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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

Barry K. Winters d/b/a BKW Farms, Stacy Preston Winters, Paul D. Sogn and Rachelle D. Sogn d/b/a Wintersogn Farm, LLC, Michael A. Webb, Rickard W. Jackson, Jackson Farms, Inc., James M. Schaer, Julie A Schaer, Scott R. Vierck, Fred P. Bussman, John L. Meyer, John L. Meyer Cranberries, Inc., Christopher M. Bussman, Deanna M. Bussman, Charles V. Goldsworthy and Timothy R. Goldsworthy d/b/a ThunderLake-Tomahawk Cranberries, Inc. and H.E. Querry, Inc. on behalf of themselves and all others similarly situated as a class,

Plaintiffs,

v. Ocean Spray Cranberries, Inc., an agricultural cooperative, and Ocean Spray Brands, LLC, a limited liability company,

Defendants.

Civil Action No. 1:12-cv-12016-RWZ Oral Argument Requested

MEMORANDUM IN SUPPORT OF OCEAN SPRAY CRANBERRIES, INC. AND

OCEAN SPRAY BRANDS, LLC’S MOTION TO DISMISS

Case 1:12-cv-12016-RWZ Document 48 Filed 03/18/13 of 30

TABLE OF CONTENTS

TABLE OF AUTHORITIES ......................................................................................................... iii

INTRODUCTION ...........................................................................................................................1

STANDARD OF REVIEW .............................................................................................................1

ARGUMENT ...................................................................................................................................2

I. PLAINTIFFS DO NOT PLAUSIBLY STATE A CLAIM FOR RELIEF AGAINST OCEAN SPRAY BRANDS, LLC BECAUSE THEY DO NOT ALLEGE THAT OCEAN SPRAY BRANDS ENGAGED IN ANY ILLEGAL CONDUCT ..........................................................................................................................2

II. PLAINTIFFS’ CLAIMS IN SEVERAL COUNTS FAIL BECAUSE THEY DO NOT INVOKE ANY STATUTE OR COMMON LAW UNDER WHICH THEY CAN STATE A CLAIM (COUNTS I, II, VI, VII, XII) ......................................................3

A. The Capper-Volstead Act Is An Affirmative Defense To A Claim That An Agricultural Cooperative Has Violated The Antitrust Laws And Not A Statute That The Cooperative Can “Violate” (Counts I, II).....................................3

B. Plaintiffs’ “Catch-All” Counts Do Not Assert Causes Of Action Separate From Those In Other Counts Of The Complaint (Counts VI, VII, XII) ..................6

III. PLAINTIFFS CANNOT BASE ANY CAUSE OF ACTION ON OCEAN SPRAY’S ALLEGED VIOLATION OF A CONSENT DECREE (COUNTS III, V) .........................................................................................................................................6

A. Plaintiffs’ Claim That Ocean Spray Violated Chapter 93A Because It Supposedly Violated The Consent Decree Is Wrong As A Matter Of Law ............7

B. Plaintiffs Were Not Parties To The Consent Decree, And Thus Have No Standing To Seek To Enforce It...............................................................................7

C. Rule 71 Does Not Provide Plaintiffs With An Independent Basis To Claim That They Have A Right To Enforce The Consent Decree .....................................8

IV. PLAINTIFFS’ CLAIMS THAT OCEAN SPRAY AND OCEAN SPRAY BRANDS CONSPIRED WITH EACH OTHER ARE NOT COGNIZABLE AS A MATTER LAW (COUNTS X, XI) .....................................................................................9

V. PLAINTIFFS’ CLAIM THAT OCEAN SPRAY AND OCEAN SPRAY BRANDS CONSPIRED TO FIX PRICES ALSO FAILS BECAUSE PLAINTIFFS HAVE NOT PLAUSIBLY ALLEGED FACTS THAT THE DEFENDANTS ENGAGED IN ANY CONDUCT NOT IMMUNIZED UNDER THE CAPPER-VOLSTEAD ACT ....................................................................................10


ii

A. The Capper-Volstead Act Exempts Ocean Spray (And Its Wholly Owned Subsidiary) From Liability Under Section 1 Of The Sherman Act For Setting The Price At Which Ocean Spray Sells Cranberry Concentrate ...............10

B. Plaintiffs Have Not Alleged Facts That Undermine Ocean Spray’s Capper-Volstead Act Immunity ..........................................................................................12

VI. PLAINTIFFS’ SECTION 2 CLAIMS FAIL BECAUSE THEY DO NOT ALLEGE THAT OCEAN SPRAY ENGAGED IN EXCLUSIONARY CONDUCT (COUNTS VIII, IX) ......................................................................................13

VII. THE COURT ALSO SHOULD DISMISS ALL OF PLAINTIFFS’ SHERMAN ACT CLAIMS BECAUSE PLAINTIFFS DO NOT ALLEGE AN ANTITRUST INJURY (COUNTS VIII, IX, X, XI) ................................................................................16

VIII. PLAINTIFFS DO NOT ALLEGE THAT EITHER DEFENDANT ENGAGED IN ANY CONDUCT THAT RISES TO THE LEVEL OF A VIOLATION OF CHAPTER 93A (COUNT IV) ...........................................................................................18

IX. THE SOGN AND WINTERS PLAINTIFFS’ CLAIM THAT OCEAN SPRAY UNLAWFULLY TERMINATED THEIR CONTRACTS IS NOT ACTIONABLE AS A MATTER OF LAW (COUNT XIII) .............................................19

CONCLUSION ..............................................................................................................................20


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TABLE OF AUTHORITIES

Page(s) CASES

Aiken v. City of Memphis,

37 F.3d 1155 (6th Cir. 1994) .....................................................................................................8 Alexander v. National Farmers Organization,

687 F.2d 1173 (8th Cir. Mo. 1982) ................................................................................4, 12, 13 Allen v. Dairy Farmers of America, Inc.,

748 F. Supp. 2d 323 (D. Vt. 2010).............................................................................................4 Americana Industries Inc. v. Wometco de Puerto Rico, Inc.,

556 F.2d 625 (1st Cir. 1977) ..............................................................................................15, 17 Associated General Contractors of California, Inc. v. California State Council of

Carpenters, 459 U.S. 519 (1983) .................................................................................................................18

Astra Media Group, LLC v. Clear Channel Taxi Media, LLC,

679 F. Supp. 2d 413 (S.D.N.Y. 2009)......................................................................................15 Atlantic Richfield Co. v. USA Petroleum Co.,

495 U.S. 328 (1990) ...........................................................................................................16, 17 Austin v. Blue Cross & Blue Shield,

903 F.2d 1385 (11th Cir. 1990) ...............................................................................................18 Banco Santander de P.R. v. Lopez-Stubbe (In re Colonial Mortgage Bankers Corp.),

324 F.3d 12 (1st Cir. 2003) ................................................................................................ 11-12 Barry Wright Corp. v. ITT Grinnell Corp.,

724 F.2d 227 (1st Cir. 1983) ....................................................................................................15 Bell Atlantic Corp. v. Twombly,

550 U.S. 544 (2007) ...................................................................................................................1 Biovail Corp. International v. Hoechst Aktiengesellschaft,

49 F. Supp. 2d 750 (D.N.J. 1999) ..............................................................................................8 Blake v. Professional Coin Grading Service,

