In re Beer Distribution Antitrust Litigation

188 F.R.D. 557, 1999 WL 652008
CourtDistrict Court, N.D. California
DecidedAugust 23, 1999
DocketNo. C 97-20644 SW
StatusPublished
Cited by7 cases

This text of 188 F.R.D. 557 (In re Beer Distribution Antitrust Litigation) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Beer Distribution Antitrust Litigation, 188 F.R.D. 557, 1999 WL 652008 (N.D. Cal. 1999).

Opinion

ORDER RE: PLAINTIFFS’ SECOND MOTION FOR CLASS CERTIFICATION

SPENCER WILLIAMS, District Judge.

Plaintiffs Huntington Beach Brewing Company d/b/a El Toro Brewing Company (“El Toro”), Kenneth Allen d/b/a Anderson Valley Brewing Company (“Anderson Valley”), Lake Tahoe Brewing Company, Inc. d/b/a Tahoe Basin Beverage Company (“Lake Tahoe”), and St. Stan’s Brewing Company (“St. Stan’s”) each filed separate class action complaints against Defendant Anheuser-Busch, Inc. (“Anheuser-Busch”, “AB” or “A-B”) alleging claims under various federal anti-trust statutes. Following consolidation of these four separate actions, Plaintiffs moved for certification of their consolidated class action complaint. The Court denied that motion. See Order Denying Without Prejudice Plaintiffs’ Motion for Class Certification, dated November 10, 1998. Plaintiffs subsequently sought and received leave of Court to amend their consolidated complaint. See Order Granting Plaintiffs’ Motion For Leave to File Amended Complaint, dated February 18, 1999. On February 18, 1999, Plaintiffs filed their First Amended Consolidated Class Action Complaint (“Amended Complaint”) in which they allege the following three claims for relief: (Claim 1) concerted refusal to deal and group boycott as a per se violation of § 1 of the Sherman Act (15 U.S.C. § 1); (Claim 2) concerted refusal to deal and group boycott under the rule of reason pursuant to § 1 of the Sherman Act (15 U.S.C. § 1); and (Claim 3) attempted monopolization in violation of § 2 of the Sherman Act (15 U.S.C. § 2).1

Plaintiffs now bring their second motion for class certification and for an order that this action may be maintained as a class action pursuant to Federal Rule of Civil Procedure 23. For the reasons set forth below, and pursuant to Rule 23(c)(4), the Court DENIES Plaintiffs’ motion with respect to the Amended Complaint’s second and third claims for relief, but DEFERS RULING on certification with respect to the first claim for relief (per se violation) pending a motion for summary judgment on that claim.

I. BACKGROUND2

Anheuser-Busch is a major beer manufacturer with an established distribution network. This distribution network includes some Anheuser-Busch-owned distributors and some independent distributors. Of the independent distributors, some exclusively distribute Anheuser-Busch products while others distribute Anheuser-Busch beer products as well as non-Anheuser-Busch beer products. In their First Amended Consolidated Complaint, Plaintiffs allege that Anheuser-Busch sought to force all of its independent distributors into exclusivity by engaging in anticompetitive activities. Specifically, Plaintiffs allege that AnheuserBusch formed relationships with other brewers, which Anheuser-Busch called its “Beer Partners,” and then implemented an illegal “100% Share of Mind” campaign. According to Plaintiffs, the 100% Share of Mind campaign was the means by which AnheuserBusch and its Beer Partners effected horizontal restraints against competing breweries, including Plaintiffs.

