You Say Potato, Plaintiffs Say Conspiracy In “OPEC Of Potatoes” Case

A group of Wisconsin consumers is asking the U.S. District Court in the Eastern District of Wisconsin to mash the alleged “OPEC of potatoes” in a class action alleging price fixing by a purported cartel of U.S. and Canadian potato growers and their co-conspirators, including leading agricultural technologist Bayer CropScience.

This case – Rizzo, et al. v. United Potato Growers of America, Inc. et al. – is the third putative class action filed against the alleged cartel. Similar cases have also been filed in federal courts in the District of Idaho (Brigiotta’s Farmland Produce and Garden Center Inc.  v. United States Potato Growers of Idaho Inc., et al., No. 10-CV-307-BLW) and the Northern District of California (Marvilla v. United Potato Growers of Idaho, Inc. et al., No. 10-CV-3954).

Defendants in all of the cases include United Potato Growers of America, United Potato Growers of Idaho (UPGI), other regional and national organizations and their members, as well as General Mills, Dole Food and Bayer CropScience.  (General Mills is not named in the Wisconsin case, and Dole is named only in the Idaho case.)

Plaintiffs are all purchasers of potatoes – indirect in Wisconsin and California (e.g., consumers and retailers) and direct in Idaho (e.g., wholesalers).  They claim that potatoes are “the most important vegetable in the diet of United States consumers,” and comprise a “multi-billion dollar” market.  Plaintiffs allege that defendants control 80% of that market (by acreage of production).

The Wisconsin complaint paints a picture of potato farming that is far from the potato farmers painted by Van Gogh.  Plaintiffs allege egregious conduct, including “brib[ing], threaten[ing] and coerc[ing],” “satellite imagery [and] fly-overs,” and “punish[ing] violators’ of the cartel’s directives.”

Plaintiffs claim that the cartel attempts to shield its actions behind the Capper-Volstead Act (7 U.S.C. § 291), a 1922 federal statute that exempts certain agricultural associations from antitrust scrutiny.  However, plaintiffs say, defendants may enjoy no such exemption.  First, they are not “genuine cooperatives,” and second, their illegal acts “have stripped them of any immunity.”

All three cases may soon be in the U.S. District Court in Idaho.  The Judicial Panel on Multidistrict Litigation is considering an unopposed motion to centralize them there.  On October 6, 2010, Judge B. Lynn Winmill of the federal court in Idaho appointed an executive committee of interim class counsel including Labaton Sucharow LLP and Spector Roseman Kodroff & Willis PC, with Hausfeld LLP as its chair, although class certification has not yet been decided.

Tagged in: Antitrust Litigation, Price Fixing,