Middle District Of Florida Limits Statute Of Limitations Tolling Arguments For Alleged Output Restrictions In Milk Market
01/29/2019On January 16, 2019, Judge Brian J. Davis of the United States District Court for the Middle District of Florida issued an order granting in part and denying in part defendants’ motion for summary judgment. Winn-Dixie Stores, Inc. v. Southeast Milk, Inc. et al., Case No. 3:15-cv-01143 (M.D. Fla. Jan. 16, 2019). The Court ruled that plaintiffs should not receive equitable tolling of the statute of limitations for fraudulent concealment, that only a limited subset of claims were eligible for class action tolling, and that other theories for the timeliness of plaintiffs’ claims depended on the jury’s determination of the facts.
This case concerned national milk output restrictions stemming from the national Herd Retirement Program (HRP). Plaintiff1 Winn-Dixie, a supermarket chain, alleged that dairy purchasers paid elevated prices for milk due to the HRP established by the National Milk Producers Federation (NMPF). Defendant NMPF is a twenty-eight-member “federation of dairy cooperations [. . .] engaged in the production and marketing of milk and dairy products” that represents approximately 30,000 dairy producers. Additional defendants Southeast Milk, Inc., Dairy Farmers of America, Inc., Land O’Lakes, Inc., Agri-Mark, Inc., and Dairylea Cooperative Inc. are NMPF members. Additional defendant Cooperatives Working Together (CWT) is a separately-funded program that is run “within the structure of NMPF” and executes HRP. Plaintiffs alleged that the HRP, which financially incentivized farmers to convert milking cows to beef, restricted the output of milk and raised prices of dairy products in violation of the Sherman Act, 15 U.S.C. § 1.
This suit was filed on September 23, 2015—five years after the last herd retirement operation in September 2010. As Sherman Act claims have a four-year statute of limitations, 15 U.S.C. § 15b, defendants argued that these claims were untimely and should be dismissed. The Court considered whether plaintiffs’ claims could survive summary judgment, first, through the doctrine of “continuing antitrust violation.” If an act or sale is a continuing violation of the antitrust laws, the “violation occurs each time the plaintiff is injured by the act”, restarting the statute of limitations period. Hanover Shoe, Inc. v. United Shoe Mach. Corp., 392 U.S. 481, 502 n.15 (1968); Klehr v. A.O. Smith Corp., 521 U.S. 179, 189 (1997). Whether the prolonged market impact of retiring dairy cows for meat constituted a continuing violation was a factual question for the jury, said the Court. Similarly, the jury should decide whether a defendant had withdrawn from the conspiracy, which would limit the period of potential continuing violations.
The Court then considered whether plaintiffs’ claims were tolled under either (1) the equitable theory of fraudulent concealment or (2) class action tolling. As to the first theory, the Court found fraudulent concealment implausible. Rather than conceal, the Court found that defendants publicized their conduct, garnering news coverage and Congressional support for the HRP. “The publications were widespread, diverse in types of media outlets, and were publicized in areas where Plaintiff’s [sic] owned dairy plants.” Therefore, plaintiffs could have discovered these claims and filed sooner than 2015.
For class action tolling, the Court reviewed several class actions that plaintiffs argued would toll their claims’ statute of limitations for the period that those cases’ class certifications were pending. American Pipe & Construction Co. v. Utah, 414 U.S. 538, 554 (1974). To be eligible for class action tolling, the claims must concern “the same evidence, memories, and witnesses as the subject matter of the original class suit, so that the defendant will not be prejudiced” and will be “placed on notice by the class suit.” Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 355 (1983). Plaintiffs relied on four cases that alleged HRP and CWT antitrust violations, and were filed against common defendants (including NMPF, Dairy Farmers of America, Inc., Land O’Lakes, Inc., Dairylea Cooperative Inc., and Agri-Mark, Inc.) in California, Pennsylvania, and Illinois.
The Court found that most of plaintiffs’ claims were different with regard to “parties, evidence, memories, and witnesses.” Only a limited subset of plaintiffs’ claims regarding “fresh dairy product purchases” from defendants Dairy Farmers of America, Inc., Land O’Lakes, Inc., and Agri-Mark, Inc., were tolled due to similarities with the cited class actions. The Court denied tolling on claims related to distinct products like raw milk, cheese, butter, and purchases from Southeast Milk, Inc. As further grounds against tolling, the Court cited the reasons for a previous denial of consolidation of this case with the Illinois class actions. In re Fresh Dairy Prod. Antitrust Litig. (No. III), 190 F. Supp. 3d 1353, 1355 (U.S. Jud. Pan. Mult. Lit. 2016). Quoting the Judicial Panel, the Court noted that the other cases had been pending for longer, with certification proceedings “well underway”, and that this case involved an additional defendant, Southeast Milk, Inc. As such, with the limited exception, defendants’ motion for summary judgment was granted in part as to the issue of tolling.
Finally, defendants also asserted that plaintiffs lacked standing, which the Court tabled until further briefing by the parties.
1 Co-plaintiff Bi-Lo Holdings, LLC, was dismissed without prejudice by Order on December 13, 2018.