No. 11-11531-WGY, 2012 U.S. Dist. LEXIS 148422 (D. Mass. Oct. 16, 2012)......................8


iv

Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723 (1975) ...................................................................................................................8

Brooke Group Ltd. v. Brown & Williamson Tobacco Corp.,

509 U.S. 209 (1993) .................................................................................................................14 Brown v. America Honda (In re New Motor Vehicles Canadian Export Antitrust

Litigation), 522 F.3d 6 (1st Cir. 2008) ........................................................................................................16

Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.,

429 U.S. 477 (1977) .................................................................................................................16 C.B. Trucking, Inc. v. Waste Management, Inc.,

944 F. Supp. 66 (D. Mass. 1996), aff'd, 137 F.3d 41 (1st Cir. 1998) .....................................15 CCBN.com, Inc. v. Thomson Finance, Inc.,

270 F. Supp. 2d 146 (D. Mass. 2003) ......................................................................................14 C.R. Bard, Inc. v. Medical Electronics Corp.,

529 F. Supp. 1382 D. Mass. 1982 ............................................................................................14 Case-Swayne Co. v. Sunkist Growers, Inc.,

389 U.S. 384 (1967) .................................................................................................................12 Coastal Fuels of Puerto Rico, Inc. v. Caribbean Petroleum Corp.,

79 F.3d 182 (1st Cir. 1996) ......................................................................................................14 Copperweld Corp. v. Independence Tube Corp.,

467 U.S. 752 (1984) .................................................................................................................10 DJ Manufacturing Corp. v. Tex-Shield, Inc.,

275 F. Supp. 2d 109 (D.P.R. 2002), overruled on other grounds, 337 F.3d 56 (1st Cir. 2003) ........................................................................................................................................14

Data Processing Finance & General Corp. v. IBM Corp.,

430 F.2d 1277 (8th Cir. 1970) ...................................................................................................8 Davis, Malm, D’Agostine P.C. v. Vale,

No. 041495, 2005 WL 1155171 (Mass. Super. Ct. Mar. 31, 2005).........................................19 Fairdale Farms, Inc. v. Yankee Milk, Inc.,

635 F.2d 1037 (2d Cir. 1980)...................................................................................................16 GMO Trust v. ICAP Plc,

No. 12-10293-DPW, 2012 U.S. Dist. LEXIS 150074 (D. Mass. Oct. 18, 2012) ....................18


v

GVF Cannery, Inc. v. California Tomato Growers Association,

511 F. Supp. 711 (N.D. Cal. 1981) ....................................................................................11, 12 Gagliardi v. Sullivan,

513 F.3d 301 (1st Cir. 2008) ......................................................................................................1 Garshman v. Universal Resources Holding, Inc.,

824 F.2d 223 (3d Cir. 1987).....................................................................................................11 High-Tech Communications, Inc. v. Panasonic Co.,

No. 94-1477, 1995 WL 65133 (E.D. La. Feb. 15, 1995) .........................................................20 Hinds County v. Wachovia Bank N.A.,

620 F. Supp. 2d 499 (S.D.N.Y. 2009)........................................................................................3 In re Processed Egg Products Antitrust Litigation,

836 F. Supp. 2d 290 (E.D. Pa. 2011) ..................................................................................... 4-5 In re Processed Egg Products Antitrust Litigation,

821 F. Supp. 2d 709 (E.D. Pa. 2011) .........................................................................................3 Invamed, Inc. v. Barr Laboratories, Inc.,

22 F. Supp. 2d 210 (S.D.N.Y. 1998)......................................................................................2, 6 Jackson v. Astrue,

No. 3:08-cv-461-J-34TEM, 2011 U.S. Dist. LEXIS 8552 (M.D. Fla. Jan. 28, 2011) ...............9 Lasky v. Quinlan,

558 F.2d 1133 (2d Cir. 1977).....................................................................................................9 Laudano v. 214 South Street Corp.,

608 F. Supp. 2d 185 (D. Mass. 2009) ......................................................................................20 Maryland & Virginia Milk Producers Ass’n v. United States,

362 U.S. 458 (1960) .............................................................................................................4, 11 National Union Electric Corp. v. Emerson Electric Co.,

No. 81 C 1912, 1981 U.S. Dist. LEXIS 14709 (N.D. Ill. July 23, 1981) ..................................8 New York News, Inc. v. Kheel,

972 F.2d 482 (2d Cir. 1992).......................................................................................................9 Odishelidze v. Aetna Life & Casualty Co.,

853 F.2d 21 (1st Cir. 1988) ......................................................................................................10


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PMP Associates, Inc. v. Globe Newspaper Co., 321 N.E.2d 915 (Mass. 1975) ..................................................................................................19

Pimental v. Wachovia Mortgage Corp.,

411 F. Supp. 2d 32 (D. Mass. 2006) ........................................................................................19 Port Drum Co. v. Umphrey,

852 F.2d 148 (5th Cir. 1988) .....................................................................................................9 Precision Associates, Inc. v. Panalpina World Transport (Holding) Ltd.,

08-CV-00042 (JG) (VVP), 2012 U.S. Dist. LEXIS 113829 (E.D.N.Y. Aug. 13, 2012) ...........3 Sanchez v. Pereira-Castillo,

590 F.3d 31 (1st Cir. 2009) ........................................................................................................2 Sterling Merchandising, Inc. v. Nestle, S.A.,

656 F.3d 112 (1st Cir. 2011) ....................................................................................................16 Sterling Merchandising, Inc. v. Nestle, S.A.,

724 F. Supp. 2d 245 (D.P.R. 2010), aff'd, 656 F.3d 112 (1st Cir. 2011) .................................10 Story Parchment Co. v. Paterson Parchment Paper Co.,

282 U.S. 555 (1931) .................................................................................................................16 Sunkist Growers, Inc. v. Winckler & Smith Citrus Products Co.,

370 U.S. 19 (1962) .....................................................................................................................5 Town of Concord v. Boston Edison Co.,

915 F. 2d 17 (1st Cir. 1990) .....................................................................................................14 United States v. National Cranberry Ass’n,

No. 55-418-S, 1957 U.S. Dist. LEXIS 4199 (D. Mass. Oct. 28, 1957) .....................................6 Wagner v. Circle W Mastiffs,

732 F. Supp. 2d 792 (S.D. Ohio 2010) ....................................................................................16 Waters v. National Farmers Organization, Inc.,

328 F. Supp. 1229 (S.D. Ind. 1971) ...................................................................................12, 13 Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co.,

549 U.S. 312 (2007) ...........................................................................................................14, 15 Williams v. 5300 Columbia Pike Corp.,

891 F. Supp. 1169 (E.D. Va. 1995) .........................................................................................11


vii

Yachting Promotions, Inc. v. Broward Yachts, Inc., 792 So. 2d 660 (Fla. Dist. Ct. App. 2001) ...............................................................................20

Zurich American Insurance Co. v. Watts Regulator Co.,

796 F. Supp. 2d 240 (D. Mass. 2011) ..................................................................................7, 18

OTHER AUTHORITIES Fed. R. Civ. P. 71 ......................................................................................................................... 8-9 H.R. Rep. No. 67-24 (1921) ...........................................................................................................12 Mass. Gen. Laws ch. 93A, § 2(a) ...............................................................................................7, 18 Mass. Gen. Laws ch. 93A, § 11 .................................................................................................7, 18 7 U.S.C. § 291 ............................................................................................................................5, 12 15 U.S.C. § 17 ..................................................................................................................................4 28 U.S.C. § 2072(b) .........................................................................................................................9


INTRODUCTION

Plaintiffs’ complaint, while styled as an action for violations of multiple statutes and a

55-year-old consent decree, is in reality a wholesale attack on Ocean Spray’s success in building

an iconic, world-wide brand of cranberry based products. Ocean Spray is an agricultural

cooperative composed of over 700 cranberry growers. The plaintiffs are disgruntled cranberry

growers who want to get paid more for their crop. Most of them sell their cranberries to

middlemen. The others are members of Ocean Spray’s B Pool. Pursuant to a contract with

Ocean Spray, the B Pool plaintiffs grow cranberries that Ocean Spray uses to make cranberry

concentrate.

