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In re Wholesale Grocery Products Antitrust Litigation

United States District Court, D. Minnesota

February 1, 2019

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

          W. Joseph Bruckner, Esq., Elizabeth R. Odette, Esq., and Kate M. Baxter-Kauf, Esq., Lockridge Grindal Nauen PLLP, Minneapolis, MN; Richard B. Drubel, Esq., Matthew J. Henken, Esq., and Jonathan R. Voegele, Esq., Boies, Schiller & Flexner LLP, Hanover, NH; and Daniel A. Kotchen, Esq., and Daniel L. Low, Esq., Kotchen & Low LLP, Washington, DC, on behalf of the Midwest Plaintiffs.

          Edward T. Dangel III, Esq., Dangel & Mattchen, Edgartown, MA, on behalf of Plaintiffs DeLuca's Market Corp., JFM Market, Inc., and MJF Market, Inc.

          Martin R. Lueck, Esq., Stephen P. Safranski, Esq., Jeffrey S. Gleason, Esq., Lisa L. Beane, Esq., Eric P. Barstad, Esq., and Geoffrey H. Kozen, Esq., Robins Kaplan LLP, Minneapolis, MN, on behalf of Defendant SuperValu, Inc.

          David J. Lender, Esq., Eric S. Hochstadt, Esq., and Luna Ngan Barrington, Esq., Weil, Gotshal & Manges LLP, New York, NY; Erik T. Koons, Esq., Andrew L. Lucarelli, Esq., and Aaron S. Rabinowitz, Esq., Baker Botts LLP, Washington, DC; and Todd A. Wind, Esq., and Nicole M. Moen, Esq., Fredrikson & Byron, PA, Minneapolis, MN, on behalf of Defendant C&S Wholesale Grocers, Inc.

          ORDER

          ANN D. MONTGOMERY U.S. DISTRICT JUDGE.

         I. INTRODUCTION

         On November 26, 2018, the Clerk of Court entered two Cost Judgments for Defendant C&S Wholesale Grocers, Inc. (“C&S”) [Docket Nos. 1337, 1338] and two Cost Judgments for Defendant SuperValu, Inc. (“SuperValu”) [Docket Nos. 1339, 1340]. Motions for review of the Cost Judgments have been filed by SuperValu [Docket No. 1341], C&S [Docket No. 1345], Plaintiff DeLuca's Corporation (“DeLuca's”) [Docket No. 1351], [1] Plaintiffs JFM Market, Inc. and MFJ Market, Inc. (collectively, “Village Market”) [Docket No. 1358], and jointly by Village Market and DeLuca's [Docket No. 1363]. For the reasons stated below, SuperValu and C&S' Motions are granted in part and denied in part, DeLuca's Motion is denied, Village Market's Motion is granted in part and denied in part, and the joint Motion by Village Market and DeLuca's is granted in part and denied in part.

         II. BACKGROUND

         This multi-district litigation consolidated four putative class action lawsuits brought in 2009 by retail grocers in New England and the Midwest. Plaintiffs alleged that Defendants C&S and SuperValu conspired to allocate customers and territories in the New England and Midwest wholesale grocery markets, and that Defendants used the allocation to eliminate competition and charge the retailers supra-competitive prices. Second Consol. Am. Class Action Compl. [Docket No. 99] ¶¶ 34-44.

         The Consolidated Class Action Complaint alleged two broad putative classes: (1) retailers who purchased products or related services from Defendants in the Midwest market (the “Midwest Class”); and (2) retailers who purchased such products or services in the New England market (the “New England Class”). See id. ¶ 67. Retailer D&G, Inc. (“D&G”) was a named plaintiff in the Midwest Class, and DeLuca's was a named plaintiff in the New England Class. Id. ¶ 71. Both classes included a subclass of retailers who were party to an arbitration agreement with a Defendant during the class period. Id. Village Market was a named plaintiff in the New England arbitration subclass. Id.

         In December 2009, the Court entered a pretrial order appointing three firms as Co-Lead Counsel in this case. See Pretrial Order No. 1 [Docket No. 15]. Among the firms appointed as Co-Lead Counsel was DeLuca's individually-retained counsel.

