Mushroom Price-Fixing Litigation Granted Class Certification

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Class certification has been granted to a group of mushroom buyers who allege growers and sellers of the fungi conspired to fix prices.

U.S. District Judge Thomas N. O’Neill approved certification in the long-running antitrust litigation stating that the plaintiffs have met all the necessary requirements for class certification.

“I find plaintiffs have satisfied all of the relevant Rule 23 requirements, and thus, that class certification is appropriate,” Judge O’Neill said in the opinion. “Accordingly, I will grant plaintiffs’ motion for class certification.”

The newly certified Class is comprised of individuals and entities spanning 36 non-western states and the District of Columbia who directly purchased fresh agaricus mushrooms from a member of the Eastern Mushroom Marketing Cooperative (EMMC) or its subsidiaries.

In addition to granting class certification, Judge O’Neill rejected a motion from the mushroom growers to dismiss the case, but left claims brought by two plaintiffs: Associated Grocers Inc. and Diversified Foods and Seasonings Inc.

Judge O’Neill also denied summary judgment for defendant M.D. Basiciani & Sons Inc. and other mushroom sellers in a separate ruling.

According to a ruling dated Dec. 13, Judge O’Neill found the arguments that buyers lacked antitrust standing because they did not purchase the mushrooms directly was not sufficient. He also rejected the sellers’ assertions regarding statute of limitations.

Following an 2003 investigation and subsequent litigation by the U.S. Department of Justice, plaintiffs filed the complaint claiming mushroom growers and sellers engaged in a conspiracy to control the supply and set artificially-inflated prices for fresh agaricus mushrooms. Fresh agaricus mushrooms include white mushrooms, crimini mushrooms, and portabella mushrooms.

Specifically, the litigation alleges that the mushroom growers established a supply-control operation from 2001 and 2002 membership funds in order to purchase and dismantle non-EMMC mushroom growing entities to increase prices.

The plaintiffs also contend that to support the Pennsylvania-based EMMC’s minimum pricing policies, the defendants implemented a supply control scheme – purchasing and leasing mushroom farms in order to place on the properties deed restrictions prohibiting the conduct of business related to the production of mushrooms.

The EMMC settled with the DOJ in 2005, agreeing to nullify deed restrictions and to cease imposing similar restrictions on other properties for a period of 10 years.

The defendants oppose class certification, asserting that “before adopting its minimum pricing policy or its supply control program,” the EMMC and its members believed that the group was formed in accordance with the Capper-Volstead Act. The CVA exempts agricultural cooperatives and their members from price-fixing claims under the Sherman Act.

The mushroom growers claim that the DOJ’s 2003 investigation into the EMMC concluded that the organization was compliant with the the Capper-Volstead Act

The buyers are represented by Kozyak Tropin Throckmorton LLP, Odom & Des Roches LLP, Hangley Aronchick Segal Pudlin & Schiller, Garwin Gerstein & Fisher LLP, Smith Segura & Raphael LLP and Taus Cebulash & Landau LLP.

The Mushroom Price-Fixing Class Action Lawsuit is In re: Mushroom Direct Purchaser Antitrust Litigation, Case No. 2:06-cv-00620, in the U.S. District Court for the Eastern District of Pennsylvania.