Jewel also owns this repackaging and distribution center in Franklin Park, IL.

 

 

 

Just over two years after the Tylenol poisonings, Jewel Foods was responsible for the largest outbreak of salmonella poisoning in U.S. history.

Of Microbes and Milk: Probing America's Worst Salmonella Outbreak

Chris Lecos

Large, refrigerated tanker trucks no longer rumble through the streets of Melrose Park, Ill., to Deliver their 40,000- to 50,000-pound loads of milk to the Hillfarm Dairy. The dairy at one time processed about 1.5 million pounds of milk a day, but not a drop has flowed through its maze of nearly five miles of stainless steel pipes almost a year now. The huge silo-like storage tanks that rise above the plant's rooftop are readily visible to any casual passer-by, but they stand there today as empty monuments to the worst outbreak of Salmonella food poisoning in U.S. history.

Located in a thriving industrial area of this Chicago suburb, the dairy was the sole supplier of milk to 217 supermarkets operated by the Jewel Food Stores chain in Illinois, Indiana, Iowa and Michigan. The dairy, also owned by the Jewel Company, had been producing milk there since 1968.

The outbreak that prompted the company to cease all dairy production on April 9, 1985, began with a scattered trickle of patients into Chicago-area hospitals and doctors' offices in late March. It ended with a torrent of sick men, women and children, all stricken by an organism identified as Salmonella typhimurium. One of its microbiological characteristics was its resistance to certain antibiotics.

At least 16,284 persons are known victims of the outbreak, all but 1,059 of them from Illinois. The others lived in Indiana, Iowa, Michigan, Minnesota and Wisconsin. That is the number of culture-confirmed cases, meaning the Salmonella typhimurium strain that was contaminating the milk they drank also was found in stool samples from the victims. Patricia J. Larsen, a spokeswoman for the Illinois Department of Public Health, said the organism "directly caused" the deaths of two persons and was a contributing factor in the deaths of four, possibly five, others. The latter were people with other conditions that "presumably were aggravated to some degree by the infection," she said.

Those are the official numbers, but most public health authorities agree that the actual totals are substantially higher. Many more people, it is believed, suffered diarrhea, fever, abdominal pain and cramps from drinking the milk but recovered quickly and never saw a doctor or reported their illness.

The Illinois outbreak triggered one of the most intensive investigations ever made of a milk-borne epidemic. What made it so frightening was the fact that thousands of people had become ill from drinking one of the most closely regulated products in the food supply. For years, milk has had the enviable record of being one of the nation’s safest foods because it was a pasteurized product.

It's not uncommon for unpasteurized milk to contain Salmonella or other organisms. But about 99 percent of the 280 million glasses of milk Americans drink every day is pasteurized. At most dairies, that means heating the milk to at least 161 degrees Fahrenheit for at least 15 seconds and then quickly cooling it--thus destroying microorganisms that could contaminate the milk. Milk safety experts with the Food and Drug Administration point out that less than 1 percent of all outbreaks of food poisoning reported in the past decade were caused by milk. And over the past 30 years, about 95 percent of those milk-related food poisoning incidents that did occur involved upnasteurized milk.

At the Hillfarm Dairy it was pasteurized, 2 percent (low-fat) milk produced under two brand names--Bluebrook and Hillfarm--that caused so many to become ill with Salmonella poisoning.

But when the investigation into the poisonings began, there was no certainty that the outbreak was due solely to low-fat milk, although it was the one product that many of the victims said they had consumed.

As investigators began their probe to find the source of the contamination, countless questions begged for answers:

Where did this unusual strain of Salmonella come from? Did it originate at one of the dairy farms that supplied the milk to Hillfarm? Was it brought into the plant by an unsanitized truck? Was the milk originally so contaminated that enough bacteria survived the plant's pasteurization process to contaminate the finished product? Was the contaminating organism resistant to heat treatment? Did someone purposely, or accidentally, introduce the organism into the plant?

The investigation determined that the same organism had caused at least three outbreaks of food poisoning in the spring of 1985 and other smaller, scattered outbreaks dating back to June 1984. Investigators believe an August 1984 outbreak, in which 200 people became ill, probably was related to consumption of Hillfarm products. However, later investigation failed to provide enough evidence for investigators to claim that the other 1984 incidents were similarly linked. Such reoccurrence, however, did raise the possibility that the organism had somehow persisted within the plant's environment for many months. What made it possible for this organism to intermittently--but not regularly--contaminate 2 percent milk but not whole or skim milk or any other products (chocolate milk, cottage cheese, ice cream, etc.) produced by Hillfarm?

These were just some of the questions that confronted state and federal investigators, and later a special task force of experts, who swarned all over this dairy last year searching for the cause of the outbreak.

Last years' outbreak had its beginning with the low-fat milk produced on March 20, a Wednesday. By the following weekend, small numbers of people were entering Chicago-area hospitals complaining of fever, cramps, stomach pains and diarrhea. Almost another week would elapse before it was apparent that a major outbreak was developing. Analysis of stool cultures, which takes several days to complete, confirmed that this scattering to victims had a common link: All were stricken by Salmonella typhimurium. The other common denominator, obtained by interviewing the victims, was the low-fat milk that many said they had drunk.