Plaintiffs’ primary complaint is that Ocean Spray sells cranberry juice concentrate to its

own customers at low prices and that, as a result, plaintiffs have lost a great deal of money.

Blissfully ignoring the laws of supply and demand that, in the real world, are responsible for the

prices for many agricultural commodity products, including cranberries, plaintiffs seek this

Court’s intervention to stop Ocean Spray from offering competitive prices. Fortunately, neither

the antitrust laws nor Massachusetts state law is available to assist plaintiffs in this endeavor.

STANDARD OF REVIEW

To survive a motion to dismiss, plaintiffs must allege a cognizable claim for relief.

Gagliardi v. Sullivan, 513 F.3d 301, 305 (1st Cir. 2008). That means that, at a minimum, a

complaint must contain the elements “necessary to sustain recovery under some actionable legal

theory.” Id. (citation omitted) (internal quotation marks omitted); see also Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 555-56 (2007) (holding that a complaint must contain “enough facts to

state a claim to relief that is plausible on its face.”). Plaintiffs have not met this basic pleading

standard for any of the counts in their complaint.


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ARGUMENT

I. PLAINTIFFS DO NOT PLAUSIBLY STATE A CLAIM FOR RELIE F AGAINST OCEAN SPRAY BRANDS, LLC BECAUSE THEY DO NOT ALLEGE THAT OCEAN SPRAY BRANDS ENGAGED IN ANY ILLEGAL CONDUCT

Plaintiffs purport to assert multiple claims against Ocean Spray Brands, LLC, an entity

that, they concede, is a wholly owned subsidiary of Ocean Spray. Compl. ¶ 10. They claim in

conclusory fashion in Counts X and XI that Ocean Spray Brands conspired with Ocean Spray to

fix prices and to monopolize and monopsonize the “cranberry market.” Compl. ¶¶ 10, 130-135,

137-142. They also assert claims against Ocean Spray Brands under Massachusetts General

Laws Chapter 93A (Counts IV and V) and bring three counts against the company that do not

identify any particular causes of action (Counts VI, VII and XII).

But legal conclusions do not suffice to state a claim under Twombly that is sufficient to

withstand dismissal under Rule 12(b)(6). Instead, plaintiffs must “plead factual content that

allows the court to draw the reasonable inference that [Ocean Spray Brands] is liable for the

misconduct alleged.” Sanchez v. Pereira-Castillo, 590 F.3d 31, 48 (1st Cir. 2009).

Here, however, plaintiffs do not allege that Ocean Spray Brands actually engaged in any

of the conduct that allegedly gives rise to their claims. Plaintiffs allege that Ocean Spray set up

the A and B Pools and their payment structure (id. ¶¶ 42, 74), that Ocean Spray established rules

regarding membership in the A Pool (id. ¶ 46), and that Ocean Spray runs the alleged “sham”

auctions that are the foundation of plaintiffs’ price fixing claim. Id. ¶¶ 81-88. They also claim

that Ocean Spray is the alleged monopolist and monopsonist, not Ocean Spray Brands. Id. ¶¶

120-22. A plaintiff does not state a claim against a corporation through allegations that a related

entity violated the law. Invamed, Inc. v. Barr Labs., Inc., 22 F. Supp. 2d 210, 218-19 (S.D.N.Y.

1998) (“[Plaintiff] cannot rely on its allegation that . . . another defendant engaged in

monopolistic practices . . . to satisfy its requirement that [affiliated companies] too [engaged in


3

such conduct].”); Precision Assocs. v. Panalpina World Transp. (Holding) Ltd., No. 08-CV-

00042 (JG) (VVP), 2012 U.S. Dist. LEXIS 113829, at *10-13 (E.D.N.Y. Aug. 13, 2012)

(adopting magistrate’s order and rejecting plaintiffs’ “group pleading” by “families” of affiliated

companies because “the bare allegation that one defendant is the subsidiary of another” and

therefore also participated in a conspiracy fails to satisfy Twombly).

Plaintiffs’ repeated allegations that “defendants” engaged in a conspiracy and that

“defendants’” actions constitute unfair and deceptive practices do not save their claims against

Ocean Spray Brands. See, e.g., Compl. ¶¶ 50, 52, 56, 130, 131, 137, 138, and 144. A plaintiff

must allege facts that relate separately to each defendant to satisfy Twombly. See, e.g., Hinds

Cnty. v. Wachovia Bank, 620 F. Supp. 2d 499, 530 (S.D.N.Y. 2009) (dismissing claims that

asserted only “conclusory and perfunctory allegations” as to all defendants, but failed to allege

facts regarding each particular defendant’s involvement in the alleged conspiracy); In re

Processed Egg Prods. Antitrust Litig., 821 F. Supp. 2d 709, 720, 746-48 (E.D. Pa. 2011)

(granting motion to dismiss certain entities for group pleading because “more than mere

repetitive generic reference to ‘Defendants’ tacked on to a conclusory verb form” is needed “to

connect an individual defendant to an actual agreement in an antitrust conspiracy,” and

“‘[s]imply using the global term ‘defendants’ . . . without any specific allegations that would tie

each particular defendant to the conspiracy is not sufficient’” (citation omitted)).

II. PLAINTIFFS’ CLAIMS IN SEVERAL COUNTS FAIL BECAUSE T HEY DO NOT INVOKE ANY STATUTE OR COMMON LAW UNDER WHICH TH EY CAN STATE A CLAIM (COUNTS I, II, VI, VII, XII)

A. The Capper-Volstead Act Is An Affirmative Defense To A Claim That An Agricultural Cooperative Has Violated The Antitrust Laws And Not A Statute That The Cooperative Can “Violate” (Counts I, II)

Count I of the complaint, entitled “Violation of Capper-Volstead Act” alleges that Ocean

Spray’s actions in “fail[ing] to administer the cooperative for the mutual benefit of its B pool


4

members” constitute “violations” of the Capper-Volstead Act. Compl. ¶ 94-95. Count II alleges

that “Ocean Spray’s violation of the Capper-Volstead Act has injured Plaintiffs and the members

of the B Pool Class.” Id. ¶ 97. Each count seeks $120,000,000 and an injunction for the same

alleged “violation” of the Capper-Volstead Act. Id. ¶¶ 95, 98.

These claims are legally baseless. The Capper-Volstead Act gives “persons engaged in

the production of agricultural products” an affirmative defense to a claim that their conduct

violates the antitrust laws. Alexander v. Nat’l Farmers Org., 687 F.2d 1173, 1184 (8th Cir.

1982) (“the exemption is an affirmative defense”); Allen v. Dairy Farmers of Am., Inc., 748 F.

