion of Mid-Am's proposed conclusions of law forecast our agreement with a number of conclusions of law proposed by NFO. Our rejection of Mid-Am's proposed conclusions of law reflected our view that Mid-Am failed to carry the burden of proof in regard to the factual assumptions upon which Mid-Am's proposed conclusions of law were based.

Our express acceptance of a particular conclusion of law proposed by NFO will further reflect our view of the facts and circumstances established by all the evidence and make explicit the rationale of our ruling against Mid-Am on the ultimate issues of fact and the conclusions of law which Mid-Am proposed in connection with Mid-Am's claim in regard to an illegal boycott.

On the issue of liability in regard to Mid-Am's illegal boycott claim, we therefore state the following conclusions of law, keyed to paragraph numbers proposed by NFO:

6. Mid-Am has not proven the involvement of any "non-exempt, proprietary corporations," such as "haulers, milk brokers, bottling plants, and manufacturing plants" in a combination or conspiracy with NFO to conduct or induce a boycott.

8. In the absence of proof that a contract, combination or conspiracy with non-farmers was involved, interference by one agricultural marketing association with contractual relationships between a competing agricultural marketing association and its members is no violation of Section 1 of the Sherman Act.

9. NFO's efforts to become the exclusive bargaining agent for dairy-producer members of Mid-Am did not violate Section 1 of the Sherman Act.

10. NFO's conduct in soliciting producer members of Mid-Am to market milk through NFO, NFO offers of milk sales to Mid-Am customers, and NFO sales of milk to Mid-Am customers increased competition in the procurement and sales of milk and furthered the purposes of the Sherman Act.

11. NFO's persuading and attempting to persuade Mid-Am milk producer members to market milk through NFO was not a combination or conspiracy to induce a group boycott or a group refusal to deal or predatory practice in violation of Section 1 of the Sherman Act.

13. NFO's and its members' threats to withhold, and actual withholding, if any, of milk from Mid-Am in an unsuccessful attempt to induce Mid-Am to sign a supply contract is no more a Section 1 Sherman Act violation than any other seller's refusal *427 to sell except on terms he regards as satisfactory.

14. NFO's supply contracts are ordinary buy-and-sell arrangements that do not constitute illegal price fixing.

19. Mid-Am has not, in any event, met its burden of proof that any of NFO's conduct was unreasonable, and only unreasonable restraints of trade violate Section 1 of the Sherman Act.

In light of our findings of fact and conclusions of law in regard to the liability questions presented in connection with Mid-Am's illegal boycott claim, we need not and therefore do not reach the questions presented by additional conclusions of law proposed by NFO in regard to damages in connection with that claim.

Conclusions of Law Regarding NFO Membership Agreement as a Tying Arrangement

The conclusions of law proposed by Mid-Am and those proposed by NFO in connection with Mid-Am's claim that the NFO membership agreement must be considered as a tying arrangement are poles apart. Mid-Am proposed that we conclude as a matter of law that "[t]he NFO membership agreement clearly represents a tying contract ...." Indeed, Mid-Am argued that "there can be no question that the NFO Membership Agreement is a tying arrangement ...." (Mid-Am's post-trial brief, page 5; Mid-Am's emphasis). NFO proposed as its conclusion of law 20 that "[t]he `exclusive representative' clause in NFO's membership agreement is not a tying arrangement violative of Section 1 of the Sherman Act."

The parties are in general agreement that principles of law applicable to tying arrangements are enunciated in International Salt Co. v. United States, 332 U.S. 392 , 68 S.Ct. 12 , 92 L.Ed. 20 (1947); Northern Pacific Ry. Co. v. United States, 356 U.S. 1 , 78 S.Ct. 514 , 2 L.Ed.2d 545 (1958); Times-Picayune Publishing Co. v. United States, 345 U.S. 594 , 73 S.Ct. 872 , 97 L.Ed. 1277 (1953); Fortner Enterprises, Inc. v. U. S. Steel Corp., 394 U.S. 495 , 89 S.Ct. 1252 , 22 L.Ed.2d 495 (1969); and U. S. Steel Corp. v. Fortner Enterprises, Inc., 429 U.S. 610 , 97 S.Ct. 861 , 51 L.Ed.2d 80 (1977).