On April, the Illinois public health department issued its first warning that Bluebrook 2 percent milk produced on March 20 and bearing a shelf expiration date of March 29 posed a health hazard. By this time, there were at least 300 suspected Salmonella cases in five Chicago-area counties. As the number of victims swelled, it became apparent that two more outbreaks were developing among people who drank the dairy's other, Hillfarm brand of 2 percent milk that was produced on March 30 and April 8. On April 9, the Jewel company ceased all dairy production.

When it became that the outbreak was getting more serious with each passing day, the investigation started by state public health authorities, assisted by their federal counterparts, was turned over to a 22-member task force appointed by Illinois Inspector General Jeremy D. Margolis. Formed April 19, 10 days after the plant's closing, the task force included scientists, engineers and other experts from FDA, the U.S. Centers for Disease Control, and the Illinois public health department, as well as consultants and specialists from the private sector, including key employees of the Hillfarm Dairy. Jerome J. Kozak, chief of FDA's Milk Safety Branch In Washington, D.C., was named to oversee the task force's day-to-day operations.

"The Jewel company literally turned over the entire plant to us," Kozak said. "Anything we wanted, any record, anything they could do to help find out what had occurred, we were given. We could go to the person responsible in the plant for an explanation of what occurred at specific times, dates and places. If there was any reticence by plant employees to talk to us, there were plant superiors there to assure the employees they could talk to us without fear of retribution."

Hillfarm had enjoyed the reputation of being a well-run dairy operation. Many of its processing functions were automatic and computer-controlled. The technology included an efficient CIP, or Clean-in-Place, system that, with the touch of the right buttons, sent cleaning and sanitizing solutions throughout the system. The 170,000 gallons of milk that it processed each day usually were delivered to Jewel's supermarkets within two days after production. Al the finished milk products carried a shelf expiration date, or "pull date." That meant the milk had been produced nine days earlier--a fact that enabled investigators to pinpoint the different batches and brands of contaminated milk.

The task force went to extraordinary lengths to find the cause of the outbreak during its five-month probe.

The group met in a "war room" in the plant and methodically set out to prove or disprove a wide array of theories that might account for the outbreak.

Company records were meticulously checked so that the task force could reconstruct, as closely as possible, the operating procedures of the plant. The plant's equipment was taken apart almost piece by piece. Its storage tanks for unpasteurized and pasteurized milk, pasteurizing equipment, pipelines milke fillers and other major pieces of equipment were examined for physical defects. In addition, thousands of samples were collected for laboratory analysis. Both physical and laboratory examinations were made of valves, pipes, gaskets, packaging materials, and even the ink on the packages. The plant's compressed air and water systems, conveyors, floors, sewers, and even its roof were examined. In effect, the entire plant environment was exposed to the scientific and engineering scrutiny of the investigators.

In addition, all of the plant's milk sources--dairy farms in Wisconsin, Illinois and michigan--were checked to see if the Salmonella typhimurium strain could be found. It wasn't. Tanker trucks--which are tagged to show when they were last cleaned and sanitized--were selectively checked. Some were not tagged properly, and the task force noted that it could not exclude all the trucks, or some of the products shipped in them, as a possible means of bringing the organism into the plant.

Elaborate tests were done to uncover possible defects in equipment.

For example, all the milk storage tanks were tested with colored dyes and checked for hairline cracks and pinholes that could serve as bacterial breeding grounds. The tanks are 15 to 55 feet high. The tests required the erection of scaffolding in the tank interiors. During the examination of the tank that held pasteurized skim milk, several suspicious areas were found about 20 feet up from the bottom. Four-inch holes were cut into the tank and foam insulation for any evidence of milk residue or moisture leakage. There was none.

The task force also ruled out any possibility that the pasteurization system was overwhelmed by huge doses of Salmonella-contaminated milk. Only an enormous dose of Salmonella--estimated at 1 trillion organisms per milliliter--could theoretically enable a few organisms to survive the plant's pasteurization process. "In practice," the report said, "this level cannot be achieved. . ."

The investigators' concern that the strain may have been resistant to heat also was ruled out after tests by FDA and other microbiological experts. An employee could have been a chronic carrier of the Salmonella organism but, the task force concluded after testing the employees, this also was unlikely.

The investigation of the sabotage theory, which had received considerable publicity, also involved Illinois state police, who interviewed 129 plant employees and former employees. Many were given lie detector tests. The report noted that a person or persons with a culture of Salmonella typhimurium would need access to, as well as a thorough knowledge of, the plant and its operation and then be able to "commit a series of intentional acts"--undetected--in order to contaminate the milk on an intermittent basis on at least three production dates in 1985 as well as during the year before. No significant leads or evidence of sabotage were found.

In the end, the task force was unable to unearth any evidence within the plant of the existence of the same Salmonella typhimurium strain that was causing the food poisonings. Nor could it prove how the bacteria got into the plant in the first place to contaminate the low-fat milk.

A report released by the task force on Sept. 14 disclosed various defects in the plant's operation and equipment and, more importantly, what the investigators felt were the most likely causes of the outbreak. But while "potential problems" were identified in the plant, the task force was unable "to reconstruct an unbroken chain of probable events that led to intermittent contamination" of the dairy's low-fat milk products. A "combination of defects" probably played a role in causing the oubreak, according to the report.

The task force concluded that the most likely source of the outbreak was a stainless steel pipe called a cross-connection. The pipe, about 10 feet long, was linked on one side to piping that carried unpasteurized milk and on the other o pipes carrying pasteurized skim milk. (The connection is also called a skim milk transfer line.) Valves at each end were supported to prevent unpasteurized milk from mixing with pasteurized products.