Supp. 2d 323, 345 (D. Vt. 2010) (“Capper-Volstead immunity [is] an affirmative defense to be

established by a defendant seeking its protections” (citing cases)). The Capper-Volstead Act was

designed to expand the cooperative exemption of Section 6 of the Clayton Act, 15 U.S.C. § 17

(providing that neither agricultural organizations nor their members shall “be held or construed

to be illegal combinations or conspiracies in restraint of trade, under the antitrust laws”). Md. &

Va. Milk Producers Ass’n v. United States, 362 U.S. 458, 464-65 (1960). The effect of these

statutes is to enable farmers, dairymen, growers and other producers of agricultural products to

work together to market their products and sell those products at the prices that they choose.

Because it is an affirmative defense to an antitrust claim against an agricultural

cooperative, the Capper-Volstead Act does not create a cause of action; it is a shield, not a

sword. In In re Processed Egg Products Antitrust Litigation, the defendant agricultural

cooperatives argued that they had lawfully removed a case alleging that they had violated the

Kansas Antitrust Act to a federal court, because they intended to assert that their conduct was

exempt from antitrust liability under the Capper-Volstead Act. 836 F. Supp. 2d 290, 293 (E.D.

Pa. 2011). The court noted that the Act would completely preempt state antitrust laws (and thus


5

justify removal) if it contained “civil enforcement provisions within the scope of which

plaintiffs’ claim falls” and evidenced a clear indication that Congress intended that the federal

remedy be exclusive. Id. at 300. The court explained that the defendants “appear to recognize

that any federal cause of action in antitrust cases involving agricultural producers arises under

the Sherman Act, not the Capper-Volstead Act or similar federal law” and they conceded that

federal antitrust law does not preempt all state antitrust law. Id. at 301 & n.13. Since the

Capper-Volstead Act does not create a cause of action, the court held that defendants had not

identified a federal cause of action that preempted the state antitrust claim at issue and that the

defense did not support removal.

Moreover, the Capper-Volstead Act does not contain any provisions that an agricultural

cooperative can “violate.” The Act provides that “[p]ersons engaged in the production of

agricultural products . . . may act together in associations, . . . may have marketing agencies in

common[,] . . . and may make the necessary contracts and agreements to effect such purposes,” if

they satisfy certain conditions.1 7 U.S.C. § 291. Thus, if the members of an agricultural

cooperative choose to satisfy the Act’s conditions, they are immune from liability for collective

activities that might otherwise violate the antitrust laws. If they do not satisfy the conditions, the

Act does not insulate their activities from potential antitrust scrutiny. Sunkist Growers, Inc. v.

Winckler & Smith Citrus Prods. Co., 370 U.S. 19, 27-28 (1962). But there is nothing in the Act

1 The Act allows producers to engage in the described conduct “[p]rovided, however” that the association is “operated for the mutual benefit of the members thereof, as such producers,” and “conform[s] to one or both of the following requirements: First[:] That no member of the association is allowed more than one vote because of the amount of stock or membership capital he may own therein, or, Second[:] That the association does not pay dividends on stock or membership capital in excess of 8 per centum per annum.” 7 U.S.C. § 291. The Act provides the additional condition that “the association shall not deal in the products of nonmembers to an amount greater in value than such as are handled by it for members.” Id.


6

that mandates that the members of an agricultural cooperative do anything. Plaintiffs cannot use

the Act to sue Ocean Spray for failing to do something that it is has no legal obligation to do.

Finally, there is no basis for plaintiffs’ claim that the alleged “violation” establishes a

cause of action under Chapter 93A. Plaintiffs do not suggest how the alleged failure to satisfy

the Capper-Volstead Act’s conditions is unfair and deceptive, or supports a claim independent of

their other 93A claims. The Court should dismiss both counts.

B. Plaintiffs’ “Catch-All” Counts Do Not Assert Causes Of Action Separate From Those In Other Counts Of The Complaint (Counts VI, VII, XII)

Plaintiffs claim that Ocean Spray and Ocean Spray Brands’ alleged violations of the

Capper-Volstead Act, the consent decree, the Sherman Act, and Chapter 93A “show a deliberate

disregard for the law and Defendants’ responsibilities under it.” Compl. Counts VI, VII and XII,

¶¶ 116, 118, 144. But plaintiffs do not assert any statutory or common law cause of action that

arises from a defendant’s “deliberate disregard” of any other laws, or of the consent decree that

plaintiffs reference. Thus, plaintiffs’ claims in these “catch-all” counts are simply restatements

of their other claims, and the Court should dismiss them as redundant. See, e.g., Invamed, 22 F.

Supp. 2d at 217 (claims that are redundant and duplicative are subject to dismissal; a plaintiff

“may not plead the same claim more than once”).

III. PLAINTIFFS CANNOT BASE ANY CAUSE OF ACTION ON OCEAN SPRAY’S ALLEGED VIOLATION OF A CONSENT DECREE (COUNTS III, V)

Plaintiffs allege in two counts that Ocean Spray has violated a 55-year-old consent

decree2 between the Antitrust Division of the Department of Justice and Ocean Spray’s

predecessor. Count III asserts that Ocean Spray has violated Chapter 93A because its B Pool

structure supposedly discriminates against Ocean Spray’s B Pool members in violation of the

2 The consent decree is reported at United States v. National Cranberry Ass’n, No. 55-418-S, 1957 U.S. Dist. LEXIS 4199 (D. Mass. Oct. 28, 1957) (“Consent Decree”).


7

consent decree. Compl. ¶¶ 100-105. Count V asserts a Chapter 93A claim based on Ocean

Spray’s alleged sales of its cranberry juice concentrate to “other processors” in violation of the

consent decree. Id. ¶¶ 111-114. Plaintiffs claim that they have standing to sue to enforce the

consent decree under Rule 71 of the Federal Rules of Civil Procedure. Id. ¶ 102. Ocean Spray

will demonstrate that it has not violated the consent decree in either particular, if necessary. But,

as a matter of law, a violation of a consent decree does not itself constitute a violation of Chapter

93A or give plaintiffs standing to assert rights under it.

A. Plaintiffs’ Claim That Ocean Spray Violated Chapter 93A Because It Supposedly Violated The Consent Decree Is Wrong As A Matter Of Law

Plaintiffs cannot maintain a claim under Chapter 93A based solely on the allegation that

Ocean Spray has violated a 55-year old federal consent decree. To state a violation of Chapter

93A, plaintiffs must allege conduct that is unfair or deceptive. Mass. Gen. Laws ch. 93A, §§

2(a), 11; see also Zurich Am. Ins. Co. v. Watts Regulator Co., 796 F. Supp. 2d 240, 244 (D.

Mass. 2011). Here, plaintiffs do not allege how the violation of the consent decree (as opposed

to the conduct that they challenge) is itself unfair or deceptive, and thus they have not stated a

claim under Chapter 93A.

B. Plaintiffs Were Not Parties To The Consent Decree, And Thus Have No Standing To Seek To Enforce It

To the extent that Counts III and V attempt to enforce the consent decree, plaintiffs have

no standing to do so. The consent decree provides that “[j]urisdiction is retained for the purpose

of enabling any of the parties to this Final Judgment to apply to this Court at any time for such

further orders and directions as may be necessary or appropriate . . . for the enforcement of

compliance” with it. Consent Decree § X (emphasis added). Plaintiffs were not parties to the

consent decree, and therefore the decree itself precludes them from enforcing its terms. Id.