All of Mid-Am's conclusions of law proposed in connection with its tying arrangement claim are based on the proposed findings of ultimate facts as proposed by Mid-Am in its paragraphs 160 to 195, inclusive. [20] *428 Those paragraphs either accurately paraphrase or quote the particular paragraphs of the stipulation of facts upon which they are based. It is thus clear that there is no substantial dispute about the underlying factual base upon which Mid-Am attempts to rely to support its tying arrangement argument.

NFO, of course, argues that Article I of the NFO membership agreement must be read in light of the exception stated in that article and in light of Article VII, Section 1 and Article XII, Section 3 of that agreement. [21] NFO further argues that Mid-Am has recognized that the NFO dairy program is voluntary and that Mid-Am, in fact, requested an admission from NFO which would agree that "the NFO dairy program is voluntary." That argument is based on NFO's proposed finding of fact 108. NFO bases an additional argument on its proposed findings of fact 105 to 113, inclusive. As we earlier noted in connection with paragraphs 173 to 183 of our findings of fact, we make the following findings of fact proposed by NFO in those nine paragraphs which read as follows:

105. Mid-Am's claim that NFO has engaged in an illegal tying arrangement is based solely upon the terms of the NFO membership agreement and the availability of NFO bargaining services for grain and livestock, as well as for milk.

106. In the NFO membership agreement, each member authorizes NFO to act as his "exclusive representative in collective bargaining in respect to all commodities marketed from my farm, with the exception of those commodities presently covered by other marketing contracts." (PX 226)

107. However, an NFO member is not bound to market his milk through NFO solely on the basis of his membership agreement. (Mid-Am Narrative ¶ 164, Tr. 1352)

108. The NFO dairy program is voluntary. (Mid-Am Narrative ¶ 1106, Tr. 1352; Mid-Am Responsive Narrative ¶ 2450, Tr. 1353)

109. Many NFO members who produce more than one commodity market some of their commodities through NFO and some through other channels. (Mid-Am Responsive Narrative ¶ 2448, Tr. 1353)

110. It is the policy of NFO that, when a farmer executes an NFO membership agreement, he is not precluded from participating in a cooperative. (Mid-Am Narrative ¶ 1563, Tr. 1353)

111. There is no evidence that any dairy farmer who switched from Mid-Am to NFO ever actually marketed any commodity other than milk through NFO.

112. There is no evidence of the extent of NFO's market power in grain or livestock bargaining or marketing in central and southwestern Missouri or southern Illinois at any time.

113. There is not even any evidence of record that NFO offered grain or livestock bargaining services in the geographic areas relevant to this litigation.

We conclude that four out of the five conclusions of law proposed by NFO in connection with Mid-Am's tying arrangement *429 claim are supported by the undisputed evidence in this case. We therefore state the following conclusions of law in regard to Mid-Am's tying arrangement claim:

20. The "exclusive representative" clause in NFO's membership agreement is not a tying arrangement violative of Section 1 of the Sherman Act.

21. [NFO proposed in this paragraph that we conclude a Capper-Volstead Act exemption is applicable. We need not and do not reach that question for the reasons we have already stated.]

22. Mid-Am's concession that the NFO dairy program is voluntary for NFO members precluded judgment for Mid-Am on its claim that farmers who wished to use NFO's livestock and grain-marketing services must market their milk through NFO.

23. Failure to prove the strength of NFO's market position in grain or livestock marketing or a causal relationship between the "exclusive representative" clause and Mid-Am producers' switch to NFO or even the existence of NFO grain and livestock marketing services in Missouri and southern Illinois bars judgment for Mid-Am on its tying arrangement claim.

24. Failure to prove that the "exclusive representative" clause in NFO's membership contract is unreasonable bars judgment for Mid-Am on this portion of its Section 1 Sherman Act claim.

Conclusions of Law Regarding NFO's Alleged Unfair Trade Practices

Mid-Am's proposed conclusions of law regarding NFO's alleged unfair trade practices were based upon the assumption that findings of fact as stated in paragraphs 196 to 216 of its proposed findings of ultimate fact would be made in substantially the same form as proposed by Mid-Am. Comparison of the findings of fact as proposed by Mid-Am with those actually found by this Court reflects our view that Mid-Am has not carried the burden of proof in regard to the requisite factual circumstances necessary to support its legal theory in regard to NFO's alleged unfair trade practices.

