The opinion of the court was delivered by: Byron G. Cudmore, U.S. Magistrate Judge:
Monday, 07 March, 2011 04:53:58 PM
Clerk, U.S. District Court, ILCD
This matter comes before the Court on Movant Dean Foods Company's (Dean Foods) Motion to Compel Compliance with Subpoena Duces Tecum (d/e 3) (Motion). Dean Foods issued a Subpoena Duces Tecum (Subpoena) to Respondent Prairie Farms Dairy, Inc. (Prairie Farms) in connection with an ongoing civil antitrust action in the United States District Court for the Eastern District of Wisconsin. United States v. Dean Foods Company, E.D.WI. Case No. 10-cv-00059 (Antitrust Action). Prairie Farms is not a party to the Antitrust Action. Prairie Farms objects to producing any of the documents requested in the Subpoena. Dean Foods brings the Motion to compel Prairie Farms to produce the documents. For the reasons set forth below, the Motion is allowed in part and denied in part.
Dean Foods is the largest producer and supplier of milk in the United States. Prairie Farms processes and distributes milk in Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin. Prairie Farms is headquartered in Carlinville, Illinois. Memorandum of Law in Opposition to Motion to Compel Compliance with Subpoena Duces Tecum (d/e 7) (Prairie Farms Memorandum), attached Declaration of Ed Mullins, ¶ 2.
On April 1, 2009, Dean Foods acquired two dairy processing plants in Wisconsin (the Acquisition) from Foremost Farms USA (Foremost). On January 22, 2010, the United States Department of Justice (United States or DOJ) and the States of Illinois, Wisconsin, and Michigan (collectively the Antitrust Plaintiffs) brought the Antitrust Action against Dean Foods alleging that the Acquisition violated § 7 of the Clayton Act, 15 U.S.C. § 18, because the Acquisition will substantially lessen competition. Memorandum of Law in Support of Motion to Compel Compliance with Subpoena Duces Tecum (d/e 2) (Dean Foods Memorandum), Declaration of Sean Pugh, Exhibit A, Complaint, ¶¶ 54-55. The Antitrust Plaintiffs allege that the Acquisition will reduce competition in the market for selling milk to schools in Wisconsin and the Upper Peninsula of Michigan (UP), and in the market for selling fluid milk in Wisconsin, the UP, and a nine-County Chicago metropolitan area in northeastern Illinois (Metropolitan Chicago) (Wisconsin, the UP, and Metropolitan Chicago are collectively referred to as the Market). Fluid milk is raw milk processed for human consumption. The Antitrust Plaintiffs seek an injunction to require Dean Foods to divest itself of the two dairy processing plants acquired in the Acquisition.
In July 2009, before filing the Antitrust Action, the United States issued Civil Investigative Demands (CIDs) to several competitors, including Prairie Farms. Prairie Farms responded to the CID issued to it by providing information to the United States about its plants in Peoria, Illinois, Rockford, Illinois, and Dubuque, Iowa. Prairie Farms sold milk in Metropolitan Chicago from the Peoria and Rockford plants. Prairie Farms sold milk in Wisconsin from the Dubuque facility. Mullins Declaration, ¶¶ 9-10.*fn1
Prairie Farms delivers milk by truck. Delivery routes are designed so that the driver can deliver the milk and return to the plant in one day. Prairie Farms does not transport milk longer distances because fuel costs and the costs associated with drivers staying on the road overnight are prohibitive. Mullins Declaration, ¶¶ 3-6. As a result, Prairie Farms generally does not deliver milk more than 200 miles from any given plant that it operates. Mullins Declaration, ¶ 7. This distance limitation seems to be common in the industry. The Antitrust Plaintiffs allege that more than ninety percent of the milk sold to customers in Wisconsin and the UP travels less than one hundred fifty miles from the plant in which it was processed. Complaint, ¶ 15.
