Full opinion text
MEMORANDUM DECISION AND ORDER B. LYNN WINMILL, Chief Judge. INTRODUCTION The Court has before it several pending motions (Dkts. 72, 73, 75, 76, 77, 78, 79, 82, 85, 88,120 and 122). The Court heard oral argument on the motions on June 20, 2011, and now issues the following memorandum decision and order. BACKGROUND Plaintiffs are a company who claims to have purchased potatoes directly from one or more of the defendants, and a series of persons or entities who allege they have indirectly purchased potatoes from one or more of the defendants. The former is referred to as direct purchaser plaintiffs and the latter as indirect purchaser plaintiffs. All plaintiffs contend that defendants illegally agreed to reduce the supply of potatoes in order to raise prices. Plaintiffs assert that the alleged scheme started when potato growers in Idaho formed a cooperative called United Potato Growers of Idaho (“UPGI”). The Idaho potato growers, along with potato farmers in several other states, then established United Potato Growers of America (“UPGA”) as an umbrella cooperative. Plaintiffs assert that the cooperatives were created for the purpose of increasing the price of potatoes through supply management. They further allege that defendants implemented their plan by agreeing to limit potato planting acreages, and by paying farmers to either destroy existing stocks or refrain from growing additional potatoes in order to reduce the overall number of potatoes available for sale to direct purchasers. Plaintiffs contend that defendants’ supply reduction program caused potato prices to be fixed, raised, maintained, and/or stabilized. This, it is argued, violated the antitrust laws. Defendants filed motions to dismiss on several grounds. Some of their arguments apply to all defendants (or large groups of defendants), while some are specific to individual defendants. After laying out the general legal standard for motions to dismiss, the Court will address motions that apply to each large groups of defendants, and then address individual defendant motions. LEGAL STANDARD Federal Rule of Civil Procedure 8(a)(2) requires only “ ‘a short and plain statement of the claim showing that the pleader is entitled to relief,’ ” in order to “give the defendant fair notice of what the ... claim is and the grounds upon which it rests, ...” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). While a complaint attacked by a Rule 12(b)(6) motion to dismiss “does not need detailed factual allegations,” it must set forth “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” Id at 570, 127 S.Ct. 1955. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id at 556, 127 S.Ct. 1955. The plausibility standard is not akin to a “probability requirement,” but it asks for more than a sheer possibility that a defendant has acted unlawfully. Id Where a complaint pleads facts that are “merely consistent with” a defendant’s liability, it “stops short of the line between possibility and plausibility of ‘entitlement to relief.’” Id at 557, 127 S.Ct. 1955. In a more recent case, the Supreme Court identified two “working principles” that underlie Twombly. See Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Id “Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.” Id at 1950. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. Id “Determining whether a complaint states a plausible claim for relief will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id A dismissal without leave to amend is improper unless it is beyond doubt that the complaint “could not be saved by any amendment.” Harris v. Amgen, Inc., 573 F.3d 728, 737 (9th Cir.2009) (issued two months after Iqbal). The Ninth Circuit has held that “in dismissals for failure to state a claim, a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.” Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv., Inc., 911 F.2d 242, 247 (9th Cir.1990). The issue is not whether plaintiff will prevail but whether he “is entitled to offer evidence to support the claims.” See Hydrick v. Hunter, 466 F.3d 676, 685 (9th Cir.2006). These familiar principles guide the Court’s analysis of any 12(b)(6) motion, but they bear repeating here. The Court will consider the Supreme Court’s landmark decision, Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), in more detail later, along with Ninth Circuit authority interpreting that decision. Twombly is of particular importance here — not only because it announced the plausibility standard in the first place, but because it did so in the context of a Sherman Act § 1 claim. ANALYSIS Plaintiffs allege that defendants violated § 1 of the Sherman Act, which prohibits “any contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce.” 15 U.S.C. § 1. To state a claim under § 1, plaintiffs must plead facts that plausibly suggest “(1) an agreement or conspiracy among two or more persons or distinct business entities, (2) by which the persons or entities intend to harm or restrain competition, and (3) which actually injures competition.” Les Shockley Racing, Inc. v. Nat’l Hot Rod Ass’n, 884 F.2d 504, 507 (9th Cir.1989). Additionally, for each individual defendant, plaintiffs must allege that that defendant had “ ‘a conscious commitment to a common scheme designed to achieve an unlawful object.’ ” Monsanto Co. v. Spray-Rite Corp., 465 U.S. 752, 764, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984) (citation omitted). Defendants’ motions to dismiss fall into four basic categories. First, a large group of defendants assert that the Capper-Volstead Act immunizes them from Sherman Act liability. Second, these defendants, along with several others, argue that plaintiffs have failed to plausibly allege that each individual defendant joined the conspiracy. Third, several defendants argue that the indirect-purchaser plaintiffs’ claims should be dismissed based on standing and preemption doctrines. Fourth, defendant United Potato Growers of Canada (“UPGC”) asserts unique arguments for dismissal based upon, among other things, the act of state doctrine. 1. MOTIONS TO DISMISS BASED ON THE CAPPER-VOLSTEAD ACT A. The Capper-Volstead Act and Related Statutes Congress enacted the Capper-Volstead Act in the early 1900’s. It provides agricultural cooperatives with a limited exemption from antitrust laws. It states that: Persons engaged in the production of agricultural products as farmers, planters, ranchmen, dairymen, nut or fruit growers may act together in associations, corporate or otherwise, with or without capital stock, in collectively processing, preparing for market, handling, and marketing in interstate and foreign commerce, such products of persons so engaged. Such associations may have marketing agencies in common; and such associations and their members may make the necessary contracts and agreements to effect such purposes: Provided, however, That such associations are operated for the mutual benefit of the members thereof.... 