United States, et al. v. Dairy Farmers of America, Inc. and Dean Foods Company; Proposed Final Judgment and Competitive Impact Statement, 33712-33733 [2020-11857]

Agencies

• Antitrust Division
• Department of Justice

[Federal Register Volume 85, Number 106 (Tuesday, June 2, 2020)]
[Notices]
[Pages 33712-33733]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-11857]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States, et al. v. Dairy Farmers of America, Inc. and Dean 
Foods Company; Proposed Final Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment, 
Stipulation, and Competitive Impact Statement have been filed with the 
United States District Court for the Northern District of Illinois in 
United States of America, et al. v. Dairy Farmers of America, Inc., et 
al., Civil Action No. 1:20-cv-02658. On May 1, 2020, the United States 
filed a Complaint alleging that Dairy Farmers of America, Inc.'s 
(``DFA'') proposed acquisition of certain assets from Dean Foods 
Company would violate Section 7 of the Clayton Act, 15 U.S.C. 18. The 
proposed Final Judgment, filed at the same time as the Complaint, 
requires DFA to divest three dairy processing plants and related 
tangible and intangible assets.
    Copies of the Complaint, proposed Final Judgment, Competitive 
Impact Statement, and a letter the United States considered 
determinative in formulating the proposed Final Judgment are available 
for inspection on the Antitrust Division's website at https://www.justice.gov/atr and at the Office of the Clerk of the United States 
District Court for the Northern District of Illinois. Copies of these 
materials may be obtained from the Antitrust Division upon request and 
payment of the copying fee set by Department of Justice regulations.
    Public comment is invited within 60 days of the date of this 
notice. Such comments, including the name of the submitter, and 
responses thereto, will be posted on the Antitrust Division's website, 
filed with the Court, and, under certain circumstances, published in 
the Federal Register. Comments should be directed to Eric D. Welsh, 
Acting Chief, Healthcare and Consumer Products Section, Antitrust 
Division, Department of Justice, 450 Fifth Street NW, Suite 4100, 
Washington, DC 20530 (telephone: 202-598-8681).

Suzanne Morris,
Chief, Premerger and Division Statistics.

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS 
EASTERN DIVISION

    UNITED STATES OF AMERICA, COMMONWEALTH OF MASSACHUSETTS, and STATE 
OF WISCONSIN, Plaintiffs, v. DAIRY

[[Page 33713]]

FARMERS OF AMERICA, INC. and DEAN FOODS COMPANY, Defendants.

Case No. 1:20-cv-02658

Complaint

    The United States of America, the Commonwealth of Massachusetts, 
and the State of Wisconsin (``Plaintiff States''), bring this civil 
antitrust action to prevent Dairy Farmers of America, Inc. (``DFA'') 
from acquiring certain fluid milk processing plants from Dean Foods 
Company (``Dean'').

I. Introduction

    DFA's acquisition of most of Dean's fluid milk processing plants 
would further consolidate two highly concentrated fluid milk markets: 
(1) Northeastern Illinois and Wisconsin and (2) New England. The 
acquisition would make DFA the largest player in each market, with 
nearly 70% market share in northeastern Illinois and Wisconsin and over 
50% in New England. DFA is the largest dairy cooperative in the United 
States, with nearly 14,000 farmer-members located in dozens of states. 
DFA also owns numerous fluid milk processing plants, including plants 
in Cedarburg, Wisconsin; New Britain, Connecticut; and Portland, Maine. 
Dean, the largest fluid milk processor in the nation, owns competing 
plants in Harvard, Illinois; De Pere, Wisconsin; and Franklin, 
Massachusetts.
    DFA and Dean compete head-to-head to sell fluid milk to customers 
in the geographic areas served by these plants, including supermarkets, 
schools, convenience stores, and hospitals, among others. In these 
areas, DFA and Dean are two of only three significant competitive 
options for these customers. Competition between DFA and Dean has 
benefitted these customers by lowering fluid milk prices and improving 
service. The acquisition would eliminate competition between DFA and 
Dean in these geographic areas, threatening to increase prices for 
supermarkets, schools, and other fluid milk customers--price increases 
that would ultimately be passed on to millions of individual consumers.
    For these reasons and those set forth below, DFA's proposed 
acquisition of assets from Dean threatens to lessen competition 
substantially in violation of Section 7 of the Clayton Act, 15 U.S.C. 
18.

II. Background

A. Fluid Milk Processing

    1. Approximately 10 million dairy cows produce over 200 billion 
pounds of raw milk in the United States each year. Dairy farmers sell 
the raw milk that their cows produce to processing plants that convert 
the raw milk into fluid milk, ice cream, cheese, and other dairy 
products. Fluid milk is raw milk that has been processed for human 
consumption. It is the ordinary fresh milk that can be found in 
supermarket and convenience store refrigerators.
    2. Fluid milk processing plants purchase raw milk from dairy 
farmers, pasteurize and package the milk, and sell and distribute the 
processed product. Processors sell fluid milk to supermarkets, schools, 
convenience stores, hospitals, and others--sometimes through 
distributors and sometimes directly. The demand for fluid milk in the 
United States has declined, causing the closure of fluid milk 
processing plants around the country and, among other factors, leading 
to the pending bankruptcy of Dean and other fluid milk processors. 
Despite this reduction in demand, a significant group of consumers 
remains loyal to traditional fluid milk, and their demand for fluid 
milk continues to be largely unaffected by changes in price.
    3. Fluid milk customers pay different prices based on a variety of 
factors, including the number of competitive alternatives available to 
the customer. Large customers and school districts typically request 
bids from fluid milk processors. The prices quoted by processors in 
these bids depend on the number and strength of competing processors, 
the processor's product, transportation and service costs, the 
processor's capacity utilization, and the ability of the processor to 
deliver directly to the customers' locations, among other factors. 
Distance between processors and purchasers also affects fluid milk 
pricing because fluid milk has a limited shelf life and is costly to 
transport. As a result, most customers purchase fluid milk from nearby 
processing plants.

B. The Defendants and the Merger

    4. Dairy Farmers of America is the largest cooperative of dairy 
farmers in the country, with nearly 14,000 members. In 2018, DFA 
marketed 64.5 billion pounds of raw milk--approximately 30% of all raw 
milk produced in the United States. DFA had 2018 revenues of $13.6 
billion.
    5. DFA is also vertically integrated through its ownership 
interests in milk processing plants. DFA owns a number of dairy 
processing plants around the country, including eight fluid milk 
processing plants and a significant stake in a joint venture that owns 
twelve additional fluid milk plants. In the northeastern Illinois and 
Wisconsin area, DFA owns a fluid milk plant in Cedarburg, Wisconsin. In 
the New England area, DFA owns fluid milk plants in New Britain, 
Connecticut and Portland, Maine. These plants compete directly against 
certain processing plants that DFA proposes to acquire from Dean.
    6. Dean Foods is the largest fluid milk processor in the country. 
It currently operates 57 fluid milk processing plants in 29 states. 
Dean's fluid milk processing network includes plants in the 
northeastern Illinois and Wisconsin area in Harvard, Illinois and De 
Pere, Wisconsin, and in the New England area in Franklin, 
Massachusetts. Dean had 2018 revenues of $7.75 billion.
    7. Dean filed for Chapter 11 bankruptcy protection on November 12, 
2019. Simultaneous with the bankruptcy filing, Dean announced that it 
was in discussions to sell some or all of its fluid milk plants to DFA. 
Dean's financial position continued to worsen in the months after its 
bankruptcy filing and was exacerbated by the coronavirus pandemic, 
which caused demand for milk by schools and restaurants to plummet. The 
growing financial crisis caused the bankruptcy process to be 
accelerated in order to find buyers for Dean's assets before the 
company ran out of money to continue operating. By order of the 
bankruptcy court, Dean accepted bids for its assets and selected 
winning bidders on March 30, 2020. Dean selected DFA as the winning 
bidder for the majority of Dean's assets.
    8. On April 6, 2020, DFA and Dean entered into an asset purchase 
agreement whereby DFA agreed to purchase 44 of Dean's 57 fluid milk 
plants, along with various other assets, for a total value of $433 
million. The purchase price consists of $325 million in cash and $108 
million in forgiveness of debt owed by Dean to DFA.

III. Jurisdiction and Venue

    9. The United States brings this action under Section 15 of the 
Clayton Act, 15 U.S.C. 25, as amended, to prevent and restrain 
Defendants from violating Section 7 of the Clayton Act, 15 U.S.C. 18.
    10. The Plaintiff States bring this action under Section 16 of the 
Clayton Act, 15 U.S.C. 26, to prevent and restrain Defendants from 
violating Section 7 of the Clayton Act, 15 U.S.C. 18. The Plaintiff 
States, by and through their respective Attorneys General, bring this 
action as parens patriae on behalf of and to protect the health and 
welfare of their citizens and the general economy of each of their 
states.
    11. DFA and Dean process, market, sell, and distribute fluid milk 
in the flow of interstate commerce, and their

[[Page 33714]]

sale of fluid milk substantially affects interstate commerce. This 
Court therefore has subject matter jurisdiction over this action 
pursuant to Section 15 of the Clayton Act, 15 U.S.C. 25, and 28 U.S.C. 
1331, 1337(a), and 1345.
    12. DFA and Dean both transact business in this district, including 
by selling fluid milk to customers in this district. Venue is therefore 
proper in this district under Section 12 of the Clayton Act, 15 U.S.C. 
22 and under 28 U.S.C. 1391(c).

IV. The Merger Would Substantially Lessen Competition in the Sale of 
Fluid Milk

    13. DFA's acquisition of Dean's plants in northeastern Illinois, 
Wisconsin, and New England is likely to lessen competition 
substantially for fluid milk customers. DFA and Dean are two of only 
three significant fluid milk processors that can serve customers in 
these areas. If the acquisition were permitted to proceed, DFA would 
control nearly 70% of the fluid milk market in northeastern Illinois 
and Wisconsin, and approximately 51% in New England. DFA and Dean 
compete head-to-head to supply fluid milk customers in these areas 
today, and those customers rely on competition between DFA and Dean to 
get lower prices and better terms. The acquisition would eliminate this 
competition and lead to higher prices and inferior service for 
supermarkets, schools, and other fluid milk customers and, ultimately, 
millions of individual consumers.