Moreover, both the Supreme Court and this Court have held that third parties like


8

plaintiffs do not have standing to enforce a consent decree between the government and another

party. Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 750 (1975) (holding that “a

consent decree is not enforceable directly or in collateral proceedings by those who are not

parties to it”); Aiken v. City of Memphis, 37 F.3d 1155, 1168 (6th Cir. 1994) (“The plain

language of Blue Chip indicates that even intended third-party beneficiaries of a consent decree

lack standing to enforce its terms.”); Blake v. Prof’l Coin Grading Serv., No. 11-11531-WGY,

2012 U.S. Dist. LEXIS 148422, at *37 n.12 (D. Mass. Oct. 16, 2012) (same).

Thus, because plaintiffs were not parties to the decree, they do not have standing to

enforce any violations of it even if they benefit from its provisions explicitly. Data Processing

Fin. & Gen. Corp. v. IBM Corp., 430 F.2d 1277, 1278 (8th Cir. 1970) (affirming dismissal of

claim for breach of consent decree, despite provision in decree that specifically benefitted the

plaintiff); Nat’l Union Elec. Corp. v. Emerson Elec. Co., No. 81 C 1912, 1981 U.S. Dist. LEXIS

14709, at *6 (N.D. Ill. July 23, 1981) (dismissing claim to enforce consent decree by an explicit

beneficiary of the decree based on well-settled authority that “a consent decree is not enforceable

directly or in collateral proceedings by those who are not parties to it even though they were

intended to be benefited by it”); Biovail Corp. Int’l v. Hoechst Aktiengesellschaft, 49 F. Supp. 2d

750, 762 (D.N.J. 1999) (same). This is because antitrust consent decrees are entered to benefit

the public by remedying alleged antitrust violations, and not to benefit competitors. Biovail, 49

F. Supp. 2d at 764.

C. Rule 71 Does Not Provide Plaintiffs With An Independent Basis To Claim That They Have A Right To Enforce The Consent Decree

Rule 71 does not give plaintiffs standing to assert a claim that the consent decree itself

does not provide to them. Rule 71 merely provides a mechanism for asserting a cause of action

that otherwise exists. The rule provides that “[w]hen an order grants relief for a nonparty. . . the


9

procedure for enforcing the order is the same as for a party.” Fed. R. Civ. P. 71. The purpose of

this rule is to allow a non-party who has a right to enforce a court order the ability to do so

through the same procedure that the parties to the court order would have. See Lasky v. Quinlan,

558 F.2d 1133, 1137 (2d Cir. 1977) (“It seems clear that Rule 71 was intended to assure that

process be made available to enforce court orders in favor of and against persons who are

properly affected by them, even if they are not parties to the action . . . [but] it cannot be used by

a party to enforce an order in an action in which he no longer has standing to sue.”); Jackson v.

Astrue, No. 3:08-cv-461-J-34TEM, 2011 U.S. Dist. LEXIS 8552 (M.D. Fla. Jan. 28, 2011)

(“Rule 71 does not undertake to say when an order can be made in favor of or against a person

not a party. The rule merely provides that when this can be done nonparties have recourse to,

and are subject to, process in the same measure as parties.” (citations omitted) (internal quotation

marks omitted)). The consent decree here does not “grant[] relief” to any non-party, and thus

Rule 71 does not apply.3

IV. PLAINTIFFS’ CLAIMS THAT OCEAN SPRAY AND OCEAN SPRAY BRANDS CONSPIRED WITH EACH OTHER ARE NOT COGNIZABLE AS A M ATTER LAW (COUNTS X, XI)

Plaintiffs claim that Ocean Spray and Ocean Spray Brands conspired to monopolize and

monopsonize the “cranberry market” to “allow Ocean Spray to attain monopoly and monopsony

power.” Compl. Count X, ¶¶ 130-31. Plaintiffs also allege that Ocean Spray and Ocean Spray

Brands conspired to fix the price that plaintiffs received for their fresh and processed cranberries

3 The Rules Enabling Act precludes any broader interpretation of the Rule. 28 U.S.C. § 2072(b) (the federal rules “shall not abridge, enlarge or modify any substantive right”); cf. Port Drum Co. v. Umphrey, 852 F.2d 148, 149 (5th Cir. 1988) (holding that a rule of civil procedure is “a regulator of a party’s proceedings once that party is in federal court pursuant to another, independent jurisdictional grant”); N.Y. News, Inc. v. Kheel, 972 F.2d 482, 486 (2d Cir. 1992) (“The Federal Rules of Civil Procedure are procedural in nature and do not provide substantive rights.”).


10

in violation of Section 1 of the Sherman Act. Id. Count XI, ¶¶ 138-39.

Plaintiffs concede that Ocean Spray Brands is a wholly owned subsidiary of Ocean Spray

(Compl. ¶ 10), and this concession is absolutely fatal to both conspiracy claims. The Supreme

Court held in Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 771 (1984), that a

parent cannot conspire with its own subsidiary because they are a “single enterprise” and are,

therefore, incapable of conspiring with each other as a matter of law. “Indeed, the very notion of

an ‘agreement’ in Sherman Act terms between a parent and a wholly owned subsidiary lacks

meaning. . . . [I]n reality a parent and a wholly owned subsidiary always have a ‘unity of purpose

or a common design.’” Id.; see also Odishelidze v. Aetna Life & Cas. Co., 853 F.2d 21, 23 (1st

Cir. 1988) (affirming dismissal of antitrust conspiracy claim based on Copperweld, explaining

that “for § 1 purposes, the activities of a corporation and its wholly owned subsidiaries are

viewed as that of a single enterprise”).

This conclusion applies equally to conspiracies to fix prices and to monopolize. Sterling

Merch., Inc. v. Nestle, S.A., 724 F. Supp. 2d 245, 273 (D.P.R. 2010) (dismissing conspiracy

claims against a parent and its subsidiary because Copperweld “applies to both Section 1 and

Section 2 claims”), aff’d, 656 F.3d 112 (1st Cir. 2011).

V. PLAINTIFFS’ CLAIM THAT OCEAN SPRAY AND OCEAN SPRAY BRANDS CONSPIRED TO FIX PRICES ALSO FAILS BECAUSE PLAINTIF FS HAVE NOT PLAUSIBLY ALLEGED FACTS THAT THE DEFENDANTS ENG AGED IN ANY CONDUCT NOT IMMUNIZED UNDER THE CAPPER-VOLSTEAD ACT

A. The Capper-Volstead Act Exempts Ocean Spray (And Its Wholly Owned Subsidiary) From Liability Under Section 1 Of The Sherman Act For Setting The Price At Which Ocean Spray Sells Cranberry Concentrate

Even if Ocean Spray Brands and Ocean Spray could conspire with each other, plaintiffs’

allegations that Ocean Spray fixed the price at which it sells cranberry concentrate at auction do

not state a claim under Section 1.


11

Plaintiffs allege that Ocean Spray “predatorily set[s] the cranberry prices” at which it will

sell concentrate through the auction. Compl. Intro. However, even if plaintiffs had accurately

described the auction in the third amended complaint (and they did not), Ocean Spray’s selection

of the price at which it is willing to sell its products is not a violation of the antitrust laws. The

price-fixing that is “within the scope of the per se prohibition of § 1 . . . is an agreement to fix the

price to be charged in transactions with third parties, not between contracting parties

themselves.” Garshman v. Universal Res. Holding, Inc. 824 F.2d 223, 231 (3d Cir. 1987); see

also Williams v. 5300 Columbia Pike Corp., 891 F. Supp. 1169, 1176, 1177 & n.14 (E.D. Va.

