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In re Mushroom Direct Purchaser Antitrust Litigation

United States District Court, E.D. Pennsylvania

March 6, 2017

IN RE MUSHROOM DIRECT PURCHASER ANTITRUST LITIGATION THIS DOCUMENT RELATES TO: ALL ACTIONS

          MEMORANDUM

          O'NEILL, J.

         This long-running antitrust litigation, which has been certified as a class action, [1] arises out of plaintiffs'[2] claim that defendants acted in violation of Sections 1 and 2 of the Sherman Act and Section 7 of the Clayton Act by conspiring “to set artificially-inflated prices” for fresh agaricus mushrooms, see Dkt. No. 185 at ¶ 93, and through the implementation of a supply control scheme related to the production of mushrooms. Id. at ¶ 94. Certain defendants[3] seek partial summary judgment with respect to plaintiffs' claims against defendant John Pia. Now before me with respect to their motion are: defendants' motion for partial summary judgment on the issue of entitlement to immunity from plaintiffs' claims under § 1 of the Sherman Act and for Reconsideration of the Court's March 2, 2009 Opinion (Dkt. No. 513), plaintiffs' opposition to the motion for summary judgment with respect to John Pia (Dkt. No. 612), certain defendants' reply in support of the motion of John Pia for partial summary judgment (Dkt. No. 615), plaintiffs' sur-reply in opposition to the motion of John Pia for partial summary judgment (Dkt. No. 650) and defendant John Pia's sur-reply in support of the motion for partial summary judgment (Dkt. No. 652).[4] For the reasons that follow, I will deny the instant motion.

         BACKGROUND[5]

         John Pia was a 50% co-owner and secretary/treasurer of Kaolin Mushroom Farms, a mushroom grower and a member of the Eastern Mushroom Marketing Cooperative (EMMC). Dkt. No. 245, Ex. 25 (Pia. Dep.) at 7:12-14, 7:22-24, 11:13-15; 33:18-34:8. Pia was also a 50% co-owner and president of South Mill Mushroom Sales, Inc., a mushroom distribution entity. Id. at 8:5-18. Additionally, Pia was the president of the EMMC in 2000, when it came into being. Dkt. No. 612, Ex. A. (Pia Dep.) at 55:8-18. When they first moved for summary judgment in Pia's favor, certain defendants noted that when asked what his duties were as president of the EMMC, Pia testified, “[c]heerleading.” Dkt. No. 245 at 78, citing Pia Dep. at 56:2-4. Pressed for further information, he testified that “the first year was pretty much consumed [with] toning the anger and difficulties that members had in their prior life with eachother.” Id. at 56:9-12. Consistent with his testimony, in a July 2, 2001 email from Pia to the EMMC, he explained that he was “stepping aside as President” and noted that among the EMMC's “tremendous strides” during his tenure was having

brought together people from all over the country that 12 months ago, had either a poor relationship or no relationship at all. In all except the most rare circumstances we have come to trust the words and actions of fellow members. Who would have thought this possible one year ago? We were so consumed with cutting each other's throats we could not see what it was doing to us.

Dkt. No. 513, App'x, Ex.G at CREEK-RFP-0000349. As president, Pia was a member of the EMMC's executive committee which, he testified, “was an informal group that would . . . throw ideas around and make recommendations to the board.” Dkt. No. 245, Ex. 25 (Pia Dep.) at 58:18-21.

