Knevelbaard Dairies v. Kraft Foods, Inc.

Opinion by Judge DWYER; Dissent by Judge PAEZ.

I. INTRODUCTION

In this antitrust case originally brought in state court under the Cartwright Act, Cal. Bus. & Prof.Code §§ 16700-16770, the plaintiff milk producers 2 claim that the defendant cheese makers 3 conspired successfully to depress the prices they paid for milk produced in California. The alleged price fix among buyers was accomplished in an unusual way: through a now-defunct auction agency called the National Cheese Exchange (“NCE”), the cheese makers are said to have rigged the price for bulk cheese in order to depress their acquisition costs both for that commodity and for milk. California milk prices were targeted and restrained in that the NCE bulk cheese price “determined the cost of fluid milk.” That allegation, as the parties’ briefs confirm, means that the California Department of Food & Agriculture (“CDFA”) used the reported NCE bulk cheese price in its formula for setting the “support” (i.e., minimum) price for milk produced in that state. Thus, the alleged price-fixing that controlled the NCE bulk cheese price was intended to, and did, depress the California milk price as well. The milk producers claim that as…

Dissenting:

I respectfully dissent on two separate grounds. First, I cannot agree with the majority’s conclusion that we have jurisdiction over this appeal. The record contains no “final decision” of the district court, as 28 U.S.C. § 1291 requires. Second, even if we did have jurisdiction, I do not agree with the majority that plaintiffs have adequately stated claims for relief under California’s Cartwright Act and unfair competition law, California Business and Professions Code §§ 17200 et seq. Accepting plaintiffs’ allegations as true, as we must under Rule 12(b)(6) of the Federal Rules of Civil Procedure, plaintiffs do not (and cannot) allege any anti-competitive effect resulting from defendants’ purported collusion. Accordingly, they fail to state either an antitrust or unfair competition claim under California law. 1 Because *995 I cannot reconcile the majority’s analysis of plaintiffs’ alleged per se horizontal price-fixing scheme with existing state and federal antitrust jurisprudence, I address the nature of plaintiffs’ Cartwright Act claim and plaintiffs’ failure to allege “antitrust injury,” as well as the jurisdictional defect.

I

Jurisdiction

Even if the parties…