A. The processing and Sale of Fluid Milk Is a Relevant Product Market

    14. The processing and sale of fluid milk is a relevant product 
market and line of commerce under Section 7 of the Clayton Act. 
Consumers have long-held cultural and taste preferences for fluid milk 
over other beverages, and fluid milk has particular nutritional 
benefits and qualities for use in cooking. Consequently, consumer 
demand for fluid milk is relatively inelastic; that is, fluid milk 
consumption does not decrease significantly in response to a price 
increase. Fluid milk is distinct from extended shelf-life milk, ultra-
high temperature milk, and aseptic milk, which are produced by 
different processes, have numerous significant differences, and 
generally cost significantly more than fluid milk.
    15. Retailers, supermarkets, distributors, and other fluid milk 
customers are unlikely to substitute other products for fluid milk 
because the individual consumers that they serve continue to demand 
fluid milk. Schools are similarly unlikely to substitute away from 
fluid milk in response to even a substantial price increase because 
they are required by federal regulations to offer fluid milk to 
students to receive federal reimbursements for meals served to lower-
income students.
    16. For these reasons, the processing and sale of fluid milk 
satisfies the well-accepted ``hypothetical monopolist'' test set forth 
in the U.S. Department of Justice and Federal Trade Commission 2010 
Horizontal Merger Guidelines (``Horizontal Merger Guidelines''). A 
hypothetical monopolist processing and selling fluid milk likely would 
impose a small but significant and non-transitory price increase (e.g., 
five percent) because an insufficient number of customers would switch 
to alternatives to make that price increase unprofitable.

B. The Two Relevant Geographic Markets Are (1) Northeastern Illinois 
and Wisconsin and (2) New England

    17. Fluid milk processors charge different prices to buyers in 
different areas. They negotiate prices individually, and fluid milk's 
high transportation costs and limited shelf life mean that customers 
cannot practically buy fluid milk from each other to avoid a higher 
price charged by processors. In other words, fluid milk processors can 
engage in ``price discrimination.'' When price discrimination is 
possible, relevant geographic markets may be defined by reference to 
the location of customers. In particular, a relevant geographic market 
for the processing and sale of fluid milk is a region within which 
customers can be targeted for a price increase. Most customers purchase 
fluid milk from suppliers and processing plants located near them 
because transportation costs and shelf life make sourcing from more 
distant suppliers prohibitive.
    18. Northeastern Illinois, which includes Chicago and its suburbs, 
and the state of Wisconsin together comprise a relevant geographic 
market and section of the country within the meaning of Section 7 of 
the Clayton Act. Similarly, New England--including the states of 
Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and 
Vermont--is a relevant geographic market and section of the country 
within the meaning of Section 7 of the Clayton Act. A hypothetical 
monopolist selling fluid milk in either of these two areas likely would 
find it profitable to impose a small but significant and non-transitory 
price increase (e.g., five percent), because customers could not 
economically switch their source of supply to more distant sources.

C. The Merger Is Presumptively Unlawful in Both Geographic Markets

    19. DFA's acquisition of Dean's fluid milk processing plants would 
result in a substantial increase in the concentration of processors 
that compete to supply fluid milk to customers in the northeastern 
Illinois and Wisconsin geographic market and the New England geographic 
market. DFA and Dean are two of only three significant fluid milk 
processors that sell into each of these geographic markets. In both 
geographic markets the acquisition would eliminate one competitor, 
leaving just two remaining competitive options for fluid milk 
customers, with DFA controlling a significant majority of fluid milk 
sales. Although there are small or fringe fluid milk processors in each 
market, these processors are not competitive options for most fluid 
milk customers because they are much smaller and lack the capabilities 
necessary to compete against processors like DFA and Dean.
    20. The Supreme Court has held that mergers that significantly 
increase concentration in already concentrated markets are 
presumptively anticompetitive and therefore presumptively unlawful. To 
measure market concentration, courts often use the Herfindahl-Hirschman 
Index (``HHI'') as described in the Horizontal Merger Guidelines. HHIs 
range from 0 in markets with no concentration to 10,000 in markets 
where one firm has a 100% market share. According to the Horizontal 
Merger Guidelines, mergers that increase the HHI by more than 200 and 
result in an HHI above 2,500 in any market are presumed to be 
anticompetitive and, therefore, unlawful.
    21. The acquisition of Dean's plants by DFA is presumptively 
unlawful in northeastern Illinois and Wisconsin. For fluid milk 
customers in this geographic market the combined market share of Dean's 
processing plants in Harvard, Illinois, and De Pere, Wisconsin, and 
DFA's processing plant in Cedarburg, Wisconsin is estimated to be 
approximately 70%. The result is a highly concentrated market with an 
HHI of nearly 5,200 and an increase in HHI of nearly 1,900.
    22. The acquisition is also presumptively unlawful in the New 
England geographic market. For fluid milk customers in New England, the 
combined market share of Dean's processing plant in Franklin, 
Massachusetts, and DFA's processing plants in New Britain, Connecticut, 
and

[[Page 33715]]

Portland, Maine is estimated to be approximately 51%. The result is a 
highly concentrated market with an HHI of approximately 3,300 and an 
increase in HHI of over 1,000.

D. The Merger Would Reduce Competition That Benefits Fluid Milk 
Customers in Northeastern Illinois and Wisconsin and in New England

1. The Merger Would Eliminate Head-to-Head Competition Between DFA and 
Dean
    23. DFA's acquisition of Dean's plants in northeastern Illinois and 
Wisconsin and in New England would eliminate head-to-head competition 
that has benefitted and would otherwise continue to benefit 
supermarkets, schools, and other fluid milk customers in the relevant 
geographic markets. Especially for large customers like supermarkets, 
DFA and Dean are two of only three competitive fluid milk processors, 
and they are often the two lowest-price options in these geographic 
markets. For reasons related to service and delivery capabilities, some 
fluid milk customers consider DFA and Dean to be their only practical 
options.
    24. Many customers solicit bids from fluid milk processors and 
select the bidder that offers the lowest price. These customers often 
leverage a lower-priced bid from one supplier to obtain improved offers 
and lower prices from other bidders in individual negotiations. Even 
customers who use less formal procurement processes benefit from the 
presence of competitive alternatives, which constrain the prices that 
fluid milk processors can charge. Fluid milk customers in the relevant 
geographic markets have historically used competing bids from DFA and 
Dean to obtain lower prices.
    25. As described above, customers typically purchase fluid milk 
from processing plants located near them because of shelf life and the 
costs associated with transportation. These costs comprise a 
significant portion of the prices that fluid milk processors offer to 
customers. Therefore, the lowest-price fluid milk processors available 
to customers typically are the processing plants located closest to 
them. For many fluid milk customers in the relevant geographic markets, 
DFA and Dean are two of the closest processing plants and, therefore, 
two of the most competitive options. The only other significant 
competitors selling fluid milk to customers in these markets are 
unlikely to substantially mitigate the loss of competition between DFA 
and Dean.
    26. Many customers also have particular product and service 
requirements that not all fluid milk processors can meet. Many 
supermarkets, convenience stores, schools, and other customers require 
processors to arrange direct-store delivery, or ``DSD,'' where the 
processor delivers fluid milk to each of the customer's locations on a 
set schedule--sometimes as often as daily. Schools typically require 
milk to be packaged in small half-pint containers that require a 
separate bottling line and dedicated equipment. DFA and Dean, along 
with the third significant competitor in each of the relevant 
geographic markets, can satisfy these complex product and service 
requirements, while other smaller processors cannot.
2. The Merger Would Increase the Likelihood of Anticompetitive 
Coordination
    27. The acquisition would result in easier and more stable 
coordinated interaction among DFA and the remaining fluid milk 
competitors in northeastern Illinois and Wisconsin and in New England. 
By reducing the number of significant fluid milk processors in these 
areas from three to two, the acquisition would make it easier for the 
remaining two processors to coordinate. Coordination is more likely to 
occur where it would be particularly effective and profitable, as in 
markets with few significant competitors, relatively homogenous 
products, and where demand for the product is not significantly 
affected by an increase in its price. Fluid milk markets exhibit each 
of these characteristics.
    28. There is a history of anticompetitive coordination, including 
price-fixing, bid-rigging, and customer allocation in fluid milk 
markets in the United States and, in particular, in the sale of milk to 
schools. Numerous fluid milk processors, including Dean itself, have 
engaged in criminal collusive activities at various times over the last 
40 years. Given this history of coordination among fluid milk 
processors and the reduction in the number of significant competitors, 
DFA's acquisition of Dean's assets makes coordination more likely to 
occur in these geographic markets.

E. Entry by Other Fluid Milk Processors Is Unlikely To Prevent an 
Anticompetitive Price Increase

    29. Entry by fluid milk processors outside the relevant geographic 
markets is unlikely to be sufficient or timely enough to offset the 
anticompetitive effects of the acquisition. Processors who do not 
currently serve these markets are unlikely to begin shipping a 
significant quantity of fluid milk into the relevant geographic markets 
due to the same factors that make them uncompetitive in these markets 
today, including transportation costs and the lack of necessary 
capabilities or levels of service. Any milk that could be shipped into 
the relevant geographic markets likely could not be competitively 
priced because of high transportation costs, nor could it be 
economically delivered to customers like schools without local 
distribution networks.
    30. The construction of a new fluid milk processing plant to serve 
customers in either of the relevant geographic markets is very unlikely 
because of the high costs of building a dairy processing plant--
especially as fluid milk consumption has declined. Numerous fluid milk 
processing plants have closed in the last ten years across the United 
States, while only a few new plants have been built, largely for 
retailers to supply their own stores. The two largest fluid milk 
processors in the country, Dean and Borden, have filed for bankruptcy.

V. Countervailing Factors Do Not Offset the Anticompetitive Effects of 
the Merger

    31. The proposed merger is unlikely to generate verifiable, merger-
specific efficiencies sufficient to outweigh the anticompetitive 
effects that are likely to occur in the provision of fluid milk in the 
relevant geographic markets.

VI. Violations Alleged

    32. The acquisition by DFA of certain Dean assets likely would 
lessen competition substantially for the processing and sale of fluid 
milk in the two relevant geographic markets alleged above in violation 
of Section 7 of the Clayton Act, 15 U.S.C. 18.
    33. Unless enjoined, the acquisition likely would have the 
following anticompetitive effects, among others, in the relevant 
geographic markets:
    (a) competition for the sale and processing of fluid milk between 
DFA and Dean would be eliminated;
    (b) prices for fluid milk would increase; and
    (c) quality and service levels would decrease.