         In July 2011, while the parties were engaged in fact discovery, the Court dismissed the claims of Village Market and other arbitration subclass plaintiffs in favor of arbitration, and continued adjudicating the claims of the two lead plaintiffs, D&G and DeLuca's. See In re Wholesale Grocery Prods. Antitrust Litig., No. 09-MD-2090, 2011 WL 9558054, at *3-*4 (D. Minn. July 5, 2011). Village Market appealed the dismissal of its claims to the Eighth Circuit.

         On July 16, 2012, this Court denied class certification of both proposed classes, determining that the plaintiffs could not show class-wide impact through common evidence. See In re Wholesale Grocery Prods. Antitrust Litig., No. 09-MD-2090, 2012 WL 3031085 (D. Minn. July 25, 2012) (redacted). The Court found that the “formulaic nature” of SuperValu's pricing method used in the Midwest market made a better case for certification of the Midwest Class than the New England Class. Id. at *16. Nevertheless, the Midwest Class could not prove impact by common evidence because each of SuperValu's distribution centers across the Midwest inserted different values into the pricing formula, requiring an analysis of each distribution center's fees and competitive conditions. Id. Following this ruling, D&G requested leave to move for certification of a narrower Midwest class of grocers who were charged using formulaic pricing and supplied by SuperValu's Champaign, Illinois distribution center. See Letter, Aug. 31, 2012 [Docket No. 362] (“August 2012 Letter”). DeLuca's made no request for a narrower New England class.

         On January 11, 2013, the Court granted summary judgment for C&S and SuperValu against D&G and DeLuca's. In re Wholesale Grocery Prods. Antitrust Litig., No. 09-MD-2090, 2013 WL 140285 (D. Minn. Jan. 11, 2013). Based on the grant of summary judgment to Defendants, the Court denied D&G's request for renewed class certification of the narrower Midwest Class as moot. Id. at *15. D&G appealed both the summary judgment ruling and the denial of Midwest class certification. Notice of Appeal [Docket No. 429]. DeLuca's did not appeal the January 2013 Order.

         On February 13, 2013, while the summary judgment and Midwest Class certification appeal was pending, the Eighth Circuit reversed the dismissal of the arbitration subclass plaintiffs and remanded with instructions to consider whether some of these plaintiffs' arbitration agreements, including Village Market's agreement, were enforceable under a “successor-in-interest” theory. King Cole Foods, Inc. v. SuperValu, Inc., 707 F.3d 917 (8th Cir. 2013). This Court later ruled, and the Eighth Circuit affirmed, that arbitration was not compelled under a successor-in-interest theory. See In re Wholesale Grocery Prods. Antitrust Litig., No. 09-MD-2090, 2015 WL 1191826 (D. Minn. March 16, 2015); aff'd, In re Wholesale Grocery Prod. Antitrust Litig., 850 F.3d 344, 348 (8th Cir. 2017), amended (May 1, 2017).

         On February 15, 2013, SuperValu and C&S timely filed Bills of Costs against D&G and DeLuca's. See SuperValu 2013 Bill of Costs [Docket No. 439]; C&S 2013 Bill of Costs [Docket No. 440]. Due to the pendency of D&G's appeal and the remand of Village Market and other plaintiffs' claims at that time, the Court held the 2013 Bills of Costs in abeyance.

         In May 2014, the Eighth Circuit reversed summary judgment against D&G and remanded to the district court to consider whether to certify a narrower class of Midwest Plaintiffs that was based on which Midwest distribution center a plaintiff utilized. See In re Wholesale Grocery Prod. Antitrust Litig., 752 F.3d 728 (8th Cir. 2014).

         Following the reversal of summary judgment against D&G, the Midwest Plaintiffs' claims proceeded on a different schedule than the New England Plaintiffs' claims. See Letter, Oct. 3, 2014 [Docket No. 487] at 2. Additionally, the Midwest Plaintiffs continued to be represented by Lead Counsel, but New England plaintiff Village Market was represented by its individual counsel, Dangel & Mattchen. Id. Nevertheless, the New England and Midwest Plaintiffs agreed to coordinate discovery of their cases. Id.

