Plaintiffs v Dairy Farmers of America and Dean Foods Company
Northeast Dairy Farmers Slap Milk Processor With Lawsuit
A class action antitrust lawsuit was filed on behalf of Northeast dairy farmers against the Dairy Farmers of America and Dean Foods Company in U.S. District Court in Burlington, Vt., according to lead attorney Benjamin Brown, of Cohen Milstein.
The suit charges DFA and Dean each with monopolizing a level of distribution of fluid milk in the Northeast and forcing dairy farmers to join DFA or its affiliate, Dairy Marketing Services, to survive. DMS and milk processor HP Hood also were named in the suit for aiding DFA's and Dean's monopolization and, in the case of DMS, for price-fixing with DFA.
Northeast dairy farmers blame DFA, the nation's largest cooperative, and Dean, the nation's largest processor, for lowering the price they receive for fluid milk by making DFA and its affiliates the exclusive suppliers of milk to Dean and HP Hood. Together the two processors bottle about 90 percent of the fluid milk in the Northeast.
The DFA, DMS, Dean and HP Hood domination of the milk distribution system resulted from an unlawful series of contracts, agreements and understandings that defied restrictions that the U.S. Department of Justice and various state attorneys general offices imposed, says Brown.
The suit, Alice H. Allen, et al. vs. Dairy Farmers of America, which seeks both monetary damages and injunctive relief that could have far-reaching effects on the American dairy industry, charges that DFA and others engaged in a string of unlawful mergers, acquisitions and closures of bottling plants, many of which violated conditions imposed by the DOJ, to strengthen their control of the fluid Grade A milk market.
Defying the explicit instructions of the DOJ, DFA entered into unlawful agreements with Dean Foods, which controls approximately 70 percent of the Northeast market for bottling fluid Grade A milk, and HP Hood, which controls approximately 20 percent of the market. This ensures that DFA and DMS would supply virtually all of the fluid Grade A milk bottled in the Northeast by Dean and HP Hood, the suit charges.
Plaintiffs also charge that, independent dairy cooperatives and independent dairy farmers have been forced to pay membership fees and dues to join DFA or DMS so they can obtain access to bottling plants. Access to such plants is the only way they can quality to receive minimum monthly payments on Grade A milk sales set by the United States Department of Agriculture. And, that DFA and DMS suppressed and fixed milk prices for Northeast dairy farmers, thus increasing the profits of Dean and HP Hood, and permitting DFA's management to divert revenue from farmers to themselves and outside business partners.
For more information please contact:
Benjamin Brown
Cohen Milstein
1100 New York Ave
Suite 500 West
Washington, DC 20005
t: 202 408 4600
f: 202 408 4699
