Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Four in One Co., Inc. v. SK Foods

November 10, 2010

FOUR IN ONE COMPANY, INC., ET AL., PLAINTIFFS,
v.
SK FOODS, L.P., ET AL., DEFENDANTS.



ORDER

On September 15, 2010, the court heard intervenor United States Department of Justice's motion for a limited stay of discovery. Dckt. No. 159. Plaintiffs oppose the motion, Dckt. No. 164; and defendants Ingomar Packing Company, Los Gatos Tomato Products, Stuart Woolf, and Scott Salyer each filed statements of non-opposition to the motion and expressed their support for intervenor's requested stay, Dckt. Nos. 160, 161, 163. At the hearing, attorney Barbara Nelson appeared on behalf of the intervenor; attorneys Michael Lehmann and A. William Urquhart appeared on behalf of plaintiffs; attorney Stephen Zovickian appeared on behalf of defendant Ingomar Packing Company; attorney George Nicoud appeared on behalf of defendants Los Gatos Tomato Products and Woolf; and attorney James Mayo appeared on behalf of defendant Salyer.*fn1 For the reasons stated at the hearing and for the additional reasons stated herein, intervenor's request for a limited discovery stay of six months is granted.

I. BACKGROUND

This is a purported class action lawsuit alleging that defendants violated antitrust law by engaging in anticompetitive conduct in the processed tomato products market. Originally, the plaintiffs herein filed four separate actions against defendants,*fn2 but on March 12, 2009, the assigned district judge consolidated the cases, noting that the actions all arose from the same Department of Justice ("DOJ") investigation into anticompetitive conduct within the processed tomato industry*fn3 and were all purported class actions instituted on behalf of purchasers of tomato products and therefore involve similar questions of fact and of law.*fn4 Dckt. No. 88.

On November 9, 2009, plaintiffs Four in One, Diversified Foods, Bruce Foods, and Cliffstar filed a consolidated amended class action complaint against defendants SK Foods, Ingomar Packing Company, Los Gatos Tomato Products, Scott Salyer, Stuart Woolf, and Greg Pruett. Dckt. No. 113. The amended complaint alleges that defendants are in the business of manufacturing processed tomato products, including but not limited to, tomato sauces, tomato paste and diced tomatoes ("Processed Tomato Products") and that defendants engaged in illegal anticompetitive conduct in the United States market for the sale of those Processed Tomato Products. Id. ¶ 1. Specifically, the complaint alleges, among other things, that defendants conspired together with unnamed co-conspirators to suppress and restrain competition for and to fix, raise, maintain, and/or stabilize the price of Processed Tomato Products sold in the United States, and that as a direct and proximate result of the anticompetitive conduct, defendants restrained competition in the United States market for the sale of Processed Tomato Products and injured Plaintiffs and the purported class in their business and property. Id. ¶ 2, 3. The complaint alleges that defendants' conduct violated Section 1 of the Sherman Act (15 U.S.C. § 1) and Section 4 of the Clayton Act (15 U.S.C. § 15).

Defendants Ingomar Packing Company, Greg Pruett, and Los Gatos Tomato Products deny the allegations in plaintiffs' amended complaint. See Dckt. Nos. 127, 130, 131. Defendants Stuart Woolf and Scott Salyer deny some of the allegations in plaintiffs' amended complaint and have asserted their constitutional right to decline to admit or deny the remaining allegations. See Dckt. Nos. 126, 131.

On April 28, 2009, the parties stipulated to permit the United States, through the Antitrust Division of the Department of Justice ("DOJ") and the U.S. Attorney's Office for the Eastern District of California, to intervene in the action for the purpose of seeking to limit discovery temporarily. Dckt. No. 96. The parties also stipulated to a limited stay of discovery in the consolidated actions for six months because of the ongoing DOJ criminal investigation.*fn5

Dckt. No. 97. On May 8, 2009, the assigned district judge permitted the United States to intervene in the action (pursuant to the stipulation between the parties) for the purpose of seeking to limit discovery temporarily. Dckt. No. 100.

