Judge Denies Dean Foods' Motion to Dismiss Antitrust Case

Judge Denies Dean Foods' Motion to Dismiss Antitrust Case
Posted by Dave on April 7, 2010

By Kerry Panchuck

A federal judge in Milwaukee has denied Dean Foods’ motion to dismiss an antitrust case filed against the Dallas-based dairy company by the United States Department of Justice.

Dean Foods attempted to get the suit thrown out of court, alleging the Department of Justice failed to include facts in its complaint that could legally support the case going forward.

A judge denied Dean Foods’ motion to dismiss, but did slam the DOJ for how the complaint against Dean was laid out. The court in its conclusion said, “In today’s world, structural issues, together with a lack of specificity in content associated with the underlying complaint, simply do not measure up to that which any court would reasonably expect in draftsmanship from an experienced litigator.”

The motion to dismiss was filed in relation to the DOJ’s antitrust suit, which it filed earlier this year.

The suit alleged that Dean Foods’ recent acquisition of the Foremost Farms USA Consumer Products Division created unfair competition that may drive up milk prices for retailers and school districts in Illinois, Michigan and Wisconsin.

Dallas-based Dean Foods and Foremost Farms are both dairy processors that purchase raw milk to pasteurize and package.

In the 2009 transaction, Dean Foods acquired two dairy process plants: one in De Pere and one in Waukesha, Wis. The Justice Department alleged that this acquisition eliminated one of Dean’s main competitors in a region that extends from northeastern Illinois to Michigan and Wisconsin, leaving Dean Foods with a 57 percent market share.

The Department of Justice’s lawsuit seeks to undo the 2009 purchase and wants Dean Foods to notify the department 30 days in advance when acquisitions are planned going forward.

“The purpose of the department’s lawsuit is to restore competition so that schools, grocery stores and other retailers in Illinois, Michigan and Wisconsin will pay lower prices for their milk,” said Christine Varney, assistant attorney general in charge of the Department of Justice’s Antitrust Division.

Dean Foods plans to defend its purchase of Foremost Farms, the company said in a statement earlier this year. The motion to dismiss, which failed this week, was one of their first steps.

A spokeswoman for Dean released a comment Wednesday saying: “We believe our acquisition of Foremost Farms is promoting competition in the region and has already produced benefits for consumers and farmers. We continue to believe that the government’s complaint against us is unfounded. In a motion to dismiss, the court views everything in the light most favorable to the plaintiffs, which is a high bar for any defendant. However, we are encouraged by the court’s recognition of the 'shortcomings’ of the plaintiffs’ pleadings, which the Court called 'not well structured,’ and we look forward to the discovery process.”