# Petition for Writ of Certiorari — United Dairymen of Arizona v. LaSalvia > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_2152%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1987 - **Citation:** 482 U.S. 928 ## Text = igh 4h 86 1702 [Siero Court, USS, FILED | APR No. : 20 1987 $ducers, continue to protest the con- tinued suspension as granted because of the four initial ob- jections as stated previously, pending such a public hearing. Furthermore, we do hereby protest the continuation of the suspension of the following points. * 1. The original suspension as granted by AMS was based on a specific period of time, June and July, 1974, and classified as temporary. 2. At the time of the suspension it was noted that Class I sales had not declined in the previous twelve months of record, but had actually increased 14 million pounds per month on an average basis. 3. The amount of milk could have been reasonably anticipated by the petitioning party as they have complete control of their production and the basis upon which they allow it to fluctuate. 4. The excessive amounts of milk being produced cur- rently and in the immediate past can by no means be con- sidered as a regular or usual amount already associated in the market.® ; 5. It is a gross error to assume that this market is now or shall continue to orderly dispose of milk.® 6. It is not in the public interest to continue and abet the current policies as are developing in this market under the auspices of AMS. 7. The continuation of this suspension will continue to work undue hardship on a number of producers in that 3 Order Suspending Certain Provisions. 4 Milk in the Central Arizona Marketing Area Order Suspending Certain Provisions. i 5 Current Milk Market Report. | 6 Letter to Producers by Shamrock Foods; dated April 4, 1974. ae er ee A-39 it will tend to depress the blend price of milk and further aggravate the normal production of this market.? 8. It is not necessary to assure “relatively heavy sup- plies of reserve milk” being marketed in this area as it only will tend to serve as an undue hardship on producers and ultimately the consumer. 9. Since the suspension was originally approved for the months of June and July yet continuation sought in August (which historically is a low month in this market) are we to assume a further continuation is to be given through November, 1974, as paragraph 1131.13 would indicate?* And if so does this not effectively delete the paragraph’s intended usage on a yearly basis without the petitioning party having given evidence through public hearing? 10. Further, a continuing investigation by the Market Administrator, Order 115i concerning possible improper handling and/or classification of milk in this market by the original petitioning party as well as others, may bear heavily on the continued order in this market. Should it be the intent of AMS to provide relief to the peti- tioning party by allowing all milk produced in this market to become pooled irregardless of real need or apparent detriment to blend pricing, then it is only just and in the public interest to allow all milk produced in this market to be pooled whether or not it is received at a pool plant. Furthermore, it would appear completely and unequivocally discriminatory to allow only certain producers in this market to pool all milk produced despite need or utilization. If the member of a cooperative has the inherent right to have all his milk pooled whether or not essential need is established then the Order must afford the 7 Market Production and Comparison Last Twelve Months. 8 Paragraph 1131.13 of the Order. A-40 same rights to all producers. It has never been the intent of the Agricultural Marketing Agreement Act of 1937 to dis- criminate against certain producers and any such interpreta- tion either by intent or prejudice is in violation of that said Act. Although the Capper-Volsted Act of 1922 grants Agri- cultural Marketing Cooperatives immunity from monopoly, it appears that gross misuse of these immunities may exist. It is a fact that the petitioning party, a cooperative, maintains the only surplus plant within the order for pool classification. It is a recorded fact that said cooperative refused to receive milk at their plant from individual independent producers during periods of surplus production. It is a fact that said co- operative received directly unspecified quantities of milk di- rectly from these same independent producers previously and allowed it to enter the pool.® It is a fact that these independent producers sought relief from: (a) the handler/s, (b) the co- operative, (c) the Department of Agriculture, and (d) vari- ous other interested parties.'” And it is a fact that any and all equitable remedy has been denied to the independent pro- ducer by the above parties in an effort to pool their so-called excess contract milk.'