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OBERWEIS DAIRY v. ASSOCIATED MILK PRODUCERS

August 4, 1983

OBERWEIS DAIRY, INC., PLAINTIFF,
v.
ASSOCIATED MILK PRODUCERS, INC., ET AL., DEFENDANTS.



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

MEMORANDUM OPINION AND ORDER

Oberweis Dairy, Inc. ("Oberweis") 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. AMPI filed a Counterclaim asserting Oberweis' commencement of this action violated an Agreement of Settlement (the "Agreement") that terminated Oberweis' earlier antitrust action against AMPI's predecessor and others, Oberweis Dairy, Inc. v. Pure Milk Association, No. 65 C 2189 (N.D.Ill.) (the "1965 Lawsuit"). Oberweis has now moved under Fed.R.Civ.P. ("Rule") 56 for summary judgment on AMPI's Counterclaim. For the reasons stated in this memorandum opinion and order Oberweis' motion is granted.

In their briefing on Oberweis' motion both parties also addressed the legal effect on and relevance to this action of a release (the "Release") executed by Oberweis as part of the settlement of the 1965 Lawsuit. AMPI had already pleaded the Release as an affirmative defense to Oberweis' own claim. At a July 26, 1983 status hearing this Court informed the parties it was also prepared to consider the parties' arguments on the Release as arguments for and against a Rule 56 motion by AMPI for summary judgment on Oberweis' claim, if the parties had nothing more to offer on that score. In response the parties advised this Court (1) they agreed with its characterization of their briefing arguments and (2) they were prepared to stand on those arguments as already submitted. For the reasons stated in this memorandum opinion and order AMPI is denied summary judgment on Oberweis' claim on the basis of the Release.

Background

Oberweis filed the 1965 Lawsuit seeking both damages and injunctive relief for alleged antitrust violations by Pure Milk Association ("PMA") and others. In particular, Oberweis attacked the 1965 Lawsuit defendants' maintenance of "super pool agreements" in the milk industry (1965 Complaint ¶¶ 13, 28-29, Prayer ¶¶ 5 and 6).*fn2

Oberweis, PMA and others entered into the Agreement August 26, 1969. Agreement ¶ 2 provided:

  Plaintiff [Oberweis] will not interfere with the
  performance of any milk marketing agreement now
  or hereafter in effect between Federated Dairy
  Cooperatives or Pure Milk Association and any
  dairy farmer or any milk marketing agreement now
  or hereafter in effect between Federated Dairy
  Cooperatives or Pure Milk Association and any
  "cooperative association of producers,"
  "association of producers," or "marketing
  agencies in common" as defined in §§ 2, 291 and
  2302 of Title 7 and § 1141j of Title 12, U.S.C.A.

Contemporaneously Oberweis executed a Release that provided:

  For the sum of Ten Dollars ($10.00) and other
  valuable consideration, receipt of which is
  hereby acknowledged this 26th day of August,
  1969, OBERWEIS DAIRY, INC., for itself, and any
  successors or assigns, does hereby release and
  forever discharge PURE MILK ASSOCIATION,
  FEDERATED DAIRY COOPERATIVES and ASSOCIATED MILK
  DEALERS, INC., and each of their officers,
  directors, employees, stockholders, members,
  agents and representatives, and any successors or
  assigns thereof, from any and all manner of
  action or actions, cause or causes of action,
  damages or demands, whatsoever, be they in law or

  equity, which arise out of or refer or relate to,
  directly or indirectly, the facts, claims, or
  causes of action alleged in the complaint in the
  case entitled Oberweis Dairy, Inc. v. Pure Milk
  Association, Federated Dairy Cooperatives and
  Associated Milk Dealers, Inc., filed December 23,
  1965 in the United States District Court for the
  Northern District of Illinois, Eastern Division,
  and further identifiable as Case No. 65 C 2189 in
  said Court.*fn3

Oberweis filed its present action in 1972, again seeking both damages and injunctive relief against alleged antitrust violations. Count I ¶ 21 of the 1972 Complaint alleged a conspiracy beginning as early as 1957, and Oberweis again specifically attacked the super pool program (id. ¶ 23(e) — (f), Prayer (a)). In its Answer AMPI pleaded the Release as its Seventh Affirmative Defense and the Agreement as its Eleventh Affirmative Defense. AMPI's Counterclaim seeks damages for Oberweis' alleged violation of the Agreement by commencement of the present action.

Oberweis' Motion on AMPI's Counterclaim

Oberweis advances three arguments in support of its summary judgment motion (Mem. 1-3):

    1. By its terms the Agreement does not
  expressly bind Oberweis to refrain from enforcing
  subsequently-arising antitrust claims.
    2. If the Agreement were nonetheless construed
  to preclude the enforcement of antitrust claims,
  the Agreement would be void ...

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