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PotatoesIn re Fresh and Process Potatoes Antitrust Litigation
10-md-2186, 2011 March 2014
Hausfeld LLP represents a class of direct purchasers of fresh and process potatoes bringing claims against potato growers, their cooperatives, processors, and packers that violated federal antitrust laws by conspiring to manipulate the price and supply of potatoes. The case, In re Fresh and Process Potatoes Antitrust Litigation, is pending before Judge Winmill in the U.S. District Court for the District of Idaho.
Beginning in late 2004, potato growers formed cooperatives for the sole purpose of fixing potato prices by, among other conduct, agreeing to planting and other production restrictions that suppressed the supply of fresh potatoes and artificially increased prices. The co-ops and their members imposed penalties on potato-grower members that did not comply with the planting and related acreage restrictions, and operated a potato dehydration enterprise for the purpose of diverting fresh potatoes into processing to further reduce the supply of fresh potatoes. Potato packers involved in the conspiracy imposed “shipping holidays” and other post-production supply restrictions to artificially restrict the flow of fresh potatoes to the market in order to artificially stabilize and increase prices.
Hausfeld partner James Pizzirusso successfully argued that the Capper Volstead Act—which immunizes certain legitimate conduct of agricultural cooperatives from federal antitrust liability—does not protect producers or their cooperatives that agree to pre-production supply restraints and that vertically integrated growers do not automatically qualify as "producers" that are subject to the Act's protections. See In re Fresh and Process Potatoes Antitrust Litig., No. 10–md–2186, 2011 WL 6020859 (D. Idaho Dec. 2, 2011). The result was a groundbreaking court opinion that dramatically limited the reach of that statute and will help stem a growing trend toward similar price-fixing tactics by other so-called “cooperatives” that increase the cost of basic food items to manufacturers and consumers alike. Having survived two sets of motions to dismiss by Defendants, discovery is ongoing in the matter.
The firm has been appointed by the Court as the Chair of the Executive Committee of Direct Purchase Plaintiffs.
Practice Areas: Antitrust / Competition