Prairie Farms also has plants in Fort Wayne, Indiana, Battle Creek, Michigan, and Iowa City, Iowa. The Fort Wayne plant is less than 200 miles from Metropolitan Chicago. Prairie Farms ships milk from the Fort Wayne plant to one customer in Metropolitan Chicago, in Lemont, Illinois, 166 miles away. Prairie Farms can make the delivery and return trip in one day because an entire truckload is delivered to one customer at one location. The driver does not have to make multiple stops. The driver delivers a full truck trailer and picks up an empty trailer to return. The customer unloads the truck and has it ready for the driver to pick up at the next delivery. Mullins Declaration, ¶ 11. Prairie Farms makes no other deliveries to Metropolitan Chicago from Fort Wayne and does not plan to do so because of the distance and difficulties in making multiple delivery stops in and around Chicago. Id. The Fort Wayne plant does not sell milk to anyone in Wisconsin or the UP.
The Battle Creek plant sells milk to one customer in the UP. The Battle Creek plant loses money on the sales to that customer and is not planning to sell to any other customers in the UP. Mullins Declaration, ¶ 16. The Battle Creek plant does not sell milk to anyone in Metropolitan Chicago or Wisconsin. The Iowa City plant sells milk to customers in the Quad Cities, but does not sell milk to any customer in the Market. Prairie Farms has no plans to distribute milk to the Market from the Iowa City plant. Mullins Declaration, ¶ 10.
After the Antitrust Action was filed, the United States provided Dean Foods with the information that Prairie Farms provided in response to the CID. Prairie Farms Memorandum, attached Declaration of Teresa Bonder, ¶ 8 and accompanying documents referenced therein. On August 17, 2010, Dean Foods issued the Subpoena to Prairie Farms. Dean Foods Memorandum, Pugh Declaration, Exhibit B, Subpoena. Dean Foods also issued deposition subpoenas for three of Prairie Farms' employees. Prairie Farms indicates that these employees will comply with those subpoenas and make themselves available to be deposed. The Motion does not concern the three deposition subpoenas.
The Subpoena ordered Prairie Farms to produce confidential information about its business operations in all thirteen states in which Prairie Farms operates. The Subpoena sought documents covering the time period from January 1, 2007, to the present. Counsel for Prairie Farms and Dean Foods corresponded regarding the request, but did not reach an agreement on the scope of the information to be provided. On December 1, 2010, Prairie Farms formally objected to the Subpoena's requests. Dean Foods Memorandum, Pugh Declaration, Exhibit F, December 1, 2010, letter from Teresa T. Bonder to Sean P. Pugh (Objections Letter). Dean Foods responded with this Motion.
Federal Rule of Civil Procedure 26(b)(1) allows parties to obtain discovery regarding any matter, not privileged, which is relevant to the claim or defense of any party. Relevant information need not be admissible at trial if the discovery appears to be reasonably calculated to lead to the discovery of admissible evidence. The rule gives the district courts broad discretion in matters relating to discovery. See Brown-Bey v. United States, 720 F.2d 467, 470-471 (7th Cir.1983); Eggleston v. Chicago Journeymen Plumbers' Local Union 130, 657 F.2d 890, 902 (7th Cir.1981); see also, Indianapolis Colts v. Mayor and City Council of Baltimore, 775 F.2d 177, 183 (7th Cir.1985) (on review, courts of appeal will only reverse a decision of a district court relating to discovery upon a clear showing of an abuse of discretion). "[I]f there is an objection the discovery goes beyond material relevant to the parties' claims or defenses, the Court would become involved to determine whether the discovery is relevant to the claims or defenses and, if not, whether good cause exists for authorizing it so long as it is relevant to the subject matter of the action. The good-cause standard warranting broader discovery is meant to be flexible." Fed. R. Civ. P. 26(b)(1) Advisory Committee Notes, 2000 Amendment.
This case involves a subpoena to a non-party. In the context of a subpoena to a non-party, the party issuing the subpoena has the burden to "take reasonable steps to avoid imposing undue burden or expense" on the party subject to the subpoena." The Court must modify or quash a subpoena if it subjects a party to an undue burden. Fed. R. Civ. P. 45(c)(3)(A)(iv).
The case also seeks confidential commercial information. In such situations, the party seeking discovery from a non-party has the burden to show that the information is sufficiently relevant and necessary to its case to outweigh the harm disclosure would cause to the party from which the information is sought. Greater Rockford Energy and Technology Corp. v. Shell Oil Co., 138 F.R.D. 530, 534 (C.D.Ill. 1991). The Court, further, may modify or quash a subpoena to protect the party subject to the subpoena if the subpoena requires the production of confidential ...