! We therefore resubmit for consideration not only the arbi- trary administration of the Order by AMS as being discrim- inatory and not in accordance with the Act, but vehemently protest the continued abuse of certain producers within this market which tends to accentuate market problems rather than resolve them. And finally, it is hereby requested that if 9 (Two) Authorization to Compensate Handler; dated May 6, 1974, to Independent Producers from United Dairymen and Shamrock Foods. 10 Letters: to Arizona Milk Inc.; United Dairymen of Arizona. Editorial: By Herbert Saal, Editor American Dairy Review. 11 Memorandum Dated August 6, 1974, from Mr. Paul P. Dew of Shamrock Foods. A-41 the petitioning party must seek further to suspend provisions of the Order, that they do so only after public hearing to that effect. As has been previously noted both the petitioning party and the AMS recognized the need for such a hearing. We sub- mit that adequate time has elapsed for that procedure to have been initiated by either/or both parties. It would be gross negligence to continue on without the appropriate detail of this issue. Jerome LaSalvia 268-0140 Jerome LaSalvia, probably the last independent dairy farm- er in Arizona will be forced to dump about 100,000 lbs. of milk Thursday night. Shamrock the creamery processor he has shipped to for over ten years, has informed him it will not continue taking milk over their stated contract as they have done in the past. (Cows fluctuate their milk production with the season, producing much more in the spring with green hay and nice weather, and drop drastically in the heat of Phoenix summers.) The principle surplus milk plant in Phoenix is owned by UDA, a cooperative; because Mr. LaSalvia is not a member of their cooperative they will not purchase his milk. Phoenix and most of central Arizona is under a Federal Milk Marketing order; the government figures out the floor of the prices of milk in a complicated computation based on Minnesota-Wisconsin prices; they then audit the amount of milk produced in the Arizona market and audit its usage— fluid milk, butter, or cheese, etc.—puts it into what it defines as a “pool” and instructs the processors to pay the independent dairy farmer or the cooperative a “blend” price. Therefore, the processors pay the same price per hwt. to either the in- dependent or cooperative dairy farmer UNLESS the coopera- A-42 tive gets a premium above this floor set by the Federal gov- ernment as they did in August and September 1974. Local producer-distributors (processors that have their own dairy farms and traditionally process only their own milk) cannot purchase LaSalvia’s milk; in order to do so they would have to submit to the Federal Milk Marketing Order and pay a considerable sum to the pool on all the milk their own cows produce. The other processors in Phoenix, Safeway, Carnation, Bordens, and Foremost have also refused to purchase the Grade A milk. (These same processors also refused to purchase Grade A milk in August and September 1974 when 6 inde- pendent dairy farmers offered it to them in full-truck loads at 62 cents hwt. less than the cooperative demanded and re- ceived at that time.) Peggy LaSalvia—Dep. Exh. No. 15—10/1/82. Files CU 7254 CU 7255 Cornell—8313 Cohen—8417 February 27, 1975 L.A. Field Office: Gary M. Cohen File: 60-139-0 Chrono Bold Milk: Telephone Conversation with Jerome LaSalvia, Phoenix, Arizona (602) 268-0140 or LaSalvia called to complain about the activities of the 4 major milk processors in the Phoenix area—Carnation, Bord- en, Shamrock, and Foremost—and the dominant cooperative— A-43 United Dairymen of Arizona. He accused them of a variety of things including price fixing and excluding the milk of independent farmers. : LaSalvia said he had complained to our Los Angeles Field Office on a number of occasions and that one of our L.A. lawyers had interviewed him. Yet, no action was taken. He continued to complain to that Office but it continued to ignore him. LaSalvia also had some contact with the San Francisco Field Office. He said that he called Washington, not expecting any action, but merely to “build a record.” IN THE UNITED STATES DISTRICT COURT IN THE DISTRICT OF ARIZONA No. CIV 80-245-PHX-CAM No. CIV 80-252-PHX-CAM STATE OF ARIZONA, Plaintiff, vs. UNITED DAIRYMEN OF ARIZONA, an Arizona Cooperative Marketing Association, ROBERT M. GIRARD and LEONARD F. CHEATHAM, Defendants. JEROME LaSALVIA, et ux., Plaintiffs, vs. UNITED DAIRYMEN OF ARIZONA, an Arizona Cooperative Marketing Association, ROBERT M. GIRARD and LEONARD F. CHEATHAM, Defendants. A-44 Phoenix, Arizona July 6, 1982 9:30 o’clock a.m. DEPOSITION OF JEROME LaSALVIA VOLUME I (Pages 1 through 223) * * * were. Q. You