7 U.S.C. § 291. The Capper-Volstead Act clarified and expanded the antitrust exemption for cooperatives found in Section 6 of the Clayton Act, which provided that: Nothing contained in the antitrust laws shall be construed to forbid the existence and operation of labor, agricultural or horticultural organizations instituted for the purposes of mutual help ... or forbid or restrain individual members of such organizations from lawfully carrying out the legitimate objects thereof; nor shall such organizations, or the members thereof, be held or construed to be illegal combinations or conspiracies in restraint of trade under the antitrust laws. 15 U.S.C. § 17. Congress had enacted Section 6 of the Clayton Act to counter the possibility that the Sherman Act’s prohibition against combinations in restraint of trade would be applied to imperil the development of cooperative endeavors such as unions. Case-Swayne Co. v. Sunkist Growers, Inc., 389 U.S. 384, 390-91, 88 S.Ct. 528, 19 L.Ed.2d 621 (1967). But Section 6 of the Clayton Act “shows no more than a purpose to allow farmers to act together in cooperative associations without the associations as such being held or construed to be illegal combinations or conspiracies in restraint of trade, under the antitrust laws, as they otherwise might have been.” Maryland & Virginia Milk Producers Ass’n v. U.S., 362 U.S. 458, 465, 80 S.Ct. 847, 4 L.Ed.2d 880 (1960) (Internal quotations omitted). Thus, “a group of farmers acting together as a single entity in an association cannot be restrained from lawfully carrying out the legitimate objects thereof, but ... it [does not] give[ ] such an entity full freedom to engage in predatory trade practices at will.” Id. (Internal quotations omitted). With respect to the Capper-Volstead Act, the Supreme Court has recognized that it and its legislative history “ ‘indicate!] a purpose to make it possible for farmer-producers to organize together, set association policy, fix prices at which their cooperative will sell their produce, and otherwise carry on like a business corporation without thereby violating the antitrust laws.’ ” In re Mushroom Direct Purchaser Antitrust Litigation, 621 F.Supp.2d 274, 283 (E.D.Pa., 2009) (citing Maryland & Virginia Milk Producers, 362 U.S. 458, 466, 80 S.Ct. 847 (1960)). It provides “that among the legitimate objects of farmer organizations [are] collectively processing, preparing for market, handling, and marketing products through common marketing agencies and the making of necessary contracts and agreements to effect such purposes.” Id. (Internal quotations omitted). Thus, the general philosophy of Section 6 of the Clayton Act and the CapperVolstead Act is simply that, through agricultural cooperatives acting as entities, individual farmers should be given the same unified competitive advantage and responsibility available to businessmen acting through corporations as entities. Id. As explained below, the Court will deny the motions to dismiss to the extent they are based on the Capper-Volstead Act because questions of fact remain as to whether the Act applies in this case. However, the Court recognizes that the parties fully briefed and argued areas of law where case law is scant, and where there are no disputed issues of fact in this case. Under these circumstances, the Court believes it prudent to address these areas of law because leaving them unresolved would likely cause the parties to incur unnecessary expense going forward. If, as the case progresses, disputed issues of fact appear where there were none today, or if significant new decisions are issued, a motion for reconsideration may be appropriate. (1). Questions of Fact Remain about Whether the Capper-Volstead Act Applies As noted above, the Capper-Volstead Act exempts certain agricultural cooperatives from antitrust liability. However, the Supreme Court has made clear that the exemption only applies if all participants in the organization qualify under the Act. Questions of fact prevent the Court from making a final determination on this question at this time. In their complaint, Plaintiffs contend that the Capper-Volstead exemption does not apply because Defendants conspired with non-members, ineligible members, and non-producers. Plaintiffs contention is based upon the Supreme Court’s decisions in Case-Swayne Co. v. Sunkist Growers, Inc., 389 U.S. 384, 88 S.Ct. 528, 19 L.Ed.2d 621 (1967) and National Broiler Marketing Ass’n v. United States, 436 U.S. 816, 98 S.Ct. 2122, 56 L.Ed.2d 728 (1978). In Sunkist, the Court concluded that Congress did not intend to allow organizations with nonproducer interests to avail themselves of the Capper-Volstead exemption. Sunkist, 389 U.S. at 395-96, 88 S.Ct. 528. In that case, the structure of the Sunkist system included local producers organized into associations operating packing houses, with those houses organized into exchanges. Id. at 386, 88 S.Ct. 528. Although eighty-five percent of the local associations were exclusively made up of fruit growers, the remaining members were private, for-profit packing houses. Id. The packers entered into contracts with producers where they would handle each grower’s fruit at cost, plus a fixed surcharge. Id. The Supreme Court explained that the exemption should be limited to only actual producers of agricultural products, and not those involved in the processing of those raw commodities into other products. Id. at 393, 88 S.Ct. 528. The Supreme Court concluded that Sunkist could not avail itself of the Capper-Volstead exemption because it included non-producer interests. Id. The court noted that the right of agricultural producers to unite under the Capper-Volstead Act “cannot be deemed to authorize any combination or conspiracy with other persons in restraint of trade that these producers may see fit to devise.” Id. at 395, 88 S.Ct. 528 (Internal citation omitted). The holding in Sunkist was reaffirmed in National Broiler Marketing Ass’n v. United States, 436 U.S. 816, 98 5. Ct. 2122, 56 L.Ed.2d 728 (1978). There, the Supreme Court concluded that in order for a defendant to be exempt from antitrust liability pursuant to Capper-Volstead, the defendant must establish that both itself, and all entities with which it conspired, qualify under the Act. National Broiler, 436 U.S. at 822-23, 98 S.Ct. 2122. “It is not enough that a typical member qualify, or even that most of [the] members qualify.” Id. Plaintiffs’ complaint alleges that the cooperatives involve numerous vertically integrated members who perform packing and processing functions for themselves and other growers of potatoes. The majority opinions in Sunkist and National Broiler do not provide a clear indication whether such integrated agribusiness would be a disqualified participant in an association otherwise protected by Cap-per-Volstead. Indeed, the majority in National Broiler expressly chose not to address the question. However, the dissenting and concurring opinions in that decision provide something of a roadmap to the answer to that question. The dissent in National Broiler suggested that expanding the exemption to include integrated agribusiness is necessary because the nature of agriculture has changed dramatically since the CapperVolstead Act was adopted. Id. Justice Brennan’s concurring opinion explained why that argument fails. Justice Brennan noted that the dissent “recognizes that integrated ... producers do not neatly fit the limitation Congress signified by the phrase ‘as farmers,’ but reads that limitation out of the Act in order to give effect to what it perceives as Congress’ desire to aid the agricultural industry generally because of the uncertainty of profits in that