Dairy Farmers of America Responds to Food Lion’s Antitrust Complaint

After a failed attempt to dismiss Food Lion’s antitrust complaint against them, Dairy Farmers of America (DFA) filed an answer on Friday in the Middle District of North Carolina and alleged that their purchase of three processing plants in the area from bankrupt Dean Foods is not a violation of the Clayton Act or the Sherman Act.

The company argued that the milk market’s competition in the Eastern states has not changed because of the purchase because the North and South Carolina plants processed raw milk from DFA previously. They also said that Food Lion still does not purchase milk from either Dean Foods or DFA. The answer stated, “there is no allegation that the competition, as it presently exists, is illegal or improper in any way.”

Food Lion, LLC and the Maryland and Virginia Milk Producers Cooperative Association, Inc., (MDVA) filed the initial complaint in May and alleged that the company’s purchase of dairy processing plants created a monopoly in the area with DFA being the only local option for the grocery company to purchase its milk.

The response claimed the plaintiffs were alleging an implausible geographic market because the company can purchase milk in other states in the Southeastern United States. DFA requested in its motion that the court dismiss the complaint and that the court grant them relief from the legal costs and judgment in the company’s favor.

DFA stated that “MDVA sues because it has been unable to compete in the marketplace; Food Lion, which is part of a $70 billion international conglomerate, sues because it seeks to extract the lowest possible prices to enhance its profit margins. This is an improper use of the antitrust laws.”

The defendant initially tried to get the lawsuit dismissed, but their motion was denied by Judge Catherine Eagles in late July. DFA claimed that the case against them was speculative and that the plaintiffs had not actually received any injury from DFA’s purchase of plants. DFA argued further in the motion for dismissal and their answer that the company’s purchase of the Carolina milk processing plants was approved by the Bankruptcy Court, which provided bidding procedures for the purchase. MDVA was also involved in the bid and attempted to purchase one of the North Carolina plants, but DFA was the winning bidder.

DFA is represented by Womble Bond Dickinson, Baker and Miller, and Latham and Watkins. MDVA is represented by Troutman Sanders. Food Lion is represented by Hunton Andrews Kurth.