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December 30, 1982


The opinion of the court was delivered by: Shadur, District Judge.


Oberweis Dairy, Inc. ("Oberweis") has sued Associated Milk Producers, Inc. ("AMPI") and Central Milk Producers Cooperative ("CMPC")*fn1 alleging violations of the Sherman Act, 15 U.S.C. § 1 and 2. Oberweis has moved for summary judgment on the issue of liability, contending AMPI and CMPC are collaterally estopped from litigating that issue as a result of the holding in Alexander v. National Farmers Organization, 687 F.2d 1173 (8th Cir. 1982). In turn AMPI and CMPC have moved for "partial summary judgment" on certain Oberweis claims. For the reasons stated in this memorandum opinion and order:

1. This Court finds (a) certain facts and issues have been determined with preclusive effect in Alexander and (b) AMPI and CMPC are collaterally estopped from relitigating those facts and issues in this action.

2. This Court denies the AMPI-CMPC motion.


Oberweis is a dairy engaged in the business of buying raw milk and marketing Grade A milk in the greater Chicago area.*fn2 AMPI is a large dairy cooperative. CMPC is a federation of cooperatives, including AMPI. Dairy cooperatives operate to increase the market power of member dairy farmers by various means.*fn3

Alexander was a private antitrust action begun in 1971 when a large dairy cooperative, Mid-America Dairymen, Inc. ("Mid-Am") sued National Farmers Organization ("NFO"), a rival organization of dairy and other farmers. NFO counterclaimed against Mid-Am, AMPI, CMPC and others, and AMPI counterclaimed against NFO. At the District Court level all substantive antitrust claims of the parties were rejected. In re Midwest Milk Monopolization Litigation, 510 F. Supp. 381 (W.D.Mo. 1981) ("Midwest Milk").

On appeal the conclusion NFO had not violated the antitrust laws was affirmed on other grounds. But the Court of Appeals for the Eighth Circuit found "Mid-Am, AMPI and CMPC did conspire to monopolize milk and eliminate competition through the use of predatory, anticompetitive and unlawful tactics." Alexander, 687 F.2d at 1179.*fn4 Oberweis invokes Alexander in its effort to preclude AMPI and CMPC from litigating their liability in this action.

By way of counterattack, AMPI and CMPC contend they are entitled to "partial summary judgment" on Oberweis' claims for damages arising from:

    1. purchases of raw milk from suppliers not
  controlled by AMPI or CMPC;
    2. handling, hauling and premium charges for
  certain raw milk in purchases from AMPI-CMPC; and

3. alleged AMPI-CMPC acts with co-conspirators.

AMPI and CMPC contend the first type of claim is barred under the "indirect purchaser" doctrine of Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977). As for the other two types, they contend Oberweis (a) has not produced in the discovery process, (b) is now precluded from producing or (c) admittedly does not have any factual evidence supporting those claims.

Oberweis' Motion

Oberweis has miscast its current motion as one seeking summary judgment on AMPI-CMPC liability. As Oberweis' own Mem. 5-8 indicates, it rather wants a ruling that (1) certain specific facts and issues have been determined in Alexander and (2) AMPI and CMPC are precluded from relitigating those issues here. Summary judgment "on the issue of liability alone" is appropriate under Fed.R.Civ.P. ("Rule") 56(c) only when a party has moved under Rule 56(a) or 56(b) and has established there is no genuine issue of fact material to liability, but the court does find a genuine issue as to the amount of damages. Though the Rules provide no specific procedural vehicle for the relief Oberweis seeks, Rule 16 comes closest to doing so. See Wetherill v. University of Chicago, 548 F. Supp. 66, 67 & n. 3 (N.D.Ill. 1982).

Even apart from that procedural problem, Alexander could not conceptually have determined AMPI-CMPC's liability to Oberweis. "[B]efore the private plaintiff in an antitrust action can recover damages, he must establish not only that the defendant has violated the antitrust laws, but also that the violation proximately caused injury to his business or property." 15 J. Von Kalinowski, Antitrust Laws and Trade Regulation § 111.01, at 111-1 (1981) ("Von Kalinowski"). Alexander did decide AMPI and CMPC conspired in violation of the antitrust laws, but their liability in that action necessarily depended on the Court's also finding "that NFO was a specific target of the conspiracy." 687 F.2d at 1191.

There was of course no corresponding finding in Alexander that the AMPI-CMPC conspiracy "proximately caused injury to" or targeted Oberweis' business. Oberweis cannot therefore be put in a position where "only the issue as to the amount of damages" remains in this action. Oberweis Motion at 1. That issue can be reached only after Oberweis satisfies its burden as to causation. 15 Von Kalinowski § 111.01, at 111-1 to 111-2. Any collateral estoppel effect of Alexander cannot and does not eliminate that burden.

Oberweis' mischaracterization of its motion has misdirected the argument between the parties. Essentially three questions are really presented:

    1. What relevant facts and issues did
  Alexander determine, with possibly preclusive
    2. Can Oberweis satisfy the general
  requirements for invocation of offensive
  collateral estoppel?
    3. Are there specific reasons why collateral
  estoppel should not be applied against AMPI and
  CMPC in this action?

Those questions are addressed in turn.

1. Alexander's Relevant Holdings

Alexander found specifically (all these are direct quotes from the Court of Appeals' opinion):

    (a) In any commercially meaningful sense, Grade
  A milk is . . . a relevant product market for
  antitrust purposes. . . . 687 F.2d at 1191.
    (b) [T]he record reveals public
  assertions . . . by CMPC that it represents over
  ninety percent of the producers selling into the
  Chicago market, and supplies over ninety percent
  of that market's fluid milk use. Id. at 1192.
    (c) [T]he defendants do not seriously dispute,
  nor could they on this record, that they acted in
  concert with the intent to eliminate competition
  and gain sufficient control of milk to enable
  them to set higher prices. Id. at 1193.
    (d) AMPI, Mid-Am and CMPC did conspire to
  monopolize and eliminate competition in the
  marketing of Grade A milk produced in the
  Midwest, through the use of discriminatory
  pricing, coercive supply disruptions and threats
  of similar conduct, as well as bad faith
  harassment and threats of litigation against
  independent buyers of NFO milk. Id.
    (e) This conspiracy violates Sections 1 and 2
  of the Sherman Act, notwithstanding the
  Capper-Volstead exemption [of cooperatives from
  certain antitrust law liability], because it
  involved the concerted use of predatory and other
  unlawful, anti-competitive means to eliminate
  competition and pursue monopoly power.
  Id. at 1191.

Then the Court of Appeals surveyed the defendants' overt acts, id. at 1194-1207, including some in the Chicago marketing region, id. at 1196-99. All the activity cited in that survey fell in the 1969-71 period, and there is nothing to indicate a holding of illegality either before or after those years.*fn5 As AMPI points out (Ans. Mem. 13 n. 5) the Chicago-area overt acts described in Alexander occurred only in 1970-71.

In this action Oberweis claims damages allegedly arising from AMPI and CMPC conduct beginning in 1957 and continuing to date, Complaint ¶ 21, insofar as those fall within the statute of limitations, id. ¶ 26. But Oberweis has not responded to AMPI's point on the time frame of Alexander's holding. Because Alexander's findings relevant here ...

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