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Sitts v. Dairy Farmers of America, Inc.
United States District Court, D. Vermont
July 23, 2019
GARRETT AND RALPH SITTS, LEON ATWELL, VICTOR BARRICK, DANIEL BAUMGARDER, WILLIAM BOARD, GEORGE BOLLES, ROGER BOLLES, ANDY BOLLINGER, THOMAS BOLLINGER, LOGAN BOWER, DWIGHT BRANDENBURG, BERNARD BROUILLETTE, THOMAS BROUILLETTE, AARON BUTTON, HESTER CHASE, THOMAS CLARK, THOMAS CLATTERBUCK, PAUL CURRIER, GERRY DELONG, PETE AND ALICE DIEHL, MARK DORING, MARK AND BARBARA DULKIS, GLEN EAVES, MIKE EBY, WILLIAM ECKLAND, DOUG ELLIOT, JAMES ELLIOT, WENDALL ELLIOTT, MICHAEL FAUCHER, DAVID AND ROBIN FITCH, DUANE AND SUSAN FLINT, JOSEPH FULTS, RICHARD GANTNER, STEFAN AND CINDY GEIGER, WILLIAM GLOSS, JOHN GWOZDZ, DAVID AND LAURIE GRANT, JIM AND JOYCE GRAY, DENNIS HALL, ROGER AND JOHN HAMILTON, NEVIN AND MARLIN HILDEBRAND, JAKE AND HARLEN HILLYERD, RICHARD AND TERRI HOLDRIDGE, PAUL HORNING, TERRY AND ROBERT HUYCK, DONALD SCOTT HYMERS, TERRY INCH, RANDY AND LYNETTE INMAN, THEODORE JAYKO, JACK KAHLER, JAMES AND TERESA KEATOR, JIM AND SHARON KEILHOLTZ, GEORGE KEITH, LEE AND ELLEN KLOCK, MIKE AND LISA KRAEGER, FRED LACLAIR, TIM LALYER, FRANK AND JOHN LAMPORT, CORRINE LULL, CHARLES AND GRETCHEN MAINE, THOMAS AND DEBORA MANOS, FRED MATTHEWS, RUSSELL MAXWELL, GERRY MCINTOSH, STEPHEN MELLOTT, JOHN AND DAVID MITCHELL, THOMAS MONTEITH, WALT MOORE, RICHARD AND SHEILA MORROW, DEAN MOSER, MELISSA MURRAY, SEAN QUINN, THOMAS NAUMAN, CHARLES NEFF, DAVID NICHOLS, MICHAEL NISSLEY, LOU ANN PARISH, DANIEL PETERS, MARSHA PERRY, CAROLYN AND DAVE POST, JUDY LEE POST, SCOTT RASMUSEU, BRIAN REAPE, DAVID AND LYNETTE ROBINSON, BRIAN AND LISA ROBINSON, CALVIN ROES, BRADLEY ROHRER, PAUL AND SARAH ROHRBAUGH, ROBERTA RYAN, SCOTT AND LIN SAWYER, S. ROBERT SENSENIG, THOMAS AND DALE SMITH, DALE AND SUSAN SMITH, DENNIS SMITH, DONALD T. AND DONALD M. SMITH, ROGER AND TAMMY, SMITH, TODD SNYDER, RICHARD SOURWINE, DANNY SOURWINE, RANDY SOWERS, SHANE STALTER, GEORGE AND SHIRLEY STAMBAUGH, TRACY STANKO, STEPHEN SOURWINE, RICHARD SWANTAK, GEORGE AND PATRICIA THOMPSON, JEREMY THOMPSON, KEN AND JUDY TOMPKINS, DANIEL VAUGHN, MARK VISSAR, ERIC WALTS, EDWARD WALLDROFF, GERALD WETTERHAHN, JR., EUGENE WILCZEWSKI, STEVE WILSON, DALE COVERT, FAMILY DAIRY FARMS, LLC, RICHARD PUGH, Plaintiffs,
DAIRY FARMERS OF AMERICA, INC. and DAIRY MARKETING SERVICES, LLC, Defendants.
OPINION AND ORDER DENYING DEFENDANTS' MOTION TO
STRIKE NEW EXPERT OPINION AND DENYING DEFENDANTS' MOTION
TO STRIKE AN UNDISCLOSED EXPERT OPINION (DOCS. 96 &
Christina Reiss, District Judge.
filed this action seeking relief pursuant to the Sherman Act,
15 U.S.C. §§ 1-2, for alleged antitrust violations
committed by Defendants Dairy Farmers of America, Inc.
