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Potatoes

Related Lawyers: James J. Pizzirusso, Jeannine M. Kenney
Related Practice Areas: Antitrust / Competition

In re: Fresh and Process Potatoes Antitrust Litigation, MDL No. 2186, D. IdahoHausfeld represented 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. In 2015, Hausfeld settled the case for $19.5 million for direct purchasers of fresh potatoes plus important injunctive relieve that ensures the defendants cannot engage in similar anticompetative conduct in the future. 

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 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 also imposed post-production supply restrictions to artificially restrict the flow of fresh potatoes to the market in order to artificially stabilize and increase prices. 

Hausfeld was appointed by the Court as the Chair of the Executive Committee of Direct Purchaser Plaintiffs. 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. 

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