VII. Request for Relief

    34. Plaintiffs request that the Court:
    (a) adjudge and decree that DFA's proposed acquisition of assets 
from Dean would be unlawful and violate Section 7 of the Clayton Act, 
15 U.S.C. 18;

[[Page 33716]]

    (b) preliminary and permanently enjoin and restrain Defendants and 
all persons acting on their behalf from consummating the planned 
acquisition or from entering into or carrying out any other contract, 
agreement, plan, or understanding, the effect of which would be to 
combine DFA and Dean in the relevant geographic markets alleged above;
    (c) award Plaintiffs the costs of this action; and
    (d) award Plaintiffs other relief that the Court deems just and 
proper.

    Dated: May 1, 2020

    Respectfully submitted,

FOR PLAINTIFF UNITED STATES OF AMERICA:

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Makan Delrahim
Assistant Attorney General for Antitrust

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Bernard A. Nigro, Jr.
Principal Deputy Assistant Attorney General

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Kathleen S. O'Neill
Senior Director of Investigations and Litigation

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Eric D. Welsh
Acting Chief, Healthcare and Consumer Products Section

John R. Lausch, Jr.
United States Attorney, Northern District of Illinois

Thomas P. Walsh
Chief, Civil Division, United States Attorney's Office, Northern 
District of Illinois, 219 South Dearborn Street, Chicago, IL 60604, 
Tel.: 312-353-5312, Email: [email protected]

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Karl D. Knutsen
Justin T. Heipp
Nate Harris
Joseph Chandra Mazumdar
Christopher A. Wetzel
Attorneys for the United States, U.S. Department of Justice, 
Antitrust Division, 450 Fifth Street NW, Suite 4100, Washington, DC 
20530, Tel.: 202-514-0976, Fax: 202-307-5802, Email: 
[email protected]

FOR PLAINTIFF COMMONWEALTH OF MASSACHUSETTS:

Maura Healy
Attorney General

    By: Daniel H. Leff

Daniel H. Leff
Assistant Attorney General
Michael MacKenzie
Assistant Attorney General, Deputy Chief, Antitrust Division, One 
Ashburton Place, 18th Floor Boston, MA 02108, Tel: (617) 962-2613, 
Fax: (617) 722-0184, [email protected], 
[email protected].

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS 
EASTERN DIVISION

    UNITED STATES OF AMERICA, COMMONWEALTH OF MASSACHUSETTS, and STATE 
OF WISCONSIN, Plaintiffs, v. DAIRY FARMERS OF AMERICA, INC. and DEAN 
FOODS COMPANY, Defendants.

Case No. 1:20-cv-02658

[Proposed] Final Judgment

    Whereas, Plaintiffs, United States of America and the State of 
Wisconsin and the Commonwealth of Massachusetts (collectively, the 
``Plaintiff States''), filed their Complaint on May 1, 2020, the United 
States and Defendants, Dairy Farmers of America, Inc. and Dean Foods 
Company, by their respective attorneys, have consented to entry of this 
Final Judgment without trial or adjudication of any issue of fact or 
law and without this Final Judgment constituting any evidence against 
or admission by a party regarding any issue of fact or law;
    And whereas, Defendants agree to be bound by the provisions of this 
Final Judgment pending its approval by the Court;
    And whereas, the essence of this Final Judgment is the prompt and 
certain divestiture of certain rights or assets by Defendants to assure 
that competition is not substantially lessened;
    And whereas, Defendants agree to make certain divestitures for the 
purpose of remedying the loss of competition alleged in the Complaint;
    And whereas, Defendants represent that the divestitures and other 
relief required by this Final Judgment can and will be made and that 
Defendants will not later raise a claim of hardship or difficulty as 
grounds for asking the Court to modify any provision of this Final 
Judgment;
    Now therefore, before any testimony is taken, without trial or 
adjudication of any issue of fact or law, and upon consent of the 
parties, it is ordered, adjudged, and decreed:

I. Jurisdiction

    The Court has jurisdiction over the subject matter of and each of 
the parties to this action. The Complaint states a claim upon which 
relief may be granted against Defendants under Section 7 of the Clayton 
Act, as amended (15 U.S.C. 18).

II. Definitions

    As used in this Final Judgment:
    A. ``Acquirer'' or ``Acquirers'' means the entity or entities to 
whom Defendants divest any of the Divestiture Assets.
    B. ``DFA'' means Defendant Dairy Farmers of America, Inc., a Kansas 
cooperative marketing association with its headquarters in Kansas City, 
Kansas, its successors and assigns, and its subsidiaries, divisions, 
groups, affiliates, partnerships, and joint ventures, and their 
directors, officers, managers, agents, and employees.
    C. ``Dean'' means Defendant Dean Foods Company, a Delaware 
corporation with its headquarters in Dallas, Texas, its successors and 
assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships, and joint ventures, and their directors, officers, 
managers, agents, and employees.
    D. ``Fluid Milk'' means raw milk that has been processed for human 
consumption as a beverage, but does not include organic milk, soy milk, 
extended shelf life milk, ultra-high temperature milk, or aseptic milk.
    E. ``De Pere Plant'' means Dean's dairy processing plant located at 
3399 South Ridge Road, Ashwaubenon, Wisconsin 54115.
    F. ``Franklin Plant'' means Dean's dairy processing plant located 
at 1199 West Central Street, Franklin, Massachusetts 02038.
    G. ``Franklin Purchase Option'' means Dean's non-assignable option 
to purchase the real estate on which the Franklin Plant is located.
    H. ``Harvard Plant'' means Dean's dairy processing plant located at 
6303, 6306, and 6313 Maxon Road, Harvard, Illinois 60033.
    I. ``Exclusive Territory'' means (1) the states of Illinois, 
Wisconsin, and Indiana; and (2) the Upper Peninsula of Michigan.
    J. ``Non-Exclusive Territory'' means (1) the states of Minnesota 
and Iowa; and (2) the Lower Peninsula of Michigan.
    K. ``Transitional Dean's Brand License'' means a non-exclusive, 
royalty-free, paid-up, irrevocable, nationwide license to use the 
``Dean's'' brand name (and all associated trademarks, service marks, 
and service names) for all products for two (2) years from the date 
that the De Pere Divestiture Assets are divested to an Acquirer.
    L. ``Dean's Brand Licenses'' means:
    1. An exclusive (subject only to the rights of the Acquirer of the 
De Pere Divestiture Assets under the Transitional Dean's Brand License, 
if applicable), royalty-free, paid-up, irrevocable, perpetual license 
to use the ``Dean's'' brand name (and all associated trademarks, 
service marks, and service names) for all products in the Exclusive 
Territory; and

[[Page 33717]]

    2. A non-exclusive, royalty-free, paid-up, irrevocable, perpetual 
license to use the ``Dean's'' brand name (and all associated 
trademarks, service marks, and service names) for all products in the 
Non-Exclusive Territory.
    M. ``Transitional Dairy Pure Brand License'' means a non-exclusive, 
royalty-free, paid-up, irrevocable, nationwide license to use the 
``Dairy Pure'' brand name (and all associated trademarks, service 
marks, and service names) for all products for two (2) years from the 
date that the relevant Divestiture Assets are divested to an Acquirer.
    N. ``TruMoo Products'' means all products sold by Dean under the 
TruMoo brand name at any time from January 1, 2019 to the date that the 
relevant Divestiture Assets are divested to an Acquirer.
    O. ``Transitional TruMoo Brand License'' means a non-exclusive, 
royalty-free, paid-up, irrevocable, nationwide license to use the 
``TruMoo'' brand name (and all associated trademarks, service marks, 
and service names) for TruMoo Products for two (2) years from the date 
that the relevant Divestiture Assets are divested to an Acquirer.
    P. ``TruMoo IP'' means all intellectual property, product formulas, 
technology, know-how, or other rights used in the manufacture or 
formulation of any TruMoo Products.
    Q. ``TruMoo IP License'' means a non-exclusive, royalty-free, paid-
up, irrevocable, perpetual, nationwide license to the TruMoo IP.
    R. ``Divestiture Assets'' means the De Pere Divestiture Assets, the 
Franklin Divestiture Assets, and the Harvard Divestiture Assets.
    S. ``De Pere Divestiture Assets'' means:
    1. All of Defendants' rights, title, and interests in the De Pere 
Plant and the ancillary facilities listed in Appendix A;
    2. All tangible assets related to or used in connection with the 
processing, marketing, sale, or distribution of Fluid Milk and all 
other products by the De Pere Plant or the ancillary facilities listed 
in Appendix A, including, but not limited to: research and development 
activities; all manufacturing and processing equipment, quality 
assurance equipment, research and development equipment, machine 
assembly equipment, tooling and fixed assets, personal property, 
inventory, office furniture, materials, supplies, and other tangible 
property; all licenses, permits, certifications, and authorizations 
issued by any governmental organization; all contracts, teaming 
arrangements, agreements, leases, commitments, certifications, and 
understandings, including supply agreements; all customer lists, 
contracts, accounts, and credit records; all repair and performance 
records; and all other records;
    3. All intangible assets related to or used in connection with the 
processing, marketing, sale, or distribution of Fluid Milk and all 
other products by the De Pere Plant or the ancillary facilities listed 
in Appendix A, including, but not limited to: all patents; licenses and 
sublicenses; intellectual property (except the TruMoo IP); copyrights; 
trademarks, trade names, service marks, and service names (including 
the ``Morning Glory'' and ``Farm Fresh'' brand names and all associated 
trademarks, service marks, and service names), except the ``Dean's,'' 
``Jilbert,'' ``Dairy Pure,'' and ``TruMoo'' brand names; technical 
information; computer software and related documentation; customer 
relationships, agreements, and contracts (or portions of such 
relationships, agreements, and contracts that relate to the De Pere 
Plant or the ancillary facilities listed in Appendix A); know-how; 
trade secrets; drawings; blueprints; designs; design protocols; 
specifications for materials; specifications for parts and devices; 
safety procedures for the handling of materials and substances; quality 
assurance and control procedures; design tools and simulation 
capability; all manuals and technical information Dean provides to its 
own employees, customers, suppliers, agents, or licensees; and all 
research data concerning historic and current research and development 
efforts, including but not limited to designs of experiments and the 
results of successful and unsuccessful designs and experiments;
    4. A Transitional TruMoo Brand License;
    5. The Transitional Dean's Brand License;
    6. A TruMoo IP License; and
    7. A Transitional Dairy Pure Brand License;

