Court rules in favor of Southern Belle, DFA

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KANSAS CITY, Mo. – The U.S. District Court, Eastern District of Kentucky, ruled Aug. 31 that Southern Belle Dairy and Dairy Farmers of America Inc. (DFA) did not violate the antitrust laws in 2003.
The complaint, filed by the U.S. Department of Justice and the commonwealth of Kentucky, alleged that DFA’s partial acquisition of ownership interest in Southern Belle, a milk processing facility in Somerset, Ky., violated Section 7 of the Clayton Act.
In this lawsuit, the Department of Justice alleged that DFA’s joint venture relationships with Southern Belle and a National Dairy Holdings Flav-O-Rich plant in London, Ky., had given DFA the opportunity to substantially reduce future competition in the sale of milk to Kentucky and Tennessee schools.
Ruling. The recent court ruling acknowledged that DFA is not involved in the day-to-day operations or management decisions of its joint ventures with Southern Belle or National Dairy Holdings.
The court found that DFA’s ownership interest in these partnerships did not create greater “incentives and opportunities for collusion.”
Decisions? In its order granting the summary judgment, the court stated that, based on the limited nature of DFA’s ownership in Southern Belle, DFA does not have the ability to make decisions regarding the sale of school milk: “

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