Edwards v. Nat'l Milk Producers Fed'n

MATTHEW EDWARDS, et al., Plaintiffs, v. NATIONAL MILK PRODUCERS FEDERATION, akaCOOPERATIVES WORKING TOGETHER, et al., Defendants.

No. C 11-04766 JSW

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

September 16, 2014

ORDER REGARDING MOTION FOR CLASS CERTIFICATION

Now before the Court is the motion for class certification filed by Plaintiffs, the Daubert motion to exclude Plaintiffs' expert filed by Defendants, and the motion to strike the Daubert motion filed by Plaintiffs. Having considered the parties' pleadings and relevant legal authority, the Court hereby grants in part and denies in part the motion for class certification, denies the request to exclude Plaintiffs' expert, and grants the motion to strike Defendants' separate evidentiary objections.¹

BACKGROUND

Plaintiff filed this putative antitrust class action against Defendants National Milk Producers Federation, aka Cooperatives Working Together ("CWT"), Dairy Farmers of America, Inc., Land O'Lakes, Inc., Dairylea Cooperative Inc., and Agri-Mark, Inc. (collectively"Defendants") on behalf of all consumers who indirectly purchased milk and/or other fresh milk products for their own use from 2003 to the present as residents of the fifteen states at issue and of Washington, D.C. In addition to Washington, D.C., Plaintiffs contend that Defendants violated the state antitrust laws of the following fifteen states: Arizona, California, Kansas, Massachusetts, Michigan, Missouri, Nebraska, Nevada, New Hampshire, Oregon, South Dakota, Tennessee, Vermont, West Virginia, and Wisconsin.

Plaintiffs allege that CWT and its members have engaged in a nationwide conspiracy to limit the production of raw farm milk, and thus increase the price of raw milk, through premature "herd retirements." (Second Amend. Consolidated Class Action Compl. ("SACCAC"), ¶ 1.) "These herd retirements required participating dairy farmers to destroy all of the dairy cows in all of their herds and, beginning on April 1, 2009, agree not to reenter the dairy farming business for at least one year." Id. Plaintiffs allege that this conspiracy artificially inflated, and continues to artificially inflate, the price of milk and other fresh milk products, including cream, half & half, yogurt, cottage cheese, cream cheese, and sour cream. Id.

Plaintiff now seeks class certification in each of the fifteen states, plus Washington, D.C., pursuant to Federal Rule of Civil Procedure 23 for the following classes:

All consumers who, from 2003 to the present, as residents of [State], indirectly purchased milk and/or other fresh milk products (including cream, half & half, yogurt, cottage cheese, cream cheese, and/or sour cream) for their own use and not for resale.

(Id. at ¶ 126.)

The United States Department of Agriculture ("USDA") issues Farm Milk Marketing Orders ("FMMO") which set the minimum price which may be charged for raw milk. See Carlin v. DairyAmerica, Inc., 688 F.3d 1117, 1120 (9th Cir. 2012). The rates set by FMMOs "consist of only minimum prices" from which the prices charged may be increased. Id. at 1130 (emphasis in original). The AMAA does not mandate a maximum price. Parties "can and do, negotiate premiums, known as 'over-order' prices, for the sale of milk." Id. at 1120 (quotingFarmers Union Milk Mktg Coop. v. Yeutter, 930 F.2d 466, 468-69 (6th Cir. 1991)). Plaintiffs contend that Defendants artificially raised the over-order prices for raw milk.

Defendants do not dispute that they engaged in herd retirement. Rather, they contend that their conduct is immune from antitrust liability pursuant to Section 2 of the Capper-Volstead Act, 7 U.S.C. § 292. The Capper-Volstead Act, in conjunction with Section 6 of the Clayton Act, 15 U.S.C. § 17, provides an exemption from liability under section 1 of the Sherman Act, 15 U.S.C. § 1. Whether Defendants' conduct is in fact immune is a merits argument that Defendants do not raise, and the Court does not address, upon the present motions.

ANALYSIS

Before the Court turns to the motion for class certification, the Court addresses Defendants' challenge to Plaintiffs' expert, Dr. John M. Connor, based on Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 597 (1993). Under Federal Rule of Evidence 702, "[a] witness who is qualified as an expert by knowledge, skill experience, training, or education may testify in the form of an opinion or otherwise if," inter alia, "the testimony is the product of reliable principles and methods." Fed. R. Evid. 702.

It is well established that a court has a "gatekeeping function" to determine that proposed expert testimony, whether it is based on scientific, technical or other "specialized knowledge," is both relevant and reliable. See Kumho Tire Co. v. Carmichael, 526 U.S. 137, 141 (1999); Daubert, 509 U.S. at 597; Estate of Barbarin v. Ashten-Johnson, Inc., - F.3d -, 2014 WL 129884, at *4 (9th Cir. Jan. 15, 2014). This inquiry is a "flexible" one, and the Court may consider such factors as whether the specialized knowledge or scientific or technical theory or technique: (1) can be or has been tested; (2) has been subjected to peer review or publication; (3) is subject to generally applicable standards or known error rates; and (4) is "generally accepted" in the field of expertise. Kumho, 526 U.S. at 151; Daubert, 509 U.S. at 592-94; see also United States v. Hankey, 203 F.3d 1160, 1168 (9th Cir. 2000.)

