A Salt Lake City-based potato cooperative and affiliated companies have filed a lawsuit against their former attorney, alleging poor legal advice led to antitrust lawsuit settlements.
Salt Lake City-based United Potato Growers of America, established in 2004, once promoted caps on spud acreage to restore market stability following years of overproduction.
The strategy was suggested by attorneys specializing in antitrust law with Utah-based Jones, Waldo, Holbrook & McDonough, according to separate complaints filed during January in Twin Falls County court on behalf of potato companies and UPGA. The lawyer-defendants allegedly assured the potato officials supply-management strategies were protected under the federal Capper-Volstead Act.
But in 2010, the cooperative and several members were targeted by a class-action lawsuit alleging they illegally acted as a cartel to constrain production and artificially raise prices.
The following year, Chief US District Judge Lynn Winmill issued an opinion in response to a motion in the case that “acreage reductions, production restrictions or collusive crop planning” weren’t shielded under Capper-Volstead.
In June 2015, UPGA and the potato companies agreed to a $25 million settlement. However, one of the major plaintiffs, Associated Wholesale Grocers of Kansas City, opted out of the settlement to pursue its own case. The potato companies and cooperative settled with Associated last November. Terms were not disclosed.
“If you have a greater supply than demand, people go out of business, or they find ways to get prices up,” said Steve Six, an attorney with Associated. “That’s a basic principle, and people don’t want to go out of business.”
UPGA and the members are now seeking more than $30 million in damages from their former law firm, according to attorneys involved in the case.
US District Judge Richard Bevan is expected to rule soon on motions in the recent suit, including a motion for dismissal by UPGA’s former law firm.
Full Content: Capital Press
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