Upon expiration of the stipulated stay, plaintiffs and defendants Ingomar Packing Company, Pruett, Los Gatos Tomato Products, and Woolf reached an agreement in principle with the United States for a further limited stay of discovery until April 30, 2010, and since that stay expired, plaintiffs voluntarily have not pursued any of the types of discovery covered by the expired stay. Dckt. No. 164 at 6.

The United States did not oppose the production of documents during the stipulated stays. Id. at 8. Plaintiffs, however, have not yet served document requests because Ingomar Packing Company, Pruett, Los Gatos Tomato Products, and Woolf agreed to produce any documents previously produced to the United States as part of its investigation. On April 12, 2010, Ingomar Packing Company produced approximately 155,000 pages of documents, and on March 29, 2010, Los Gatos Tomato Products produced approximately 12,000 pages of documents.

In late May 2010, the United States requested a further stay from plaintiffs. Dckt. No. 164 at 8-9. After several conferences between the United States and plaintiffs, plaintiffs agreed to an additional six month stay, but only on the condition that the United States would not seek any further discovery stays in this action. Id. at 9. The United States, however, was not willing to agree to those conditions. Id.

II. SUMMARY OF DISPUTE

On August 5, 2010, after being unable to reach an agreement with plaintiffs, the United

States filed the instant motion for a limited stay of discovery. Dckt. No. 159. The United States argues that, in light of the parallel criminal action, a six month limited stay of interrogatories, depositions, and requests for admissions on the substantive allegations of the criminal case or communications with the United States, as specified in the government's proposed order, is warranted. Id. The United States also requests that the court authorize the United States to extend the stay if warranted, and the United States proposes that it provide to the court, sometime before the expiration of the stay, a status report on the progress of the criminal action.

The government argues that during the six month stay, the case will not be idle since the plaintiffs have received, and continue to receive, unlimited production of documents, and would be entitled to seek discovery on non-substantive issues. The government also notes that prior to filing its motion, it met and conferred with plaintiffs and plaintiffs were willing to agree to a six month stay, but were just unwilling to agree to a possible extension of the stay beyond six months. The government argues that permitting unrestricted discovery in this civil action at this time could lead to unnecessary consumption of the court's time and the parties' resources concerning matters that may be largely resolved by the outcome of the criminal case and interfere with a closely related, ongoing criminal proceeding in this district. Specifically, the government contends that a review of the complaint reveals that plaintiffs' case is inseparable from the criminal charges, alleges many of the exact same facts as stated in the criminal indictment, and is derivative of the criminal investigation. See Dckt. No. 159-1 at 6-7. The government contends that a limited stay of discovery is necessary to ensure the integrity of the criminal proceeding and protect the rights of the defendant, the United States, and others. Id. at 7-9.

Defendant Ingomar Packing Company supports the limited discovery stay sought by the government for the reasons stated by the government, and for two additional reasons: (1) Ingomar Packing Company has already produced 155,000 pages of documents to plaintiffs, and (2) the additional time represented by the limited stay imposes no undue prejudice on plaintiffs since any alleged "conspiracy" has terminated and there is therefore nothing to enjoin in this action. Dckt. No. 160.

Defendants Los Gatos Tomato Products and Woolf also support the limited discovery stay because of the pending criminal proceedings against defendant Salyer. They contend that they would be materially prejudiced by allowing depositions to proceed at this juncture in the civil action since many of the probable deponents will likely invoke their Fifth Amendment privilege not to testify and because waiting for the criminal case against Salyer to proceed may narrow the scope of discovery that will take place in this action. They argue that testimony at the criminal trial will show that they had nothing to do with the bribery, racketeering, and adulteration in which Salyer and others are alleged to have engaged. Dckt. No. 161.

Defendant Salyer also supports the limited discovery stay and states that because of the pending indictment against him, which substantially overlaps with the allegations in this case, he reserves the right to assert his Fifth Amendment privilege as to the limited discovery suggested by the government and reserves the right to seek a stay of all discovery should such a motion become ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.