Investigators suspected the cross-connection early on, after it was discovered by Charles Price, the senior regional milk specialist from FDA's Chicago office, when he went to the plant on April 2. Price discovered that sometime in the past the Hillfarm Dairy had converted one of its raw milk storage tanks into a tank for storing pasteurized skim milk. Tracing the piping from the tank, he found the cross-connection.

The cross-connection was a "modification" to the plant's original engineering design and had been installed sometime between 1975 and 1979. It had several functions. It was used when the dairy wanted to route pasteurized skim milk from the storage tank for use with such products as ice cream. If there wad contaminated skim milk in the line, it did not affect those products becuase they were pasteurized afterwards. The cross-connection also was used at the end of a day's production to remove for reprocessing whatever milk was left over in the pasteurized skim milk tank.

"Just because it was there," Kozak pointed out, "did not mean it caused the contamination. There was still a question of figuring and demonstrating how contaminated milk could get through the cross-connection and then into the pasteurized skim milk line." Presumably, this was supposed to be prevented by appropriate shut-offs.

So another elaborate test was undertaken. Like other U.S. dairies, Hillfarm employed what is known as a post-pasteurization blending process to produce its low-fat (2 percent) milk--the type linked to the outbreak of the illness. This involves blending already pasteurized whole milk (3.25 percent or more milk fat) with already pasteurized whole milk (3.25 percent or more milk fat) with already pasteurization was done since the process involved the mixing of already pasteurized products. Post-pasteurization blending is not uncommon; some dairies around the country have used the process for more than 20 years.

To test the blending system, thousands of gallons of colored water were pumped into a storage tank for unpasteurized milk. Clear water was used in the storage tank for pasteurized skim milk. When the pump for the blending system was activated, an inspection of the cross-connection revealed "a mixture of clear and colored water," thus indicating, the task force report said, that "products on the raw side of the valve cluster could be commingled with pasteurized skim milk in the skim milk transfer line," or cross-connection.

The test showed that small amounts of milk could collect in the cross-connection and remain there long enough for bacteria to multiply. Even a cupful, said one scientist, would be enough. But how did the milk, even though contaminated, get past the shut-off valves into the pasteurized skim milk lines?

Tests demonstrated that when the processing system for producing low-fat milk activated, the pasteurized skim milk was pumped at such a high speed from the skim milk tank to the blending lines that it created a vacuum. According to Kozak:

"We were able to prove that when the pump was put into operation--that is, when you started pulling product out of the pasteurized skim milk tank at a high volume--it created such a tremendous suction that potentially contaminated product which was already in the cross-section, and just at there, could then be sucked into the line for pasteurized skim milk during blending."

This was a possible explanation for the outbreaks that occurred from milk produced on March 20 and March 30. But it did not necessarily account for the contaminated milk found in the April 8 production, for the investigators knew that the cross-connection, upon its discovery April 2, had been disconnected the following day. A plant employee told the taks force that the transfer line was reconnected on the evening of April 7 by a worker who did not know it was supposed to remain disconnected. However, another plant employee said he discovered the reconnected pipe and again disconnected it--before any low-fat milk was produced on April 8.

But another avenue for contaminated milk to get into the cross-connection was found by the task force. This route involved the plant's reclaiming milk that, for various reasons, was unsuitable for delivery to stores and was not supposed to leave the plant. This milk was salvaged for use with such plant products as ice cream. (However, it was Hillfarm's policy, the report said, not to reclaim any milk that was unsold and returned from the supermarkets.)

On a typical day, the Hillfarm Dairy would take the packaged milk that had been produced, load it onto pallets, and move it to coolers where it would remain until it was trucked to the supermarkets. When a forklift would raise a pallet load of milk, it was not uncommon for cartons to tip over, fall on the floor, or suffer other damage. That made it possible for carton exteriors to become contaminated. Rather than selectively remove the undeliverable cartons, it was easier for the dairy to move the entire pallet to a section of the cooler for later salvaging. Milk in damaged cartons was disposed of, but the milk in other cartons involved in such incidents was reprocessed.

When it came time to reprocess this milk, the carton would be opened and the contents dumped into a vat. FDA officials were critical of the employees' practice of emptying cartons by opening them by hand and banging them on the side of the vat.

All reclaimed milk was supposed to be repasteurized, but another test demonstrated that it was possible for some reclaimed milk to bypass the pasteurizing units and get into the cross-connection, where it would sit until it was drawn into the pasteurized skim milk piping during the blending for low-fat milk. However, for this so happen, the report stressed, two plug valves would have to have been turned to an "improper position." Some task force members believe the valves might have been unintentionally left in the wrong position after cleaning and sanitizing operations were completed and production was resumed.

Plant inventory records disclosed that a large volume of milk was reclaimed on March 19. This was milk that had accumulated during a week when the floor of the cooler was being ripped up to replace a sewer drain. The report notes that "some stacks of cases were reportedly tipped onto and into this construction area," and that it is "highly probable" that Bluebrook low-fat milk processed on March 20 and Hillfarm low-fat milk processed on March 30 "were brought back from the cooler to the production floor and reprocessed before it was known that these products were contaminated." Milk was being reclaimed until the plant ceased operations. So this was another possible means of contamination within the plant's environment and could have accounted for the contaminated production of April 8.

Yet another potential source of contamination existed.