industry caused by the combination of weather, fluctuations in demand, and perishability of the product.” National Broiler, 436 U.S. at 884, 98 S.Ct. 2122 (Brennan, J., concurring). He then explained that such a drastic restructuring of the statute is both inconsistent with Congress’ specific intent regarding the meaning of the limitation, and unnecessary to give continuing effect to its broader purposes. Id. In Justice Brennan’s view, Congress consciously chose not to exempt processors engaged in the production of agriculture even though they bore some risks in common with agriculture generally. Id. The dissent’s approach of adopting a bright-line rule permitting integrated producers to partake of the benefits of Capper-Volstead would do violence to that legislative intent. In Justice Brennan’s view the proper approach is to engage in a case-by-case analysis, in which, “the nature of the association’s activities, the degree of integration of its members, and the functions historically performed by farmers in the industry are relevant considerations in deciding whether an association is exempt.” Id. at 836, 98 S.Ct. 2122. The defendants here urge the Court to adopt the bright line rule suggested by the dissent in National Broiler, to the effect that a farming operation is an eligible participant under Capper-Volstead, even if it is a fully integrated operation which extends from spring planting to the grocery store warehouse. However, the Court agrees with Justice Brennan’s concern with that view. Adopting the dissent’s expansive reading of the statute would read “the farmer” requirement out of the statute, ignore congressional intent, and create the potential for abuse. On the other hand, the Court is also disinclined to adopt a bright line rule that any degree of vertical integration disqualifies a farming operation from participating in a Capper-Volstead eligible association. Rather, a factually-intense inquiry is necessary — one which focuses on the economics and history of potato marketing, the actual functions of the associations, and the degree of integration of the participants. From that evaluation a determination must be made as to whether granting Capper-Volstead exemption here would be consistent with the legislative intent to create an environment in which farmers can compete on a level playing field. However, a better-developed record is necessary before the Court can make that determination. Accordingly, the Court will deny the motions to dismiss to the extent they are based on Capper-Volstead. In their complaint, Plaintiffs allege that Defendants entered into agreements with unprotected entities, including non-protected potato groups, non-producer partners, a dehydration joint venture, and integrated members and packer/warehouses. If proved, these allegations could preclude application of the Capper-Volstead exemption. Resolving these allegations of alleged anti-competitive practices which potentially place a defendant’s conduct outside the CapperVolstead exemption requires a fact intensive inquiry which should be completed by the Court only after proper discovery has been conducted. (2). Legal Issues As noted above, the Court will, although not necessary to its decision, address legal issues which have been fully briefed and argued, on which there is little case law, and where there are no disputed issues of fact. (a) Collusive Production Curtailment Plaintiffs contend that the list of activities protected by the Capper-Volstead Act excludes acreage reductions, production restrictions, or collusive crop planning. The Court agrees. The Court first notes that there are no cases where a court specifically approved, under the Capper-Volstead Act, a preproduction agricultural output limitation as opposed to a post-production marketing decision such as withholding of product from market. Likewise, there are no cases where a court has concluded that Capper-Volstead immunizes cooperatives and their members who seek to collectively implement production controls in order to raise prices. However, the language of the Capper-Volstead Act itself indicates that it does not apply to production limitations. The Court must construe statutory terms in accordance with their ordinary meaning. Federal Deposit Ins. Corp. v. Meyer, 510 U.S. 471, 476, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994); United States v. Nader, 542 F.3d 713, 717 (9th Cir.2008). The key phrase of the Act, “processing, preparing for market, handling, and marketing,” applies to acts done to an agricultural product after it has been planted and harvested. Thus, under the plain language of the statute, coordinating and reducing acreage for planting is not allowed. The cases cited by Defendants for the contrary view are distinguishable. For example, in In the Matter of Wash. Crab Ass’n, 66 F.T.C. 45 (1964), the court did not address Capper-Volstead. Instead, the case dealt with the Fishermen’s Collective Marketing Act (“FCMA”) (15 U.S.C. § 521), which states: Persons engaged in the fishery industry, as fishermen, catching, collecting, or cultivating aquatic products, or as planters of aquatic products on public or private beds, may act together in associations, corporate or otherwise, with or without capital stock, in collectively catching, producing, preparing for market, processing, handling, and marketing in interstate and foreign commerce, such products of said persons so engaged. 15 U.S.C. § 521. The plain language of that statute is far different from the plain language of Capper-Volstead. It specifically allows fishermen to act jointly in producing and catching fish. Defendants next suggest that the court in Alexander v. Nat’l Farmers Organization, 687 F.2d 1173 (8th Cir.1982) broadly considered antitrust claims involving a cooperative’s efforts to limit the supply of milk. Defendants cite the court’s conclusion that the cooperative’s decision to withhold milk from the market “as a general matter, is within the scope of the CapperVolstead exemption.” Alexander, 687 F.2d at 1188. Alexander did not involve a production restriction, however. Instead, members of a dairy farmer cooperative withheld already produced milk from the market for a matter of days until the DOJ successfully enjoined it. Alexander, 687 F.2d at 1182. The case of Holly Sugar Corp. v. Goshen County Co-op. Beet Growers Ass’n, 725 F.2d 564 (10th Cir.1984) is even less applicable to this case. Defendants properly explain that in that case the Tenth Circuit recognized that the Capper-Volstead exemption protected the efforts of a sugar beet growers’ association to prevent its members from contracting outside of the association. Members of the association had signed a marketing agreement which prevented them from contracting individually with a buyer. Holly Sugar, 725 F.2d at 566. After the association failed to reach an agreement with the buyer, several growers sought to sell their sugar beets outside of the association. Id. The members sued the association for relief from the marketing restriction, and the trial court granted the injunction. Id. at 567. The Tenth Circuit reversed and held that the marketing agreement did not violate antitrust laws and that the cooperative could prevent its members from negotiating independent sales contracts. Id. at 569. Based on that finding, Defendants