don’t believe there were what? A. Any notes regarding him, that I had talked to— Q. And why is that? A. Well, somewhere we had a eonversation, and he made it quite clear to me— Q. About what? A. About the fact that I should never call him again. Q. When was that? A. Way back when I was having problems with my milk. Q. What do you mean by way back when you were having problems with your milk? A. Iwas calling everybody, including United Dairymen. Q. Is that the year that you dumped the milk, you mean? A. That’s the year that I had the milk running over the top of the tanks and we dumped it. Q. Yes. And he told you don’t call him again? A. He said if he wanted to talk to me, he’d call me. Q. And so you never called him again? A. I—I think Mr. West made it clear to the lawyer also, so I did »et—lI did as they asked. And can you read the first line? “UDA 5-27-75.” And then what does it say? You have a little more legible copy. Does it say “Asked Girard to take 4 loads of milk’? o>o>re A-45 A. Yes. Q. “Offered to buy back powder”? A. Yes. Q. Then what? A. “He refused.” I can’t make out the next one. Looks like “Refused to handle milk.” ; Q. Is that the time when he told you not to call him again? A. Not positive. It doesn’t make that note here anywhere. Q. Do you have the original of this document? A. Yes. Q. I wonder if you’d bring it with you tomorrow so that we could get a more legible copy. Do you have a specific recollection of this conversation that’s referred to, on what appears to be May 27, ’75? A. Based on what it says there, I tried to at least put it in powder, I could have fed the calves. * * * (Caption) Phoenix, Arizona July 9, 1982 9:30 o’clock a.m. CONTINUED DEPOSITION OF JEROME LaSALVIA VOLUME IV (Pages 529 through 668) * * * which says, only, “Claude P. Cobb—John S. Pierce— Attorney General—Special Agent—Processed—Milk Monop- oly,” and ask you if you can recall that conversation? A. No. Q. Do you recall what the conversation related to with a special agent or Attorney General? A. I cannot recall the conversation. A-46 MR. BERDE: Let’s take about two minutes, there’s some- thing I’ve got to find that I overlooked. (Whereupon a recess was taken.) MR. BERDE: I found it. Q. BY MR. BERDE: Turning back to May 23, 1975, and directing your attention to the transcript portion where there’s first an entry in handwriting up above, “9 :30—Girard—No- No-No.” Do you see that? A. Yes. Q. Was that your telephone call to Mr. Girard? A. I believe so. Q. That was the occasion where he said, “I'll call you if we've got room,” or what you referred to earlier? A. I’m not sure if this is the specific conversation, it is possible. Q. Is that all you remember Mr. Girard saying? MR. GIBSON: Is what all you remember Mr. Girard * * * (Caption) DEPOSITION OF ROBERT GIRARD VOLUME I Phoenix, Arizona July 29, 1982 10:15 o’clock a.m. * * * knowledge even though it may be reflected elsewhere in the records. You know that quite well. Q. So, your best estimate is tat it would cost millions of dollars for the ent/re manufacturing plant? A. Oh, I think it’s probably 8 to 10 million dollars. Q. You were here during parts of Mr. LaSalvia’s deposi- tion. Do you recall him talking about a telephone conversation that he had with you in May of 1975? A. Yes. A-47 Q. Do you have any independent recollection of that tele- phone conversation? A. Well, I had several conversations with—with Mr. LaSalvia, and I don’t recall that one— Q. When you say you had several conversations— A. —separately. Q. I’m sorry. When you say you had several conversations with Mr. LaSalvia, over what period of time do these conversations span? A. °74 and 75. I think—I think that, May, ’75, may have been the last time. It was—in the middle of ’'75 was the last time I have talked to him. Q. Do you have any approximation as to how many times you talked to Mr. LaSalvia during that period? A. Four or five times. Q. Were these conversations about various matters or al- ways about his trying to find a place for—to get rid of his milk? A. Various matters. Q. What matters do you recall being discussed during those four or five conversations? A. Well, he came in originally in January of '74 wanting some information regarding joining our organization. I be- lieve in "74 he called one time and said he had a load or two of milk. And in '75 once or twice he called and said he had a load, or, I think, in May there he had four loads of milk. Q. In January of '74 when he came in and inquired about joining UDA, would you tell me what you recall about that conversation. A. Well, that’s the conversation that was taped, so I— generally, they just wanted some information. They wanted to know if we would be willing—-there were three of them, A-48 independent producers. They wanted to know if we would discuss the possibility