A federal appeals court has refused to overturn a judgment that the country's largest mushroom cooperative must face accusations of unlawfully fixing prices of "white button" mushrooms sold to distributors and retailers.
In its August 2011 ruling, the U.S. Court of Appeals for the Third Circuit rebuffed an argument by the Eastern Mushroom Marketing Cooperative (EMMC) that it should be exempt from federal antitrust laws under a 1920s measure aimed at protecting agricultural cooperatives. Defendants are seeking a rehearing before all 14 members of the appeals court.
Berman DeValerio is one of the law firms representing plaintiffs in a class action accusing EMMC and its members of unlawfully conspiring to fix prices on fresh Agaricus mushrooms in violation of federal antitrust laws. Agaricus mushrooms (agaricus bisporus), also known as "white button" mushrooms, are common table mushrooms typically sold to grocery stores.
To date, the Honorable Thomas N. O'Neill, Jr. of the U.S. District Court for the Eastern District of Pennsylvania has denied EMMC's motion to dismiss and granted Plaintiffs' motion for summary judgment on EMMC's affirmative defense of immunity under the Capper-Volstead Act. This Act authorizes various kinds of agricultural producers to form voluntary cooperative associations for purposes of producing, handling, and marketing farm products and exempts them from the antitrust laws.
In granting Plaintiff's motion for summary judgment, the court held that EMMC's interaction with its affiliated distributors resulted in a lack of "complete unity of interest" necessary to find them a "single enterprise" under Capper-Volstead. Thus, for EMMC to fix prices with its affiliated distributors constitutes a conspiracy that destroys EMMC's Capper-Volstead immunity.
In April 2009, EMMC and members of the cooperative appealed Judge O'Neill's summary judgment order to the U.S. Court of Appeals for the Third Circuit. On August 23, 2011, the Third Circuit ruled that the issue of Capper-Volstead protection is not one the Court of Appeals has jurisdiction to hear at this prejudgment stage of the case. On September 6, 2011, Defendants filed a petition with the Third Circuit for a rehearing of their appeal before the original panel and the court en banc.