In Re Catfish Antitrust Litigation

826 F. Supp. 1019, 1993 U.S. Dist. LEXIS 9748, 1993 WL 267099
CourtDistrict Court, N.D. Mississippi
DecidedJune 28, 1993
Docket2:92-cv-00073
StatusPublished
Cited by88 cases

This text of 826 F. Supp. 1019 (In Re Catfish Antitrust Litigation) is published on Counsel Stack Legal Research, covering District Court, N.D. Mississippi primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Catfish Antitrust Litigation, 826 F. Supp. 1019, 1993 U.S. Dist. LEXIS 9748, 1993 WL 267099 (N.D. Miss. 1993).

Opinion

MEMORANDUM OPINION

DAVIDSON, District Judge.

This litigation presently consists of thirteen individual lawsuits which were filed in various federal district courts throughout the country. While most of the actions were filed here in the Northern District of Mississippi, there were also filings in the Western District of Washington, Eastern District of Pennsylvania, Eastern District of Louisiana, and the Eastern District of Tennessee. In accordance with 28 U.S.C. § 1407, the Judicial Panel on Multidistrict Litigation has transferred all cases to this district for centralized and consolidated pretrial proceedings.

The named plaintiffs in this litigation are food distributors who purchased catfish and catfish products from 1981 until 1990, from various companies that were engaged in the business of processing and selling farm raised catfish and catfish products. In the consolidated class action complaint which was *1023 filed on October 14, 1992, the named plaintiffs (distributors) invoke section 4 of the Clayton Act (15 U.S.C. § 15) 1 as a means to recover treble damages, costs of suit, and attorneys’ fees for the defendants’ (proeessors/sellers) alleged violations of section 1 of the Sherman Act. The sum and substance of the consolidated complaint is that the defendants have engaged in a combination and conspiracy, since at least 1981 through 1990, to suppress and eliminate competition in the catfish industry by fixing prices of catfish and catfish products sold throughout the United States. It is alleged that the defendants agreed to establish minimum prices for catfish and certain catfish products and to adhere to the established minimum prices. As a consequence, plaintiffs allege injury in that the prices paid for catfish were artificially high and at non-competitive levels.

As noted above, the litigation began as thirteen separate actions filed in various districts. 2 However, since all actions have been consolidated under the “master file” for pretrial treatment, the court had the benefit of consolidated motions, responses, and memorandum briefs which pertain to all actions. The named plaintiffs, on behalf of themselves and a class of all those similarly situated, are as follows: State Fish Distributors, Inc.; Robert Orr-Sysco Food Services Co.; Randle Trout Distributors, Inc.; Farm House Food Distributors, Inc.; and, American Seafood, Inc. The defendants in this case are the following catfish processors: Magnolia Processing, Inc. (“Magnolia”); Delta Pride Catfish, Inc. (“Delta Pride”); Simmons Farm Raised Catfish, Inc. (“Simmons”); Farm Fresh Catfish Company (“Farm Fresh”); Country Skillet Catfish Company (“Country Skillet”); ConAgra; and Southern Pride Catfish Company, Inc. (“Southern Pride”). 3 All defendants, except for Southern Pride, have filed motions to dismiss plaintiffs’ third amended class action complaint. The motions to dismiss are advanced under F.R.C.P. 12(b)(6), failure to state a claim upon which relief can be granted, and 9(b), failure to aver fraud with particularity. Also ripe for consideration is the motion by the named plaintiffs to certify a class action pursuant to F.R.C.P. 23. In order to better understand the legal issues which the court considers, a brief sketch of the catfish industry is presented before addressing the motions to dismiss.

*1024 Background

Catfish aquaculture experienced growth explosion in the 1980s. The consumer market for catfish expanded beyond its traditional base in the Deep South, and markets were cultivated in regions throughout the country, with particular success in the West. This growth was attributed to aggressive marketing along with a consumer preference for leaner, low-fat meat choices. During the 1980s, catfish sales by processors increased tenfold, and catfish is now a $400 million per year business. From 1986 through 1989 alone, ten new processing plants entered the business.

Catfish production begins with young fish, fingerlings, which are raised in hatcheries to a size that can be transported to catfish ponds. Once transferred to the production ponds, the fingerlings may take 'up to two years to reach harvesting maturity. The defendants purchase farm-raised catfish which they process and then sell to wholesalers and retailers for distribution to final consumers. Once the processors purchase live fish from the producers, the fish go through various stages of processing' at processing plants. Initially, the fish are beheaded, eviscerated and skinned. The processor may then sell the whole processed fish, or further processing could occur. For example, the whole fish could be cut into steaks, which are cross-section cuts; filets, which are the boned side of the fish; nuggets, which are small filets cut from below the rib; or strips, finger-size pieces of fish cut from the filets. Once the fish are processed and cut into the desired serving portion, the catfish are either packed in ice or frozen for shipment.

Catfish is a highly concentrated industry. Approximately 80% of the nation’s catfish is produced and processed in the Mississippi Delta region, and neighboring Alabama is the second leading producer. Delta Pride, Country Skillet, and Farm Fresh are considered the “big three,” in catfish processing; and in 1988, these three processors accounted for more than 70% of the industry’s processing capacity. In more recent years, it has been reported that Delta Pride and Farm Fresh have lost some of their market share to new entrants. However, Delta Pride, a farmer-owner cooperative, is, and has always been, the dominant force in the catfish production/proeessing business.

MOTIONS TO DISMISS

Rule 12(b)(6) Standard

A Rule 12(b)(6) motion is disfavored, and it is rarely granted. Clark v. Amoco Production Co., 794 F.2d 967, 970 (5th Cir.1986); Sosa v. Coleman, 646 F.2d 991, 993 (5th Cir.1981). Dismissal is never warranted because the court believes the plaintiff is unlikely to prevail on the merits. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974). Even if it appears an almost certainty that the facts alleged cannot be proved to support the claim, the complaint cannot be dismissed so long as the complaint states a claim. Clark v. Amoco Production Co., 794 F.2d 967, 970 (5th Cir.1986); Boudeloche v. Grow Chemical Coatings Corp., 728 F.2d 759, 762 (5th Cir.1984). “To qualify for dismissal under Rule 12(b)(6), a complaint must on its face show a bar to relief.” Clark, 794 F.2d at 970; see also Mahone v. Addicks Utility Dist., 836 F.2d 921, 926 (5th Cir.1988); United States v. Uvalde Consolidated Ind. School Disk, 625 F.2d 547, 549 (5th Cir.1980), cert.

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Bluebook (online)
826 F. Supp. 1019, 1993 U.S. Dist. LEXIS 9748, 1993 WL 267099, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-catfish-antitrust-litigation-msnd-1993.