1995) (dismissing Section 1 claim against defendants who merely “set a price to effect a sale” on

the ground that “the Sherman Act does not, of course, prohibit ‘price-fixing’ agreements between

the buyer and seller of an asset”).

To the extent that plaintiffs are alleging that Ocean Spray’s grower-members and Ocean

Spray Brands agreed upon the price to charge for concentrate at the auction, the Court must

dismiss the claim because the Capper-Volstead Act expressly protects the joint activity of

cooperative members in setting the price at which their products are sold. See Md. & Va. Milk

Producers, 362 U.S. at 466; GVF Cannery, Inc. v. Calif. Tomato Growers Ass’n, 511 F. Supp.

711 (N.D. Cal. 1981) (dismissing Section 1 claim against agricultural cooperatives, in part,

because “price fixing is a legitimate purpose under the” Capper-Volstead Act).

Here, plaintiffs concede that Ocean Spray is an agricultural cooperative. Compl. ¶ 9.

Thus, their complaint must allege facts that would plausibly establish the basis for their claim

that Ocean Spray and its grower-members are not entitled to Capper-Volstead Act immunity.4

4 Although the Capper-Volstead Act is an affirmative defense to a Section 1 claim, a court may dismiss a complaint based on an affirmative defense when the complaint alleges facts that conclusively establish the defense. Banco Santander de P.R. v. Lopez-Stubbe (In re Colonial


12

B. Plaintiffs Have Not Alleged Facts That Undermine Ocean Spray’s Capper-Volstead Act Immunity

Plaintiffs claim that the Capper-Volstead Act does not protect Ocean Spray because

Ocean Spray does not “operat[e] . . . for the mutual benefit of the members thereof.” Compl.

¶ 71. They claim that Ocean Spray is “organized to increase the profitability of the Ocean Spray

branded products to the detriment of the B Pool growers and to the benefit of the A Pool” (Id.),

and that Ocean Spray, Ocean Spray Brands, and their board members and managers have

economic interests that conflict with those of the B Pool, and thus, have not acted for the B Pool

members’ benefit. Compl. ¶ 80. These allegations do not save their claim.

The “mutual benefit” requirement of the Capper-Volstead Act does not mandate that a

cooperative make equal payments to all of its members. 7 U.S.C. § 291; cf. Waters v. Nat’l

Farmers Org., Inc., 328 F. Supp. 1229, 1245 (S.D. Ind. 1971); Alexander v. Nat’l Farmers Org.,

687 F.2d 1173, 1184-85 (8th Cir. 1982). The clause states that cooperatives must be “operated

for the mutual benefit of the members thereof, as such producers.” 7 U.S.C. § 291 (emphasis

added; clause omitted from third amended complaint). Congress enacted the provision because it

was concerned that cooperatives would share their proceeds with non-producers, and thus the

purpose of the mutual benefit requirement was to ensure that only producers, in their capacity as

such, would receive the financial benefits of their collaboration. Case-Swayne Co. v. Sunkist

Growers, Inc., 389 U.S. 384, 393-94 (1967) (noting that Congress intended the “mutual benefit”

condition only “to insure that qualifying associations be truly organized and controlled by, and

for, producers”); see also H.R. Rep. No. 67-24 (1921).

Courts have rejected attempts to interpret the mutual benefit requirement more broadly.

Mortg. Bankers Corp.), 324 F.3d 12, 16 (1st Cir. 2003); see also GVF Cannery, 511 F. Supp. at 714-15 (granting dismissal because the complaint’s allegations themselves failed to overcome Capper-Volstead Act immunity).


13

In Waters and Alexander, for example, the plaintiffs claimed that the National Farmers

Organization did not satisfy the requirement because it did not pay dividends to its members

based on the cooperative’s annual proceeds, but instead paid the members through a third party.

Waters, 328 F. Supp. at 1233; Alexander, 687 F.2d at 1183-84. Both courts rejected that

argument and held that the mutual benefit provision does not require a cooperative to “make or

be authorized to make distributions to its members, of its income or property, by way of

dividends or otherwise.” Waters, 328 F. Supp. at 1245.

Plaintiffs do not allege that any non-growers receive the financial benefits of Ocean

Spray’s sales, or that the growers receive those benefits in any capacity other than as growers.

Plaintiffs do not allege that the creation of the A and B Pool structure or the auction allows

Ocean Spray to transfer the benefits of the cooperative outside of the cooperative as a whole.

Thus, plaintiffs’ claim boils down to an assertion that Ocean Spray has lost its immunity for

price fixing because B Pool members have a different contractual relationship with Ocean Spray

than A Pool members do. As the complaint alleges, B Pool members agreed by contract that

Ocean Spray would use their cranberries for “non-value added, commodity cranberry

concentrate,” whereas Ocean Spray uses the A Pool members’ cranberries for its branded

products. Compl. ¶ 42. Those allegations do not at all suggest that the cooperative is not

operating for the mutual benefit of its members, as producers, and thus plaintiffs’ price fixing

claim fails for this independent reason.

VI. PLAINTIFFS’ SECTION 2 CLAIMS FAIL BECAUSE THEY DO N OT ALLEGE THAT OCEAN SPRAY ENGAGED IN EXCLUSIONARY CONDUCT (C OUNTS VIII, IX)

Plaintiffs’ third amended complaint contains two additional counts that assert violations

of Section 2’s prohibition on monopolies and monopolization: Counts VIII and IX. Both of

these claims fail as a matter of law.


14

To state a claim for monopolization or monopsonization, a plaintiff must allege that the

defendant “has engaged in impermissible ‘exclusionary’ practices with the design or effect of

protecting or enhancing its monopoly [or monopsony] position” in a properly defined relevant

market in which the defendant has market power. Coastal Fuels of P.R., Inc. v. Caribbean

Petrol. Corp., 79 F.3d 182, 195-96 (1st Cir. 1996); see also Weyerhaeuser Co. v. Ross-Simmons

Hardwood Lumber Co., 549 U.S. 312, 319, 325-26 (2007) (applying the same in the monopsony

context).5 But plaintiffs do not accuse Ocean Spray of exclusionary conduct. Plaintiffs complain

that Ocean Spray’s constant need for more cranberries led it to set up a pool whose cranberries

are sold to the commodity market through an auction that has resulted in lower prices. Compl.

Intro. But this conduct does not violate the antitrust laws.