         Plaintiffs contend that during Pia's tenure as president, “the EMMC implemented the price-fixing agreements at issue here, including setting the prices to be charged and implementing the first price fix in February 2001.” Dkt. No. 612 at 4. Asked whether the EMMC adopted minimum pricing “[a]s part of the rules and regulations of the EMMC, ” Pia testified that it “did adopt minimum pricing.” Dkt. No. 245, Ex. 25 (Pia Dep.) at 59:4-8. However, Pia testified that he could not explain how the minimum pricing was set or “recall the basis for the levels of minimum pricing in the various regions.” Id. at 59:9-15. Asked whether, to his knowledge, he “or any of the member of the EMMC attempt[ed] to get a nonmember to agree to any type of minimum pricing or any of the policies of the EMMC, ” Pia responded “[n]o.” Id. at 363:4-11. Asked whether, “[n]otwithstanding advice from counsel to the contrary, ” he “or any other member of the EMMC attempt[ed] to induce or persuade or agree with a nonmember that the nonmember should follow one or more EMMC policy, ” Pia responded, “[n]o. Never.” Id. at 363:19-25. However, the record in this litigation also includes the deposition testimony of Stuart Thomas, [6] who testified that it was John Pia who verbally communicated to him the prices at which the South Mill distribution entity - which was not an EMMC member - should resell mushrooms to the market. Dkt. No. 612, Ex. B (Thomas Dep.) at 47:22-48:10 (“Q. . . . who communicated to you the prices at which you should sell? A. John Pia.”); id. at 92:16-93:10 (“Q. . . . why are your prices set by the EMMC . . . ? . . . A. I was informed by John Pia that I had to follow the rules of the EMMC ..... Q. Who verbally communicated that pricing? A. John Pia.”). Also, in his July 2, 2001 email to the EMMC, Pia wrote:

On the subject of market pricing: I think you have to go back to our fathers['] time, or before, to find a situation which allowed us to realize the levels of fresh market pricing that we now see, during a period of unprecedented low cannery prices. Of all the things that the EMMC has Dated this has to stand out as . . . the most significant accomplishment. Yet, it doesn't happen by magic. It happens only because each of us as members, maintains our honor and commitment to those things we have agreed to do as a team.

Dkt. No. 513, App'x, Ex.G at CREEK-RFP-0000349. He wrote that “[i]ncreased pricing in the future should allow us to keep up with the ‘cost of business[.]' No longer should we hope for the demise of an industry member to be able to realize pricing suitable to maintain our own existence.” Id. at CREEK-RFP-0000350. Concluding his email, Pia asked, “[w]here would our fresh market pricing be today with cannery pricing at $.30 and $.20 . . . ?” Id.

         Pia also testified that he thought he had been on a “supply committee” in the EMMC; he testified that it was “a committee that dealt with joint purchasing, purchasing goods together in bulk form, trying to pass value to membership in that way” - i.e., the term “supply” in the committee's name did not refer to the alleged supply control scheme. Dkt. No. 245, Ex. 25 (Pia Dep.) at 58:9-15. However, there is other evidence of record that would support a finding that Pia was involved in the EMMC's efforts to control the supply of mushrooms. In an April 21, 2001 email, he wrote that “[w]e all suffer when things are bad. The purpose of the EMMC is to minimize the number of times we face that problem. It is working. We have accomplished nothing short of a miracle.” Dkt. No. 273, Ex. 21. He explained that “[f]or months now, I have worked my butt off at the expense of my own company to further this cause in which I so much believe.” Id. Discussing the possibility that two closed mushroom farms owned by non-EMMC member Money's - Dublin and Hillsboro - could return to mushroom production, he wrote that

[o]n Tuesday, the Executive Committee will begin to work on the supply side issue. Hopefully, if and when we can come up with what we think is a workable solution, we will address the membership with the hopes of being able to raise the money it takes to carry out the job. If you agree with the plan, and support us with the funding, we will make it happen.

Id. Then, on May 23, 2001, Pia wrote to the EMMC that, at the Money's auction, there had been “three other bidders” for the Money's farms including non-EMMC member mushroom grower, Rakraha and that “our challenge was to unseat the incumbent bid from Rakraha.” Dkt. No. 273, Ex. 29. He described the outcome as “a day of victory, ” because the EMMC was successful in making the winning bid for the properties (and for a dollar amount “well below the maximum bid authorized by the membership”). Id. In a June 9, 2001 email, Pia wrote that the duties of the EMMC's Executive Committee

have recently consisted of carrying out the responsibilities of organizing and fulfilling the needs required for the purchase of the previously failed attempt to purchase the operating Money's facilities, and lastly dealing with the project of renting mushroom growing doubles in Chester and Berks County, for the purpose of creating order in the supply side of business.

Dkt. No. 513, App'x, Ex. J at 1-2 (CREEK000112-13). In a February 8, 2002 email, he wrote to representatives of EMMC members that they should “be prepared to discuss whether we want to buy [a] farm ou[t] from under Blue Mountain, ” noting “the importance of continuing on the plan of absorbing available plants/production” and cautioning that the EMMC was handing power “over ...


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