Otto Milk Co. v. United Dairy Farmers Cooperative Ass'n

388 F.2d 789
CourtCourt of Appeals for the Third Circuit
DecidedDecember 26, 1967
DocketNo. 16386
StatusPublished
Cited by6 cases

This text of 388 F.2d 789 (Otto Milk Co. v. United Dairy Farmers Cooperative Ass'n) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Otto Milk Co. v. United Dairy Farmers Cooperative Ass'n, 388 F.2d 789 (3d Cir. 1967).

Opinion

OPINION OF THE COURT

McLAUGHLIN, Circuit Judge.

Appellee sued defendants under sections 1 and 2 of the Sherman Act (15 U. S.C. Sections 1 and 2) for engaging in an unlawful conspiracy in restraint of trade and for endeavoring to monopolize the marketing of milk in the particular southwestern area of Pennsylvania involved. The third count of the complaint, urged under the pendent jurisdiction of the district court, was for unlawfully interfering with plaintiff’s relations with its customers. The case was heard on the merits of all three of plaintiff’s charges on June 14 and 22, 1966. The three counts were sustained by the trial judge. A decree was issued which permanently enjoined the defendants.

«* * * from inducing, or attempting to induce, directly or indirectly, any present or potential customer of plaintiff to refuse to purchase products from plaintiff and, in connection therewith, from picketing or demonstrating, or threatening to picket or demonstrate, before or about any retail store in and around Western Pennsylvania, or in any other place which is, or may become, a purchaser of the bottled milk or dairy products of plaintiff.”

Appellee buys raw milk, then processes, bottles and sells it to retail stores. The milk comes from Western Pennsylvania farms, is handled at appellee’s receiving plants in Pennsylvania and Ohio and sold as bottled milk and other dairy products in Pennsylvania, Ohio and West Virginia. Plaintiff’s milk supplier during the critical period was Dairymen’s Co-Operative Sales Association (DCSA). Plaintiff’s [791]*791president, Thomas P. Otto, as a witness, testified that there are in the neighborhood of 4,000 members of the DCSA with approximately 700 of these having furnished milk to plaintiff. Defendant-appellant United Dairy Farmers Cooperative Association (Association) is an incorporated association under the laws of Pennsylvania. Defendant United Dairy Farmers (UDF) admittedly was an unincorporated association. Defendant-appellant Hayes was sued individually and is designated in the complaint as currently president of the Association and of UDF. He admits being president of the Association. Defendants-appellants Smouse, Piper, Yagla and Babiarz were all sued as individuals and were stated to be currently respectively Vice President, Treasurer, Secretary and Assistant Secretary of the Association and UDF. An answer was filed on behalf of all defendants. The individual defendants admitted they were officers of the Association. They denied they were then officers of UDF. The trial court found as a fact that the individual defendants are officers of said organization.

Plaintiff Otto Milk Company sought a permanent injunction against the defendants from inducing or attempting to induce customers of plaintiff to refuse to purchase products from plaintiff and in connection therewith, from picketing or demonstrating before any retail store which was a purchaser of plaintiff’s products. Defendants agreed voluntarily to stop the complained of conduct pending the outcome of this case.

So that the entire situation appears in its true perspective it is necessary to set out at some length highlights of the hearing testimony. As stated the president of plaintiff company was a witness. He said that on April 29, 1966 at the last contact he had with defendant Hayes the latter “asked that we discontinue the purchase of our milk supplies from the Dairymen’s Cooperative Sales Association and buy the Class I needs from the United Dairy Farmers. He also at that time indicated that he couldn't be responsible for what might happen if we did not do so.” Otto said that by May 26, 1966 “in various areas, pickets appeared before the stores ■of our very good customers.” With reference to an article in the Pittsburgh Post Gazette titled “Dairymen to picket Otto outlets” in which defendant Hayes was purportedly quoted (Pltf’s Ex. 2) the latter was called to the witness stand by the plaintiff. He was asked how many members the UDFCA had. He said that the last tally made probably two months previously, showed in the neighborhood of 600 members. He stated they were taking in new members all the time. After some back and forth he was asked “All right now, I will get back to you later, sir, but are we agreed that you did tell the reporter from the Pittsburgh Post Gazette that you were going to tell your story and ‘this’, meaning walking around with cards or signs was the only way to do it? A. I didn’t say the only way, I said this was a way that we would inform the public.” Hayes, shown a sign by his lawyer, identified it as “a sign that our members was carrying, * * He agreed with his attorney that it was the typical sign that was carried by the persons who were telling their story. A little later plaintiff’s attorney referring to the same sign asked Hayes “Incidentally on the back, it says ‘UDF and DSCA’. What’s that?” Hayes answered saying “This is an old sign.” and went on to explain that they “just turned it over and used the side that there was nothing printed on it.”

Otto, returning to the stand, stated that his company since that May had been obtaining all their dairy products from Western Pennsylvania farms. A letter from the Pennsylvania Milk Control Commission to plaintiff company advised “that the audit recently completed by our auditors reveals that your company purchased its entire milk supply for the month of May, 1966 from 740 Pennsylvania producers.” The witness testified that because of the pickets the numbers of stores that discontinued the Otto product totaled a weekly purchase from Otto of some $3,670. In addition leaflets or pamphlets [792]*792which the defense attorney said were printed by UDFCA were distributed by persons wearing the alluded to signs and walking up and down in front of stores belonging to Otto customers. Hayes, as a witness, said United Dairy Farmers paid for the printing and that “it was written back when we negotiated the contract with Beverly Farms.” (Emphasis supplied). The leaflet or pamphlet was marked in evidence as plaintiff’s exhibit 5. It was read into the record as follows:

“A. The heading in bold type, ‘Help your local farmer help you. When you buy milk today, please buy Beverly Farms United Dairy Farmers milk. When you do this you are actually helping your local farmers stay in business and you are getting better milk. The only carton of milk guaranteed to have local farmers’ milk in it, is the one which has the black “United Dairy Farmers” handle. We local farmers need your help and support. When you buy Beverly Farms United Dairy Farmers milk you help us help you keep the price down. If your dealer does not have the milk with the United Dairy Farmers label from Beverly Farms — ask him for it. Thanks and God bless you for helping us stay in business to better serve you and your children. United Dairy Farmers Cooperative Association.’ ” (Emphasis supplied).

Otto denied that Beverly milk was better than his. He was asked one other way customers could be sure of obtaining local milk and answered. “They can buy it from Otto ’Milk and they can buy from other dairies.” Otto went on to say that their customers had been reporting to them that they had been asked and in some cases demanding that they take Otto milk off sale.

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

Related

Cite This Page — Counsel Stack

Bluebook (online)
388 F.2d 789, Counsel Stack Legal Research, https://law.counselstack.com/opinion/otto-milk-co-v-united-dairy-farmers-cooperative-assn-ca3-1967.