From the Wires
Northeast Dairy Farmers File Suit Against DFA and Dean Foods
By: PR Newswire
Oct. 9, 2009 10:57 AM
DMS and HP Hood also are charged with aiding in monopolization and price-fixing
WASHINGTON, Oct. 9 /PRNewswire-USNewswire/ -- A class action, antitrust lawsuit was filed Thursday on behalf of Northeast dairy farmers against the Dairy Farmers of America (DFA) and Dean Foods Company ("Dean") 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 marketing affiliate Dairy Marketing Services (DMS) 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 Hood. Together the two processors bottle about 90 percent of the fluid milk in the Northeast.
"Monopolization and price-fixing have contributed to the milk-pricing crisis dairy farmers -- especially small, family-owned dairies in the Northeast -- face today," says Brown. "Many dairy farmers have been forced to choose between joining DFA or DMS or going out of business. If they join, they have to pay to market to their own customers at prices fixed by DFA, DMS and other cooperatives. Meanwhile, major milk processors Dean and Hood, which is part-owned by DFA, enjoy the economic benefits."
The DFA, DMS, Dean and 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 (DOJ) 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:
"At virtually every stage of this conspiracy, the DOJ or state attorneys general intervened to place conditions on major transactions to preserve competition," says Brown. "Yet time and time again, DFA and others circumvented and thwarted the conditions imposed by DOJ and state antitrust authorities. Now, these Defendants are using their resulting market power to deny farmers the benefits of competition. This has got to stop, which is why we filed this lawsuit on behalf of all Northeast dairy farmers."
For more information about Cohen Milstein, visit www.cohenmilstein.com
SOURCE Cohen Milstein
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