Southern District of Florida Judge Marcia G. Cooke denied a motion to dismiss a counterclaim by milk distributor McCowtree Brothers Dairy Inc. that exclusive supply agreements between milk processor Dean Foods and milk producers violate the Clayton Act. The agreements are alleged to have resulted in Dean’s monopoly of the south Florida milk market, higher milk prices, and fewer choices for consumers. These allegations were filed by McCowtree as counterclaims against Dean Foods in a breach of contract suit by a Dean subsidiary against McCowtree.
McCowtree alleges that the exclusive supply agreements with Dairy Farmers of America, the largest milk cooperative in the U.S., and its subsidiary, Natonal Dairy Holdings, violate the U.S. Department of Justice’s instructions that conditioned Dean Foods’ 2001 merger with Suiza Foods Corp., which combined the two largest processed milk bottlers in the U.S. DOJ required Suiza and Dean to divest 11 milk bottling plants to National Dairy Holdings, and required Suiza Foods to modify its full supply agreement with Dairy Farmers of America to make sure the plants would compete to buy their raw milk. The court found that “McCowtree’s claims contain a sufficiently developed description of McArthur’s and Dean Food’s intent to monopolize through the sales and acquisition of milk processing plants and a dangerous probability of achieving monopoly power.” Judge Cooke dismissed McCowtree’s claim of conspiracy to monopolize.