Summary Of In Re Southeastern Milk Antitrust Litig

As a consequence of DFA’s repeated price fixing and anti-competitive practices, several notable class-action lawsuits have been filed. Importantly, most of the claims that are brought against dairy cooperatives, including DFA, focus on violations of Sections §§ 1 and 2 of the Sherman Antitrust Act. Per Section 1, an antitrust complaint must sufficiently allege “(1) concerted action, (2) by two or more persons that (3) unreasonably restrains trade.” Furthermore, Section 2 of the Sherman Act deems it unlawful for any person to “monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce…” Claims that are brought under Section 2 of the Sherman Antitrust Act must

In the case, dairy farmers in the Southeastern United States brought a class action lawsuit against Dean Foods– the largest US fluid milk processor– and DFA– the largest dairy cooperative in America – for conspiring to monopolize and monopsonize the market for milk in the Southeastern region. Among other allegations, the plaintiff farmers contended that these entities had violated the antitrust laws by implementing exclusive, full supply contracts to its subsidiaries, creating a non-competitive market for farmers, and fixing and suppressing milk prices.38 Moreover, the farmers argued that through predatory conduct, including vertical integration, Dean Foods and DFA had been able to control over 90% of milk within the Southeastern United States. After years of litigation, the parties reached a settlement on the eve of trial. Overall, DFA agreed to pay over $158 million dollars to the plaintiffs and vowed to implement over a dozen different changes to improve their business operations throughout the Southeast. Most notably, this involved DFA agreeing to “execute annual conflict of interest certifications, which will be subject to review by DFA's Audit Committee,” have all financial reports “be prepared in accordance with generally accepted accounting principles, and…audited by a nationally-recognized accounting firm,” and “post on its member-only website an annual disclosure of all material related-party transactions, specifically broken out and identified by