Winn-Dixie store. Photo: J. Albert Diaz/ALM

A lawsuit alleging that several Kennett Square mushroom farms conspired with other growers to jack up mushroom prices can move forward, in part, a federal judge has ruled.

U.S. District Judge Berle M. Schiller of the Eastern District of Pennsylvania allowed Florida-based supermarket chain Winn-Dixie to proceed with some of its claims against members of the Eastern Mushroom Marketing Cooperative—a consortium of mushroom growers including some based in Kennett Square—while dismissing other claims.

Winn-Dixie and co-plaintiff Bi-Lo markets claimed that the mushroom farms violated the Sherman Antitrust Act by engaging in “naked price-fixing and conspired among themselves and in conjunction with [non-EMMC member] distributors to set artificially inflated [mushroom] prices,” according to Schiller's opinion.

The plaintiffs also accused the cooperative of “'meeting and agreeing to fix the price of Agaricus mushrooms' and 'by collectively interfering with, penalizing and retaliating against any non-EMMC growers that sought to sell at prices that were below the artificially-inflated prices set by EMMC,'” Schiller said.

In requesting dismissal of the lawsuit, the defendants claimed the plaintiffs' allegations were not specific enough to move forward, claiming that there are no differences in the allegations against the cooperative and the individual member farms.

But Schiller said that in the early stages of the litigation, it didn't matter.

“Winn-Dixie plaintiffs have furnished a clue as to which of the EMMC members allegedly agreed to the alleged conspiratorial scheme and 'when and where the illicit agreement took place,” Schiller said. “At this stage of the litigation, the court must accept these allegations as true.”

He added, “Whether Winn-Dixie plaintiffs can ultimately prove that each EMMC-member defendant participated identically—as alleged—in the antitrust violations is not a question for resolution at this stage of the litigation.”

However, Schiller did dismiss Winn-Dixie's claims that the members of EMMC sought to establish a monopoly over the mushroom market. He also dismissed claims against several farms over Winn-Dixie's failure to properly serve complaints to them within 90 days.

Patrick Ahern of the Chicago firm Ahern and Associates represents Winn-Dixie and declined to comment on Schiller's ruling.

H. Laddie Montague of Berger Montague in Philadelphia represents the mushroom growers and did not respond to a request for comment.

Winn-Dixie's mushroom antitrust case has been ongoing since December 2015 and is separate from a nationwide class action filed against the EMMC. The class action has resulted in settlements between some growers and plaintiffs.