of them joining our organization. Q. That was the tape we listened to during the last deposi- tion? A. Right. Q. Except for what we’ve already gone over for quite * * * (Caption) DEPOSITION OF PEGGY LaSALVIA (VOLUME I) (Pages 1 through 159) Pursuant to the annexed stipulation and notice of taking deposition duly filed in the above cause, the deposition of Peggy LaSalvia was taken by the Defendants as upon cross- examination under the statute, before * * * . * - Q. What was the reason that you decided not to join UDA? A. I didn’t think they were operating in good faith. I, in fact, felt like they had forced what had happened in the market. Q. Forced it how? A. I felt like that they had actually backed up the milk into their plant on purpose. Q. When did that occur? A. When the independents were called in and asked to cut back, when I dumped milk, et cetera, ’73, ’74. Q. And your belief is that UDA purposely told Shamrock they didn’t have any more room, but it was false? No, I didn’t say that. What then? I think they physically filled it up. Filled it up how? 2>o> A-49 A. I think they put milk in the tanks so the tank was full, filled up. Q. Where did it get the milk? A. From their own producers, from Shamrock probably, from AMPI. Q. If they got it from Shamrock, it was your * * * (Caption) Phoenix, Arizona October 1, 1982 9:45 o’clock a.m. CONTINUED DEPOSITION OF PEGGY LaSALVIA (VOLUME II) (Pages 160 through 378) * * * Q. Do you recall receiving a letter? A. Yes, sir. Q. Now, on April 16, 1975, do I understand you to say that you already had milk sold to California that you antici- pated you would not be able to deliver to Shamrock? A. The date on this letter is April 16th. I do not know when I received the letter. I would assume that it would be after that date in the mail, like the 17th or 18th. Q. Well, let’s assume you received it on the 19th. On April 19, 1975, did you already have milk sold to California that you anticipated you could not deliver to Shamrock? A. My recollection is that we had already made arrange- ments with a buyer for the milk in California when we re- ceived the letter. Q. Were those arrangements a better outlet for you than donating your milk to charity? A. If I was going to receive money for it, it appears it would be better. A-50 Q. Go ahead and clarify anything you want to clarify. A. At a point in February where it appeared that the creameries that we went to would not take our milk, prior to the dumping of the milk, Jerome did, in fact, call Mr. Girard, and that was the conversation we spoke earlier of that Mr. Girard told him not to call him back. We also got a tanker in from Flagstaff Dairy that day. We fully expected to be able to sell the milk in it, but if we could—or if we could get it to charity, we had a tanker there to transport it. Q. To where? A. To wherever and whomever would accept it. The tanker sat at our dairy all day long. Q. You are saying that— MR. BOUMA: You want to hear the rest of it? Q. BY MR. BERDE: You got more? A. The news media that cane did try and get the milk into charity. In fact, they assured us that they thought they could. - MR. BOUMA: You said something with respect to the fol- lowing month with respect to the letter from Norman. What was that? THE WITNESS: The following month after Mr. Girard said that he—for us not to call him back and we proceeded to try all the other creameries again, Jerome asked our attorney at that time, Mr. Brophy, to contact UDA because Mr. Girard told us not to talk to him. Mr. Brophy tried to contact UDA to purchase the milk. Q. BY MR. BERDE: When was that? A. March, '75. Q. Um-hmm. A. Mr. West talked to Mr. Brophy, I believe. I think he— essentially he said that he wished we would stop starting fires that he had to put out and go away and leave him alone. A-51 Q. Who said that? A. I think he—essentially that’s what Mr. West replied to Mr. Brophy. Q. Is that what Mr. Brophy related to you? A. Yes. Q. I see. A. We proceeded then to arrange with the Health Depart- ment to get interstate shipping. We arranged for transporta- tion at Shamrock to transport the milk over to California because their trucks were going there anyway because they were picking up California milk and bringing it back to Phoenix, and after we had made our arrangements, we re- ceived a ietter from Mr. McClelland, Exhibit 17. Q. Soin February, it’s vour testimony that Jerome calfed Bob Girard and it was in February thai Bob Girard said, “Don’t call me, I'll call you’? A. Yes, sir. Q. And so, therefore, you didn’t call Bob Girard after that? MR. BOUMA: For what period of time? MR. BERDE: I don’t know. MR. BOUMA: Well, that—we know there were communica- tions since then, I guess. Q. BY MR. BERDE: Well, until recently in 1981? A. I don’t believe—Mr. Girard was very emphatic. Q. That’s