DFA Reaches Settlement With Food Lion Regarding Antitrust Allegations

Dairy Farmers of America reportedly reached a settlement with Food Lion, a grocery company, and Maryland and Virginia Milk Producers Cooperative Association (MDVA) Inc in a lawsuit purporting that Dairy Farmers of America’s purchase of milk production facilities from Dean Foods after its bankruptcy constituted illegal antitrust activity. The terms of the settlement are not public. 

According to a court note, Brent Powell, counsel for the defense, reported that the parties had settled the case on Wednesday.  A stipulation of dismissal will be due by March 25. This stipulation comes shortly after the expiration of a sixty-day stay in the lawsuit, which additionally extended the deadline for mediation until February 23. 

Food Lion and MDVA initiated the lawsuit in May and claimed that DFA’s purchase created a monopoly in its section of the United States, specifically in the North Carolina and Virginia areas. They alleged that the activities of DFA violated the Sherman Act and the Clayton Act and would cause the price of milk available to the plaintiffs to rise. 

Alternatively, DFA purported that its purchase did not violate antitrust laws because the plants it purchased in North and South Carolina had already processed raw milk from DFA. The defendant also purported that Food Lion was not purchasing milk from Dean Foods or DFA so there is other competition in the area. DFA further claimed that the plaintiffs could purchase milk from companies in other Southeastern states. 

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

A separate lawsuit was also filed against DFA by the United States, Massachusetts, and Wisconsin in the Northern District of Illinois.  The court ruled to require DFA to divest three of its plants, however, the plaintiffs later approved a motion from DFA after no buyers were found to allow it to keep the Franklin, Massachusetts plant which was one of the plants it was ordered to divest, in order to not inhibit the milk supply in the area during the COVID-19 pandemic.