In general, the plant's Clean-in-Place system was effective in cleaning and sanitizing the equipment, piping and other critical areas of the dairy operation. One exception was a T-shaped pipe connection leading from the pasteurized skim milk tank to the skim milk transfer line. It was still attached even after the cross-connection pipe had been disconnected. Tests showed that small amounts of milk could collect in the T-connection long enough for populations of Salmonella to multiply.

The T-connection had threated caps, and interviews with plant employees disclosed that a contaminated threaded cap to an unpasteurized milk line could have been removed and placed on a pasteurized milk line. Plant employees admitted "they were not aware . . . that it was necessary to remove the end cap of the valve and manually clean" the removed caps.

As the final report stresses, the task force's conclusions are theories that were backed by the findings of close physical examination of the plant and by a wide array of tests. Describing the task force's effort as "the most comprehensive dairy investigation ever undertaken," Illinois Inspector General Margolis noted in releasing the report last fall:

"This wasn't sabotage, this wasn't a superbug, this wasn't a failure of the pasteurization process. It was a unique microbiological engineering phenomenon."

Jewel at Fault for Outbreak

By Kathy Schaeffer Daily HERALD Staff Writer

A Cook County jury should slap Jewel Companies Inc. and its parent company with $33 million to $100 million in punitive damages because of the "reckless" handling of the April 1985 salmonella outbreak caused by Jewel milk, a lawyer for at least 18,000 salmonella victims said.

"The decisions made by Jewel and American Stores (A&P) were made on behalf of their own benefit and not their customers," attorney William Harte said during more than three hours of closing statements in the class-action case.  Harte said $33 million is about the same as one year of Jewel's net profits and about 5 percent of the company's net worth. He said the suggested $100 million is 10 percent of American Stores' net worth.

Jewel attorney Richard Phelan called the suggestion of $30 million to $100 million in damages "absolutely outrageous." Phelan said there is no way the jury can find that Jewel acted in a willful and wanton disregard for the public safety. In addition, Phelan reminded the jury that Jewel already has agreed to pay compensatory damages to all victims in the case. That includes money awards for pain and suffering in the past, present and future; disability and disfigurement; medical bills and lost wages.

"Not one of these persons will walk away without being fully and wholly compensated," Phelan said.

Compensatory damages, he said, will "take the person who has been injured and has suffered the disease and make them whole."

The SPECIAL DECEMBER 2005 GRAND JURY further charges:

1. The grand jury realleges and incorporates by reference paragraphs 1 through 41 of Count Two of this indictment as though fully set forth herein.

2. On or about September 2, 2005, in the Northern District of Illinois, Eastern Division, VITO R. SCAVO and

GARY MONTINO, defendants herein, for the purpose of executing and attempting to execute the above-described scheme, knowingly did cause to be delivered by the United States Postal Service according to the directions thereon, an envelope containing the security payment of Jewel Food Stores, a grocery store chain with a facility in Melrose Park that used security provided by DOD, for the period August 8, 2005, to August 21, 2005, which envelope was addressed to:

VITO R. SCAVO DBA D.O.D. SECURITY 280 BRADDOCK MELROSE PARK, IL 60160;

In violation of Title 18, United States Code, Sections 1341, 1346, and 2.

The indictment alleges that the former chief, Vito R. Scavo, and other defendants defrauded west suburban Melrose Park and its citizens by using police department personnel and property to operate several private security guard companies and provide personal services to Scavo; extorted village businesses into using security guard services provided by companies that Scavo and others controlled; and that Scavo committed individual and corporate tax fraud and improperly compensated police department employees who performed personal chores for him with compensatory time off that they had not earned.

 

Scavo, who was village police chief from 1995 until he resigned in September 2006, was charged with racketeering conspiracy along with Deputy Police Chief Gary Montino and Michael "Mickey" Caliendo, former civilian supervisor of part-time police officers.

 

As part of the alleged conspiracy, Scavo and two other defendants, Guy Ric Cervone, a former police lieutenant recently promoted to commander, and German Cepeda, a former police department janitor and current code enforcement inspector for the village, allegedly obstructed a grand jury investigation of their conduct and tampered with potential grand jury witnesses.

 

"Scavo exploited and preyed upon the businesses' fears that if they did not hire security through [him], he would use his official position to cause the businesses to suffer negative consequences," the indictment states. Scavo also charged the businesses more for security services than what they had previously been paying for security, knowing that they agreed to pay his rate to ensure no adverse consequences from police officers and Scavo himself, it adds.

 

Among the Melrose Park businesses named in the indictment that Scavo and certain codefendants allegedly defrauded and/or extorted are: Cinemark, Navistar, Jewel Food Stores, Allied Waste Services, Inc., and Lincoln Tech, as well as a bar, which was not identified by name. 

 

 

Recently Impeached Governor Rod Blagojevich Paid "Street Tax" to the Mob

 

 

 

 

 

 

 

 

422 F.2d 546

ASSOCIATED MILK DEALERS, INC., et al., Plaintiffs-Appellees,
v.
MILK DRIVERS UNION, LOCAL 753, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN & HELPERS OF AMERICA, Defendant-Appellant.

No. 17577.

United States Court of Appeals, Seventh Circuit.

February 6, 1970.

COPYRIGHT MATERIAL OMITTED Stephen A. Schiller, Solomon I. Hirsh, Joseph M. Jacobs, Albert Gore, Judith A. Lonnquist, Chicago, Ill., for defendant-appellant; Jacobs & Gore, Chicago, Ill., of counsel.