not my question. MR. BOUMA: Peggy, he wants to know whether you had the conversation before or after Mr. Girard made the state- ment that he’d call you, don’t call him, essentially. Did you have any conversation, or Jerome, between you folks and Girard at any time after that conversation in 1981? That was the question. THE WITNESS: I do not believe that Jerome had any con- versations. A-52 MR. BOUMA: Peggy, that’s an error. You had the discus- sion, at least, about the powdered milk. MR. BERDE: Wait a minute. I don’t know if it’s an error. Let’s see if the witness knows. MR. BOUMA: That’s fine. You can play whatever game you want. MR. BERDE: It’s no game. I want to get her recollection of what the facts are. MR. BOUMA: That’s fine. You haven’t asked her about the subject. THE WITNESS: There was another subject that Jerome had where he tried to sell the milk and buy it back from UDA in powder form. BY MR. BERDE: When did that occur? I don’t know. Were you in on that discussion? Did I participate in the discussion? Yes. I don’t believe so. The discussion about what you just related involving an offer to sell milk and take back powder, was that in the time period that we’re now discussing, that is February- March, 1975? A. I think so. I’m not sure. Q. Okay. Now, while your recollection was being refreshed during the break in your consultation with counsel, were you also refreshed as to Mr. Brophy telling you not to call UDA again? A. I believe he was relaying Mr. West’s request not to call them again. ; Q. Did you talk to Mr. Brophy at that time when he re- layed what you described as Mr. West’s conversation? A. I may have. OPorore A-53 Q. Did you record that conversation in any kind of a memorandum? A. I’ve seen it in some notes, but I don’t recall. Q. Have those notes been produced, to your knowledge? A. I don’t recall seeing them. Q. If such notes exist, would you have produced—have they been produced, to your knowledge? A. If they were in the form of a memorandum, other than if they were in Jerome’s diaries that we don’t have. Q. Did you make a memorandum of that conversation with Mr. Brophy— .A. I don’t recall specifically. Q. —involving his conversation with Mr. West? A. I don’t recall specifically. oe .8 * A. Apparently the whole market didn’t think so. Q. Well, at least Shamrock didn’t think so because they were bringing the milk in and didn’t want to take your milk? A. Neither did Safeway or UDA or Foremost or— Q. Well, you don’t know about UDA because you didn’t call them in March of ’75, did you? MR. BOUMA: That’s a little bit argumentative in view of her testimony that they had been told not to call, and secondly that Jerome had—Frank Brophy lad called and Dave West told him forget it. Q. BY MR. BERDE: In any case, my question is that if you had milk that you knew Shamrock wouldn’t take and no one else apparently wanted to buy in Phoenix, why didn’t you try to get it moved somewhere else? A. Mr. Berde, I want to sell my milk in Phoenix where it belongs. I was trying to do so. I had, for two months very definitely as this shows, tried to do that. A-54 Q. I understand. You’ve testified to that. A. After it became apparent that I would not be allowed in this market with the milk my dairy produced, I eventually went to California with it. ¥ OK 7 ARIZONA CONSUMERS COUNCIL 823 W. Adams Street Phoenix, Arizona 85007 March 27, 1975 Thomas E. Kauper, Assistant Attorney General Antitrust Division U. S. Department of Justice Washington, D. C. 20503 Dear Mr. Kauper: The Arizona Consumers Council respectfully requests that your office immediately investigate monopoly practices in the Arizona milk industry since the August, 1974 federal grand jury indictments of four milk companies, Borden, Carnation, Foremost, and Shamrock, which account for 90% of milk sales in this State, for price-fixing in violation of federal antitrust laws. The companies pleaded no contest to charges. Jerome LaSalvia, independent dairy farmer of Laveen, is unable to sell milk he produces in this market. Until recently LaSalvia sold milk from his 1000 cow operation to Shamrock Dairy. Shamrock notified him that they would purchase no more milk from him this month. Last month LaSalvia dumped 20,000 pounds of milk because no creamery would buy his milk. Milk prices in this market were recently increased. United Dairymen of Arizona coop commands premium prices for milk. Milk produced by UDA coop members is sold without diffi- culty. LaSalvia refuses to join the coop. A-55 LaSalyia now has 100,000 pounds of milk which he has offered to sell to every creamery in this market, including the UDA surplus creamery. No creamery will buy his milk. He has offered to give the milk away to charity rather than dump it. He has been prohibited from doing that. Jerome LaSalvia is being forced