Plaintiffs Agree to Allow Dairy Farmers of America to Keep Franklin Plant

On Thursday, the United States approved a motion from Dairy Farmers of America (DFA) saying that it agreed to let the company keep the dairy farm in Franklin, Mass. that it purchased from Dean Foods Company after a buyer for the plant could not be found.  The matter was part of a Northern District of Illinois lawsuit was filed by the United States, Massachusetts, and Wisconsin, attempting to stop DFA from acquiring Dean Foods, DFA’s biggest competitor, after Dean declared bankruptcy.

The motion stated, “under these circumstances, DFA’s retention of the Franklin Plant provides the Franklin Plant the best chance to continue operating and supplying fluid milk to retailers and schools as the country continues to work through the pandemic.” 

The plaintiffs argued that DFA owning Dean Foods would create a monopoly in some markets and violate the Clayton Act. The judgment in the lawsuit, granted in October 2020, required DFA to divest three of the plants it acquired from Dean Foods, including the Franklin plant. 

After no buyer was found for the Franklin plant, the plaintiffs did include in the Final Judgment a provision allowing the defendant to make this motion if the Divestiture Trustee could not sell the plant. The United States filed its response in favor of the motion on the same day that DFA filed its unopposed motion asking the court to allow them to keep the plant. 

DFA said it is “strongly committed” to continuing operation at the plant, despite the fact that it has been losing money, because its operation “is central to DFA’s core purpose as a dairy cooperative.” Dairy Farmers of America is represented by Baker & Miller, PLLC and Latham & Watkins LLP

Dairy Farmers of America is also involved in at least one other lawsuit alleging their purchase of Dean Foods Plants is harming competition. That suit was filed in the Middle District of North Carolina by Food Lion and Maryland and Virginia Milk Producers.