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Boardman v. Pacific Seafood Group

United States District Court, D. Oregon, Medford Division

May 15, 2018

JEFF BOARDMAN, et al., Plaintiffs,
v.
PACIFIC SEAFOOD GROUP, et al., Defendants.

          OPINION AND ORDER

          MICHAEL MCSHANE U.S. DISTRICT JUDGE

         Plaintiffs[1] Jeff Boardman, Dennis Rankin, Lloyd D. Whaley, and MV Fisheries, Inc. bring this antitrust action against Defendants Pacific Seafood Group (Pacific Seafood) and more than 50 other businesses owned in whole or part by Defendants Frank Dulcich and Dulcich, Inc. Plaintiffs, who are commercial fishermen, seek a permanent injunction prohibiting Pacific Seafood from acquiring any additional ownership interest in Ocean Gold Seafoods and its affiliates, including Ocean Protein, LLC and Hoquiam Riverview Properties, LLC (Ocean Gold). Pacific Seafood currently owns about a third of Ocean Gold. Mot. Intervene 1, ECF No. 220. Francis Miller, Sherry Miller, Jacquelyn Rydman, and Mark Rydman, who collectively own about 48% of Ocean Gold, have intervened as Defendants.

         Pacific Seafood moves for summary judgment, contending that Plaintiffs have not shown antitrust standing to bring this action because they do not participate in the relevant markets. Plaintiffs respond that they have antitrust standing, and alternatively that Pacific Seafood's motion for summary judgment should be stayed to allow additional discovery.

         Because the Plaintiffs do not participate in the relevant markets, Plaintiffs lack antitrust standing. Pacific Seafood's motion for summary judgment is GRANTED. Plaintiffs' request for further discovery is denied.

         PROCEDURAL BACKGROUND

         Plaintiffs filed this action in January 2015 after Pacific Seafood notified Plaintiffs' counsel of the proposed acquisition of Ocean Gold. The settlement agreement in a prior action, Whaley v. Pacific Seafood Group, No. 10-cv-3057-MC, required that Pacific Seafood notify Plaintiff's counsel about any proposed acquisition of Ocean Gold. See Pls.' Mem. Opp'n 13 n.6, ECF No. 211.

         Plaintiffs bring claims against Pacific Seafood for monopolization and attempted monopolization in violation of the Sherman Act, 15 U.S.C. § 2, and for unlawful merger in violation of the Clayton Act, 15 U.S.C. § 18. Plaintiffs seek only injunctive relief, not damages.

         Plaintiffs assert that Pacific Seafood's proposed acquisition of Ocean Gold would cause a “substantial lessening of competition and the enhancement of an existing monopoly held by Pacific Seafood Group in the West Coast seafood input markets for trawl-caught groundfish, Pacific onshore whiting and Pacific coldwater shrimp.” Second Am. Compl. ¶ 63, ECF No. 52. Plaintiffs claim that “[t]his resulting increased concentration in these West Coast seafood input markets will result in ex vessel price suppression to the detriment of plaintiffs.” Id.

         Shortly after filing their complaint, Plaintiffs moved for a preliminary injunction prohibiting Pacific Seafood from acquiring full ownership of Ocean Gold. Pls.' Mot. Prelim. Inj., ECF No. 22. In March 2015, this court granted Plaintiffs' motion for a preliminary injunction. Boardman v. Pacific Seafood Group, 2015 WL 13357739 (D. Or. Mar. 6, 2015), ECF No. 55.

         Pacific Seafood moved to compel arbitration, based on the terms of the settlement agreement in Whaley. Defs.' Mot. Compel Arbitration, ECF No. 71. In June 2015, this court denied Pacific Seafood's motion to compel arbitration. Boardman v. Pacific Seafood Group, 2015 WL 13358335 (D. Or. June 8, 2015), ECF No. 83. In August 2015, this court granted Pacific Seafood's motion to stay proceedings pending its appeal of this court's rulings. Order, ECF No. 103. On appeal, the Ninth Circuit affirmed. Boardman v. Pacific Seafood Group, 822 F.3d 1011 (9th Cir. 2016). The preliminary injunction remains in place.