out of the dairy farming business because he refuses to submit to monopoly domination of the milk market in Arizona. This domination is possible because federal antitrust laws are not now being enforced against known violators. We ask that your office take immediate steps to enforce the antitrust laws against price-fixers in the Arizona milk in- dustry and to protect independent dairy farmers who do not want to be a part of a price-fixing conspiracy. Sincerely, CURRIN V. SHIELDS President cc: Jerome LaSalvia A-56 John J. Bouma Kenneth D. Nyman SNELL & WILMER 3100 Valley Center Phoenix, Arizona 85073 Attorneys for Plaintiffs IN THE DISTRICT COURT OF THE UNITED STATES FOR THE DISTRICT OF ARIZONA No. CIV. 80-252 PHX-CLH JEROME LaSALVIA, et ux., Plaintiffs, vs. UNITED DAIRYMEN OF ARIZONA, et al., Defendants. PLAINTIFFS’ RESPONSE TO DEFENDANTS’ MOTION TO COMPEL PRODUCTION AND REQUEST FOR A PROTECTIVE ORDER A. RESPONSE TO MOTION TO COMPEL Until approximately 1974, plaintiffs were able to sell all of their milk in the Arizona market for the so-called “blend” price provided by the Central Arizona Milk Marketing Order. The gravamen of this lawsuit is that defendants, by their monopolistic practices and their concerted activities in re- straint of trade, have forced plaintiffs to divert their milk from the Central Arizona Milk Market and to either dump that milk, or sell it in other markets for a price lower than the Central Arizona “blend” price. Defendants’ themselves summarized their First Request for Production of Documents as a request for: A-57 “all documents which refer or relate to Piaintiffs’ busi- ness and property. .. .” (Defendants’ First Request for Production of Documents, page 3, lines 28-29). Defendants followed the above quoted language with a litany of every conceivable record which a business could possess. Plaintiffs’ response was to provide defendants with the records of every one of plaintiffs’ milk sales during the rele- vant time period, thereby providing defendants with a clear and concise record of (1) what plaintiffs were able to get for the milk that they were able to sell in the Central Arizona Milk Marketing Order, (2) what they were able to get for their milk when they were forced to sell it elsewhere, and (3) the amounts of milk sold in the Central Arizona Market and elsewhere. In short, plaintiffs gave defendants everything they would need to compute plaintiffs’ damages. Defendants want more. _ Defendants want, for the entire “period of time during which plaintiffs have engaged in the business of the produc- tion of milk in Arizona’, (Defendants’ First Request for Pro- duction of Documents, p.3, 1.31, p.4, 11.1-3.) all of plaintiffs’ (1) financial accounting documents, (2) documents evidenc- ing income and expenses, (3) banking records, (4) documents evidencing production and disposition of milk (these were provided), (5) tax records, (6) financial statements, (7) docu- ments evidencing ownership of property and indebtedness, and (8) other documents that reflect the type of information contained in the foregoing documents. 1. Time Period. Defendants have failed even remotely to suggest why they are entitled to all of plaintiffs’ financial records for the entire period that plaintiffs have been in the dairy business. Plaintiffs are only seeking damages for not A-58 being able to sell all of their milk in Arizona from the early 70’s on. Plaintiffs do not claim that they were damaged by defendants’ activities until the early 70’s and plaintiffs have given defendants the records of all of their milk sales from 1968 to 1981. 2. Financial Accounting Documents, Documents Evidenc- ing Income and Expenses, Banking Records, Tax Records, Financial Statements and Other Records. Again, plaintiffs are claiming that, because of defendants’ actions, instead of receiving the Central Arizona Milk Marketing Order blend price for all of their milk, plaintiffs had to sell their milk elsewhere and therefore receive something less than that blend price. The records produced to defendants reflect the blend price received in Central Arizona, the lower than blend prices received elsewhere, and the quantities of plaintiffs’ milk that received each price. Extraneous expenses, banking records and financial statements are totally irrelevant. Defendants’ strategy is, of course, transparent. Plaintiffs own one of the only remaining dairies in the Central Arizona Milk Marketing Order which is not a member of UDA. If the LaSalvias give up these critical financial documents, defen- dants will quickly ascertain how long the LaSalvias will be able to sustain the financial burden of this lawsuit. Of even greater concern will be defendants’ ability to further their monopolistic scheme by applying financial pressure on the LaSalvias’ creditors, suppliers