suggest that the Tenth Circuit concluded that the cooperative could manage the supply of sugar beets by preventing its members from putting their crops on the market. Notably, however, there was no finding that the cooperative controlled pre-production agricultural output. Defendants next rely on Northern California Supermarkets, Inc. v. Central California Lettuce Producers Coop., et al, 413 F.Supp. 984 (N.D.Cal.1976) which concluded that a cooperative’s activities were within the purposes of Capper-Volstead and Section 6 of the Clayton Act through all production phases. In that case, the court specifically noted that the cooperative engaged in marketing activities such as gathering and disseminating information concerning the planting, harvesting and shipment of lettuce. This general statement does seem to cloud the issue a bit. However, there was no dispute in Northern California Supermarkets that the “primary activity of [the cooperative] [was] to set prices or price ranges to which members [were] required to adhere in the sale of their lettuce.” Id. at 987. There was no indication that the cooperative actually curtailed production or did anything more than gather and disseminate information regarding pre-production agricultural output. Still, Defendants argue that because Capper-Volstead cooperatives are allowed to fix prices, they must also be allowed to restrict production. This argument is unpersuasive. The reason an agricultural cooperative can fix the price at which their good is sold is because if the price rises, farmers will produce more and consumers will not be overcharged. Individual freedom to produce more in times of high prices is a quintessential safeguard against Capper-Volstead abuse, which Congress recognized in enacting the statute. Although dicta, the FTC’s language in In the Matter of Central California Lettuce Producers Cooperative, 90 F.T.C. 18, at 32 n. 20 (July 25, 1977) is telling on this matter: Congress’ attitude toward production controls provides an additional indication that it did not regard the corporation as the model around which the CapperVolstead exemption would be built. Beyond doubt, a single corporation can restrict its output, if it chooses, without incurring antitrust liability. Nevertheless, there are strong indications that Congress did not intend to allow farmers to use cooperatives as a vehicle by which they could effectively agree to limit production. (emphasis added). The FTC went on to quote Senator Capper during debate of the Act, where he stated: But a farmers’ monopoly is impossible. If the cooperative marketing association makes its price too high, the result is inevitable self-destruction by overproduction in the following years. No other industry except agriculture has this automatic safeguard. With corporation activities the group producers, such as the United States Steel Corporation, can reduce the quantity of steel rails it will produce at any given time or completely close down its mills and reduce the supply- Id. (Internal citations omitted). Furthermore, “Congress has reinforced the interpretation that production controls were not authorized by adding to the Cap-per-Volstead Act a comprehensive statutory scheme for controlling supply in the form of the Agricultural Marketing Agreement Act of 1937 (AMAA), 7 U.S.C. 601 et seq.” Id. If a cooperative is allowed to limit production among its own members, it can “shut[ ] off the safety valve against private abuse that ameliorates the adverse consumer impact of the Capper-Volstead exemption and circumvent[ ] the important procedural safeguards of the AMAA.” Id. For these reasons, the Court concludes that acreage reductions, production restrictions, and collusive crop planning are not activities protected by the CapperVolstead Act. (b) Alleged Conspiracy with Foreign Association Plaintiffs do not challenge the applicability of the Capper-Volstead exemption based on foreign farmers being members of UPGA. However, they do contend that any conspiracy with a foreign association negates the exemption. The issue has not been directly addressed by a court, and opinions on the matter are scant at best. The most compelling evidence of whether a domestic cooperative forfeits application of the Capper-Volstead applies when it conspires with a foreign association is in the Act itself. The CapperVolstead Act uses the term “persons” without limitation and does not exclude foreign producers. As pointed out by Defendants, the reference in the Act to “foreign commerce” demonstrates that Congress intended Capper-Volstead to apply to foreign entities. 7 U.S.C. §§ 291-292. Additionally, Section 6 of the Clayton Act serves to exempt agricultural producers from liability under the antitrust laws. The Sherman Act and the Clayton Act both define “person” to include “corporations and associations existing under or authorized by the laws of the United States, the laws of any of the Territories, the laws of any State, or the laws of any foreign country.” 15 U.S.C. §§ 7, 12(a). Accordingly, as a matter of law, any collaboration with foreign growers does not necessarily destroy the Capper-Volstead exemption. A few courts have touched on the issue, but those cases are barely worth noting. For example, in Northland Cranberries, Inc. v. Ocean Spray, Inc., 382 F.Supp.2d 221 (D.Mass.2004), the court interpreted the term “persons” in 7 U.S.C. § 291 to include foreign persons and entities such that they could be members of a domestic cooperative. Cranberries, 382 F.Supp.2d at 225-26. However, the decision did not directly address whether a domestic cooperative would lose access to the CapperVolstead exemption if it conspired with a foreign cooperative. Similarly, in United States v. Natl Board of Fur Farm Organizations, Inc., 395 F.Supp. 56, 57 (E.D.Wis. 1975), the court touched on the issue in the context of a motion to dismiss a criminal indictment. The court noted that both the government and the defendants appeared to agree that a Capper-Volstead organization is not exempt from liability if the organization conspires with “other persons,” but it never directly addressed the question of whether the foreign organizations were exempt under Capper-Volstead. Instead, the court simply denied the motion to dismiss because the government was not obligated to negate the defense in the criminal indictment. Fur Farm, 395 F.Supp. at 57. Finally, United States v. Dairy Farmers of America, Inc., 2000 WL 33200552 (E.D.Pa.2000) is not as helpful as suggested by Plaintiffs. Plaintiffs suggest that the DOJ’s view as to the inapplicability of the Capper-Volstead Act to foreign producers figured into the resolution to its challenge to the acquisition by the Dairy Farmers of America (“D.F.A.”) of SODIALL North American Corporation, a subsidiary of a large foreign cooperative. Plaintiffs cite the DOJ’s competitive impact statement in that case, and suggest that central to DOJ’s decision to block the merger was DOJ’s determination that SODIALL did not have the benefit of the Capper-Volstead exemption. The impact statement does indicate that DOJ believes that SODIALL did not have the benefit of the Capper-Volstead exemption. (Dkt. Ill, Ex. S.) However, there is no discussion about why SODIALL does not have the benefit of the exemption, or more importantly, whether a conspiracy between D.F.A. and SODIALL would deny application of the exemption to D.F.A. After considering the statutory language and the limited number of cases which have addressed the issue, the Court concludes that an association does not lose its Capper-Volstead exemption by including, among its members, foreign corporations or legal entities. 