“Low prices benefit consumers.” Brooke Grp. Ltd. v. Brown & Williamson Tobacco

Corp., 509 U.S. 209, 223 (1993). Thus, a firm’s sale of its products at low prices is only

“exclusionary or “anticompetitive” if it “harms the competitive process”; it harms that process

when it “obstructs the achievement of competition’s basic goals – lower prices, better products,

and more efficient production methods.” Town of Concord v. Boston Edison Co., 915 F. 2d 17,

21-22 (1st Cir. 1990). Thus, to state a claim for monopolization or attempted monopolization on

the basis of the prices that a firm charges for its products, a plaintiff must allege that the

defendants’ prices are below an appropriate measure of the defendant’s costs and that, once its

below-cost prices have eliminated its competition, the defendant can and will seek to “recoup”

5 An attempt to monopolize claim requires the plaintiff to allege the same elements that a monopolization claim requires. C.R. Bard, Inc. v. Med. Elecs. Corp., 529 F. Supp. 1382, 1390 D. Mass. 1982); DJ Mfg.Corp. v. Tex-Shield, Inc., 275 F. Supp. 2d 109, 117-20 (D.P.R. 2002), overruled on other grounds, 337 F.3d 56 (1st Cir. 2003). Thus, courts dismiss attempted monopolization claims that suffer from the same insufficiencies as a monopolization claim. See CCBN.com, Inc. v. Thomson Fin., Inc., 270 F. Supp. 2d 146, 156-57 (D. Mass. 2003) (analyzing and dismissing plaintiffs’ Section 2 monopolization and attempted monopolization claims jointly for failure to sufficiently allege the relevant market and market power).


15

its investment in below-cost prices through future high prices. See id.; see also Astra Media

Grp., LLC v. Clear Channel Taxi Media, LLC, 679 F. Supp. 2d 413, 424-25 (S.D.N.Y. 2009)

(dismissing predatory pricing claim that contained conclusory allegations of below-cost pricing

and did not plead recoupment). A complaint that alleges low prices without these facts

“reflect[s] no more than the sort of healthy competition which the antitrust laws are designed to

foster.” Americana Indus. Inc. v. Wometco de P.R., Inc., 556 F.2d 625, 627-28 (1st Cir. 1977).

Here, plaintiffs claim only that the prices that they received did not cover their respective

costs of producing cranberries or that they fell below average national production costs. Compl.

¶¶ 39(c), 53, 85. But the relevant question is whether the complaint alleges that the auction price

is below Ocean Spray’s variable costs to produce concentrate. Plaintiffs do not allege anything

about Ocean Spray’s costs. Thus, their Section 2 claim fails for this additional reason. See

Barry Wright Corp. v. ITT Grinnell Corp., 724 F.2d 227, 231-32 (1st Cir. 1983) (rejecting

Section 2 claim based on allegedly “predatory pricing” that was above defendant’s incremental

and average costs); see also C.B. Trucking, Inc. v. Waste Mgmt., Inc., 944 F. Supp. 66, 68 (D.

Mass. 1996) (rejecting predatory pricing claim where defendants’ low bid prices were not below

its own costs and plaintiffs did not establish that defendant could recoup its losses), aff’d, 137

F.3d 41 (1st Cir. 1998). Moreover, plaintiffs do not allege facts that would support a claim that

Ocean Spray could or would recoup its losses once its competitors are eliminated. Thus, their

claim that Ocean Spray sold concentrate at lower prices is legally meaningless.

Plaintiffs’ claim that Ocean Spray’s scheme was motivated by its need for more fruit to

support the brand is equally irrelevant. Weyerhaeuser, 549 U.S. 312 (reversing jury verdict that

permitted plaintiff to recover damages for monopolization under a theory that the defendant had

purchased logs at a predatorily high rate to put the plaintiff competitor out of business).


16

Moreover, plaintiffs’ failure to allege that Ocean Spray engaged in exclusionary conduct

also means that they have not alleged facts that establish the basis for their claim that Ocean

Spray has lost its Capper-Volstead Act protection for these claims. See, e.g., Fairdale Farms,

Inc. v. Yankee Milk, Inc., 635 F.2d 1037, 1045 (2d Cir. 1980) (holding that the Capper-Volstead

Act allows agricultural cooperatives to acquire and maintain monopoly power, as long as they do

so without engaging in predatory tactics). Thus, the Court should dismiss Counts VIII and IX for

this reason as well.

VII. THE COURT ALSO SHOULD DISMISS ALL OF PLAINTIFFS’ SH ERMAN ACT CLAIMS BECAUSE PLAINTIFFS DO NOT ALLEGE AN ANTITRUS T INJURY (COUNTS VIII, IX, X, XI)

An antitrust plaintiff must allege more than that the defendant violated the antitrust laws

to bring an antitrust claim (and plaintiffs have not, of course, alleged that here). Under Section 4

of the Clayton Act (the statute that authorizes private parties to bring claims under the Sherman

Act), a plaintiff also must allege that it has suffered injury in its business or property “by reason

of” conduct that the antitrust laws forbid. Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429

U.S. 477, 488-89 (1977). The first requirement – injury to business or property – is called

“impact” or “the fact of damage.” Story Parchment Co. v. Paterson Parchment Paper Co., 282

U.S. 555, 562 (1931); Brown v. Am. Honda (In re New Motor Vehicles Canadian Exp. Antitrust

Litig.), 522 F.3d 6, 19 n.18 (1st Cir. 2008). The second requirement – that the injury occur “by

reason of [something] forbidden in the antitrust laws” – is called “antitrust injury.” Brunswick

Corp. 429 U.S. at 488-89; Sterling Merch., Inc. v. Nestle, S.A., 656 F.3d 112, 125 (1st Cir. 2011).

The necessary antitrust injury to a competitor does not flow from the competitor-

defendant’s sale of products at low prices. Atl. Richfield Co. v. USA Petrol. Co., 495 U.S. 328,

335-38 (1990) (“ARCO”); see also Wagner v. Circle W Mastiffs, 732 F. Supp. 2d 792, 802 (S.D.

Ohio 2010) (holding that “a competitor’s inability to charge more (provided the price is at a


17

nonpredatory level) is not an injury protected under antitrust laws”). In ARCO, an independent

gasoline retailer alleged that it lost money because the defendant prohibited its branded dealers

from selling gas above a certain price, and, to compete with those branded dealers, the plaintiff

had to sell at the same price. Id. at 331-32. The Supreme Court held that, although the plaintiff

had lost money because of the price fixing, that loss resulted from the low but non-predatory

prices of its rivals, not from an anticompetitive aspect of the defendant's conduct. Id. at 337-38.

Similarly, in Americana Industries, the plaintiff alleged that the defendant priced its

movie theater tickets at low prices to drive the plaintiff out of business and destroy competition.

556 F.2d at 627. The plaintiff lowered its ticket prices to meet the defendant’s, then sued based

on its alleged losses. Id. The court held that even if the defendant acted with “malice and a

specific intent to put the plaintiff out of business,” there was no allegation that the prices were

predatory, and thus illegal under the antitrust laws. Id. at 627-28. The court explained that low

prices that are not below the seller’s costs do not harm competition; they enhance it. Id. The

court concluded that the defendant’s alleged conduct was consistent with “perfectly lawful

conduct” and affirmed dismissal. Id. at 628.

Here, plaintiffs allege that Ocean Spray sold concentrate at prices lower than plaintiffs

would prefer. Compl. Intro. While such an allegation may establish the fact of injury (if they

had alleged an antitrust violation at all), it does not suffice to allege an antitrust injury. Plaintiffs

must allege lost profits from conduct that the antitrust laws forbid. They have not done so.

While the above issue applies to all of the plaintiffs, the independent grower plaintiffs

have an additional problem. They claim injury because they did not make as much money as

they would have liked when they sold their cranberries to handlers. They claim that, supposedly,

the price that Ocean Spray charges to its concentrate customers at auction causes other


18

concentrate buyers to quote the same low price to the processors who sell concentrate made from

the independent growers’ cranberries (so that such unnamed processors can compete with Ocean

Spray). Those low prices, in turn, cause those processors to demand that independent growers

charge less for their cranberries. This chain of causation is too remote to give the independent

growers standing to sue. See Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of

Carpenters, 459 U.S. 519, 529-35 (1983); Austin v. Blue Cross & Blue Shield, 903 F.2d 1385,

1389, 1392-93 (11th Cir. 1990) (finding the “causal connection” between the plaintiffs’ alleged

injuries and the alleged anticompetitive conduct was “at best remote and tenuous”).