and customers. In short, de- fendants will be in a position to drive the last nail in the coffin of one of the last independent dairymen in Arizona. All of this in spite of the fact that the measure of damages for what really amounts to a theft should be the value of the goods stolen—not the value of the victim. i ee he A-59 3. Documents Evidencing Ownership of Property and In- debtedness. ' This total irrelevancy and immateriality of this request is clear on its face. What possible difference will plaintiffs debt picture have to the issues involved in this lawsuit. When a farmer’s cow is stolen from his pasture, is it relevant that the pasture was mortgaged? More to the point, when milk is stolen from the cow, is it relevant that the pasture is mortgaged? B. REQUEST FOR A PROTECTIVE ORDER Until defendants restricted their market, plaintiffs had one of the most successful dairies in Arizona. Plaintiffs’ ability to survive is a testament to their tenacity and business acumen. Defendants would like nothing more than to have full rein to explore plaintiffs’ records and to appropriate plaintiffs’ meth- ods of doing business for their own use. For the foregoing reasons, plaintiffs request that a protec- tive order be entered limiting disclosure of any documents produced to ‘endants’ attorneys and experts retained for this case. C. CONCLUSION Defendants’ Motion to Compel seems superficially attrac- tive. After all, this is an antitrust case and antitrust cases are supposed to involve lots of documents. Upon closer examina- tion, however, it is apparent this is not a typical antitrust case. Defendants and plaintiffs sell a fungible product at a governmentally controlled price. Defendants, through their anticompetitive activities, have restricted plaintiffs’ ability to sell that product for that price. The measure of damages is simply the difference between the market price and the actual price for the amount of plaintiffs’ milk that defendants ex- cluded from the market. In view of the number and type of documents requested and their total irrelevance to this case, denial of defendants’ Motion is appropriate. A-60 If the Court should decide to order the production of some of the documents, it is imperative that a protective order be entered limiting disclosure of plaintiffs’ documents to attor- neys and their experts. RESPECTFULLY SUBMITTED the 17th day of August, 1981. SNELL & WILMER By JOHN J. BOUMA KENNETH D. NYMAN 3100 Valley Center Phoenix, Arizona 85073 Attorneys for Plaintiffs COPY of the foregoing mailed this 24th day of August, 1981, to: David Wm. West Harold J. Bliss, Jr. WEST & BLISS, P.A. 4154 North 12th Street Phoenix, Arizona 85014 Attorneys for Defendants Jerri P. Forsythe A-61 Law Offices SNELL & WILMER 3100 Valley Bank Center Phoenix, Arizona 85073 (602) 257-7211 TELEX 165088 May 8, 1981 BY HAND Mr. Harold J. Bliss, Jr. West & Bliss, P.A. 4154 North 12th Street Phoenix, AZ 85014 Re: Jerome LaSalvia, et ux. v. UDA, et al. Dear Hal: At the end of our meeting in your offices on May 5th, I told you that I would get back to you on any additional documents which we would be willing to turn over in further response to your First Request for Production. This letter represents our response. As you understand by now, the gravamen of our case is that Jerome and Peggy LaSalvia were denied the opportunity to sell all of their milk in this market by certain activities of UDA which we regard as being in violation of the State and Federal antitrust laws. They had to either sell that milk else- where—for a lower price—or dump it. In support of that theory, we supplied you with documents evidencing prices and quantities of milk sold elsewhere. You can compute the dam- ages by taking the difference between the Shamrock (blend) price and the non-Shamrock price and multiplying the re- mainder by the volume of milk either sold outside the market or dumped. As your April 9, 1981 letter correctly notes, we have also accused UDA of increasing the LaSalvia’s costs of doing busi- A-62 ness and increasing capital requirements. Because of the expense involved in conducting a detailed damage study, we are only claiming the cost of the new milk tank which Jerome recently purchased from UDA in order to hold milk for out- of-market or distress sales. And, of course, UDA has its own records on how much Jerome paid it for that tank. Your Request also asked for quality control test documenta- tion. Although Jerome does keep a few records, they are not - well organized, and it would be much easier for you to get those records directly from the State Dairy Commission. Jerome does not believe that he has any health records that are not duplicated in the State Dairy Commission files, and he hereby gives the UDA permission to copy any quality control test results kept by