2. TWOMBLY MOTIONS The defendants who seek a Twombly dismissal fall into four general categories: potato growers; licensors; marketers; and dehydrators. A. The Potato Growers’ Motion to Dismiss At its heart, this case is about a group of potato growers who allegedly agreed to reduce the supply of potatoes they produce so as to increase prices. See DPC ¶ 3. The core allegations against the potato growers begin with a September 2004 meeting in Blackfoot, Idaho, which is described in the complaints as follows: 167. The potato cartel was first formalized when Mr. Wada organized a meeting of Idaho potato farmers in September of 2004 to discuss how to “curb production” and “boost prices” for potatoes. At this meeting, Mr. Wada and Keith Cornelison (of Defendant Cornelison Farms) summoned 23 Idaho potato growers to an office in Blaekfoot, Idaho to discuss how their collective efforts at reducing potato supplies would help fix, raise, maintain, and stabilize prices. 168. After more meetings, phone calls, and emails among these growers, the group agreed to form UPGI — with the explicit goal of reducing potato supplies through various means. 169. The 23 growers in attendance at this meeting became the founders of UPGI, which filed for incorporation on November 2, 2004. The founders’ operations encompassed approximately 60 percent of the fresh potatoes produced in Idaho and 25 percent of the fresh potato market in the United States. 171. In the Articles of Incorporation of UPGI, the stated purpose of the organization is “to stabilize potato prices and supplies in the State of Idaho and to work with similar cooperatives in other states having similar purposes.” DPC ¶ 167-69, 171. The growers who are identified as having attended the meeting include the moving grower defendants. Id. ¶ 170. It further alleges that these growers were founding members of UPGI and that they “explicitly signed on to the supply reduction and price-fixing scheme alleged herein.” Id. The DPC goes on to detail various acts taken after the 2004 meeting to implement the conspiracy, including, among other things: • Yearly acreage reductions rules, meaning that the growers planted fewer potatoes; • A bid buy-down program, whereby growers were paid not to plant potatoes; • “Shipping holidays,” during which packing plants were shut down for at least eight hours; and • “Flow-control” activities, whereby certain defendants allegedly participated in marketing calls in an effort to prevent potatoes from being shipped when prices were too low. • “Offloading” surplus potatoes by selling them to dehydration plants. DPC ¶¶ 118, 185-90; see also IPC ¶¶ 221-27. The grower defendants contend that these allegations fail to plausibly allege a § 1 conspiracy as to each individual defendant. They make two basic arguments in support of this contention. First, they argue that mere membership in a trade association such as UPGI or UPGA cannot form the basis of a § 1 conspiracy. See Joint Mot. Memo., Dkt. 79-1, at 23. Second, they argue that plaintiffs have failed to allege each individual defendant’s role in the alleged conspiracy with sufficient factual detail. (1). The Membership Argument Turning first to the membership argument, defendants rely on Kline v. Coldwell Banker & Co., 508 F.2d 226 (9th Cir.1974) and Kendall v. Visa U.S.A. Inc., 518 F.3d 1042 (9th Cir.2008). In Kline, a group of real estate sellers sued a local realty board and thirty-two named brokers who were board members during the previous four years. Plaintiffs alleged that the defendants conspired to fix brokerage commissions at six percent by distributing a recommended fee schedule to its members. Id. at 228. The Ninth Circuit reversed the district court’s grant of class certification because plaintiffs had not shown that common questions predominated as to defendants’ liability. Id. at 236. In so holding, the Court clarified that membership in the realty board, standing alone, was insufficient to impose liability. Id. at 233. Rather, “in order for a member of a trade association to become ... liable in a treble damage case he must have ‘knowingly, intentionally and actively participated in an individual capacity in the scheme.’ ” Id. at 232 (citation omitted). The key difference between Kline and this case is that in Kline plaintiffs did not allege that the realty board itself was created to effectuate a pre-existing agreement to violate antitrust laws. Here, by contrast, plaintiffs allege that UPGI and UPGA were formed for the sole purpose of managing potato supply and fixing prices. See, e.g., DPC ¶ 3. Further, defendants allege that the grower defendants were directly involved in the meetings and agreements leading to the formation of the cooperatives. This allegation — essentially, that UPGI and UPGA formalized an underlying § 1 conspiracy — is supported with “evidentiary factual” allegations. For example, plaintiffs allege that UPGA’s website articulates its “Vision” as follows: “We will manage national potato supply so as to positively affect grower profitability.” Id. ¶ 198; see also id. ¶ 164. As for UPGI, because it believed it had Capper-Volstead immunity, UPGI’s stated corporate purpose is “to stabilize potato prices and supplies in the State of Idaho and to work with similar cooperatives in other states having similar purposes.’ ” Id. ¶ 17 1; see also id. ¶ 200 (“Our efforts are targeted at supply management in order to help growers receive a reasonable price for their crop.”). As such, these defendants did not merely join an extant trade association and then choose whether or not to follow suggested guidelines; rather, plaintiffs alleged that they first agreed to the conspiracy outlined in the complaint, and then created the trade associations to formalize and implement that agreement. Kline is thus inapposite. Kendall does not support the grower defendants’ membership theory either. In that case, plaintiffs alleged that a group of credit card companies and banks conspired to fix two separate fees related to credit card transactions — an interchange fee and a merchant discount fee. Kendall, 518 F.3d at 1046. Regarding the interchange fee, the bank defendants successfully argued that plaintiffs had not plausibly alleged that the banks conspired to fix the interchange fee. Id. at 1048. Rather, according to the banks, Visa and MasterCard set these fees and the banks chose to adopt them. See id. This prompted the Ninth Circuit to invoke Kline in dismissing the complaint against the banks: Regarding the allegations that the Banks conspired to fix the interchange fee, merely charging, adopting or following the fees set by a Consortium [Mastercard or Visa] is insufficient as a matter of law to constitute a violation of the Sherman Act. In Kline, we held that membership in an association does not render an association’s members automatically liable for antitrust violations committed by the association. Id. at 1048 (internal citation to Twombly omitted). A handful of grower defendants argue