Fresh N’ Pure Distributors, Inc. v. Foremost Farms USA and Dean Foods Co. (E.D. Wis.)

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.

Advertisements

One response to “Fresh N’ Pure Distributors, Inc. v. Foremost Farms USA and Dean Foods Co. (E.D. Wis.)

  1. One can understand completely why we are experiencing the concentration of wealth in our country. Federal judges are not enforcing anti trust or economic laws that protect market participants.

    The blame for this concentration of wealth and the capture of businesses in the country can clearly be laid at the feet of judges like this who will not enforce the laws of the land and instead look for excuses when businesses try to capture industries through non competitive actions. These judges are redefining the plain language of the law to protect the wrongdoers.

    The break up AT&T came after inability of the legal and regulatory system to reign in their abuses. This is nothing more than a legal tax imposed on the economy by judges who have decided to not enforce the law because of yet another tenuous excuse that breaks the spirit and intention of these economic laws. Legal remedies to correct the actions of the monopolist were so economically unviable that the company was able to continue its monopolistic practices until they became so abusive that the legal remedy ended up being their break up, not compensation for abusive practices.

    This is a historical human judicial problem. One of the oldest texts documenting abuse by the judiciary is found in the book of Judges in the Bible. The problem of a corrupt judiciary lead that nation to reform in the installation of a monarch instead of the judicial elite. In fact, another historical example many centuries later from the same nation comes from the founder of Christianity. Christianity’s founding as a religion was partly based on an elite religious group capturing the tenants of Judaism through legalese and not the spirit of the law. The concept was so well documented in this nation’s history that they even had a 50 year remedy in the form of the Jubilee.

    Tom T.