May 21, 2014, St. Louis, MO – A retail grocery store represented by Kotchen & Low LLP prevailed today in an obtaining the reversal of the grant of summary judgment in favor of the defendants in an antitrust action.
The case, brought under Section 1 of the Sherman Act, 15 U.S.C. § 1, involves an asset swap between SuperValu, Inc. and C&S Wholesale Grocers, Inc., the two largest wholesale grocery suppliers in the country. As part of the asset swap, Plaintiffs allege that defendants agreed to all ocate customers and territories, leading to artificially inflated prices. On defendants’ summary judgment motion, the district court found that the Plaintiff had failed to establish antitrust injury.
The Eighth Circuit reversed, finding that sufficient evidence existed to create a genuine dispute of material fact as to whether the Defendants had agreed to divide territories and customers along geographic lines, which would amount to a per se antitrust violation. The Eighth Circuit observed that there was evidence from which a jury could reasonably find such an agreement, e.g.:
Tellingly, although the written non-compete agreement permitted the wholesalers to compete in each other’s regions for new and existing customers, neither one actually did so. Also revealing are e-mails, written by C&S’s executive vice president, indicating “the basis of the deal” was that SuperValu would “depart fromNew England” and “wo[uld]n’t compete with [C&S] in New England” and C&S was “not interested in a transaction that leaves SuperValu in New England.”
In addition, the appellate court requested that the district court consider certifying a distribution center-specific class.
The case has been remanded to the District of Minnesota for further proceedings. The decision of the Eighth Circuit can be found here.
Kotchen & Low LLP represents Gary’s Foods and several other grocery stores in the case, which is currently pending in the District of Minnesota, Case No. MDL 2090.