         After remand from the Ninth Circuit, the parties resumed discovery, which has been ongoing since the fall of 2016. Plaintiffs served Dr. Radtke's expert report on June 30, 2017.

         Pacific Seafood deposed Dr. Radtke on October 25, 2017. Pacific Seafood filed the current motion for summary judgment on December 5, 2017. On December 19, 2017, Plaintiffs moved to replace Dr. Radtke after he stated that he was no longer able to testify due to his age and concerns about his ability to testify at trial. Pls.' Mot. Substitute Testifying Expert Witness, ECF No. 196. I granted Plaintiffs' motion to substitute, and Plaintiffs named Dr. Richard Sexton, a professor of agricultural and resource economics at University of California, Davis, to replace Dr. Radtke as an expert witness. See Sexton Decl. 3, ECF No. 212. PLAINTIFFS' REQUEST FOR A STAY TO ALLOW ADDITIONAL DISCOVERY

         I. Plaintiffs' Request for a Stay

         In their response to Pacific Seafood's motion for summary judgment, Plaintiffs seek a stay for additional discovery based on Federal Rule of Civil Procedure 56(d). Pls.' Mem. Opp'n 22, ECF No. 211. Rule 56(d) allows this court to defer ruling on a pending motion for summary judgment “[i]f a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition.”

         Plaintiffs contend that they need additional discovery to respond to Pacific Seafood's motion for summary judgment. For example, they seek “documents and depositions necessary to assess the relative market shares of Pacific Seafood and Ocean Gold in Westport.” Pls.' Mem. Opp'n 15. Plaintiffs state that although Dr. Radtke defined the relevant geographic markets based on his finding that commercial fishermen were willing to travel from 60 to 100 miles to sell their catch, Plaintiffs learned that Plaintiff Dennis Rankin has traveled more than 100 miles from the point of harvest to deliver his catch. Pls.' Mem. Opp'n 21.

         Plaintiffs also contend that their substitute expert witness, Dr. Sexton, should be given time to formulate his own market definitions, arguing that Dr. Sexton “has not had a reasonable opportunity to review the evidence or form his own opinions on relevant subjects, ” including geographic markets. Pls.' Mem. Opp'n 20. Dr. Sexton states that “insufficient analysis has been conducted to render a definitive opinion on the correct geographic market or markets for the acquisition of Pacific whiting, Pacific coldwater pink shrimp, and trawl-caught groundfish.” Sexton Decl. ¶ 9.

         II. Legal Standards for a Stay of Summary Judgment Proceedings

          Rule 56(d)[2] provides:

(d) When Facts Are Unavailable to the Nonmovant. If a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition, the court may:
(1) defer considering the motion or deny it;
(2) allow time to obtain affidavits or declarations or to take discovery; or
(3) issue any other appropriate order.

Rule 56(d) “provides a device for litigants to avoid summary judgment when they have not had sufficient time to develop affirmative evidence.” United States v. Kitsap Physicians Serv., 314 F.3d 995, 1000 (9th Cir. 2002). To justify a stay, the requesting party must establish that “(1) it has set forth in affidavit form the specific facts it hopes to elicit from further discovery; (2) the facts sought exist; and (3) the sought-after facts are essential to oppose summary judgment.” Family Home and Fin. Ctr., Inc. v. Fed. Home Loan Mortg. Corp., 525 F.3d 822, 827 (9th Cir. 2008) “Failure to comply with these requirements ‘is a proper ground for denying discovery and proceeding to summary judgment.'” Id. (citation omitted). This court has discretion in ruling on a motion to stay under Rule 56(d). Morton v. Hall, 599 F.3d 942, 945 (9th Cir. 2010).

         III. ...


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