that they are in an analogous position to the bank defendants in Kendall. See Larsenr-Driscoll-Rigby Mot. Memo., Dkt. 75-1, at 7-8; Hearing Transcript, Dkt. 151, at 208-12. These defendants point out that the bank defendants in Kendall were owner-members of Visa (which defendants liken to a “cooperative”), just as the potato growers here are members of cooperatives. See Larsenr-Driscoll-Rigby Reply, Dkt. 130, at 4. They also argue that the interchange fee in Kendall was “enforced in a mandatory way on all members [and] could not be varied,----” Hearing Transcript, Dkt. 151, at 209; see also, e.g., Larsenr-Driscoll-Rigby Reply, Dkt. 130, at 4-5. These grower defendants then proceed to argue that they are just like the banks: They may have planted fewer potatoes because UPGI and UPGA had mandatory acreage-reduction (and other rules), but being a member of that cooperative, and merely adopting or following cooperative rules cannot give rise to § 1 liability under Kendall and Kline. See, e.g., Hearing Transcript, Dkt. 151, at 210 (at oral argument counsel asserted that “the mere fact that some member of the institution is required to charge or adopt or follow the fees — or in this case it would be the acreage limitation rules or other practices set down by the association — does not, as a matter of law — the Ninth Circuit’s term— give rise to a claim.”). This argument has two problems. First, although the Kendall plaintiffs alleged that the banks participated in the management of, and held a propriety interest in Visa and MasterCard, the banks successfully argued that they did not conspire to set the interchange fee. See Kendall, 518 F.3d at 1048 (holding that although plaintiffs alleged that the banks actively participated “in an individual capacity in the scheme to fix the interchange fee or the merchant discount fee, this was nothing more than a conclusory statement.”). Here, by contrast, plaintiffs have provided evidentiary factual allegations that the moving grower defendants met and agreed to the scheme alleged in the complaint. Now, of course, whether that can be proven remains to be seen — either at trial or in the context of a motion for summary judgment. ' But, for purposes of a motion to dismiss, it is sufficient that the plaintiffs have alleged that the defendants met and agreed to the scheme. Second, the grower defendants’ argument that the interchange fees were “enforced in a mandatory way” was not part of the Ninth Circuit’s holding and appears to be controverted by the record in that case. In district court proceedings, Visa and MasterCard repeatedly asserted that each network permitted member banks to opt out of the default interchange fees and apply different arrangements between particular acquirers and issuers. The Ninth Circuit did not find to the contrary on appeal. Kendall is thus distinguishable. Among other things, plaintiffs have plausibly alleged that the growers themselves came together and agreed to reduce potato supply and stabilize prices. Such allegations were not present in Kendall. (2). The Who-What-Where-When Argument In addition to arguing that their “mere membership” in the cooperatives cannot form the basis for liability, the moving grower defendants argue that plaintiffs have not sufficiently connected each individual defendant to the alleged conspiracy. To resolve this argument requires the Court to resolve the parties’ underlying dispute as to the correct pleading standard in antitrust cases following the Supreme Court’s decision in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) and the Ninth Circuit’s decision in Kendall v. Visa U.S.A., Inc., 518 F.3d 1042 (9th Cir.2008). The parties have fundamentally different views of these cases. In particular, the parties dispute how detailed an antitrust complaint must be in answering the “basic questions: who, did what, to whom (or with whom), where, and when?” Id. at 1047. The Court will explore Twombly and Kendall in some detail before turning to the allegations in this case. (a) Twombly and Kendall In Twombly, the plaintiffs alleged that a group of telephone companies — the Baby Bells — were engaging in “parallel behavior.” In other words, they were not competing. But that’s all plaintiffs alleged to support their inference that the Baby Bells must have entered into an illegal conspiracy. The core allegation was simply that [i]n the absence of any meaningful competition between the [defendants] in one another’s markets, and in light of the parallel course of conduct that each engaged in to prevent competition from [other carriers] within their respective local telephone and/or high speed internet services markets and the other facts and market circumstances alleged above, Plaintiffs allege upon information and belief that [the defendants] have entered into a contract, combination or conspiracy to prevent competitive entry in their respective local telephone and/or high speed internet services markets and have agreed not to compete with one another and otherwise allocated customers and markets to one another. Id. at 551,127 S.Ct. 1955. The problem with this allegation is that § 1 of the Sherman Act does not require sellers to compete; it just forbids their agreeing not to compete. Further, the Supreme Court found that the Baby Bells had “tremendous independent economic incentive to resist ‘sharing’ and to forego entering one another’s markets at the pain of being forced to subsidize a competing long distance carrier by sharing equipment.” In re Packaged Ice Antitrust Litig., 723 F.Supp.2d 987, 1004 (E.D.Mich. 2010) (citing Twombly, 550 U.S. at 566, 127 S.Ct. 1955). Thus, the Twombly complaint merely alleged a fact — parallel behavior — that was equally consistent with two competing inferences: (1) an inference that the defendants were conspiring and; (2) an inference that market conditions enabled them to avoid competing without having to agree not to compete. The Court concluded that without more, this independent, economically self-motivated behavior was not enough to sustain a conspiracy claim. Instead, the Court held that allegations of parallel conduct must be placed in a factual context that “plausibly suggests” an agreement. Id. at 556-57, 127 S.Ct. 1955. In footnote 10 of its opinion, the Court explained just how barren the complaint was. Id. at 565 n. 10, 127 S.Ct. 1955. In this oft-cited footnote, the Court explained that Twombly’s conspiracy allegations, standing alone, probably would not even provide the defendants the notice required by Rule 8. Id. at 565 n. 10, 127 S.Ct. 1955. Indeed, the only specific thing Twombly did to show a conspiracy was to identify “the seven-year span in which the § 1 violations were supposed to have occurred .... ” Id. Otherwise, the pleadings “mentioned no specific time, place, or person involved in the alleged conspiracies.” Id. As a result, it furnished “no clue as to which of the four ILECs (much less which of their employees) supposedly agreed, or when or where the illicit agreement took place.” Id. A defendant seeking to respond to such a complaint “would have little idea where to begin.” Id. Less than a year after the Supreme Court handed down Tivombly, the Ninth Circuit decided Kendall. In reciting the new plausibility standard announced in Twombly, the Kendall Court cited Twombly’s footnote 10, stating