Provided, however, that the assets specified in Paragraphs II(S)(1)-(7) 
above do not include any rights, title, or interest in (i) Dean's 
corporate headquarters located at 2711 North Haskell Avenue, Dallas, 
Texas 75204 or (ii) Dean's dairy processing plant located at 1126 
Kilburn Avenue, Rockford, Illinois 61101.
    T. ``Franklin Divestiture Assets'' means:
    1. All of Defendants' rights, title, and interests in the Franklin 
Plant and the ancillary facilities listed in Appendix B, except the 
Franklin Purchase Option;
    2. All tangible assets related to or used in connection with the 
processing, marketing, sale, or distribution of Fluid Milk and all 
other products by the Franklin Plant or the ancillary facilities listed 
in Appendix B, including, but not limited to: Research and development 
activities; all manufacturing and processing equipment, quality 
assurance equipment, research and development equipment, machine 
assembly equipment, tooling and fixed assets, personal property, 
inventory, office furniture, materials, supplies, and other tangible 
property; all licenses, permits, certifications, and authorizations 
issued by any governmental organization; all contracts, teaming 
arrangements, agreements, leases, commitments, certifications, and 
understandings, including supply agreements; all customer lists, 
contracts, accounts, and credit records; all repair and performance 
records; and all other records;
    3. All intangible assets related to or used in connection with the 
processing, marketing, sale, or distribution of Fluid Milk and all 
other products by the Franklin Plant or the ancillary facilities listed 
in Appendix B, including, but not limited to: all patents; licenses and 
sublicenses; intellectual property (except the TruMoo IP); copyrights; 
trademarks, trade names, service marks, and service names (including 
the ``Garelick Farms'' brand name and all associated trademarks, 
service marks, and service names), except the ``Dean's,'' ``Dairy 
Pure,'' and ``TruMoo'' brand names; technical information; computer 
software and related documentation; customer relationships, agreements, 
and contracts (or portions of such relationships, agreements, and 
contracts that relate to the Franklin Plant or the ancillary facilities 
listed in Appendix B); know-how; trade secrets; drawings; blueprints; 
designs; design protocols; specifications for materials; specifications 
for parts and devices; safety procedures for the handling of materials 
and substances; quality assurance and control procedures; design tools 
and simulation capability; all manuals and technical information Dean 
provides to its own employees, customers, suppliers, agents, or 
licensees; and all research data concerning historic and current 
research and development efforts, including but not limited to designs 
of experiments and the results of successful and unsuccessful designs 
and experiments;
    4. A Transitional TruMoo Brand License;
    5. A TruMoo IP License; and
    6. A Transitional Dairy Pure Brand License;


[[Page 33718]]


Provided, however, that the assets specified in Paragraphs II(T)(1)-(6) 
above do not include any rights, title, or interest in Dean's corporate 
headquarters located at 2711 North Haskell Avenue, Dallas, Texas 75204.
    U. ``Harvard Divestiture Assets'' means:
    1. All of Defendants' rights, title, and interests in the Harvard 
Plant and the ancillary facilities listed in Appendix C;
    2. All tangible assets related to or used in connection with the 
processing, marketing, sale, or distribution of Fluid Milk and all 
other products by the Harvard Plant or the ancillary facilities listed 
in Appendix C, including, but not limited to: research and development 
activities; all manufacturing and processing equipment, quality 
assurance equipment, research and development equipment, machine 
assembly equipment, tooling and fixed assets, personal property, 
inventory, office furniture, materials, supplies, and other tangible 
property; all licenses, permits, certifications, and authorizations 
issued by any governmental organization; all contracts, teaming 
arrangements, agreements, leases, commitments, certifications, and 
understandings, including supply agreements; all customer lists, 
contracts, accounts, and credit records; all repair and performance 
records; and all other records;
    3. All intangible assets related to or used in connection with the 
processing, marketing, sale, or distribution of Fluid Milk and all 
other products by the Harvard Plant or the ancillary facilities listed 
in Appendix C, including, but not limited to: all patents; licenses and 
sublicenses; intellectual property (except the TruMoo IP); copyrights; 
trademarks, trade names, service marks, and service names, except the 
``Dean's,'' ``Dairy Pure,'' and ``TruMoo'' brand names; technical 
information; computer software and related documentation; customer 
relationships, agreements, and contracts (or portions of such 
relationships, agreements, and contracts that relate to the Harvard 
plant or the ancillary facilities listed in Appendix C); know-how; 
trade secrets; drawings; blueprints; designs; design protocols; 
specifications for materials; specifications for parts and devices; 
safety procedures for the handling of materials and substances; quality 
assurance and control procedures; design tools and simulation 
capability; all manuals and technical information Dean provides to its 
own employees, customers, suppliers, agents, or licensees; and all 
research data concerning historic and current research and development 
efforts, including but not limited to designs of experiments and the 
results of successful and unsuccessful designs and experiments;
    4. The Dean's Brand Licenses;
    5. A Transitional TruMoo Brand License;
    6. A TruMoo IP License; and
    7. A Transitional Dairy Pure Brand License;

Provided, however, that the assets specified in Paragraphs II(U)(1)-(7) 
above do not include any rights, title, or interest in (i) Dean's 
corporate headquarters located at 2711 North Haskell Avenue, Dallas, 
Texas 75204 or (ii) Dean's dairy processing plant located at 1126 
Kilburn Avenue, Rockford, Illinois 61101.
    V. ``Relevant Personnel'' means all full-time, part-time, or 
contract personnel whose job responsibilities related in any way to the 
processing, marketing, sale, or distribution of Fluid Milk or any other 
products by the Divestiture Assets, at any time between July 1, 2019 
and the date on which the Divestiture Assets are divested to Acquirer.

III. Applicability

    A. This Final Judgment applies to DFA and Dean, as defined above, 
and all other persons, in active concert or participation with any 
Defendant, who receive actual notice of this Final Judgment.
    B. If, prior to complying with Section IV and Section V of this 
Final Judgment, Defendants sell or otherwise dispose of all or 
substantially all of their assets or of lesser business units that 
include any of the Divestiture Assets, Defendants must require the 
purchaser to be bound by the provisions of this Final Judgment. 
Defendants need not obtain such an agreement from Acquirer(s).

IV. Divestitures

    A. Defendants are ordered and directed, within 30 calendar days 
after the Court's entry of the Asset Preservation and Hold Separate 
Stipulation and Order in this matter, to divest the Divestiture Assets 
in a manner consistent with this Final Judgment to an Acquirer or 
Acquirers acceptable to the United States, in its sole discretion. The 
United States, in its sole discretion, may agree to one or more 
extensions of this time period not to exceed sixty (60) calendar days 
in total and will notify the Court of any extensions. Defendants agree 
to use their best efforts to divest the Divestiture Assets as 
expeditiously as possible.
    B. Defendants promptly must make known, by usual and customary 
means, the availability of the Divestiture Assets. Defendants must 
inform any person making an inquiry regarding a possible purchase of 
some or all of the Divestiture Assets that the Divestiture Assets are 
being divested in accordance with this Final Judgment and must provide 
that person with a copy of this Final Judgment. Defendants must offer 
to furnish to all prospective Acquirers, subject to customary 
confidentiality assurances, all information and documents relating to 
the Divestiture Assets customarily provided in a due diligence process; 
provided, however, that Defendants need not provide information or 
documents subject to the attorney-client privilege or work-product 
doctrine. Defendants must make this information available to Plaintiffs 
at the same time that the information is made available to any other 
person.
    C. Defendants must cooperate with and assist each Acquirer in 
identifying and hiring all Relevant Personnel associated with the 
particular Divestiture Assets that each Acquirer is acquiring, 
including:
    1. Within ten (10) business days following receipt of a request by 
Acquirer or the United States, Defendants must identify all Relevant 
Personnel to Acquirer and Plaintiffs, including by providing 
organization charts covering all Relevant Personnel.
    2. Within ten (10) business days following receipt of a request by 
Acquirer or the United States, Defendants must provide to Acquirer and 
Plaintiffs the following additional information related to Relevant 
Personnel: name; job title; current salary and benefits, including most 
recent bonus paid, aggregate annual compensation, current target or 
guaranteed bonus, if any, and any other payments due to or promises 
made to the individual; descriptions of reporting relationships, past 
experience, responsibilities, and training and educational histories; 
lists of all certifications; and all job performance evaluations. If 
Defendants are barred by any applicable laws from providing any of this 
information, within ten (10) business days following receipt of the 
request, Defendants must provide the requested information to the full 
extent permitted by law and also must provide a written explanation of 
Defendants' inability to provide the remaining information.
    3. At the request of Acquirer, Defendants must promptly make 
Relevant Personnel available for private interviews with Acquirer 
during normal business hours at a mutually agreeable location.

[[Page 33719]]