Robert E. Cronin, William B. Hanley, Chicago, Ill., for plaintiffs-appellees; MacDonald & Hanley, Chicago, Ill., of counsel.

Before DUFFY, Senior Circuit Judge, and SWYGERT and FAIRCHILD, Circuit Judges.

SWYGERT, Circuit Judge.

 

1

This appeal concerns a suit brought under section 301(a) of the Labor-Management Relations Act, 29 U.S.C. § 185(a), by the Associated Milk Dealers, Inc., (AMDI), a trade association of milk dealers, against the Milk Drivers Union, Local 753, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America. Various dairies, allegedly members of AMDI, intervened as plaintiffs. The suit alleged that the union breached its collective bargaining agreement, a standard Chicago area contract with individual dairies, by refusing to submit a dispute to arbitration. The district court granted plaintiffs' motion for summary judgment and ordered the union to comply with the grievance and arbitration provisions of the agreement. Because genuine issues of material fact exist concerning the duty of the union to arbitrate the dispute in question and concerning the legality of the agreement under the antitrust laws, we reverse the district court's grant of summary judgment and remand for trial.

2

The appellant union represents delivery men employed by dairies and milk dealers in the Chicago area. The appellee, AMDI, is a nonprofit corporation which represents independently owned milk dealers in negotiating collective bargaining agreements with labor organizations. When a standard area contract is arrived at by the union and AMDI, individual milk dealers and not AMDI sign the agreement.

3

In February 1967 the union entered into negotiations for a new standard area contract. AMDI and another employer association, Chicago Area Dairymen's Association, (CADA), as well as a number of individual employers participated in the discussions. On August 29, 1967 AMDI, CADA, and the union signed a memorandum evidencing agreement to changes in the former contract. Copies signed by the union were sent to each employer for signature. The contract, effective from May 1967 to May 1970, was signed by the individual dealer plaintiffs in this action.

4

The new contract, as set out in the memorandum, contained the following provision:

5

The Union shall furnish the Dealers a letter of understanding that if certain conditions come into the market which would create an inequitable situation relative to store operations, they would meet with the dealers for the purpose of negotiating an appropriate adjustment of the situation.

6

Pursuant to this provision, a memorandum of understanding was executed by AMDI, CADA, and the union on October 6, 1967. The memorandum reads in pertinent part:

7

If certain conditions come into the market, which would create an inequitous (sic) situation relative to the store operations, or a similar situation effecting retail, the Union will meet with the Dealers upon written request for the purpose of negotiating an appropriate adjustment of the situation.

8

Although the parties differ as to the effect to be given the contract provision and the memorandum of understanding, they seem to agree that both writings contemplated the entry of Jewel Food Stores into the milk processing market in Chicago.

9

On July 11, 1968 the union entered into an agreement with Hillfarm Dairy of the Jewel Food Stores Division, Jewel Companies, Inc. Hillfarm is a milk processor wholly owned by Jewel and serves Jewel Food Stores exclusively. The union contract with Hillfarm differed substantially from the standard area contract entered into the year before with the independent milk dealers.

10

On July 25, 1968 William B. Hanley, attorney for AMDI, stated in a letter to the union that many provisions of the Hillfarm contract were more advantageous than those in the standard area contract and that the milk dealers would adopt those terms pursuant to Article 20, the "most favored nation" clause, in their contract. Article 20 reads as follows:

11

Should the Union hereafter enter into any agreement with any milk dealer upon terms and conditions more advantageous to such dealer than the terms and conditions of this Agreement, or should the Union sanction a course of conduct by any milk dealer who has signed this form of agreement enabling him to operate under more advantageous terms and conditions than those provided for in this Agreement the Employer shall be entitled to adopt such terms and conditions in lieu of those contained in this Agreement.

12

At a meeting on July 30 the union refused to accede to this demand, maintaining among other things that the memorandum of understanding governed any inconsistencies between the standard area contract and the Hillfarm contract and that it was prepared to negotiate as required by the memorandum. On August 2, AMDI and CADA requested1 that the union comply with Article 6 of the standard area contract which provides:

13

Any matter in dispute, between the Union and Employer [excepting wages and hours, as set forth in Articles 4, 37 and 41, and contributions to all existing Funds, as set forth in Articles 45, 47 and 48 and questions of jurisdictional matters, as decided by Teamsters Joint Council No. 25, which cannot be settled], shall be referred by either party to an Industry Labor Committee consisting of three [3] representatives of Employers, parties to this Agreement, and three [3] representatives of the Union. It shall be the duty of this Committee to hear and dispose of all complaints raised by either party to this Agreement concerning violations thereof that cannot be settled amicably between the parties. If this Committee is equally divided on any such complaint the Chief Justice of the Circuit Court or his nominee shall be called in to act as the impartial member of said Committee, and his decision shall be final. No action shall be taken by either party to the Agreement pending the decision of this Committee.

14

The union refused.

15

On August 20, AMDI filed this suit.2 requesting that an arbitrator be appointed to determine whether Article 20 of the contract provided for adoption by its members of the more favorable terms contained in the Hillfarm contract. After various preliminary motions, the district court characterized the dispute between the parties as whether Hillfarm was a "milk dealer" within the terms of Article 20 of the contract. At the court's suggestion AMDI moved for summary judgment. On February 24, 1969 the district court granted the motion and ordered the union to comply with Article 6.