that Supreme Court “suggested that to allege an agreement between antitrust co-conspirators, the complaint must allege facts such as a ‘specific time, place, or person involved in the alleged conspiracies,’ to give a defendant seeking to respond to allegations of a conspiracy an idea of where to begin.” Id. at 1047 (citing Twombly, 550 U.S. at 565 n. 10, 127 S.Ct. 1955). Notably, the Kendall complaint was as barren as Twombly’s. In dismissing the complaint, the Court found that even after conducting discovery, “the complaint does not answer the basic questions: who, did what, to whom (or with whom), where, and when?” Id. at 1048. In the wake of Twombly and Kendall, antitrust defendants have relied on footnote 10 and the who-what-where-when language in Kendall to argue that complaints filed against them are deficient — even when complaints contain detailed “evidentiary factual” allegations connecting them to the alleged conspiracy. See, e.g., In re Packaged Ice Antitrust Litig., 723 F.Supp.2d at 1008 (“Defendants continue to sound the who, what, when and where refrain throughout their briefs.... ”). Many courts have rejected such arguments (including district courts within the Ninth Circuit), concluding that the Supreme Court did not impose the elaborate “who-what-where-when” pleading requirement defendants insisted upon. (b) Plaintiffs’ Who-What-Where-When Allegations Turning to plaintiffs’ allegations in this case, the Court finds that plaintiffs have alleged sufficient evidentiary facts connecting the moving grower defendants to the alleged conspiracy. This complaint does answer the basic who-what-where-when question. Specifically: Who? Twenty-three growers, including the moving grower defendants. What? Met and agreed to reduce potato supply and fix prices. When? Fall 2004. Where? An office in Blackfoot, Idaho. Because these basic questions are answered, and the defendants have supplied additional factual detail regarding the activities of the group thereafter (albeit not on a defendant-by-defendant basis), the moving defendants have “an idea of where to begin” in responding to the complaint. See Kendall, 518 F.3d at 1047. Some defendants argue that the language in the complaint suggesting that the defendants “signed onto” or “participated” in the supply-reduction/price-fixing scheme are “conelusory allegations” that “must be disregarded.” Joint Reply, Dkt. 134, at 11. In a vacuum, such terms would be conelusory. But that is not so here. Plaintiffs have supported these allegations with sufficient factual detail. As noted, the moving grower defendants attended the 2004 meeting and agreed to reduce supply of and fix prices for potatoes. As for the subsequent conduct of these defendants, at this stage plaintiffs do not need to provide elaborately detailed who-what-where-when facts for every single act that the moving grower defendants allegedly took to implement the scheme. Yet this is what defendants seem to demand. For example, in the Larseiv-Driscoll-Rigby motion, defendants take issue with the following allegation, and, in particular, the use of the disjunctive “and/or”: All Defendants involved in potato growing and selling operations herein ____ were direct participants in the supply reduction scheme outlined herein and followed acreage reductions, participated in the bid-buy-down program, participated in and utilized information obtained from marketing calls and packing reports, and/or reduced the domestic supply of potatoes for the express purposes of fixing, raising, maintaining and/or stabilizing prices. DPC ¶ 246 (emphasis added). These defendants argue that they do not have proper notice of what they allegedly did, asking: “Did Larsen ‘participate’ in the bid buy-down program? Or ‘utilize’ information from marketing calls and packing reports? Or both? What about Driscoll? Rigby?” Larsevr-DriscollrRigby Mot. Memo., Dkt. 75-1, at 9. Defendants go on to state that the “obvious explanation is that plaintiffs don’t know.” Id. Defendants ask too much. Plaintiffs have alleged — with the requisite factual specificity — the moving grower defendants’ agreement to reduce potato supply and fix and elevate potato prices. This adequately describes their basic role in the alleged scheme. The level of factual detail defendants demand here is more appropriately reserved for summary judgment. See, e.g., In re Cathode Ray Tube (CRT) Antitrust Litig., 738 F.Supp.2d 1011, 1022 (N.D.Cal.2010); In re Static Random Access Memory (SRAM) Litig., 580 F.Supp.2d 896 (N.D.Cal.2008) (“Defendants ... rely upon the standard for a motion for summary judgment.”). The Court will therefore deny the following grower defendants’ motions to dismiss: (1) Blaine Larsen Farms; (2) Cornelison Farms; (3) Keith Cornelison; (4) Michael Cranney; (5) Driscoll Potatoes, Inc.; (6) Lance Funk; (7) Blaine Larsen; (8) Raybould Brothers Farms, LLC; (9) Snake River Plains Potatoes, Inc.; and (10) Rig-by Produce, Inc. As explained next, the Court will grant the Pleasant Valley and Wada entities’ motions to dismiss, although plaintiffs will be given leave to amend the complaint. (3). Pleasant Valley and the Wada Entities Unlike the other moving grower defendants, Pleasant Valley argues that plaintiffs have not sufficiently connected it to the Fall 2004 meeting where the alleged conspiracy originated. Typically, plaintiffs allege that a particular individual attended the meeting, and that the individual is “of’ an entity defendant. For example, plaintiffs assert that “Lorraine Driscoll (of Driscoll Potatoes)” attended “the initial UPGI meeting” and “explicitly signed on to the supply-reduction and price-fixing scheme.... ” DPC ¶ 170. Elsewhere, plaintiffs usually allege that the entity defendant “is a founding member of UPGI.” See, e.g., id. ¶ 102 (“Driscoll Potatoes is a founding member of UPGI”). Plaintiffs were not entirely consistent in this regard; but, for the most part, the moving grower defendants did not take issue with this particular aspect of the pleading. That is, the entity defendants did not contend that the individuals who attended the meeting were not connected to them, or that the named individual did not attend the meeting on their behalf. As already noted, Pleasant Valley is an exception. Plaintiffs allege that Pleasant Valley is a “founding member of UPGI.” DPC ¶ 111. That allegation, in turn, rests on the allegation that Kim Wahlen attended the Fall 2004 meeting and “signed on to” the conspiracy alleged in the complaint. Id. ¶ 170. There are no allegations to indicate Mr. Wahlen’s relationship to Pleasant Valley, or his ability to act on behalf of that entity. Rather, Plaintiffs connect Mr. Wahlen to Pleasant Valley only with the word of. See id. (identifying “Kim Wahlen (of Pleasant Valley Potato)”). This allegation — basically, the word “of,” — is not sufficient to plausibly allege that Mr. Wahlen had the authority to, or did, act on Pleasant Valley’s behalf, or attend that meeting on Pleasant Valley’s behalf. Cf. Acosta Orellana v. CropLife Int’l, 711 F.Supp.2d 81, 112 (D.D.C.2010) (formulaic recitations of the essential elements of agency will not suffice). Plaintiffs have therefore failed to allege facts connecting Pleasant Valley to the scheme outlined in the complaint and dismissal with leave to amend is appropriate. The Court also takes judicial