    4. Defendants must not interfere with any efforts by Acquirer to 
employ any Relevant Personnel. Interference includes but is not limited 
to offering to increase the salary or improve the benefits of Relevant 
Personnel unless the offer is part of a company-wide increase in salary 
or benefits that was announced prior to November 12, 2019 or has been 
approved by the United States, in its sole discretion, after 
consultation with the Plaintiff States. Defendants' obligations under 
this paragraph will expire six (6) months after the divestiture of the 
Divestiture Assets pursuant to this Final Judgment.
    5. For Relevant Personnel who elect employment with Acquirer within 
six (6) months of the date on which the Divestiture Assets are divested 
to Acquirer, Defendants must waive all non-compete and non-disclosure 
agreements, vest all unvested pension and other equity rights, and 
provide all benefits that those Relevant Personnel otherwise would have 
been provided had the Relevant Personnel continued employment with 
Defendants, including but not limited to any retention bonuses or 
payments. Defendants may maintain reasonable restrictions on disclosure 
by Relevant Personnel of Defendants' proprietary non-public information 
that is unrelated to the Divestiture Assets and not otherwise required 
to be disclosed by this Final Judgment.
    D. Defendants must permit prospective Acquirers of some or all of 
the Divestiture Assets to have reasonable access to make inspections of 
the Divestiture Assets for which they are prospective Acquirers and 
access to all environmental, zoning, and other permit documents and 
information, and all financial, operational, or other documents and 
information customarily provided as part of a due diligence process.
    E. Defendants must warrant to Acquirer(s) that each asset to be 
divested will be fully operational and without material defect on the 
date of sale.
    F. Defendants must not take any action that will impede in any way 
the permitting, operation, or divestiture of the Divestiture Assets.
    G. Defendants must assign, subcontract, or otherwise transfer all 
contracts, agreements, and customer relationships (or portions of such 
contracts, agreements and customer relationships, including but not 
limited to relevant portions of national contracts) related to the 
Divestiture Assets, including all supply and sales contracts, to 
Acquirer(s); provided however, that for any contracts or agreements 
(including but not limited to customer contracts and supply contracts) 
that require the consent of another party to assign, subcontract or 
otherwise transfer, Defendants must use best efforts to accomplish the 
assignment, subcontracting, or other transfer.
    1. For any customer of the Divestiture Assets with which Dean does 
not have a written contract, within five (5) business days of the 
closing of the divestiture of each set of Divestiture Assets, 
Defendants must send a letter, in a form approved by the United States 
in its sole discretion and signed by representatives of Dean and of the 
relevant Acquirer, to that customer, notifying the customer that the 
Acquirer will be the customer's new supplier pursuant to this Final 
Judgment.
    2. Defendants must not interfere with any negotiations between 
Acquirer(s) and a customer or other contracting party, and Defendants 
must not encourage any customer of the Divestiture Assets to terminate 
a contract that has been assigned or otherwise transferred to Acquirer.
    3. Notwithstanding any other provision in this Paragraph IV(G), 
Defendants must release each Acquirer from any of Dean's obligations to 
purchase raw milk from DFA that would otherwise be assigned to that 
Acquirer as part of the divestiture required by this Final Judgment.
    H. For any governmental license, permit, registration, 
authorization, approval, or the discontinuation of any obligation 
thereunder that cannot be transferred to the relevant Acquirer 
(collectively, the ``Non-Transferred Licenses''), Defendants must use 
best efforts to assist Acquirer(s) in applying for and securing all 
necessary government approvals for the issuance of the Non-Transferred 
License(s) to Acquirer(s).
    I. At the option of each Acquirer, and subject to approval by the 
United States in its sole discretion, on or before the date on which 
some or all of the Divestiture Assets are divested to that Acquirer, 
DFA must enter into a supply contract or contracts for raw milk 
sufficient to meet that Acquirer's needs, as determined by that 
Acquirer, for a period of up to three (3) months, on terms and 
conditions reasonably related to market conditions for the supply of 
raw milk. The United States, in its sole discretion, may approve one or 
more extensions of any supply contract, for a total of up to an 
additional three (3) months. If Acquirer seeks an extension of the term 
of a supply contract, Defendants must notify the United States in 
writing at least one (1) month prior to the date the supply contract 
expires. Acquirer may terminate a supply contract without cost or 
penalty at any time upon commercially reasonable notice.
    J. At the option of each Acquirer, and subject to approval by the 
United States in its sole discretion, on or before the date on which 
some or all of the Divestiture Assets are divested to that Acquirer, 
Defendants must enter into a contract or contracts, on terms and 
conditions reasonably related to market conditions, to provide 
transition services (including but not limited to back office, human 
resource, accounting, employee health and safety, and information 
technology services and support) for a period of up to six (6) months 
to facilitate the transfer of the relevant Divestiture Assets to that 
Acquirer or to allow that Acquirer to operate the relevant Divestiture 
Assets. The United States, in its sole discretion, after consultation 
with the Plaintiff States, may approve one or more extensions of a 
contract for transition services, for a total of up to an additional 
six (6) months. If Acquirer seeks an extension of the term of a 
contract for transition services, Defendants must notify the United 
States in writing at least one (1) month prior to the date the contract 
expires. Acquirer may terminate a contract for transition services 
without cost or penalty at any time upon commercially reasonable 
notice. The employee(s), contractors, or other personnel of Defendants 
tasked with providing these transition services must not share any 
competitively sensitive information of Acquirer with any other employee 
of Defendants.
    K. Defendants must warrant to Acquirer(s) that there are no 
material defects in the environmental, zoning, or other permits 
pertaining to the operation of the Divestiture Assets. Following the 
sale of any of the Divestiture Assets, Defendants must not undertake, 
directly or indirectly, any challenges to the environmental, zoning, or 
other permits relating to the operation of the Divestiture Assets.
    L. For a period of one (1) year following the divestiture of each 
set of Divestiture Assets to the relevant Acquirer, Defendants must not 
initiate customer-specific communications to solicit any customer for 
the portion of that customer's business covered by the contract, 
agreement or relationship (or portion thereof) that is included in the 
Divestiture Assets; provided, however, that:
    1. Defendants may respond to inquiries initiated by customers and 
enter into negotiations at the request of customers (including 
responding to

[[Page 33720]]

requests for quotation or proposal) to supply any business, whether or 
not such business was included in the Divestiture Assets; and
    2. Defendants must maintain a log of telephonic, electronic, in-
person, and other communications that constitute inquiries or requests 
from customers within the meaning of Paragraph IV(L)(1) above and make 
it available to the United States for inspection upon request.
    M. DFA will not exercise the Franklin Purchase Option except that, 
upon Acquirer's request, DFA will (1) exercise the Franklin Purchase 
Option and (2) sell to Acquirer all of DFA's resulting rights, title, 
and interest in the property covered by the Franklin Purchase Option at 
the same price that DFA pays for that property under the Franklin 
Purchase Option.
    N. Unless the United States otherwise consents in writing, the 
divestitures pursuant to Section IV or by a Divestiture Trustee 
appointed pursuant to Section V of this Final Judgment must include (1) 
the entirety of the De Pere Divestiture Assets and the entirety of the 
Harvard Divestiture Assets to a single Acquirer and (2) the entirety of 
the Franklin Divestiture Assets to a single Acquirer, and must be 
accomplished in such a way as to satisfy the United States, in its sole 
discretion, after consultation with the Plaintiff States, that the 
Divestiture Assets can and will be used by the relevant Acquirer as 
part of a viable, ongoing business of processing and selling Fluid Milk 
and will remedy the competitive harm alleged in the Complaint. 
Divestiture of the Divestiture Assets may be made to one or more 
Acquirers, provided that in each instance it is demonstrated to the 
sole satisfaction of the United States, after consultation with the 
Plaintiff States, that the Divestiture Assets will remain viable and 
that the divestiture will remedy the competitive harm alleged in the 
Complaint. The divestiture(s), whether pursuant to Section IV or 
Section V of this Final Judgment,

    (1) must be made to Acquirer(s) that, in the United States' sole 
judgment, after consultation with the Plaintiff States, has the 
intent and capability (including the necessary managerial, 
operational, technical, and financial capability) of competing 
effectively in the business of processing and selling Fluid Milk; 
and
    (2) must be accomplished so as to satisfy the United States, in 
its sole discretion, after consultation with the Plaintiff States, 
that none of the terms of any agreement between Acquirer(s) and 
Defendants give Defendants the ability unreasonably to raise the 
costs of Acquirer(s), to lower the efficiency of Acquirer(s), or 
otherwise to interfere in the ability of Acquirer(s) to compete 
effectively.

    O. If any of the terms of an agreement between Defendants and 
Acquirer(s) to effectuate the divestiture required by this Final 
Judgment varies from a term of this Final Judgment then, to the extent 
that Defendants cannot fully comply with both, this Final Judgment 
determines Defendants' obligations.

V. Appointment of Divestiture Trustee

    A. If Defendants have not divested the Divestiture Assets within 
the period specified in Paragraph IV(A), or if Defendants waive their 
right to first attempt such divestiture of (1) the De Pere Divestiture 
Assets and the Harvard Divestiture Assets or (2) the Franklin 
Divestiture Assets, Defendants must immediately notify Plaintiffs of 
that fact in writing. Upon application of the United States, the Court 
will appoint a Divestiture Trustee selected by the United States and 
approved by the Court to effect the divestiture(s) of any of the 
Divestiture Assets that have not been sold during the period specified 
in Paragraph IV(A).
    B. After the appointment of a Divestiture Trustee by the Court, 
only the Divestiture Trustee will have the right to sell the 
Divestiture Assets that the Divestiture Trustee has been appointed to 
sell. The Divestiture Trustee will have the power and authority to 
accomplish the divestiture(s) to Acquirer(s) acceptable to the United 
States, in its sole discretion, at a price and on terms that are then 
obtainable upon reasonable effort by the Divestiture Trustee, subject 
to the provisions of Sections IV, V, and VI of this Final Judgment, and 
will have other powers as the Court deems appropriate. Subject to 
Paragraph V(D) of this Final Judgment, the Divestiture Trustee may hire 
at the cost and expense of Defendants any agents or consultants, 
including, but not limited to, investment bankers, attorneys, and 
accountants, who will be solely accountable to the Divestiture Trustee, 
reasonably necessary in the Divestiture Trustee's judgment to assist in 
the divestiture(s). Any such agents or consultants will serve on such 
terms and conditions as the United States approves, including 
confidentiality requirements and conflict of interest certifications.
    C. Defendants may not object to a sale by the Divestiture Trustee 
on any ground other than malfeasance by the Divestiture Trustee. 
Objections by Defendants must be conveyed in writing to Plaintiffs and 
the Divestiture Trustee within ten (10) calendar days after the 
Divestiture Trustee has provided the notice required under Section VI.
    D. The Divestiture Trustee will serve at the cost and expense of 
Defendants pursuant to a written agreement, on such terms and 
conditions as the United States approves, including confidentiality 
requirements and conflict of interest certifications. The Divestiture 
Trustee will account for all monies derived from the sale of the assets 
sold by the Divestiture Trustee and all costs and expenses so incurred. 
After approval by the Court of the Divestiture Trustee's accounting, 
including fees for any of its services yet unpaid and those of agents 
and consultants retained by the Divestiture Trustee, all remaining 
money will be paid to Defendants and the trust will then be terminated. 
The compensation of the Divestiture Trustee and any agents or 
consultants retained by the Divestiture Trustee must be reasonable in 
light of the value of the Divestiture Assets and based on a fee 
arrangement that provides the Divestiture Trustee with incentives based 
on the price and terms of the divestiture(s) and the speed with which 
it is accomplished, but the timeliness of the divestiture(s) is 
paramount. If the Divestiture Trustee and Defendants are unable to 
reach agreement on the Divestiture Trustee's or any agents' or 
consultants' compensation or other terms and conditions of engagement 
within fourteen (14) calendar days of the appointment of the 
Divestiture Trustee, the United States may, in its sole discretion, 
take appropriate action, including making a recommendation to the 
Court. Within three (3) business days of hiring any agent or 
consultant, the Divestiture Trustee must provide written notice of the 
hiring and rate of compensation to Defendants and the United States.
    E. Defendants must use their best efforts to assist the Divestiture 
Trustee in accomplishing the required divestiture(s). The Divestiture 
Trustee and any agents or consultants retained by the Divestiture 
Trustee must have full and complete access to the personnel, books, 
records, and facilities of the Divestiture Assets the Divestiture 
Trustee is responsible for selling, and Defendants must provide or 
develop financial and other information relevant to the Divestiture 
Assets as the Divestiture Trustee may reasonably request, subject to 
reasonable protection for trade secrets; other confidential research, 
development, or commercial information; or any applicable privileges. 
Defendants may not take any action to interfere with or to impede the

