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In re Wholesale Grocery Products Antitrust Litigation

United States District Court, D. Minnesota

March 1, 2017

In re Wholesale Grocery Products Antitrust Litigation This Relates to All Actions

          Elizabeth R. Odette, Esq., W. Joseph Bruckner, Esq., and Kate M. Baxter-Kauf, Esq., Lockridge Grindal Nauen PLLP, Minneapolis, MN, on behalf of the Midwest Plaintiffs.

          Stephen P. Safranski, Esq., and Natalie I. Uhlemann, Esq., Robins Kaplan LLP, Minneapolis, MN, on behalf of Defendant SuperValu, Inc.

          Eric S. Hochstadt, Esq., Weil, Gotshal & Manges LLP, New York, NY, and Todd A. Wind, Esq., Fredrikson & Byron, PA, Minneapolis, MN, on behalf of Defendant C&S Wholesale Grocers, Inc.

          MEMORANDUM OPINION AND ORDER

          ANN D. MONTGOMERY U.S. DISTRICT JUDGE

         I. INTRODUCTION

         On January 25, 2017, the undersigned United States District Judge heard oral argument on Plaintiffs' Motion for Approval of the Form of Class Notice and Plan of Notice [Docket No. 684] and Defendant SuperValu, Inc.'s (“SuperValu”) Motion for Approval of Limited Customer Communications Program [Docket No. 688]. For the reasons set forth below, Plaintiffs' Motion is granted in part and SuperValu's Motion is granted in part.

         II. BACKGROUND[1]

         This multi-district class action litigation consolidates the antitrust lawsuits of retail grocers against SuperValu and C&S Wholesale Grocers, Inc. (“C&S”) (collectively, “Defendants”), the two largest full-line grocery wholesalers in the United States. See Second Consol. Am. Class Action Compl. [Docket No. 99] (“Second Am. Compl.”) ¶ 1. Plaintiffs allege that in 2003, Defendants conspired to allocate customers and territories through an Asset Exchange Agreement (“AEA”), and that, as a result of the reallocation, Defendants charged retailers supra-competitive prices, in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. See id. ¶¶ 34-44, 77-83.

         On September 7, 2016, the Court certified the following five litigation classes (“Classes”) of customers served from SuperValu's distribution centers in the Midwest:

The Champaign DC Non-Arbitration Class: All customers that paid ABS fees on wholesale grocery products in all four SuperValu ABS product categories (grocery, dairy, frozen, and general merchandise/health and beauty care) purchased directly from SuperValu's Champaign, Illinois DC from December 31, 2004 through September 13, 2008 (the “Class Period”), are located in the relevant geographic market, and did not have an arbitration agreement with SuperValu during the Class Period. This class brings claims against both Defendants;
The Champaign DC Arbitration Class: All customers that paid ABS fees on wholesale grocery products in all four SuperValu ABS product categories (grocery, dairy, frozen, and general merchandise/health and beauty care) purchased directly from SuperValu's Champaign, Illinois DC from December 31, 2004 through September 13, 2008, are located in the relevant geographic market, and had an arbitration agreement with SuperValu during the Class Period. This class brings claims against C&S only;
The Green Bay DC Class: All customers that paid ABS fees on wholesale grocery products in all four SuperValu ABS product categories (grocery, dairy, frozen, and general merchandise/health and beauty care) purchased directly from SuperValu's Green Bay, Wisconsin DC from December 31, 2004 through September 13, 2008, and are located in the relevant geographic market. This class brings claims against C&S only;
The Hopkins DC Class: All customers that paid ABS fees on wholesale grocery products in all four SuperValu ABS product categories (grocery, dairy, frozen, and general merchandise/health and beauty care) purchased directly from SuperValu's Hopkins, Minnesota DC from December 31, 2004 through September 13, 2008, and are located in the relevant geographic market. This class brings claims against C&S only; and
The Pleasant Prairie DC Class: All customers that paid ABS fees on wholesale grocery products in all four SuperValu ABS product categories (grocery, dairy, frozen, and general merchandise/health and beauty care) purchased directly from SuperValu's Pleasant Prairie, Wisconsin DC from December 31, 2004 through September 13, 2008, and are located in the relevant geographic market. This class brings claims against C&S only.[2]

Am. Redacted Mem. Op. & Order [Docket No. 651] at 31-33; In re Wholesale Grocery Prods. Antitrust Litig., No. 09-2090, 2016 WL 4697338, at *14-15 (D. Minn. Sept. 9, 2016).

         Plaintiffs now move for approval of their proposed notice program. Defendants move for approval of a limited customer communications program.

         III. DISCUSSION

         A. Notice Program

         Plaintiffs propose a notice program that consists of: (1) direct mailing of a long-form notice to all class members who can be reasonably identified; (2) supplemental publication of a short-form notice in four regional trade publications and a PR1 Newswire release; and (3) the creation of a case-specific website and toll-free phone number.

         The parties have reached agreement on the language that will be included in the long-form notice, the content of the case-specific website, and the script for the toll-free number. However, three areas of dispute remain. First, Defendants oppose supplemental publication, arguing it is unnecessary overkill and may cause confusion among SuperValu customers who do not fall within any Class but may believe their rights are impacted by the litigation. Second, Plaintiffs oppose Defendants' request to include a brightly colored opt-out form and postage-paid return envelope with the long-form notice. Plaintiffs argue that an opt-out form may be confusing or coercive. Third, Plaintiffs oppose Defendants' request that the case-specific website provide class members with the ability to opt out online. Plaintiffs argue that this form of opting out is unnecessary and may cause some class members to unintentionally opt out of a Class.

         1. Legal Standard

         Notice of the pendency of a class action must satisfy the requirements of Federal Rule of Civil Procedure 23(c) as well as due process. Rule 23(c)(2)(B) provides that “the court must direct to class members the best notice that is practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort.” Fed.R.Civ.P. ...


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