("DFA") and Dairy Marketing Services, LLC
("DMS"). Plaintiffs, who refer to themselves as
"Farmers United," are more than 115 dairy farmers
who opted out of a settlement approved by the court in a
class action styled Allen v. Dairy Farmers of America,
Inc., No. 5:09-cv-230.
before the court is Defendants' February 5, 2019 motion
to strike Professor Einer R. Elhauge's supplemental
report. (Doc. 96.) Plaintiffs opposed the motion on February
19, 2019 and Defendants replied on March 5, 2019. Oral
argument was held on April 9, 2019, at which time the court
took the motion under advisement.
pending before the court is Defendants' May 3, 2019
motion to strike Professor Elhauge's opinion that DFA and
DMS possess unilateral monopsony power because this opinion
was first disclosed at his deposition. (Doc. 121.) Plaintiffs
opposed the motion on May 17, 2019 and Defendants replied on
May 31, 2019, at which time the court took the motion under
are represented by Dana A. Zakarian, Esq., Elizabeth A.
Reidy, Esq., Gary L. Franklin, Esq., Joel G. Beckman, Esq.,
and William C. Nystrom, Esq. Defendants are represented by
Margaret M. Zwisler, Esq., Alfred C. Pfeiffer, Jr., Esq.,
Elyse M. Greenwald, Esq., Ian P. Carleton, Esq., Jennifer L.
Giordano, Esq., and W. Todd Miller, Esq.
Factual and Procedural Background.
allege that Defendants, in concert with known and unknown
coconspirators, "have engaged in an illegal conspiracy
to restrain competition, fix and suppress prices paid to
farmers and monopolize/monopsonize the raw Grade A milk
market in the Northeast." (Doc. 29 at 22, ¶ 81.)
Plaintiffs' Revised First Amended Complaint asserts the
following claims: Count I, conspiracy to monopsonize in
violation of 15 U.S.C. § 2; Count II, attempt to
monopsonize in violation of 15 U.S.C. § 2; Count III,
unlawful monopsonization in violation of 15 U.S.C. § 2;
and Count IV, conspiracy to restrain trade in violation of 15
U.S.C. § 1.
about October 3, 2018, Plaintiffs served Professor
Elhauge's initial expert report (the "Initial
Report") in which he used a regression analysis to
measure the impact of Defendants' alleged antitrust
violations and concluded that DFA, DMS, and their
coconspirators possessed monopsony power in the raw Grade A
milk market in Federal Milk Marketing Order 1. A deposition
taken on November 6, 2018 included the following colloquy
between Professor Elhauge and Defendants' attorney:
Q. So that's, again, back to my question: You did not do
an analysis in your report that says that either DFA or DMS
or the two of them together have monopsony power on their
own, apart from the conspiracy; right?
A. Again, I'm not sure-I'm not positive. I don't
think it's in the report, but I do believe that they
themselves have about 50 percent market share and thus would
likely have monopsony power on their own. But I thought as an
economic matter what matters is the collective power of the
Q. And again, let's be blunt: Are you offering an opinion
in this case that DFA or DMS or the two of them together has
monopsony power on their own?
A. I think they likely do. But I'm not sure it's in
Q. So you're not offering that opinion whether or not you
think they may have it.
A. Well, you're asking me now, and I think they likely do
have that power since they have about a 50 percent share of
Q. Okay. Is that an opinion you're offering?
A. I think it is likely the case. I guess I'd like to
investigate it further. It wasn't one of the questions I
was, you know, directed to answer. But I think I do likely
have that opinion.
Q. So it's not a question you were directed to answer;
A. Well, not explicitly, no.
Q. And it's not-
A. I suppose you could read that question to, you know,
encompass the possibility of also answering that separate
question. But I wasn't directed to explicitly separate
Q. And you didn't explicitly separate them out?
A. As far as-it's a long report. But I don't think in
this section that I ever separate out DMS and DFA shares
alone. But you could easily do so from the backup and the
data that I provided. So I guess in that sense, since the
backup is disclosed already, it is there in my analysis.
Q. But again, you'd actually have to go back and look at
your data and do that analysis and set it forth in a report
if you were going to render that opinion; right?
A. I know that it has about a 50 percent market share for DMS
and DFA combined. I know it's higher in some years and
lower in other years than 50 percent. So that I can state
confidently from the data?
Q. Is that the only factor you'd need to know to know
whether they had monopsony power on their own?
A. Well, I'm trying to think why it would be relevant. It
seems like it would be relevant only if we thought-we
accepted some premise that the other co-conspirators
didn't also participate. But if they didn't
participate, then that would mean that DFA and DMS were the
only conspirators and that they did-were able to suppress
prices. So I think that would support the inference. The
evidence about inelasticity would be the same, and the
evidence about entry barriers would be the same. So I think
it is the case that at least if I accept the premise, ...