VIII. PLAINTIFFS DO NOT ALLEGE THAT EITHER DEFENDANT ENGA GED IN ANY CONDUCT THAT RISES TO THE LEVEL OF A VIOLATION OF CHAPTER 93A (COUNT IV)

The independent grower plaintiffs claim that Ocean Spray’s and Ocean Spray Brands’

actions constitute “unfair and deceptive acts and practices” in violation of Chapter 93A, Section

11.6 See, e.g., Compl. Count IV, ¶¶ 106-109. To state a claim under 93A, a plaintiff must allege

conduct that falls within “the penumbra” of some common-law, statutory, or other “established

concept of unfairness” or is “immoral, unethical, oppressive or unscrupulous.” Zurich Am. Ins.,

796 F. Supp. 2d at 244 (citation omitted) (internal quotation marks omitted). The conduct must

“attain a level of rascality that would raise an eyebrow to the rough and tumble of the world of

commerce.” Id. (citation omitted) (internal quotation marks omitted); see also GMO Trust v.

ICAP Plc, No. 12-10293-DPW, 2012 U.S. Dist. LEXIS 150074, at *29-31 (D. Mass. Oct. 18,

2012) (“to establish a violation of chapter 93A, ‘the defendant’s conduct must be not only

wrong, but also egregiously wrong’”(citation omitted)).

6 Section 2(a) of Chapter 93A declares unlawful “unfair or deceptive acts or practices in the conduct of any trade or commerce” and Section 11 extends Section 2’s general protection to commercial parties. Mass. Gen. Laws ch. 93A, §§ 2(a), 11.


19

A 93A claim that simply repeats the same assertions that underlie a plaintiff’s common

law or statutory claims is not enough to overcome dismissal when the other claims themselves

are not cognizable. Davis, Malm, D’Agostine P.C. v. Vale, No. 041495, 2005 WL 1155171, at

*4 (Mass. Super. Ct. Mar. 31, 2005) (dismissing 93A claim because “the mere repetition of the

assertions underlying” the plaintiffs’ common law claims was not enough to support the required

element that the conduct be unfair or otherwise unscrupulous); Pimental v. Wachovia Mortg.

Corp., 411 F. Supp. 2d 32, 40 (D. Mass. 2006) (dismissing 93A claim based on breach of

contract and negligence claims on the ground that those claims were not sustainable, and

therefore, there was no basis for finding the defendant liable under Chapter 93A). As in those

cases, plaintiffs base their 93A claims here on the same conduct that they challenge under the

Sherman Act. They do not allege any facts that separately support a claim that Ocean Spray

engaged in the type of unfair and unscrupulous conduct that 93A prohibits.

IX. THE SOGN AND WINTERS PLAINTIFFS’ CLAIM THAT OCEAN S PRAY UNLAWFULLY TERMINATED THEIR CONTRACTS IS NOT ACTION ABLE AS A MATTER OF LAW (COUNT XIII)

Plaintiffs Barry K. Winters, d/b/a BKW Farms, and Paul D. Sogn, d/b/a Wintersogn

Farm, LLC bring a separate count that alleges that Ocean Spray violated 93A when Ocean Spray

exercised its contractual right to give notice that it would not renew their Cranberry Marketing

Agreements. Compl. Count XIII, ¶¶ 146-153. This claim is not actionable because a party does

not engage in unlawful, or unfair and deceptive, conduct when it exercises a contractual right

that permits it to not renew a contract. The Massachusetts Supreme Court held in PMP Assocs.,

Inc. v. Globe Newspaper Co., 321 N.E. 2d 915, 918 (Mass. 1975), that “a refusal to deal, without

a showing of monopolistic purpose or concerted effort to hinder free trade, is not an unfair trade

practice under G.L. c. 93A, and is therefore not actionable.” Winters and Sogn do not claim that

Ocean Spray’s decision not to renew their contracts was for a monopolistic purpose or the


20

product of a “concerted effort.” Compl. ¶ 152 (“The purpose of terminating the Winters CMA

and the Sogn CMA is for the purpose of frustrating this pending litigation . . . .”).

Plaintiffs’ claim that Ocean Spray failed to renew their contracts explicitly because they

sued Ocean Spray does not change this analysis. A defendant’s failure to renew a contractual

relationship because the plaintiff filed an antitrust suit against it does not state a claim under state

unfair competition laws. See, e.g., Yachting Promotions, Inc. v. Broward Yachts, Inc., 792 So.

2d 660, 664 (Fla. Dist. Ct. App. 2001) (holding that a boat show promoter’s refusal to conduct

business with an exhibitor due to a pending lawsuit “is not an unfair or deceptive trade practice”

under Florida’s Deceptive and Unfair Trade Practices Act); High-Tech Commc’ns, Inc. v.

Panasonic Co., No. 94-1477, 1995 WL 65133, at *3 (E.D. La. Feb. 15, 1995) (holding that the

failure to renew a contract did not violate the Louisiana unfair trade practices act, and noting that

“when a controversy between two parties leads to litigation, the courts have uniformly found that

either of the parties would be justified in terminating its relationship with the other”).

Moreover, plaintiffs raised this exact issue in their second motion for a protective order,

when they argued that Ocean Spray had done something wrong when it decided not to renew

Sogn and Winters’ contracts because they had sued Ocean Spray. Dkt. 40. This Court

summarily denied plaintiffs’ motion, and should not revisit its decision. See, e.g., Laudano v.

214 S. St. Corp., 608 F. Supp. 2d 185, 192 (D. Mass. 2009) (defendants’ argument barred

because they already raised it and were unsuccessful).

CONCLUSION

For all of the reasons stated above, Ocean Spray Cranberries, Inc. and Ocean Spray

Brands LLC respectfully request that the Court dismiss plaintiffs’ third amended complaint in its

entirety, with prejudice.


Dated: March 18, 2013

Respectfully submitted,

/s/ Margaret M. Zwisler

Margaret M. Zwisler (admitted pro hac vice) Marguerite M. Sullivan (admitted pro hac vice) Jennifer L. Giordano (B.B.O. #650537) LATHAM & WATKINS LLP 555 Eleventh Street, NW Suite 1000 Washington, DC 20004 Telephone: 202-637-1092 Facsimile: 202-637-2201 Email: [email protected] Alfred C. Pfeiffer, Jr. (admitted pro hac vice) LATHAM & WATKINS LLP 505 Montgomery Street, Suite 2000 San Francisco, CA 94111-6538 Telephone: (415) 391-0600 Facsimile: (415) 395-8095 Email: [email protected] Attorneys for Ocean Spray Cranberries, Inc. and Ocean Spray Brands, LLC


CERTIFICATE OF SERVICE

I hereby certify that this document filed through the ECF system will be sent

electronically to the registered participants as identified on the Notice of Electronic Filing (NEF)

and paper copies will be sent to those indicated as non-registered participants on March 18,

2013.

/s/ Margaret M. Zwisler Margaret M. Zwisler


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