Potato growers agree to settle antitrust class action

Posted on: September 2nd, 2015 by Steve Larson

PotatoAn Idaho federal judge has signed off on preliminary agreements between potato growers and classes of direct and indirect purchasers that would settle various antitrust claims for $25 million.  The settlement also provided for future injunctive relief.

The funds — to be diverted into a $19.5 million pool for direct purchasers and a $5.5 million pool for indirect purchasers — would settle claims that the growers violated the Sherman Act by conspiring to control and suppress the nation’s potato supply by agreeing to restrict acreage planted to potatoes, diverting potatoes into nonfresh markets and restricting the flow of potatoes into the fresh market, according to the agreements signed by U.S. District Judge B. Lynn Winmill. 

As part of the agreements in the multidistrict litigation, the defendants, which include the United Potato Growers of America and chapters such as the United Potato Growers of Idaho, would agree to abide by a seven-year consent order to not engage in acreage management schemes such as those alleged in the complaints.

An expert for the plaintiffs estimated that savings generated by the consent order to direct purchasers over the seven-year period could range from $1.6 billion to $2 billion, according to the preliminary agreements.

The settlements also mean that practically any consumer who bought a potato from a retailer in 14 states — Arizona, California, Florida, Iowa, Kansas, Massachusetts, Michigan, Minnesota, Nevada, New York, North Carolina, Tennessee, Vermont and Wisconsin — from October 2004 to April 2015 could stand to get a piece of the $5.5 million.

The case is In re: Fresh and Process Potatoes Antitrust Litigation, case number 4:10-md-02186, in the U.S. District Court for the District of Idaho.