In re: Fresh and Process Potatoes Antitrust Litigation, Case No.

4:10-MD-2186-BLW (Idaho, December 2, 2011) In In re: Fresh and Process Potatoes Antirust Litigation, the plaintiffs were a company that purchased potatoes directed from one or more defendants, and entities that purchased potatoes directly or indirectly from one or more defendants. All plaintiffs alleged that defendants formed a cooperative, United Potato Growers of Idaho (UPGI) that illegally agreed to reduce the supply of potatoes in order to raise prices. Defendants moved to dismiss on several grounds, including grounds that the Capper-Volstead Act immunized defendants from Sherman Act liability. The court cited Case-Swayne Co. v. Sunkist Growers, Inc., 389 U.S. 384 (1967) and National Broiler Marketing Assn v. United States, 436 U.S. 816 (1978) as stating that the Capper-Volstead Act applied to an organization only if all participants of the organization qualified under the Act. The court stated that neither of these cases decided whether vertically-integrated cooperative members qualified under the Act. Because UPGI included vertically-integrated members, plaintiffs argued for an interpretation under which UPGI would not qualify for immunity. The defendants, on the other hand, argued for the reading used by the dissent in National Broiler Market, which stated that the Congressional intent behind the Copper-Volstead Act was meant to protect the entire agricultural industry and that, therefore, vertically-integrated cooperative members qualified. The court held that a factually-intense inquiry taking into account details of the potato industry would be necessary to make this determination, and denied the defendants motion to dismiss on grounds that the Capper-Volstead Act applied. Though not necessary to its decision, the court went on to address whether pre-production activities of a cooperative could be entitled to Capper-Volstead immunity. The court found that there was no case law that found Capper-Volstead immunity when the alleged activity was preproduction agricultural output limitation, and, construing the terms of the Capper-Volstead Act according to their ordinary meaning, the CapperVolstead Act should not apply to production limitations. Defendants attempted to cite various cases for the proposition that pre-production agricultural output limitations were eligible for Capper-Volstead immunity, but the court distinguished all of these cases. Defendants then argued that because Capper-Volstead cooperatives were allowed to fix prices, they must also be allowed to restrict production. The court found this unpersuasive and noted that the reason producers were permitted to raise prices was to encourage farmers to produce more, providing a safeguard against CapperVolstead abuse. The court also noted Congressional intent, as displayed during debate of the Act, showed an indication that Congress did not intend to allow farmers to use cooperatives to limit production. The Court also concluded that the inclusion of foreign members in a cooperative does not preclude the possibility that the cooperative can be entitled to Capper-Volstead immunity.

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