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Aug 28 (Reuters) - A U.S. appeals court on Monday denied Winn-Dixie's bid for a new trial in its lawsuit alleging a conspiracy to artificially inflate mushroom prices, causing the national grocery chain to pay more to stock its shelves. Cold Room Evaporator Unit Price
Winn-Dixie had accused the Eastern Mushroom Marketing Cooperative, United Mushroom Farms Cooperative and other defendants of unlawfully fixing the price of common white or brown mushrooms between 2001 and 2008.
A jury in Philadelphia federal court in March 2022 ruled in favor of the cooperative and other defendants. The case marked the first and only trial in long-running antitrust litigation in Pennsylvania over mushroom prices.
Winn-Dixie's appeal challenged various pre-trial orders, and the company argued that a lower standard of proof called a "quick look" should have been applied, and not the "rule of reason" approach, which puts a heavier burden on plaintiffs.
In its ruling, a three-judge panel of the 3rd U.S. Circuit Court of Appeals — Judges Cheryl Ann Krause, Kent Jordan and Stephanos Bibas — said a "reasonable jury could have concluded that the [Eastern Mushroom cooperative] lacked the ability to artificially raise prices."
Jacksonville, Florida-based Winn-Dixie and a lawyer for the grocer, Patrick Ahern of Ahern & Associates, did not immediately respond to requests for comment.
William DeStefano of Saxton & Stump, representing the Eastern Mushroom Marketing Cooperative and its members, said defense expert witnesses made a "convincing" showing that price discussions were not anti-competitive.
Winn-Dixie opted out of class-action litigation against the cooperative and others. A judge in 2019 approved class-action settlements worth nearly $34 million.
At trial, Ahern argued that written agreements and other records were evidence of the alleged price-fixing conspiracy.
"They told each other that those documents were confidential to anyone outside of their group, like customers," Ahern told the jury. He argued an 8.5% price increase "generated $50 million for the mushroom industry" in the eastern U.S.
DeStefano told the jury it was "irrefutable" that prices went down during the claimed conspiracy period. He said members of the Eastern Mushroom Marketing Cooperative competed with other members and "many outside companies."
The U.S. Justice Department previously investigated a "supply control" program run by the Eastern Mushroom Marketing Cooperative that involved the purchase and sale of real estate to bar its future use as a farm.
The cooperative in 2005 signed a consent judgment with the Justice Department that required the organization to strike deed restrictions and end the program.
The case is Winn-Dixie Stores et al v. Eastern Mushroom Marketing Cooperative et al, 3rd U.S. Circuit Court of Appeals, No. 22-2289.
For Winn-Dixie: Patrick Ahern of Ahern & Associates
For Eastern Mushroom Marketing Cooperative: William DeStefano and Terri Pawelski of Saxton & Stump
For United Mushroom Farms Cooperative: Patrick Gallo of MacElree Harvey
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