         On September 7, 2016, the Court certified five classes of Midwest Plaintiffs. See Mem. Op. Order, Sept. 7, 2016 [Docket No. 647]. In July 2017, a settlement was reached between D&G on behalf of the Champaign DC Non-Arbitration Class and Supervalu. Under the Settlement Agreement [Docket No. 823, Attach. 1], SuperValu agreed to pay $8.75 million, and further agreed that “with respect to the Action, including this Settlement Agreement, Supervalu shall bear its own costs and attorneys' fees.” Settlement Agreement at 16. In return, D&G and the Champaign Non-Arbitration Class agreed to release their claims against SuperValu. Id. at 9, 11. The Court granted final approval of the Settlement Agreement on November 16, 2017. See Order Granting Mot. Final Approval Settlement [Docket No. 897]. The Midwest Plaintiffs continued to litigate their claims against C&S, and Village Market continued to litigate its claims against SuperValu.

         In April 2018, the Court held a jury trial on the Midwest Plaintiffs' claims against C&S. The jury returned a verdict for C&S on April 19, 2018. An amended final judgment for C&S was entered on May 23, 2018. Am. J. [Docket No. 1273]. C&S timely filed a 2018 Bill of Costs [Docket No. 1270] against the Midwest Plaintiffs and renewed its request for the costs itemized in its 2013 Bill of Costs.

         On July 27, 2018, the Court granted summary judgment to SuperValu on Village Market's claims. Redacted Mem. Op. Order [Docket No. 1308]. Judgment for SuperValu was entered on July 30, 2018. J. [Docket No. 1304]. SuperValu timely filed a 2018 Bill of Costs [Docket No. 1317] against Village Market and renewed its request for the costs itemized in its 2013 Bill of Costs.

         On November 26, 2018, the Court entered Cost Judgments on Defendants' 2013 and 2018 Bills of Costs as follows:

Bill of Cost Amount Claimed Amount Allowed Taxed Against
C&S 2013 $428, 372.90 $33, 585.07 Midwest Plaintiffs, DeLuca's
C&S 2018 $232, 935.93 $64, 814.43 Midwest Plaintiffs
SuperValu 2013 $162, 201.07 $35, 202.01 Village Market, DeLuca's
SuperValu 2018 $118, 867.09 $7, 737.59 Village Market

         Motions to review the Cost Judgments have been filed by DeLuca's, Village Market, and both Defendants.

         III. DISCUSSION

         A. Legal Standard

         Federal Rule of Civil Procedure 54(d)(1) provides in relevant part: “Unless a federal statute, these rules, or a court order provides otherwise, costs-other than attorney's fees-should be allowed to the prevailing party.” A cost award must, however, fit within the categories of taxable costs enumerated in 28 U.S.C. § 1920. Little Rock Cardiology Clinic PA v. Baptist Health, 591 F.3d 591, 601 (8th Cir. 2009). The Supreme Court has emphasized that taxable costs under § 1920 “are limited to relatively minor, incidental expenses, ” and “are a fraction of the nontaxable expenses borne by litigants for attorneys, experts, consultants, and investigators.” Taniguchi v. Kan.Pac. Saipan, Ltd., 566 U.S. 560, 573 (2012).

         Although the district court has discretion in awarding costs, “the Rules presume that the prevailing party is entitled to costs.” Lochridge v. Lindsey Mgmt. Co., 824 F.3d 780, 783 (8th Cir. 2016) (quoting Reger v. Nemours Found., Inc., 599 F.3d 285, 289 (3d Cir. 2010)). A losing party bears the burden of overcoming the presumption that the prevailing party may recover all of its allowable costs. Stanley v. Cottrell, Inc., 784 F.3d 454, 464 (8th Cir. 2015). A district court reviews a clerk's taxation of costs de novo. Farmer v. Arabian Am. Oil Co., 379 U.S. 227, 233 (1964).

         B. C&S' Cost Judgments

         Motions for review of C&S' Cost Judgments have been filed by DeLuca's and C&S.