Of at least equal, and perhaps even greater, importance is the fact that Mid-Am's post-trial brief reflects that part IX of that brief, entitled "N.F.O. conspired with others to use unfair trade practices to eliminate Mid-Am from bargaining for producers," was based primarily on the rationale of Albert-Pick-Barth Co. v. Mitchell Woodbury Corp., 57 F.2d 96 (1st Cir. 1932), cert. den. 286 U.S. 552 , 52 S.Ct. 503 , 76 L.Ed. 1288 (1932), and the progeny of that case. Mid-Am concluded the argument made in that section of its brief by stating (on page 64) that: "Clearly, under the Pick-Barth doctrine and the later decisions recognizing and following the Pick-Barth doctrine, N.F.O. conspired and combined to use `unfair trade practices' to eliminate Mid-Am from bargaining."

While the Pick-Barth rule had been cited and discussed in many of the district courts in the Eighth Circuit at the time the Phase I briefs were filed in this case, the Court of Appeals for the Eighth Circuit did not render any definitive decision in regard to that rule until it decided Stifel, Nicolaus & Co. v. Dain, Kalman & Quail, 578 F.2d 1256 (8 Cir. 1978) on June 15, 1978. In that case, after approving Chief District Judge McManus's detailed and comprehensive discussion of the present status of the Pick-Barth rule in his excellent district court opinion, see D.C. 430 F.Supp. 1234 at 1237-42 , the Court of Appeals concluded that:

We do not consider that this circuit has categorically either accepted or rejected the rule of Pick-Barth, either as originally announced or as modified. As a matter of policy, we decline to adopt it in present context. We do not think that the type of unfair competition charged here should be characterized as a per se violation of § 1 of the Act....

Where, as here, an antitrust plaintiff alleges nothing more than ... unfair business practices ... but does not allege any public injury resulting from the defendant's conduct, plaintiff must seek relief at common law and not under § 1 of the Sherman Act. Id. at 1260-61

*430 In footnote 6 on page 1261, the Court of Appeals added:

Allegations that the predator is a significant factor in the market and has acted with intent to destroy plaintiff as a competitor do not transform such unfair business practices into per se Sherman Act § 1 violations.

We reject the seven conclusions of law proposed by Mid-Am in connection with its unfair practices claim. [22]

Mid-Am's proposed conclusions are rejected because they are not supported by the weight of the evidence and because those proposed conclusions are inconsistent with the view most recently stated by our Court of Appeals in regard to the Pick-Barth rule in Stifel, Nicolaus & Co. v. Dain, Kalman & Quail, supra .

We accept the following conclusions of law as proposed by NFO in regard to Mid-Am's claims regarding NFO's alleged unfair practices:

25. NFO's procurement of USDA qualification as a milk-marketing association under the Agricultural Marketing Agreement Act, regardless of how it was accomplished, had the effect of enhancing competition in federal-order markets and is therefore wholly consistent with the policy and purposes of Section 1 of the Sherman Act.

26. The absence of proof that a reduction in taxes or some other financial benefit resulted in NFO's claim of tax exemption under Section 501(c) of the Internal Revenue Code, regardless of the propriety or purpose of such claim, bears no relationship to competition and therefore cannot be the basis for finding a Section 1 Sherman Act violation.

27. In the absence of proof that a reduction in interest rates or some other financial benefit resulted from those aspects of NFO's fund-raising or financing activities that Mid-Am attacks as securities law violations, those activities bear no relationship to competition and therefore cannot be the basis for finding a Section 1 Sherman Act violation.

28. Milk handlers, processors, haulers, and brokers who entered into normal business relationships with NFO as it pursued the NFO program for collectively marketing milk of its dairy-farmer members did not thereby become co-conspirators in any course of conduct intended by NFO to injure Mid-Am or interfere with the contractual relationships between Mid-Am and its members.

29. The record of evidence as to the involvement of outsiders in the

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