First Impressions Salon, Inc. v. National Milk Producers Federation

214 F. Supp. 3d 723, 2016 WL 5816506, 2016 U.S. Dist. LEXIS 138390
CourtDistrict Court, S.D. Illinois
DecidedOctober 5, 2016
DocketCase No. 13-CV-454-NJR-SCW
StatusPublished
Cited by4 cases

This text of 214 F. Supp. 3d 723 (First Impressions Salon, Inc. v. National Milk Producers Federation) is published on Counsel Stack Legal Research, covering District Court, S.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
First Impressions Salon, Inc. v. National Milk Producers Federation, 214 F. Supp. 3d 723, 2016 WL 5816506, 2016 U.S. Dist. LEXIS 138390 (S.D. Ill. 2016).

Opinion

MEMORANDUM AND ORDER

ROSENSTENGEL, District Judge:

This matter is currently before the Court on the motion filed jointly by all Defendants seeking to dismiss the Third Amended Consolidated Class Action Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) and to strike certain class allegations pursuant to Federal Rule of Civil Procedure 23(d)(1)(D) (Doc. 166).1 For the reasons explained below, the motion is granted in part and denied in part.

Background

These background facts were derived from the Third Amended Consolidated Class Action Complaint filed by Plaintiffs First Impressions Salon, Roy Mattson, Belle Foods Trust, Gerry Whiting,2 KPH Healthcare Services, and Piggly Wiggly Midwest (Doc. 182). Plaintiffs allege that Defendants National Milk Producers Federation, Cooperatives Working Together, Dairy Farmers of America, Land O’Lakes, and Agri-Mark engaged in a nationwide conspiracy to prematurely slaughter dairy cows thereby limiting the production of raw milk and driving up prices for milk and milk products. More specifically, it is alleged that the National Milk Producers Federation is a trade association of dairy cooperatives that created Cooperatives Working Together (“CWT”) in order to “strengthen and stabilize milk prices.” Dairy Farmers of America, Land O’Lakes, and Agri-Mark, along with over 30 other dairy cooperatives and over 130 independent dairy farmers, joined CWT. CWT’s [726]*726members collectively produce almost 70% of the nation’s milk. It is alleged that CWT used fees collected from its members to finance “herd retirement programs.” These programs consisted of paying strategically 'chosen members to prematurely slaughter their dairy herds in order to limit the supply of raw milk, thereby artificially inflating the price of butter and cheese and the over-order price for raw milk to “supracompetitive” levels. Plaintiffs directly purchased raw milk, cheese, and/or butter at these inflated prices from one or more CWT members or their subsidiaries. Plaintiffs bring this putative class action on behalf of themselves and all other direct purchasers of raw milk, cheese, and butter, against Defendants for violations of § 1 of the Sherman Antitrust Act.

Discussion

Defendants’ Motion to Strike

Defendants argue that Belle Foods Trust and the Bankruptcy Estate of Yar-nell’s Ice Cream Company are not adequate class representatives under Rule 23(d)(1)(D) and therefore allegations to that effect in the complaint should be stricken (Doc. 188-1, pp. 17-18). More specifically, Belle Foods Trust and Yarnell’s are both involved in bankruptcy proceedings, which Defendants contend creates an inherent conflict of interest between these two Plaintiffs and the other potential class members (Doc. 188-1, p. 17). Because of the purported conflict of interest, Defendants contend they are not adequate class representatives (Id.). After this motion was briefed, Magistrate Judge Williams allowed Gerry Whiting to be substituted for Yarnell’s as a Plaintiff in this matter (Doc. 216), however, Defendants believe that Whiting has the same conflicts of interest as YarnelPs (Doc. 192).

A motion to strike portions of a pleading is properly brought under Rule 12(f). See Fed. R. Civ. P. 12(f). It is well-established, however, that a disputed issue of law should not be decided on a Rule 12(f) motion. See, e.g., Riemer v. Chase Bank, N.A., 275 F.R.D. 492, 494 (N.D. Ill. 2011) (“A motion to strike under Rule 12(f) is not a mechanism for deciding disputed issues of law or fact....”); Van Schouwen v. Connaught Corp., 782 F.Supp. 1240, 1245 (N.D. Ill. 1991) (citing United States v. 416.81 Acres of Land, 514 F.2d 627 (7th Cir. 1975)) (“[C]ourts are typically reluctant to decide disputed or substantial issues of law on a motion to strike.”); Garza v. Chicago Health Clubs, Inc., 347 F.Supp. 955, 963 (N.D. Ill. 1972) (“The Court is not unmindful that motions to strike under Federal Rule 12(f) are not a favored means for disposition of substantial questions of law.”) See also 5C Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1380 (3d ed.) (“A motion to strike under Federal Rule 12(f) is the appropriate remedy for the elimination of redundant, immaterial, impertinent, or scandalous matter in any pleading!.]”)

Whether Belle Foods Trust and Yarnell’s/Whiting are adequate class representatives is an issue of law that goes to the propriety of certifying a class; it cannot be decided on a motion to strike under Rule 12(f). To the extent Defendants are attempting to bring their motion to strike under Rule 23(d)(1)(D),3 they are jumping the gun. The issue of adequacy, along with all of the other requirements of Rule 23, should be decided in the context of the motion for class certification, not a motion to dismiss.

[727]*727 Defendants’ Motion to Dismiss

A majority of the arguments in the motion to dismiss relate to Plaintiffs’ standing to assert their claims. In particular, Defendants argue that Plaintiffs Belle Foods Trust and KPH Healthcare Services, Inc. lack antitrust standing because they failed to sufficiently allege that they are direct purchasers. Defendants also argue that Plaintiffs lack antitrust standing to pursue claims for products they did not purchase, i e., Yarnell’s cannot pursue claims based on the prices of butter and cheese, and all other Plaintiffs cannot pursue claims based on the price of raw milk. Finally, Defendants argue that Plaintiffs lack standing to sue for injunctive relief, or in the alternative, fail to state a claim for injunctive relief. Beyond the threshold issue of standing, Defendants argue that the entire complaint should be dismissed under the filed-rate doctrine. They also argue that certain claims are barred by the statute of limitations.

Almost all of Defendants’ arguments seek dismissal under Federal Rule of Rule 12(b)(6) (Doc. 188). The purpose of a motion to dismiss under Rule 12(b)(6) is to address the legal sufficiency of a plaintiffs claim for relief, not the merits of the case or whether the plaintiff will ultimately prevail. Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 736 (7th Cir. 2014); Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). In reviewing a motion to dismiss under Rule 12(b)(6), the court must construe the complaint in the light most favorable to the plaintiff, accept as true all well-pleaded facts, and draw all possible inferences in the plaintiffs favor. See, e.g., Hecker v. Deere & Co., 556 F.3d 575, 580 (7th Cir. 2009) (quoting Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008)). To survive a motion to dismiss, the complaint must allege facts sufficient to“ ‘state a claim to relief that is plausible on its face’ and ‘raise a right to relief above the speculative level’ ” Camasta, 761 F.3d at 736 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)).

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214 F. Supp. 3d 723, 2016 WL 5816506, 2016 U.S. Dist. LEXIS 138390, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-impressions-salon-inc-v-national-milk-producers-federation-ilsd-2016.