Although the Court may exclude expert testimony, that is not always the appropriate remedy. "Vigorous cross-examination, presentation of contrary evidence, and carefulinstruction on the burden of proof are the traditional and appropriate means of attacking shaky but admissible evidence." Daubert, 509 U.S. at 596 (citing Rock v. Arkansas, 483 U.S. 44, 61 (1987)). Upon review of the record, the Court cannot say that Dr. Connor's opinions are so inherently unreliable that his testimony should be excluded, and, thus, the Court denies the request to exclude him.

"Class certifications are governed by Federal Rule of Civil Procedure 23," and a plaintiff seeking class certification bears the burden of "demonstrating that he has met each of the four requirements of Rule 23(a) and at least one of the requirements of Rule 23(b)." Lozano v. AT&T Wireless Servs., Inc., 504 F.3d 718, 724 (9th Cir. 2007); see also Zinser v. Accufix Research Institute, Inc., 253 F.3d 1180, 1186 (9th Cir.), amended 273 F.3d 1266 (9th Cir. 2001) (trial court must conduct a "rigorous analysis" to determine whether the requirements of Rule 23 have been met). "Rule 23 does not set forth a mere pleading standard. A party seeking class certification must affirmatively deonstrate his compliance with the Rule - that is, he must be prepared to prove that there are in fact sufficiently numerous parties, common questions of law or fact, etc." Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011). Further, "[c]lass certification is not immutable, and class representative status could be withdrawn or modified if at any time the representatives could no longer protect the interests of the class." Cummings v. Connell, 316 F.3d 886, 896 (9th Cir. 2003) (citing Soc. Servs. Union, Local 535 v. County of Santa Clara, 609 F.2d 944, 948-49 (9th Cir. 1979)).

A. Threshold Issues: Ascertainability and Standing.

As a threshold matter, and apart from the explicit requirements of Rule 23(a), the party seeking class certification must demonstrate that an identifiable and ascertainable class exists. Mazur v. eBay Inc., 257 F.R.D. 563, 567 (N.D. Cal. 2009). "'Although there is no explicit requirement concerning the class definition in Fed. R. Civ. P. 23, courts have held that the class must be adequately defined and clearly ascertainable before a class action may proceed.'" Schwartz v. Upper Deck Co., 183 F.R.D. 672, 679-80 (S.D. Cal. 1999) (quoting Elliott v ITT Corp, 150 F.R.D. 569, 573-74 (N.D. Ill. 1992)). "A class definition should be 'precise, objective and presently ascertainable.'" Rodriguez v. Gates, 2002 WL 1162675, at *8 (C.D.Cal. 2002) (quoting O'Connor v. Boeing North American, Inc., 184 F.R.D. 311, 319 (C.D. Cal. 1998)); see also Manual for Complex Litigation, Fourth § 21.222 at 270-71 (2004). While the identity of the class members need not be known at the time of certification, class membership must be clearly ascertainable. DeBremaecker v. Short, 433 F.2d 733, 734 (5th Cir. 1970). The class definition must be sufficiently definite so that it is administratively feasible to determine whether a particular person is a class member. See, e.g., Davoll v. Webb, 160 F.R.D. 142, 144 (D. Colo. 1995).

"A class is ascertainable if it identifies a group of unnamed plaintiffs by describing a set of common characteristics sufficient to allow a member of that group to identify himself or herself as having a right to recover based on the description." Vietnam Veterans of America v. C.I.A., 288 F.R.D. 192, 211 (N.D. Cal. 2012) (citation omitted); see also Yordi v. Plimus, Inc., 2013 WL 5832225, *2 (N.D. Cal. Oct. 29,. 2013); Hanni v. Am. Airlines, Inc., 2010 WL 289297, *9 (N.D. Cal. Jan. 15, 2010). Here, the class definition clearly defines the characteristics of a class member by providing a description of the allegedly offending products and the eligible dates of purchase. Therefore, a prospective class member would have sufficient information to determine whether he or she was an indirect purchaser of milk and/or other fresh milk products during the class period. Accordingly, the Court finds that Plaintiffs have set forth identifiable and ascertainable classes.

Standing is another threshold issue. To demonstrate standing "named plaintiffs who represent a class must allege and show that they personally have been injured, not that injury has been suffered by other, unidentified members of the class to which they belong and which they purport to represent." Lewis v. Casey, 518 U.S. 343, 347 (1996) (internal quotes omitted). Moreover, at least one named...