Monthly Archives: August 2011

Mushroom Direct Purchaser Antitrust Litigation: Capper-Volstead not immunity from suit

On August 23, 2011, the Third Circuit decided the “novel question” of whether immediate appeal is available under the collateral order doctrine from a prejudgment order denying Capper-Volstead Act protection to an agricultural cooperative. Competition Law360 reported the development.

The appellants — a group of mushroom growers who are defending consolidated class action antitrust claims in the federal district court in Philadelphia — argued unsuccessfully in the district court that the Capper-Volstead Act exempts them from the antitrust claims. They asked the Third Circuit to review the district court’s holding that the growers’ marketing cooperative “was not a proper agricultural cooperative under the Capper-Volstead Act because one of its members was not technically a grower of agricultural produce.” If the Third Circuit had taken the appeal, we could have looked forward to a circuit court opinion on that important Capper-Volstead holding, and possibly the district court’s alternative holding that Capper-Volstead does not exempt agreements between cooperatives and non-cooperatives.

Although the Third Circuit concluded those rulings are not presently reviewable, it did decide an important issue on the scope of Capper-Volstead immunity. The court of appeals agreed with the growers that “whether the arguably inadvertent inclusion of an ineligible member strips an agricultural cooperative of Capper-Volstead protection, is both serious and unsettled.” In re: Mushroom Direct Purchaser Antitrust Litigation, Nos. 09-2257, 09-2258, slip op. at 16 n.4 (3d Cir. Aug. 23, 2011). That satisfied the first requirement of the appealability test established in Cohen v. Beneficial Indus. Loan Corp. But, the growers did not meet the third Cohen requirement. The Third Circuit panel held that “an order denying a defendant the Capper-Volstead Act’s protections is not effectively unreviewable on appeal from final judgment.” Id. at 15. In reaching that conclusion, the Court carefully considered and rejected the growers’ argument that Capper-Volstead provides not merely immunity from liability, but immunity from suit. Id., at 18-24. “Neither the language of the Capper-Volstead Act nor Supreme Court cases interpreting it indicate that the Act entitles an agricultural cooperative to avoid entirely the burden of litigation. Because the Act does not provide an immunity from suit, a district court order denying a defendant its protections is not effectively unreviewable after final judgment . . . .” Id., at 24.