         1. DeLuca's Motion for Review

         DeLuca's seeks review of the Cost Judgment awarding $33, 585.07 jointly and severally against DeLuca's and the Midwest Plaintiffs for amounts claimed in C&S' 2013 Bill of Costs. See Cost Judgment [Docket No. 1337]. DeLuca's argues that it should not be held liable on the Cost Judgment. DeLuca's states that the Midwest Plaintiffs do not object to DeLuca's being removed as a liable party.

         DeLuca's contends it is not liable on the Cost Judgment because: its counsel did not play a prominent role in determining what discovery would be sought; the only discovery costs DeLuca's incurred were $1, 015.50 for its own deposition; and DeLuca's stood to gain only a fraction of the damages sought by the Midwest and New England classes.

         DeLuca's further argues that it could face financial ruin if it is held jointly and severally liable with the Midwest Plaintiffs. DeLuca's argues that if the Midwest Plaintiffs appeal the Cost Judgments and seek a stay, or if Eighth Circuit reverses the judgment against the Midwest Plaintiffs, then C&S would be allowed to seek full costs against DeLuca's and potentially put it out of business. DeLuca's asks to be removed from the Cost Judgment so that it may “be free from the risk and worry of perhaps being left alone to pay all of the costs.” DeLuca's Mem. Supp. Mot. Review [Docket No. 1352] at 4.

         C&S opposes the Motion, arguing that DeLuca's actively participated in this case from 2009 to 2013 and should be held jointly and severally liable for the costs C&S incurred to defend this action during that time. C&S also argues that financial hardship does not release DeLuca's from the Cost Judgment.

         In the Eighth Circuit, “[j]oint and several liability for costs is the general rule unless equity otherwise dictates.” Concord Boat Corp. v. Brunswick Corp., 309 F.3d 494, 497 (8th Cir. 2002). Individual pro rata liability is “inconsistent with the presumption embodied in Rule 54(d) of the Federal Rules of Civil Procedure that a prevailing party is entitled to recover all of its costs, ” because pro rata liability shifts the expense of collection and the risk of noncollection to the prevailing party. Id. In circumstances where all plaintiffs “were represented by the same counsel, had common theories of liability, and sought the same discovery, ” joint liability is appropriate because no individual plaintiff can be considered to have generated more costs than any other. Id. Even if individual plaintiffs seek varying amounts of damages, an exception to joint and several liability is not justified because such an exception would swallow the default rule. Id.

         DeLuca's has not met its burden of showing that the Court should depart from the default rule of joint and several liability. Contrary to DeLuca's arguments that its counsel had a minimal role in determining the discovery to be sought and that it incurred almost no discovery costs, DeLuca's chosen counsel-Meredith Cohen Greenfogel & Skirnick, P.C. -sought the position and was appointed as co-lead counsel in this multidistrict litigation in 2009, and was expressly responsible for coordinating discovery and other activities. See Pretrial Order No. 1 at 3-4. Additionally, DeLuca's asserted the same theory of liability as all other plaintiffs and benefitted from the discovery obtained on behalf of all plaintiffs. That DeLuca's may have been seeking less damages than other plaintiffs does not warrant an exception to the default rule of joint and several liability. See Concord Boat, 309 F.3d at 497 (“The district court's reason for allocating costs individually-that the [plaintiffs] sought varying amounts of damages-is not a sufficient reason to depart from [the general] rule.”).

         Similarly unpersuasive is DeLuca's argument that it will potentially suffer financial hardship if the Midwest Plaintiffs prevail on appeal and DeLuca's is forced to pay the Cost Judgment on its own. DeLuca's has not provided an affidavit or other evidence showing that it is financially incapable of satisfying the Cost Judgment, and even if it had, financial hardship is not a defense to a cost award. See In re Derailment Cases, 417 F.3d 840, 845 (8th Cir. 2005) (citing cases where costs were awarded against “indigent prisoners” and an individual plaintiff with “limited financial resources”). Additionally, although “[j]oint and several liability should not unfairly force any [individual plaintiff] to bear the costs alone, ” the solution is not to shift the risk of noncollection to the prevailing party by allocating costs individually. Concord Boat, 309 F.3d at 497. Rather, the losing parties should “allocate the risk of costs among themselves, ” and “any party satisfying the judgment ...


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