[[Page 33721]]

Divestiture Trustee's accomplishment of the divestiture(s).
    F. After appointment, the Divestiture Trustee will file monthly 
reports with Plaintiffs, setting forth the Divestiture Trustee's 
efforts to accomplish the divestiture(s) ordered by this Final 
Judgment. Reports must include the name, address, and telephone number 
of each person who, during the preceding month, made an offer to 
acquire, expressed an interest in acquiring, entered into negotiations 
to acquire, or was contacted or made an inquiry about acquiring, any 
interest in any of the Divestiture Assets and will describe in detail 
each contact with any such person. The Divestiture Trustee will 
maintain full records of all efforts made to divest the Divestiture 
Assets.
    G. If the Divestiture Trustee has not accomplished the 
divestiture(s) ordered by this Final Judgment within sixty (60) days of 
appointment, the Divestiture Trustee must promptly file with the Court 
a report setting forth (1) the Divestiture Trustee's efforts to 
accomplish the required divestiture; (2) the reasons, in the 
Divestiture Trustee's judgment, why the required divestiture has not 
been accomplished; and (3) the Divestiture Trustee's recommendations. 
To the extent such report contains information that the Divestiture 
Trustee deems confidential, such report will not be filed in the public 
docket of the Court. The Divestiture Trustee will at the same time 
furnish such report to Plaintiffs. Within five (5) days of receiving 
the Divestiture Trustee's report, the United States, in its sole 
discretion, may extend the period of the trust for no more than sixty 
(60) additional days by written notice to the Divestiture Trustee and 
the Court. If, at the expiration of the initial time period and any 
extension thereof, the Divestiture Trustee has not secured a definitive 
agreement for the sale of the Divestiture Assets consistent with this 
Final Judgment and acceptable to the United States, in its sole 
discretion, DFA may file a motion with the Court, which the United 
States will not unreasonably oppose, requesting that, solely with 
respect to any Divestiture Assets for which the Divestiture Trustee was 
unable to secure a definitive divestiture agreement, (i) the Asset 
Preservation and Hold Separate Stipulation and Order be terminated and 
(ii) this Final Judgment be modified to permit DFA to retain those 
assets.
    H. If the United States determines that the Divestiture Trustee is 
not acting diligently or in a reasonably cost-effective manner, the 
United States may recommend that the Court appoint a substitute 
Divestiture Trustee.

VI. Notice of Proposed Divestiture

    A. Within two (2) business days following execution of a definitive 
divestiture agreement, Defendants or the Divestiture Trustee, whichever 
is then responsible for effecting any divestiture required herein, must 
notify Plaintiffs of a proposed divestiture required by this Final 
Judgment. If the Divestiture Trustee is responsible for effecting the 
divestiture, the Divestiture Trustee also must notify Defendants. The 
notice must set forth the details of the proposed divestiture and list 
the name, address, and telephone number of each person not previously 
identified who offered or expressed an interest in or desire to acquire 
any ownership interest in the Divestiture Assets, together with full 
details of the same.
    B. Within fifteen (15) calendar days of receipt by the United 
States of this notice, the United States may request from Defendants, 
the proposed Acquirer(s), other third parties, or the Divestiture 
Trustee, if applicable, additional information concerning the proposed 
divestiture, the proposed Acquirer(s), and other prospective 
Acquirer(s). Defendants and the Divestiture Trustee must furnish the 
additional information requested to Plaintiffs within fifteen (15) 
calendar days of the receipt of the request, unless the United States 
provides written agreement to a different period.
    C. Within forty-five (45) calendar days after receipt of the notice 
or within twenty (20) calendar days after the United States has been 
provided the additional information requested from Defendants, the 
proposed Acquirer(s), other third parties, and the Divestiture Trustee, 
whichever is later, the United States will provide written notice to 
Defendants and the Divestiture Trustee, if there is one, stating 
whether or not the United States, in its sole discretion, after 
consultation with the Plaintiff States, objects to the proposed 
Acquirer(s) or any other aspect of the proposed divestiture. If the 
United States provides written notice that it does not object, the 
divestiture may be consummated, subject only to Defendants' limited 
right to object to the sale under Paragraph V(C) of this Final 
Judgment. Absent written notice that the United States does not object 
or upon objection by the United States, a divestiture may not be 
consummated. Upon objection by Defendants pursuant to Paragraph V(C), a 
divestiture by the Divestiture Trustee may not be consummated unless 
approved by the Court.
    D. No information or documents obtained pursuant to Section VI may 
be divulged by Plaintiffs to any person other than an authorized 
representative of the executive branch of the United States or the 
Plaintiff States, except in the course of legal proceedings to which 
the United States is a party (including grand-jury proceedings), for 
the purpose of evaluating a proposed Acquirer or securing compliance 
with this Final Judgment, or as otherwise required by law.
    E. In the event of a request by a third party for disclosure of 
information under the Freedom of Information Act, 5 U.S.C. 552, the 
Antitrust Division will act in accordance with that statute, and the 
Department of Justice regulations at 28 CFR part 16, including the 
provision on confidential commercial information, at 28 CFR 16.7. 
Persons submitting information to the Antitrust Division should 
designate the confidential commercial information portions of all 
applicable documents and information under 28 CFR 16.7. Designations of 
confidentiality expire ten years after submission, ``unless the 
submitter requests and provides justification for a longer designation 
period.'' See 28 CFR 16.7(b).
    F. If at the time a person furnishes information or documents to 
the United States pursuant to Section VI, that person represents and 
identifies in writing information or documents for which a claim of 
protection may be asserted under Rule 26(c)(1)(G) of the Federal Rules 
of Civil Procedure, and marks each pertinent page of such material, 
``Subject to claim of protection under Rule 26(c)(1)(G) of the Federal 
Rules of Civil Procedure,'' the United States must give that person ten 
calendar days' notice before divulging the material in any legal 
proceeding (other than a grand-jury proceeding).

VII. Financing

    Defendants may not finance all or any part of Acquirers' purchase 
of all or part of the Divestiture Assets made pursuant to this Final 
Judgment.

VIII. Asset Preservation and Hold Separate

    Until the divestiture(s) required by this Final Judgment have been 
accomplished, Defendants must take all steps necessary to comply with 
the Asset Preservation and Hold Separate Stipulation and Order entered 
by the Court. Defendants will take no action that would jeopardize the 
divestiture(s) ordered by the Court.

IX. Affidavits

    A. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, and every thirty (30) calendar days thereafter until 
the divestiture

[[Page 33722]]

required by this Final Judgment has been completed, Defendants must 
deliver to Plaintiffs an affidavit, signed by each Defendant's Chief 
Financial Officer, Dean's General Counsel, and DFA's Chief Legal 
Officer, describing the fact and manner of Defendants' compliance with 
this Final Judgment. Each affidavit must include the name, address, and 
telephone number of each person who, during the preceding thirty (30) 
calendar days, made an offer to acquire, expressed an interest in 
acquiring, entered into negotiations to acquire, or was contacted or 
made an inquiry about acquiring, an interest in some or all of the 
Divestiture Assets, and must describe in detail each contact with such 
persons during that period. Each affidavit also must include a 
description of the efforts Defendants have taken to solicit buyers for 
and complete the sale of the Divestiture Assets, and to provide 
required information to prospective Acquirers. Each affidavit also must 
include a description of any limitations placed by Defendants on 
information provided to prospective Acquirers. If the information set 
forth in the affidavit is true and complete, objection by the United 
States to information provided by Defendants to prospective Acquirers 
must be made within fourteen (14) calendar days of receipt of the 
affidavit.
    B. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, Defendants must deliver to Plaintiffs an affidavit that 
describes in reasonable detail all actions Defendants have taken and 
all steps Defendants have implemented on an ongoing basis to comply 
with Section VIII of this Final Judgment. Defendants must deliver to 
the United States an affidavit describing any changes to the efforts 
and actions outlined in Defendants' earlier affidavits filed pursuant 
to Section IX within fifteen (15) calendar days after the change is 
implemented.
    C. Defendants must keep all records of all efforts made to preserve 
and divest the Divestiture Assets until one year after the divestiture 
has been completed.

X. Compliance Inspection

    A. For the purposes of determining or securing compliance with this 
Final Judgment, or of related orders such as an Asset Preservation and 
Hold Separate Stipulation and Order, or of determining whether this 
Final Judgment should be modified or vacated, and subject to any 
legally-recognized privilege, from time to time authorized 
representatives of the United States, including agents retained by the 
United States, must, upon written request of an authorized 
representative of the Assistant Attorney General in charge of the 
Antitrust Division, and reasonable notice to Defendants, be permitted:

    (1) access during Defendants' office hours to inspect and copy 
or, at the option of the United States, to require Defendants to 
provide electronic copies of all books, ledgers, accounts, records, 
data, and documents in the possession, custody, or control of 
Defendants relating to any matters contained in this Final Judgment; 
and
    (2) to interview, either informally or on the record, 
Defendants' officers, employees, or agents, who may have their 
individual counsel present, regarding such matters. The interviews 
must be subject to the reasonable convenience of the interviewee and 
without restraint or interference by Defendants.

    B. Upon the written request of an authorized representative of the 
Assistant Attorney General in charge of the Antitrust Division, 
Defendants must submit written reports or respond to written 
interrogatories, under oath if requested, relating to any of the 
matters contained in this Final Judgment.
    C. No information or documents obtained pursuant to Section X may 
be divulged by the United States to any person other than an authorized 
representative of the executive branch of the United States or the 
Plaintiff States, except in the course of legal proceedings to which 
the United States is a party (including grand jury proceedings), for 
the purpose of securing compliance with this Final Judgment, or as 
otherwise required by law.
    D. In the event of a request by a third party for disclosure of 
information under the Freedom of Information Act, 5 U.S.C. 552, the 
Antitrust Division will act in accordance with that statute, and the 
Department of Justice regulations at 28 CFR part 16, including the 
provision on confidential commercial information, at 28 CFR 16.7. 
Defendants submitting information to the Antitrust Division should 
designate the confidential commercial information portions of all 
applicable documents and information under 28 CFR 16.7. Designations of 
confidentiality expire ten years after submission, ``unless the 
submitter requests and provides justification for a longer designation 
period.'' See 28 CFR 16.7(b).
    E. If at the time that Defendants furnish information or documents 
to the United States pursuant to Section X, Defendants represent and 
identify in writing information or documents for which a claim of 
protection may be asserted under Rule 26(c)(1)(G) of the Federal Rules 
of Civil Procedure, and Defendants mark each pertinent page of such 
material, ``Subject to claim of protection under Rule 26(c)(1)(G) of 
the Federal Rules of Civil Procedure,'' the United States must give 
Defendants ten (10) calendar days' notice before divulging the material 
in any legal proceeding (other than a grand jury proceeding).