the State Dairy Commission, on the condition that he be allowed to copy the quality control test results for all of the members of UDA. You have requested documents concerning sales of cattle, on the apparent, and correct, assumption that Jerome has been forced to sell many producing cattle for beef because of the absence of a market for his milk. However, he has elected not to pursue this theory of damages, and will therefore not claim the loss associated with the forced sale of those cattle as beef in lieu of selling their milk. I trust that the foregoing is satisfactory. If it is not, please give me a call. : Very truly yours, SNELL & WILMER KENNETH D. NYMAN KDN ij) A-63 LaSALVIA DAIRY LOST INCOME ANALYSIS Prepared by: Frank K. Stuart & Associates 455 South 300 East, Suite 200 Salt Lake City, Utah 84111 Pl. Tr. 326 LIST OF SCHEDULES Page Section 1 1.1 LaSalvia Milk Shipments To Out-of-State Consumers, 1974-1981 1-7 1.2 Calculation of LaSalvia’s Out-of-State Sales, 1974-1981 8-20 1.8 Comparison of Amount Received by LaSalvia 1.4 1.5 1.6 1.7 1.8 1.9 for Out-of-State Milk Shipment With Amount Available in State Under Federal Order 131, 1974-1981 21-24 Annual Summary of Comparisons For Out-of- State Shipments LaSalvia Dairy, 1974-1981 25 Estimated Hauling Charges Incurred By LaSalvia Dairy If Out-of-State Milk Was Sold Within Order 131 Market Area 26 Estimated Market Administrative Charges Incurred by LaSalvia if Out-of-State Milk was Sold Within Order 131 Market Area 27 Loss On Out-of-State Shipments of Milk LaSalvia Dairy, 1974-1981 28 Comparison of Production Shipped to Handlers Under Order 131 and LaSalvia’s Out-of-State Milk Shipments, 1974-1981 29-36 Uniform Producer Prices Under Federal Order 131, 1974-June 1982 837 A-64 1.10 Butterfat Differentials Under Federal Order 131, 1974-June 1982 38 Section 2 2.1 LaSalvia’s Sales To United Dairymen of Arizona, 1981-1982 39 2.2 Calculation of LaSalvia’s Sales to United Dairymen of Arizona, 1981-1982 40-41 2.3. Comparison of Amount Received by LaSalvia For Sales to United Dairymen of Arizona With Amount Available Under Federal Order 131, 1981-1982 42 2.4 Estimated Hauling Charges And Market Administrative Charges Incurred by LaSalvia for Milk Sold to United Dairymen \ of Arizona 43 2.5 Loss on Milk Sales to United Dairymen of Arizona LaSalvia Dairy, 1981 and 1982 44 Section 3 3.1 Expansion of Cow Herd Assuming No Supplemental Cow Purchases, 1965-1981 46 3.2 Comparison-of LaSalvia’s Actual Herd Increase and Projected Herd with no Supplemental Cow Purchases, 1965-1981 47 3.3 Comparison of LaSalvia’s Actual Herd Size with Projected Herd Size, 1973-1981 50 3.4 Additional Cull Cow Sales LaSalvia Dairy, 1968-1981 51 3.5 Additional Bull Calve Sales LaSalvia Dairy, 1974-1981 52 3.6 Lost Income Resulting From Lost Sales of Cull Cows and Bull Calves LaSalvia Dairy, 1975-1981 53 A-65 3.7 Loss of Revenue Associated with Additional Milk Sales and Additional Cull Cow and Bull Calve Sales LaSalvia Dairy, 1974-1981 Section 4 4.1 Loss Of Additional Cattle LaSalvia Should Have Had In 1981 Section 5 5.1 New Investment 1,200 Milking Cows (1,436 Milking Cows) With Replacements 5.2 Lost Value Of Plant And Equipment LaSalvia Dairy 54 55 56 57 5.3 Depreciation Schedule 1,200 Milking Cows With Replacements ; 5.4 Cost Of Plant And Equipment For Additional Milking Cows 1974-1981 5.5 LaSalvia Dairy Actual And Projected Net Income And Depreciation 1970-1981 5.6 Comparison Of LaSalvia Cashflow With Cost Of Additional Plant And Equipment Section 6 6.1 Sunshine Swiss Out-of-State Milk Diversions, January-March 1980 Section 7 7.1 Cost Of Extra Tank And Extra Crates Purchased Summary Of Losses 58 59 60 61 62 64 A-66 it oF ie = (Je) & i al PEI dtl rz i) on g 9 5 < | | August —_ September os October — November —_— December — Total 1975 290,820 1974 and 1975 N OF AMOUNT RECEIVED BY LaSALVIA OUT-OF-STATE MILK SHIPMENTS AILABLE IN STATE UNDER FEDERAL ORDER 131 Amount Calculated Received By Amount For Handler’s LaSalvia LaSalvia Difference Charge (Dollars) (3) 3)-(2) (2) (3) (4) (5) $ 3,161.29 $ 4,504.70 $1,343.41 a $ 3,161.29 $ 4,504.70 $1,343.41 an $ 9,292.96 $11,775.72 $2,482.76 $ 704.20 9,503.97 12,384.22 2,880.25 2,309.50 $18,796.93 $24,159.94 $5,363.01 $3,013.70 A-68 SCHEDULE 1.7 LOSS ON OUT-OF-STATE SHIPMENTS OF MILK LaSALVIA DAIRY 1974-1981 Loss On Out-Of-State Milk Shipments Difference Between Amount That LaSalvia __ Received And Calculated Revenue On Out-Of-State Sales $324,379.33 Amount LaSalvia Paid To Shamrock And Other Handlers 98,029.78 Less: Estimated Hauling And Administrative Charges Incurred By LaSalvia If Out-Of-State Milk Was Sold Within Order 131 Market Area (30,300.00) TOTAL ESTIMATED LOSS $392,109.11 — (Dollars) — --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_2152%3A1. Public record. Not legal advice.