notice of UPGI’s articles of incorporation, which do not list Pleasant Valley as a founding member. See Fed.R.Evid. 201(b); MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir.1986). As certified public records kept by the Secretary of State in Idaho, the articles fall directly within the category of documents the Ninth Circuit generally considers proper for judicial notice. Weisman, 803 F.2d at 504. This Court may consider the articles as part of a 12(b)(6) motion without converting that motion to one for summary judgment. Id. Various Wada entities make a related argument. In essence, these defendants contend that plaintiffs named them as defendants only because they carry the Wada name and because Albert Wada, the individual, is an alleged “mastermind” of the conspiracy. Plaintiffs name the following Wada entities as defendants: (1) Wada Farms, Inc.; (2) Wada Farms Potatoes, Inc.; (3) Wada Van-Orden Potatoes, Inc.; and (4) Wada Farms Marketing Group, LLC. DPC ¶¶ 30-32, 45. Plaintiffs then define the first three entities as “Wada Farms,” and then allege that ‘Wada Farms through Albert Wada, played a critical role in the formation of UPGI and UPGA and the implementation of the supply reduction conspiracy.” Id. ¶ 38; see also id. ¶ 170 (alleging that “Albert Wada (of Wada Farms)” attended “the initial UPGI meeting” and “explicitly signed on to the supply reduction and price-fixing scheme (emphasis added). Plaintiffs also allege that “Defendant Albert Wada is the Chairman and former CEO of Wada Farms.” Id. ¶ 38. In context, it is not clear if plaintiffs are alleging that Mr. Wada is the chairman and former CEO of all three entities. These allegations do not allow the reader to figure out why each corporate entity has been named as a defendant, or what its connection to the underlying scheme is. With three entities lumped together as one (“Wada Farms”), the complaint fails to sufficiently connect each corporate defendant to the scheme. Plaintiffs will be given leave to amend in order to clarify how each entity is allegedly connected to the scheme. As for Wada Farms Marketing, plaintiffs allege that it is the “sales and marketing arm of Wada Farms” and that it “participated in and benefitted from the conspiracy.” Id. ¶ 49. Plaintiffs further assert that “Wada Farms controls Wada Farms Marketing and Wada Farms Marketing acted pursuant to that control.” Id. ¶ 50; see also id. ¶ 51 (‘Wada Farms Marketing acted as Wada Farms’ agent.”). Plaintiffs attempt to connect all marketer defendants to the complaint with allegations such as these: “Idaho marketing calls were implemented” and prior to these calls “participating warehouses would log on the UPGI web-page and provide information on capacity, stocks and pack-outs. These data along with other information ... were discussed and ... summarized ... on the internet to assist with ‘flow-control’ and prevent potatoes from being shipped when prices were too low.” Id. ¶ 190. These allegations do not sufficiently connect Wada Farms Marketing to the scheme. The control allegations are too conclusory, and the other allegations do not specifically implicate Wada Farms Marketing. The Court will dismiss the complaint as to Wada Farms Marketing but will grant plaintiffs leave to file an amended complaint to allege how Wada Farms Marketing is connected to the scheme. B. Licensor Defendants — Dole’s Motion to Dismiss Dole Food Company Inc. and Dole Fresh Vegetables are named as licensor defendants. See DPC ¶¶ 52-66; IPC ¶¶ 132-45. These defendants do not grow or sell their own potatoes. Rather, Dole Fresh Vegetables licenses Wada Farms Marketing the right to place the DOLE® label on Wada-grown potatoes. This licensing relationship has been in existence for roughly 15 years. The Dole defendants contend that because this is all they do (that is, license their brand name) they should be dismissed from this action. More specifically, Dole argues that plaintiffs fail to sufficiently allege it participated in the price-fixing/supply-reduction conspiracy alleged in the complaint. Dole also argues that plaintiffs fail to properly plead an agency relationship that would give rise to vicarious liability. (1). Direct Participation As to Dole’s allegedly direct participation in the scheme, there are just a few allegations. Both complaints allege: “During the Class Period, Dole Fresh Vegetables participated in the supply-restriction and price-fixing scheme ... alleged herein.” DPC ¶ 52; IPC ¶ 133; see also DPC ¶ 246; IPC ¶268 (alleging, parenthetically, that Dole Food was a “direct participant in the supply reduction scheme outlined herein These conclusory statements are not amplified with sufficient evidentiary factual allegations. Plaintiffs do not allege, for example, that Dole attended the supply-reduction meetings described in the complaint. Nor do plaintiffs allege that Dole “signed on” to any supply-reduction agreement reached at those meetings. Instead, the complaint rests almost entirely on the existence of the licensing arrangement described above. But the fact that Dole entered into a licensing agreement several years before the alleged conspiracy began does not sufficiently link Dole to the conspiracy. Nor are there any other allegations in the complaint that would allow the Court to infer that Dole directly participated in the alleged conspiracy. Although the allegations need not include elaborate detail, the complaint must allege that each individual defendant joined the conspiracy and played some role in it. After all, the hallmark of an antitrust conspiracy is a “common scheme designed to achieve an unlawful objective.” Monsanto, 465 U.S. at 764, 104 S.Ct. 1464, and each individual defendants’ conscious commitment to that scheme. (2). Agency Theory of Liability Given the deficiency of the direct-liability allegations, plaintiffs are left with their agency allegations. See generally Am. Soc. of Mech. Eng’rs v. Hydrolevel, 456 U.S. 556, 569, 102 S.Ct. 1935, 72 L.Ed.2d 330 (1982) (defendants may be held liable for Sherman Act violations under an agency theory of liability). As with other allegations in the complaint, plaintiffs are not permitted to rest on conclusory allegations to properly plead an agency relationship. See Acosta Orellana, 711 F.Supp.2d at 112 (formulaic recitations of the essential elements of agency will not suffice); Millar v. Pitman Bd. of Educ., 2011 WL 2417141 (D.N.J. June 13, 2011) (citing cases); Imageline, Inc. v. Cafe-Press.com, Inc., 2011 WL 1322525, at *4 (C.D.Cal. Apr. 6, 2011) (“To sufficiently plead an agency relationship, a plaintiff must allege facts demonstrating the principal’s control over its agent.”). The principles of agency law at issue here — actual authority and apparent authority — are well settled: “Actual authority consists of powers which a principal directly confers upon an agent, as well as those the principal causes or permits the agent to believe he or she possess.” 2A C.J.S. Agency § 133; see also Restatement (Third) Agency § 2.01 (2006); Sun Microsystems, Inc. v. Hynix Semiconductor Inc., 622 F.Supp.2d 890, 899 (N.D.Cal. 2009) (federal common law of agency applies, as guided by principles set forth in the Restatement of Agency). Apparent authority focuses on third parties. It arises when a third party reasonably believes that the putative agent had a