XI. Notification

    A. Unless a transaction is otherwise subject to the reporting and 
waiting period requirements of the Hart-Scott-Rodino Antitrust 
Improvements Act of 1976, as amended, 15 U.S.C. 18a (the ``HSR Act''), 
Defendants may not, during the term of this Final Judgment, directly or 
indirectly acquire any assets of or any interest, including any 
financial, security, loan, equity, or management interest, in an entity 
involved in Fluid Milk processing in the United States without 
providing advance notification to the United States and to any 
Plaintiff State in which any of the assets or interests are located or 
whose border is less than 150 miles from any such assets or interests; 
provided that notification will not be required pursuant to this 
Section where the assets or interest being acquired generated less than 
$1 million in revenue from the processing, marketing, sale, and 
distribution of Fluid Milk in the most recent completed calendar year.
    B. Defendants must provide the notification required by Section XI 
in the same format as, and in accordance with the instructions relating 
to, the Notification and Report Form set forth in the Appendix to Part 
803 of Title 16 of the Code of Federal Regulations as amended, except 
that the information requested in Items 5 through 8 of the instructions 
must be provided only about Fluid Milk processing. Notification must be 
provided at least thirty (30) calendar days before acquiring any such 
interest, and must include, beyond the information required by the 
instructions, the names of the principal representatives who negotiated 
the agreement on behalf of each party, and all management or strategic 
plans discussing the proposed transaction. If, within the 30-day period 
following notification, representatives of the United States make a 
written request for additional information, Defendants may not 
consummate the proposed transaction or agreement until thirty (30) 
calendar days after submitting all requested information. Early 
termination of the waiting periods in this Paragraph may be requested 
and, where appropriate, granted in the same manner as is applicable 
under the requirements and provisions of the HSR Act and rules 
promulgated thereunder. Section XI will be broadly construed and any 
ambiguity or uncertainty

[[Page 33723]]

regarding the filing of notice under Section XI will be resolved in 
favor of filing notice.

XII. No Reacquisition, Limitations on Collaborations

    Defendants may not reacquire any part of or any interest in the 
Divestiture Assets during the term of this Final Judgment without the 
prior written consent of the United States in its sole discretion, 
after consultation with the Plaintiff States. In addition, Defendants 
and Acquirer(s) may not, without the prior written consent of the 
United States, enter into a new collaboration or expand the scope of an 
existing collaboration involving any of the Divestiture Assets during 
the term of this Final Judgment. The decision whether to consent to a 
collaboration is within the sole discretion of the United States.

XIII. Retention of Jurisdiction

    The Court retains jurisdiction to enable any party to this Final 
Judgment to apply to the Court at any time for further orders and 
directions as may be necessary or appropriate to carry out or construe 
this Final Judgment, to modify any of its provisions, to enforce 
compliance, and to punish violations of its provisions.

XIV. Enforcement of Final Judgment

    A. The United States retains and reserves all rights to enforce the 
provisions of this Final Judgment, including the right to seek an order 
of contempt from the Court. Defendants agree that in a civil contempt 
action, a motion to show cause, or a similar action brought by the 
United States regarding an alleged violation of this Final Judgment, 
the United States may establish a violation of this Final Judgment and 
the appropriateness of a remedy therefor by a preponderance of the 
evidence, and Defendants waive any argument that a different standard 
of proof should apply.
    B. This Final Judgment should be interpreted to give full effect to 
the procompetitive purposes of the antitrust laws and to restore the 
competition the United States alleged was harmed by the challenged 
conduct. Defendants agree that they may be held in contempt of, and 
that the Court may enforce, any provision of this Final Judgment that, 
as interpreted by the Court in light of these procompetitive principles 
and applying ordinary tools of interpretation, is stated specifically 
and in reasonable detail, whether or not it is clear and unambiguous on 
its face. In any such interpretation, the terms of this Final Judgment 
should not be construed against either party as the drafter.
    C. In an enforcement proceeding in which the Court finds that 
Defendants have violated this Final Judgment, the United States may 
apply to the Court for a one-time extension of this Final Judgment, 
together with other relief that may be appropriate. In connection with 
a successful effort by the United States to enforce this Final Judgment 
against a Defendant, whether litigated or resolved before litigation, 
that Defendant agrees to reimburse the United States for the fees and 
expenses of its attorneys, as well as all other costs, including 
experts' fees, incurred in connection with that enforcement effort, 
including in the investigation of the potential violation.
    D. For a period of four (4) years following the expiration of this 
Final Judgment, if the United States has evidence that a Defendant 
violated this Final Judgment before it expired, the United States may 
file an action against that Defendant in this Court requesting that the 
Court order: (1) Defendant to comply with the terms of this Final 
Judgment for an additional term of at least four years following the 
filing of the enforcement action; (2) all appropriate contempt 
remedies; (3) additional relief needed to ensure the Defendant complies 
with the terms of this Final Judgment; and (4) fees or expenses as 
called for by this Section XIV.

XV. Expiration of Final Judgment

    Unless the Court grants an extension, this Final Judgment will 
expire ten (10) years from the date of its entry, except that after 
five (5) years from the date of its entry, this Final Judgment may be 
terminated upon notice by the United States to the Court and Defendants 
that the divestitures have been completed and the continuation of this 
Final Judgment no longer is necessary or in the public interest.

XVI. Public Interest Determination

    Entry of this Final Judgment is in the public interest. The parties 
have complied with the requirements of the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16, including by making available to the 
public copies of this Final Judgment, the Competitive Impact Statement, 
comments thereon, and the United States' responses to comments. Based 
upon the record before the Court, which includes the Competitive Impact 
Statement and any comments and responses to comments filed with the 
Court, entry of this Final Judgment is in the public interest.

Date:------------------------------------------------------------------

[Court approval subject to procedures of Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16]
-----------------------------------------------------------------------

United States District Judge

Appendix A--DePere Ancillary Facilities

1. 1118 N. 17th Street, Sheboygan, Wisconsin 54115 (Garage/Parking)
2. 1233 Contract Drive, Ashwaubenon, Wisconsin 54304 (Warehouse)

Appendix B--Franklin Ancillary Facilities

1. 10 DiNunzio Road, Watertown, Connecticut 06795 (Cross-Dock/
Warehouse)
2. 1376 West Central Street, Franklin, Massachusetts 02038 
(Warehouse/Sales Office)
3. 1701 Hammond Street, Hermon, Maine 04401 (Distribution Depot)
4. 131 Rand Road, Portland, Maine 04102 (Parking)
5. 10 Creek Brook Drive, Haverhill, Massachusetts 01832 (Warehouse)

Appendix C--Harvard Ancillary Facilities

1. 3600 River Road, Franklin Park, Illinois 60131 (Depot)
2. 23914 and 23916 Center Street, Harvard, Illinois 60033 (Parking/
Part of Plant)
3. 24114 Route 173, Harvard, Illinois 60033 (Part of Plant)
4. 965 S. Wyckles Road, Decatur, Illinois 62521 (Depot/Office)
5. 450 Comanche Circle, Harvard, Illinois 60033 (Warehouse)
6. Dry Storage, 6303 Maxon Road, Harvard, Illinois 60033
7. Sludge Site, 6303 Maxon Road, Harvard, Illinois 60033
8. Alco (Alders) Storage Area, 6303 Maxon Road, Harvard, Illinois 
60033
9. Railroad Encroachment Area, 6303 Maxon Road, Harvard, Illinois 
60033

UNITED STATES DISTRICT COURT FOR NORTHERN DISTRICT OF ILLINOIS EASTERN 
DIVISION

    UNITED STATES OF AMERICA, COMMONWEALTH OF MASSACHUSETTS, and STATE 
OF WISCONSIN, Plaintiffs, v. DAIRY FARMERS OF AMERICA, INC. and DEAN 
FOODS COMPANY, Defendants.

Case No. 1:20-cv-02658

Competitive Impact Statement

    The United States of America, under Section 2(b) of the Antitrust 
Procedures and Penalties Act, 15 U.S.C. 16(b)-(h) (the ``APPA'' or 
``Tunney Act''), files this Competitive Impact Statement relating to 
the proposed Final Judgment submitted for entry in this civil antitrust 
proceeding.

I. Nature And Purpose of the Proceeding

    Dean Foods Company (``Dean'') filed for bankruptcy on November 12, 
2019, in the United States Bankruptcy Court for the Southern District 
of Texas. The

[[Page 33724]]

bankruptcy court ordered an auction and then accelerated the auction 
process because of Dean's liquidity condition. On March 30, 2020, Dairy 
Farmers of America, Inc. (``DFA'') bid for 44 of Dean's plants for a 
total value of $433 million. No other bidder submitted a bid for the 44 
Dean plants, or anything even close to that number of plants, under the 
bankruptcy court's schedule. The bid was accepted by Dean and was the 
only transaction for those 44 plants approved by the bankruptcy court.
    The United States, along with the state of Wisconsin and the 
Commonwealth of Massachusetts (collectively, the ``Plaintiff States''), 
filed a civil antitrust complaint on May 1, 2020, seeking to enjoin the 
proposed transaction. Based on a comprehensive investigation, the 
Complaint alleges that the likely effect of this transaction would be 
to substantially lessen competition for the processing and sale of 
Fluid Milk in areas encompassing (1) northeastern Illinois and 
Wisconsin and (2) New England in violation of Section 7 of the Clayton 
Act, 15 U.S.C. 18. ``Fluid Milk'' is raw milk that has been processed 
for human consumption as a beverage, but does not include organic milk, 
soy milk, extended shelf life milk, ultra-high temperature milk, or 
aseptic milk.
    At the same time the Complaint was filed, the United States filed 
an Asset Preservation and Hold Separate Stipulation and Order 
(``Stipulation and Order'') and proposed Final Judgment, which are 
designed to address the anticompetitive effects of the acquisition. 
Under the proposed Final Judgment, which is explained more fully below, 
DFA is required to divest Dean's Fluid Milk processing plants, 
ancillary facilities, and related tangible and intangible assets 
located in Franklin, Massachusetts (``Franklin Plant''); De Pere, 
Wisconsin (``De Pere Plant''); and Harvard, Illinois (``Harvard 
Plant'') (collectively the ``Divestiture Plants''). Under the terms of 
the Stipulation and Order, Defendants will take certain steps to ensure 
that, during the pendency of the required divestitures, the Divestiture 
Plants will remain independent and ongoing business concerns that will 
remain uninfluenced by Defendants and the level of competition for the 
processing and sale of Fluid Milk that existed between Defendants prior 
to the transaction will be maintained.
    The United States and Defendants have stipulated that the proposed 
Final Judgment may be entered after compliance with the APPA. Entry of 
the proposed Final Judgment will terminate this action, except that the 
Court will retain jurisdiction to construe, modify, or enforce the 
provisions of the Final Judgment and to punish violations thereof.

