Opinion ID: 195073
Heading Depth: 2
Heading Rank: 3

Heading: Allegations of Competitive Injury.

Text: 19 Since the proposed second amended complaint did not address the perceived deficiencies in the first amended complaint, and the district court did not elaborate on its reasons for denying the motion to amend, we assume that the court considered the proposed amendment futile. See Correa-Martinez v. Arrillaga-Belendez, 903 F.2d 49, 59 (1st Cir.1990). Accordingly, setting to one side the first amended complaint, we inquire whether the second amended complaint alleged an actual or imminent injury-in-fact proximately caused by the challenged pricing order. Id. (suggesting that denial of motion to amend constitutes abuse of discretion if no justification appears). 20 The second amended complaint, paraphrased, alleges that the following chain of economic events will result in appellants' loss of future income, profits, and business opportunities: 21 All milk currently produced by appellants is sold in the Massachusetts milk market in direct competition with Massachusetts milk producers. As a direct consequence of the differential assessments Massachusetts milk dealers must pay into the Fund for each cwt purchased from producers, 9 consumer milk prices in Massachusetts will rise since dealers, in all likelihood, will pass along at least some portion of their increased costs to Massachusetts consumers. 10 22 Consumer demand will decrease as prices increase. In this shrinking market, Massachusetts dealers will continue to buy all available milk produced in Massachusetts, because of their preference  for local supplies, due to the lower transportation costs and lesser producer-to-consumer delivery time (perishability being a major industry concern). Higher milk prices and increased disbursements from the Fund will induce greater milk production by Massachusetts producers, thereby lowering the current 90% Massachusetts market share enjoyed by out-of-state producers. Moreover, even if Massachusetts milk prices were to remain relatively stable, individual Massachusetts producers would have a strong incentive to increase production over their fellow home state dairy farmers, since Fund disbursements are based on each producer's relative share of overall Massachusetts milk production. 23 As Massachusetts producers increase their market share, out-of-state milk will be displaced, and overflow into interstate commerce. These resulting surplus interstate supplies will deflate the federal blend or minimum price under Order No. 1. Since appellants previously sold their entire milk production in Massachusetts, some of their out-of-state milk will be displaced by Massachusetts-produced milk. As Massachusetts consumer demand decreases, out-of-state producers will no longer be able to command the same premium prices (in excess of the federal blend price) received before the challenged pricing order. See supra note 3. Massachusetts producers will be insulated from any federal blend-price deflation, because, under the Fund's collection formula the greater the gap between $15 and the federal blend price, the larger the differential assessments Massachusetts dealers must pay into the Fund, and therefore, the larger the Fund disbursements to Massachusetts producers (but not to out-of-state producers). Unless remedied, the challenged pricing order eventually would lead to the failure and closure of appellants' businesses. 11 24