16

We think the standard area contract and the memorandum of understanding issued pursuant to it present genuine issues of material fact concerning whether the parties agreed to arbitrate disputes arising out of the contract between Hillfarm and the union. The district court's findings in support of its order, announced from the bench, did not mention the memorandum of understanding and instead relied only upon the broad language of Article 6, the arbitration clause. The court's reliance upon Article 6 can be interpreted in two ways: (1) that under the broad language of Article 6, the question of arbitrability was for the arbitrator and not the court; or (2) that the memorandum of understanding and the similar contract clause were not sufficiently specific for the court to rule that these provisions were designed to exclude arbitration over the dispute concerning the contract between Hillfarm and the union.

17

The language of Article 6 is not so broad as to make arbitrability a question for the arbitrator. Though strongly favoring arbitration, the Supreme Court in John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 547, 84 S.Ct. 909, 913, 11 L.Ed.2d 898 (1964), stated, "[t]he duty to arbitrate being of contractual origin, a compulsory submission to arbitration cannot precede judicial determination that the collective bargaining agreement does in fact create such a duty." The district court must determine whether the dispute between the parties is arbitrable, United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 4 L. Ed.2d 1409 (1960), unless the parties voluntarily submit arbitrability to the arbitrator. Metal Products Workers Union, Local 1645 v. Torrington Co., 358 F.2d 103, 105 (2d Cir.1966). The party claiming that arbitrability is for the arbitrator to decide bears the burden of proof and must show that the contract clearly manifests such an intention, United Steelworkers v. Warrior & Gulf Navigation Co., supra 363 U.S. at 583 n. 7, 80 S.Ct. 1347. AMDI has not satisfied this burden. The reference in Article 6 to "[a]ny matter in dispute" is insufficient, without further evidence of intent or express mention of the question of arbitrability, to demonstrate that the parties intended the arbitrator to decide arbitrability. Strauss v. Silvercup Bakers, Inc., 353 F.2d 555, 557 (2d Cir. 1965); Torrington Co. v. Metal Products Workers Union, Local 1645, 347 F. 2d 93, 96 (2d Cir.1965). See also Drake Bakeries, Inc. v. Local 50, American Bakery & Confectionery Workers, 370 U.S. 254, 82 S.Ct. 1346, 8 L.Ed.2d 474 (1962).

18

The district court should have allowed the parties to submit evidence concerning the effect to be given to the memorandum of understanding and the similar contract provision.3 The Supreme Court has recognized that a contract clause or a written collateral agreement can exclude disputes from arbitration, United Steelworkers v. Warrior & Gulf Navigation Co., supra at 584, 80 S.Ct. 1347.4 We think the contract and the memorandum of understanding here contemplate just such an exclusion although its scope is uncertain. Reference in the contract to meetings "with the dealers for the purpose of negotiating an appropriate adjustment of the situation" and in the memorandum of understanding to a similar meeting at the request of the dealers suggest negotiation through collective bargaining and not arbitration. The fact that Jewel or Hillfarm was not specifically mentioned is immaterial since both parties agree that the provisions in some way pertain to Jewel.

19

The Supreme Court has held, however, that language to exclude a dispute from arbitration must be specific, United Steelworkers v. Warrior & Gulf Navigation Co., supra at 585, 80 S.Ct. 1347; Sheet Metal Workers v. Barber-Colman Co., 379 F.2d 533, 536 (7th Cir. 1967). As the Second Circuit said when confronted with the same problem, "* * * it is not clear how specific the provision must be in order to have this effect." Strauss v. Silvercup Bakers, Inc., supra 353 F.2d at 557.

20

AMDI contends that the standard area contract and the memorandum of understanding issued pursuant thereto called for negotiations only if Hillfarm signed a contract with a different union. In contrast, the union maintains that the contract provision and the memorandum contemplated negotiations concerning all disputes arising out of the entry of Jewel into the Chicago milk processing market. Both interpretations of the contract and memorandum of understanding are reasonable and plausible. The fact that two interpretations exist, one which would permit and the other prevent arbitration, does not mean that the district court must order the parties to proceed to arbitration. Strauss v. Silvercup Bakers, Inc., supra at 558. Bargaining history is relevant in determining whether parties intended to submit a particular dispute to arbitration. We have previously held that such evidence is admissible in an action to compel arbitration under section 301(a), Local 483, International Brotherhood of Boilermakers v. Shell Oil Co., 369 F.2d 526, 528 (7th Cir.1966); General Teamsters, Local 782 v. Blue Cab Co., 353 F.2d 687, 690 (7th Cir.1965). Here the district court should have considered parol evidence in order to determine the extent of the contractual duty to arbitrate under the contract and the memorandum of understanding.

21

In reaching this conclusion we are not unmindful of the broad caveat in Supreme Court decisions against court interpretation of substantive provisions of collective bargaining agreements and consideration of the merits of a dispute through the interpretation of an arbitration clause. United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960); United Steelworkers v. Warrior & Gulf Navigation Co., supra. The question which the district court must decide upon remand of this case does not concern the merits of the dispute between AMDI and the union. Bargaining history concerning the merits of the dispute need not be considered, Local 12298, United Mine Workers v. Bridgeport Gas Co., 328 F.2d 381 (2d Cir.1964). The district court will not be required to interpret a broad exclusionary clause, (e. g., concerning management's right to contract out work or to discharge employees) which inevitably involves consideration of the merits of the dispute; rather the court is called upon only to determine whether the parties intended to exclude a limited and particular dispute from arbitration. Regardless of the district court's ruling on arbitrability after evidence is presented, interpretation of Article 20 of the contract by an arbitrator in this or future cases will not be affected.

