On November 28, 2011, the federal district court in Milwaukee granted a Rule 12(b)(6) motion to dismiss claims against Dean Foods (Dean) for violation of the Robinson-Patman Act, 15 U.S.C. §13, and subsections (3) and (4) of the Illinois Antitrust Act, 740 ILCS 10/3. The court’s opinion is available on Comp Law360.
Plaintiff Fresh N’ Pure Distributors (FNP) alleged that it had been Foremost Farms’ (Foremost) exclusive northeast Illinois distributor, but that since Dean’s acquisition of Foremost in 2009, Dean had refused to sell Dean milk to FNP despite contrary pre-acquisition representations. FNP alleged further that Dean’s other distributors, including Dean’s subsidiary Dean Transportation, Inc. (DTI), sold Dean products to FNP’s former customers, and that Dean had prevented FNP from filling its customers’ orders by purchasing Dean products from one of these competing Dean distributors.
Robinson-Patman Act. The district court explained that refusal to supply a prospective customer, such as alleged by FNP, is not actionable under the Robinson-Patman Act, and that there was no allegation of any sale by Dean to FNP competitors at a lower price than Dean charged FNP. DTI’s alleged sales of Dean milk to FNP’s retail customer at a price lower than the price FNP would have paid Dean did not support any inference regarding Dean’s price to DTI, the court concluded. The court also questioned that a subsidiary of a supplier counts as a competing buyer for purposes of the Act.
Illinois Antitrust Act (IATA). The court deemed Dean’s motion to dismiss FNP’s IATA claim unopposed and dismissed on that basis, but explained that it would have granted the motion in any event. No claim was stated under IATA subsection (4) the court noted, since it applies only to refusals to sell except on condition of exclusivity, and no such condition was alleged. Without “substantially more,” the court stated, the alleged price discrimination and refusal to sell were insufficient to state a claim under IATA subsection (3). The alleged sales of Dean milk to FNP customers after Dean refused to supply FNP were not actionable according to the court, since there was no allegation that Dean made the sales, and no precedent for FNP’s theory that Dean was obliged to refuse to allow other distributors to make such sales.