Antitrust Law Daily Five classes of Midwest grocers approved in market allocation suit
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Thursday, September 8, 2016

Five classes of Midwest grocers approved in market allocation suit

By Jeffrey May, J.D.

The federal district court in Minneapolis has certified five classes of retail grocery store operators serving the Midwest to pursue market allocation claims against grocery wholesalers SuperValu, Inc. and C&S Wholesale Grocers, Inc. The court had previously rejected a broader "Midwest" class but was now satisfied that the five proposed distribution-center-based classes, with one small modification to exclude Missouri grocers, satisfied the requirements for class certification set forth in Rule 23 of the Federal Rules of Civil Procedure (In re Wholesale Grocery Products Antitrust Litigation, September 7, 2016, Montgomery, A.).

The grocers were divided into five classes based on the four SuperValu distribution centers which served them: Champaign, Illinois; Green Bay, Wisconsin; Hopkins, Minnesota; and Pleasant Prairie, Wisconsin. In addition, customers of the Champaign distribution center were divided into an arbitration class and a non-arbitration class.

Because each of the five proposed classes included 40 or more members, the numerosity requirement of Rule 23(a)(1) was satisfied. Commonality also was satisfied, because the case presented several questions common to each of the proposed classes. Those questions included: whether the defendants agreed to allocate territories or customers for full-line grocery wholesale products and services; whether the defendants’ agreement caused prices for full-line wholesale products and services to be higher for class members than they otherwise would have been; whether all class members were injured by the defendants’ conduct; and whether the defendants’ conduct violated antitrust laws. Moreover, the class representatives would adequately represent the class, and their claims were typical of class members’ claims.

Predominance. The plaintiffs sufficiently demonstrated that common evidence could show an antitrust violation and could suffice to prove class-wide impact based on supra-competitive at the four distribution centers. The court also was convinced that the plaintiffs demonstrated that common evidence of damages predominated over individualized issues. Lastly, the class action mechanism was found to be superior to any alternative form of litigation for the Midwest grocers’ claims against the defendants.

Expanded class definition. The court agreed with the defendants that the plaintiffs could not expand the class definition by including customers located in a "relevant geographic market" covering parts of Missouri. The second amended complaint stated that "[t]he Midwest market includes the states of Illinois, Indiana, Iowa, Michigan, Minnesota, Ohio, and Wisconsin (‘the Midwest’)" and defined the proposed "Midwest Class" as "all entities in the Midwest that purchased full-line wholesale grocery products or related services directly from Defendants in the Midwest market."

The case is No. 09-MD-2090 ADM/TNL.

Attorneys: W. Joseph Bruckner and Elizabeth R. Odette (Lockridge Grindal Nauen PLLP); Richard B. Drubel and Matthew J. Henken (Boies, Schiller & Flexner LLP); and Daniel A. Kotchen (Kotchen & Low LLP) for the Midwest Plaintiffs. Stephen P. Safranski and Lisa L. Beane (Robins Kaplan LLP) for SuperValu, Inc. Erik Koons and Christopher J. MacAvoy (Baker Botts LLP) and Todd A. Wind (Fredrikson & Byron, PA) for C&S Wholesale Grocers, Inc.

Companies: C&S Wholesale Grocers, Inc.; SuperValu, Inc.

MainStory: TopStory Antitrust MinnesotaNews

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