Dean Foods antitrust case to proceed, despite ‘structural issues’

08-Apr-2010 - Last updated on 09-Apr-2010 at 13:41 GMT

A federal judge in Milwaukee has denied Dean Foods’ motion to dismiss an antitrust lawsuit that was filed against it by the United States Department of Justice in January.

Dean Foods, the largest processor and distributor of dairy products in the United States, moved to have the complaint thrown out on the grounds that the justice department had failed to include details that would allow the case to proceed.

Dean Foods acquired Foremost Foods USA’s milk processing plants in Wisconsin and its consumer brands in April 2009 – a move that the Department of Justice seeks to reverse. The plaintiffs claim that the acquisition creates a monopoly on milk supplies to grocery stores, retailers and schools in Illinois, Wisconsin and Michigan.

But Dean Foods has denied this claim, saying that the acquisition promotes competition in the region and assists dairy farmers.

Although the court did not allow the suit to be dismissed, the judge criticized the government’s handling of the case.

The court said in its conclusion: “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.”

Among its complaints, the court said that perhaps “one of the most troubling aspects” of the plaintiffs’ brief was that it was not electronically searchable, increasing the resources necessary to address the motion.

The justice department’s lawsuit also wants to require Dean Foods to notify the department at least 30 days before any future acquisition involving a milk processing operation.

Spokesperson for Dean Foods Marguerite Copel said in a statement: “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.”

The court order rejecting the motion to dismiss can be accessed online here.