22

The union has presented another contention on this appeal which should be considered on remand of this case. The union argues that the most favored nation clause in the standard area contract violates the Sherman Act under United Mine Workers v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965), and that the illegality of that clause constitutes a defense to its duty to arbitrate. The district court summarily dismissed this contention without stating reasons. In so doing we hold the district court erred.

23

Illegality under the Sherman Act is a defense of very limited applicability in an action based on contract. Kelly v. Kosuga, 358 U.S. 516, 518, 79 S.Ct. 429, 3 L.Ed.2d 475 (1959); Wilder Manufacturing Co. v. Corn Products Refining Co., 236 U.S. 165, 35 S.Ct. 398, 59 L.Ed. 520 (1915). The same rule applies to labor contracts, Lewis v. Seanor Coal Co., 382 F.2d 437, 441 (3d Cir. 1967). A claim that the contract violates the Sherman Act is properly allowed as a defense to the enforcement of contractual duties only when the failure to do so would "make the courts a party to the carrying out of one of the very restraints forbidden by the Sherman Act." Kelly v. Kosuga, supra 358 U.S. at 520, 79 S.Ct. at 432; Continental Wall Paper Co. v. Louis Voight & Sons Co., 212 U.S. 227, 261, 29 S.Ct. 280, 53 L.Ed. 486 (1909).

24

Under this exception the illegality of a labor contract clause under the antitrust laws can be asserted as a defense to the duty to arbitrate concerning the interpretation to be given the provisions of the illegal clause. Although the court does not actually enforce the illegal provisions of the contract until the parties seek enforcement of the arbitrator's award, the court, by ordering arbitration, gives significant practical effect to the illegal clause. Furthermore, to await the arbitrator's award before allowing the defense of illegality to be raised would be contrary to sound policy. Illegality under the antitrust laws concerns broad public interests transcending the private objectives of the parties. To discourage private enforcement by requiring the parties to await the arbitrator's decision would be contrary to the objectives of the Sherman Act. Cf. Perma Life Mufflers, Inc. v. International Parts Corp., 392 U.S. 134, 88 S.Ct. 1981, 20 L.Ed.2d 982 (1968).

25

AMDI urges that violations of the antitrust laws could be considered by the arbitrator. We disagree. Arbitrators are ill-equipped to interpret the antitrust laws and their consideration of possible violations would add little. Indeed an agreement requiring arbitration of private antitrust claims would probably be unenforceable, Silvercup Bakers, Inc. v. Fink Baking Corp., 273 F.Supp. 159, 162 (S.D.N.Y.1967). Thus we hold that if the union can establish that Article 20, the most favored nation clause, is illegal under United Mine Workers v. Pennington, supra, arbitration of the dispute between the parties is not required.

26

In asserting that Article 20 violates the Sherman Act under the Pennington case, the union makes two arguments: (1) that most favored nation clauses are per se invalid under Pennington;5 and (2) that the district court erred in refusing to allow the union to submit evidence concerning the similarity of a most favored nation clause to the agreement in the Pennington case and concerning the intent of the parties in negotiating Article 20. We hold that most favored nation clauses are not invalid per se, but remand to allow the union to present evidence concerning its second argument.

27

In its per se argument the union relies heavily on the words of Mr. Justice White whose opinion represents the views of three Justices in the Pennington case. According to the union's interpretation, a per se violation of the Sherman Act occurs whenever a union engaged in multiemployer bargaining agrees to impose the provisions of a contract between union and some employers upon other employers who are not parties to the contract. The union argues that this rule applies without regard to the purpose of the parties to the contract in imposing restrictions on the union's freedom to deal with employers not parties to the contract. It further maintains that the rule also applies to most favored nation clauses even though the restriction on a union's freedom to bargain is imposed indirectly rather than directly as in Pennington.

28

We do not think the Pennington case stands for the broad rule advanced by the union. Although some of the language of Mr. Justice White's opinion may lend support to the union's position, the actual holding of Pennington requires proof of the predatory purpose of the agreement between a union and the employers. Much of Mr. Justice White's opinion concerns itself with the scope of the labor exemption from the antitrust laws rather than with the elements required to make out a violation.6 In holding that a violation could be proved on the basis of the evidence presented to the district court, however, Mr. Justice White emphasized the anticompetitive purpose of the United Mine Workers and the large coal operators in entering into the National Bituminous Coal Agreement. Furthermore, he relied also upon various other devices employed by the defendants to injure the plaintiff. United Mine Workers v. Pennington, supra. Mr. Justice Douglas, whose opinion also represents the views of three Justices, interprets Mr. Justice White's opinion as requiring proof of predatory purpose. Thus although collective bargaining agreements with extra-unit effects constitute prima facie evidence of illegality, the jury can find a violation only if it is proved that the agreement "* * * was made for the purpose of forcing some employers out of business." United Mine Workers v. Pennington, supra, 381 U.S. at 673, 85 S.Ct. at 1595. According to Mr. Justice Goldberg, whose concurring opinion in Pennington represents the views of the remaining three Justices, any other interpretation would run directly counter to the Congressional policy in favor of uniform wages and working conditions which prompted the enactment of the National Labor Relations Act, 381 U.S. 657, 699, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965). Therefore, a majority of the Supreme Court in Pennington requires proof of predatory purpose as a prerequisite to finding that a most favored nation clause violates the antitrust laws. Cf. Allen Bradley Co. v. Local 3, International Brotherhood of Electrical Workers, 325 U.S. 797, 65 S.Ct. 1533, 89 L.Ed. 1939 (1945).

