A federal judge has dealt a serious setback to anonymous cranberry farmers who filed a lawsuit accusing the Ocean Spray cooperative of manipulating prices.
The request to certify the lawsuit as a class action, which would allow numerous other growers to join the litigation, was denied by U.S. District Judge Rya Zobel in Boston, Mass.
While the plaintiffs can still keep their lawsuit alive, the ruling is a major blow to the case, said Maria Glover, a law professor at Georgetown University who specializes in class actions.
“There’s some wiggle room, but this is not good news for the plaintiffs,” she said.
In 2012, several cranberry farmers filed a complaint claiming that Ocean Spray violated federal antitrust law by driving down the price paid for cranberries produced by certain growers.
The plaintiffs remained anonymous due to fears of retaliation from the cooperative.
According to the lawsuit, Ocean Spray’s “A pool” members were paid based on its profits from branded retail products — such as Craisins, a sweetened dried cranberry product — while “B pool” members were paid based on bulk sales of cranberry juice concentrate.
The plaintiffs claim the cooperative’s auction process artificially depressed prices for juice concentrate because Ocean Spray flooded the market with that commodity, set low opening prices and restricted bidder participation.
In this way, “A pool” members were able to profit from the lower prices paid to “B pool” growers, who were formerly independent but joined the cooperative due to the lack of other available buyers, according to the plaintiffs.
The complaint alleged that “B pool” members and independent farmers suffered $620 million in damages and demanded triple that amount — $1.86 billion — in compensation due to antitrust violations.
Attorneys often request that lawsuits be certified as class actions when there’s potentially a multitude of wronged parties whose damages are too small to justify filing individual cases.
In this case, the judge found that class certification would be inappropriate because some growers who would be represented in the lawsuit actually want it to fail.
If the plaintiffs succeeded in winning a judgment of more than $1 billion, it would “leave the cooperative unable to pay returns to its growers and would perhaps put it out of business permanently,” Zobel said.
Many members of Ocean Spray testified that they’re opposed to this outcome, and even some independent farmers said they didn’t want the cooperative to shut down because they benefit from its marketing efforts, she said.
“Plaintiffs’ proposed class would thus include members who have sworn that they oppose the aims of its representatives, and this diametric opposition renders representation inadequate and this class uncertifiable,” Zobel said.
The judge said the lawsuit had other problems that prevented class action status, such as the plaintiffs failing to show that Ocean Spray’s auction process reduced prices for all cranberry growers.
Maria Glover, the law professor, said the ruling doesn’t mean the litigation is necessarily over for the plaintiffs.
“They’re not prohibited from moving on as individuals,” she said.
However, this outcome isn’t likely unless they have high-value claims that would justify continuing the court battle, Glover said.
It would also be difficult for plaintiffs to redefine the class in this case due to the conflicts among potential class members identified by the judge, Glover said.
Arthur Miller, a professor at New York University and attorney for the plaintiffs, said they haven’t made any decisions yet.
“At this point, the team is considering what their options are,” he said.
Kellyanne Dignan, a spokesperson for Ocean Spray, said the cooperative will continue to defend itself.
“We’re pleased with the judge’s decision to deny class certification and feel it validates many of our arguments to date,” she said.