A. Anheuser-Busch’s Beer Partners

Plaintiffs assert that to realize its desire to increase the number of exclusive indepen[560]*560dent distributors, Anheuser-Busch knew that it would have to offer its distributors viable alternatives to Plaintiffs’ specialty-beers. Independent distributors would not be willing to forego distribution of Plaintiffs’ beers unless they could provide suitable replacements to satisfy customer demand for specialty beers. To meet the demand for specialty beers, Plaintiffs allege that Anheuser-Busch acquired equity interests in several specialty breweries: Redhook Ale Brewery, a domestic brewery in which AnheuserBusch acquired a 25% stock ownership interest; Kirin, a Japanese brewery with which Anheuser-Busch formed an alliance covering distribution rights and a brewing agreement covering both the United States and Japan; Grupo Modelo, a Mexican brewery in which Anheuser-Busch owns a non-controlling 50.2% interest; Widmer Brothers Brewing Company, a domestic brewery with which Anheuser-Busch has a distribution and equity alliance and in which Anheuser-Busch owns a 31% equity interest; Tsingtao, a Chinese brewing company in which AnheuserBusch owns a 5% interest; CCU-Chile Brewery, an Argentine brewery in which Anheuser-Busch owns an 8.2% interest; and Antarctica Brewery, a Brazilian brewing company in which Anheuser-Busch owns a 5% interest. Anheuser-Busch refers to these two domestic and five import breweries as its “Beer Partners.”

B. The 100% Share of Mind Program

Anheuser-Busch’s 100% Share of Mind campaign, directed to independent distributors, consisted of two programs: (1) an exclusivity incentive program; and (2) Amended and Restated Anheuser-Busch Wholesaler Equity Agreements.

1. The Exclusivity Incentive Program

Beginning on January 1, 1997, AnheuserBusch began offering financial incentives to independent distributors which choose to exclusively distribute Anheuser-Busch products. The incentives under the Exclusivity Incentive Program include: (1) a rebate on each case of Anheuser-Busch beer sold; (2) additional days of credit in which to pay for Anheuser-Busch products; and (3) reimbursement for truck painting. Under the Program, independent Anheuser-Busch distributors are categorized as levels “A” through “E.” A distributor that exclusively sells Anheuser-Busch products is level “A” while a distributor that sells any non-Anheuser-Busch beers is an “E” level distributor ineligible to receive incentives. Furthermore, a distributor may sell any of the Beer Partners’ products and remain eligible to receive incentives according to the classification system.

2. Amended and Restated Wholesaler Equity Agreements

In addition to the Exclusivity Incentive Program, Anheuser-Busch implemented an Amended and Restated Wholesaler Equity Agreement with each of its independent distributors. It is Anheuser-Busch’s policy to maintain identical distribution agreements with all of its distributors. Effective August 1997, Anheuser-Busch uniformly amended its Equity Agreements. The Equity Agreement in effect prior to the 1997 amendment granted each distributor an exclusive territory in return for which each distributor agreed to exercise its “best efforts” to promote, sell and service Anheuser-Busch products in the territory. The Amended Equity Agreements replaced the “best efforts” obligation with one to devote “primary efforts” to the sale of Anheuser-Busch products. The Amended Equity Agreements do not require distributors to cease distributing non-Anheuser-Buseh products.

C. Results of Anheuser-Busch’s Activities

Plaintiffs allege that as a result of Anheuser-Busch’s affiliation with its Beer Partners and the 100% Share of Mind campaign, a number of independent Anheuser-Busch distributors terminated distribution agreements with Plaintiffs and other specialty brewers, either outright or constructively.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Nitsch v. DreamWorks Animation SKG Inc.
315 F.R.D. 270 (N.D. California, 2016)
Campbell v. Facebook Inc.
315 F.R.D. 250 (N.D. California, 2016)
In re High-Tech Employee Antitrust Litigation
856 F. Supp. 2d 1103 (N.D. California, 2012)
Celano v. Marriott International, Inc.
242 F.R.D. 544 (N.D. California, 2007)
Rockey v. Courtesy Motors, Inc.
199 F.R.D. 578 (W.D. Michigan, 2001)

Cite This Page — Counsel Stack

Bluebook (online)
188 F.R.D. 557, 1999 WL 652008, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-beer-distribution-antitrust-litigation-cand-1999.