29

We believe the holding of Pennington also requires demonstration that most favored nation clauses operate in the same restrictive fashion as the agreement in that case. Without such proof we hesitate to say that the effect on competition is the same. Furthermore in this difficult area of conflict between labor and antitrust policy, appropriate policy considerations are best developed in a particular factual context.

30

Although the union has failed to demonstrate that most favored nation clauses are per se violations of the antitrust laws, the district court nevertheless erred in granting summary judgment on the union's antitrust claim. As previously indicated, compelling proof concerning the purpose of the adoption of Article 20 and its anticompetitive effect would be sufficient to make out a violation. In the district court the union requested an opportunity to present such evidence but was refused. In antitrust cases where, as here, intent and purpose play important roles, summary procedures should be avoided. Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962). We remand to allow the union to present evidence7 on these questions.

31

The union raises a final point which deserves only brief mention. Since AMDI was not a party to the agreement between the milk dealers and the union, the union urges that this suit should have been dismissed by the district court or in the alternative AMDI should have been dismissed as a plaintiff. We disagree. Assuming without deciding that AMDI was not a proper plaintiff to enforce the terms of the standard area contract, such a defect was cured by the addition of various milk dealers, all parties to the contract, as plaintiffs. The continued presence of AMDI as a plaintiff after that point was at most a harmless misjoinder of parties.

32

The union further maintains, without citing authority, that a demand for arbitration is a precondition to commencement of a suit under section 301(a). The union presented affidavits to demonstrate that Mr. Hanley, attorney for AMDI, was without authority to represent milk dealers concerning disputes in the interpretation of the standard area contract and that at no time was he empowered to demand arbitration on behalf of individual milk dealers. We think the authority of Mr. Hanley is irrelevant.8 Assuming arguendo that a demand for arbitration is required, we hold that the presence of milk dealers as plaintiffs constitutes a sufficient demand for arbitration in this case. A demand for arbitration serves only to provide notice of the nature of the dispute and to allow the party to comply before the commencement of costly litigation. The demand for arbitration by AMDI served this purpose. To require individual milk dealers to make perfunctory demands upon the union before joining as plaintiffs would be an excessively technical and meaningless gesture. Thus on remand this argument need not be reconsidered.

33

For these reasons the entry of summary judgment by the district court is reversed and this case is remanded for trial.

Notes:

1

The demand was made in a letter sent jointly by Mr. Hanley, and Morgan F. Murphy, Jr., attorney for CADA, which read in pertinent part:

We have now been informed through our meeting of July 30, and Mr. Jacob's letter of July 29, that we are not in agreement either as to the interpretation and application of Article 20 of our contract or as to our understandings reached through the process of our last collective bargaining sessions.

Therefore, we request compliance with Article 6 of our Agreement which provides a method of settling disputes over terms and conditions of our Agreement.

2

On August 23, 1968 CADA filed a similar suit against the union. On September 9 the CADA suit was consolidated with AMDI's, but on January 23, 1969 CADA sought and obtained an order of voluntary nonsuit of its cause

3

The fact that the terms of Article 20 were previously held to be arbitrable under Article 6, Sidney Wanzer & Sons, Inc. v. Milk Drivers Union, Local 753, 249 F.Supp. 664 (N.D.Ill.1966), is therefore not determinative of the issue before the district court

4

In Torrington Co. v. Metal Products Workers Union, Local 1645,supra, the Second Circuit held that an oral collateral agreement was sufficient to exclude matters from arbitration.

5

See generally Comment, Labor's Antitrust Exemption After Pennington and Jewel Tea, 66 Colum.L.Rev. 742 (1966); B. Meltzer, Labor Unions, Collective Bargaining and the Antitrust Laws, 32 U. Chi.L.Rev. 659 (1965).

6

Mr. Justice White described the scope of the labor exemption from the antitrust laws as follows:

"We have said that a union may make wage agreements with a multi-employer bargaining unit and may in pursuance of its own union interests seek to obtain the same terms from other employers. * * * But we think a union forfeits its exemption from the antitrust laws when it is clearly shown that it has agreed with one set of employers to impose a certain wage scale on other bargaining units." United Mine Workers v. Pennington, supra.

7

Remand of this case will allow AMDI also to present evidence. Evidence may be introduced concerning the relationship of Perma Life Mufflers, Inc. v. International Parts Corp.,supra, to the union's antitrust claim in this case. Cf. Jewel Tea Co. v. Associated Food Retailers of Greater Chicago, 331 F.2d 547, 550-551 (7th Cir. 1964), rev'd on other grounds, sub nom., Local 189, Amalgamated Meat Cutters, AFL-CIO v. Jewel Tea Co., 381 U.S. 676, 85 S.Ct. 1596, 14 L.Ed.2d 640 (1965).

8

Thus the conflict concerning Mr. Hanley's authority which clearly appears when the affidavits of Anthony Christiano, Robert Sugarman, and Albert Gore are compared with the testimony of Walter Hedin, John Linton, and Peter McCormick is not a material factual dispute requiring reversal under Fed.R.Civ. P. 56(c)