II. Description of Events Giving Rise to the Alleged Violation

(A) The Defendants and the Proposed Transaction

    35. Dean is a Delaware corporation with its headquarters in Dallas, 
Texas. Until its recent bankruptcy filing, Dean was the largest Fluid 
Milk processor in the country, operating at that time 57 Fluid Milk 
processing plants in 29 states. Dean had 2018 revenues of $7.75 
billion.
    36. DFA is organized under the laws of the State of Kansas and is 
the largest cooperative of dairy farmers in the country, with nearly 
14,000 members. In 2018, DFA marketed 64.5 billion pounds of raw milk--
an amount that accounted for approximately 30% of all raw milk produced 
in the United States. DFA had 2018 revenues of $13.6 billion.
    37. DFA is vertically integrated through its ownership interests in 
milk processing plants. DFA owns eight Fluid Milk processing plants 
around the country and has a significant stake in a joint venture that 
owns twelve additional Fluid Milk processing plants. In the 
northeastern Illinois and Wisconsin area, DFA owns a Fluid Milk 
processing plant in Cedarburg, Wisconsin. In the New England area, DFA 
owns Fluid Milk processing plants in New Britain, Connecticut and 
Portland, Maine. These plants compete directly against the Harvard 
Plant, De Pere Plant, and/or Franklin Plant that DFA proposes to 
acquire from Dean.
    38. Dean filed for Chapter 11 bankruptcy protection on November 12, 
2019. Simultaneous with the bankruptcy filing, Dean announced that it 
was in discussions to sell some or all of its Fluid Milk processing 
plants to DFA. Dean's financial position continued to worsen in the 
months after its bankruptcy filing and then was exacerbated by 
shrinking school and restaurant demand for milk caused by the 
coronavirus pandemic. Dean informed the bankruptcy court of its 
worsening financial condition and that it would not be able to pay 
farmers for raw milk or be certain that it could continue to process 
Fluid Milk beyond May 2020. Dean's worsening financial condition caused 
the bankruptcy court to accelerate the bankruptcy auction process to 
allow Dean to find buyers for its assets before the company would have 
to cease operations due to a lack of funds. By order of the bankruptcy 
court, Dean accepted bids for its assets and selected winning bidders 
on March 30, 2020. Dean selected DFA as the winning bidder for most of 
Dean's assets and began the process of closing down some plants that no 
one had sought to acquire during the bankruptcy process.
    On March 31, 2020, DFA and Dean entered into an asset purchase 
agreement whereby DFA agreed to purchase 44 of Dean's 57 Fluid Milk 
processing plants, along with related assets, for $433 million. The 
purchase price includes $325 million in cash and $108 million in 
forgiveness of debt Dean owed DFA.

(B) The Competitive Effects of the Proposed Transaction

    DFA's existing Fluid Milk processing plants overlap with two Dean 
plants that it proposes to acquire in northeastern Illinois and 
Wisconsin--the Harvard Plant and the De Pere Plant--and with Dean's 
Franklin Plant in New England. The Complaint alleges that DFA and Dean 
are two of only three significant Fluid Milk processors that can serve 
customers, including supermarkets and schools, in each of these 
geographic areas. If the acquisition were permitted to proceed, DFA 
would control nearly 70% of the Fluid Milk market in northeastern 
Illinois and Wisconsin and approximately 51% of the Fluid Milk market 
in New England. DFA and Dean compete head-to-head to supply Fluid Milk 
customers in these areas today, and those customers rely on competition 
between DFA and Dean to get lower prices and better terms. If DFA's and 
Dean's plants in these areas were owned by a single entity, this 
competitive dynamic would no longer exist, leading to higher prices and 
inferior service for supermarkets, schools, and other Fluid Milk 
customers and ultimately, millions of individual consumers.
1. The Processing and Sale of Fluid Milk Is a Relevant Product Market
    39. The Complaint alleges that the processing and sale of Fluid 
Milk is a relevant product market and line of commerce under Section 7 
of the Clayton Act. Consumers have long-held cultural and taste 
preferences for Fluid Milk over other beverages, and Fluid Milk has 
particular nutritional benefits and qualities for use in cooking. 
Consequently, consumer demand for Fluid Milk is relatively inelastic, 
which simply means that Fluid Milk consumption does not decrease 
significantly in response to a price increase. Fluid Milk is distinct 
from organic milk, soy milk, extended shelf-life milk, ultra-high 
temperature milk, and aseptic milk, which are produced

[[Page 33725]]

by different processes, have numerous significant differences, and 
generally cost much more than Fluid Milk.
    40. The Complaint alleges that retailers, supermarkets, 
distributors, and other Fluid Milk customers are unlikely to substitute 
other products for Fluid Milk because the individual consumers that 
they serve continue to demand Fluid Milk. This means, for example, that 
a grocery store would not substitute to other beverages because its 
customers will not buy other beverages as an alternative to Fluid Milk. 
Schools are similarly unlikely to substitute away from Fluid Milk in 
response to even a substantial price increase because they are required 
by federal regulations to offer Fluid Milk to students in order to 
qualify to receive federal reimbursements for meals served to lower-
income students.
    41. For these reasons, the Complaint alleges that the processing 
and sale of Fluid Milk satisfies the well-accepted ``hypothetical 
monopolist'' test set forth in the U.S. Department of Justice and 
Federal Trade Commission 2010 Horizontal Merger Guidelines 
(``Horizontal Merger Guidelines''). This test asks whether a 
hypothetical monopolist processing and selling Fluid Milk likely would 
impose a small but significant and non-transitory price increase (e.g., 
five percent) because an insufficient number of customers would switch 
to alternatives to make that price increase unprofitable. The Complaint 
alleges that this test is satisfied.
2. The Two Relevant Geographic Markets Are Northeastern Illinois and 
Wisconsin and New England
    42. The Complaint also alleges two relevant geographic markets: (1) 
northeastern Illinois and Wisconsin and (2) New England. Fluid Milk 
processors charge different prices to buyers in different areas. Prices 
are negotiated individually, and Fluid Milk's high transportation costs 
and limited shelf life mean that customers cannot practically buy Fluid 
Milk from each other to avoid a higher price charged by processors. In 
other words, Fluid Milk processors can engage in ``price 
discrimination,'' meaning that they can charge different prices to 
different customers. When price discrimination is possible, relevant 
geographic markets may be defined by reference to the location of the 
customer. In particular, a relevant geographic market for the 
processing and sale of Fluid Milk, as alleged in the Complaint, is a 
region within which customers can be targeted for a price increase. 
Most customers purchase Fluid Milk from suppliers and processing plants 
located near them because transportation costs and shelf life make 
sourcing from more distant suppliers prohibitive.
    43. The Complaint alleges that northeastern Illinois, which 
includes Chicago and its suburbs, and the state of Wisconsin together 
comprise a relevant geographic market and section of the country within 
the meaning of Section 7 of the Clayton Act. Similarly, New England--
including the states of Connecticut, Maine, Massachusetts, New 
Hampshire, Rhode Island, and Vermont--is a relevant geographic market 
and section of the country within the meaning of Section 7 of the 
Clayton Act. A hypothetical monopolist processing and selling Fluid 
Milk in either of these two areas likely would find it profitable to 
impose a small but significant and non-transitory price increase (e.g., 
five percent) because customers could not economically switch their 
source of supply to more distant sources.
3. The Acquisition Results in Large Combined Market Shares
    44. DFA's acquisition of Dean's Fluid Milk processing plants would 
result in a substantial increase in the concentration of processors 
that compete to supply Fluid Milk to customers in the northeastern 
Illinois and Wisconsin geographic market and the New England geographic 
market. The Complaint alleges that DFA and Dean are two of only three 
significant Fluid Milk processors that sell into each of these 
geographic markets. In both geographic markets, the acquisition would 
eliminate one competitor, leaving only two remaining competitive 
options for Fluid Milk customers, with DFA controlling a significant 
majority of the Fluid Milk sales. Although there are also small or 
fringe Fluid Milk processors in each market, these processors are not 
competitive options for most Fluid Milk customers because they are much 
smaller and lack the capabilities necessary to compete against 
processors like DFA and Dean.
    45. The Supreme Court has held that mergers that significantly 
increase concentration in already concentrated markets are 
presumptively anticompetitive and therefore presumptively unlawful. To 
measure market concentration, courts often use the Herfindahl-Hirschman 
Index (``HHI'') as described in the Horizontal Merger Guidelines. HHIs 
range from 0 in markets with no concentration to 10,000 in markets 
where one firm has a 100% market share. According to the Horizontal 
Merger Guidelines, mergers that increase the HHI by more than 200 and 
result in an HHI above 2,500 in any market are presumed to be 
anticompetitive and, therefore, unlawful.
    46. The Complaint alleges that the acquisition of Dean's plants by 
DFA is presumptively unlawful in northeastern Illinois and Wisconsin. 
For Fluid Milk customers in this geographic market, a conservative 
estimate of the combined market share of Dean's Harvard Plant and De 
Pere Plant and DFA's processing plant in Cedarburg, Wisconsin is 70%. 
The result is a highly concentrated market with an HHI of nearly 5,200 
and an increase in HHI of almost 1,900.
    47. As alleged in the Complaint, the acquisition is also 
presumptively unlawful in the New England geographic market. For Fluid 
Milk customers in the New England geographic market, a conservative 
estimate of the combined market share of Dean's Franklin Plant and 
DFA's processing plants in New Britain, Connecticut, and Portland, 
Maine is 51%. The result is a highly concentrated market with an HHI of 
approximately 3,300 and an increase in HHI of over 1,000.
4. The Merger Would Eliminate Head-to-Head Competition Between DFA and 
Dean
    48. The Complaint alleges that DFA's acquisition of Dean's plants 
in northeastern Illinois and Wisconsin and in New England would 
eliminate head-to-head competition that has benefitted and would 
otherwise continue to benefit supermarkets, schools, and other Fluid 
Milk customers in the relevant geographic markets. For reasons related 
to service and delivery capabilities, some Fluid Milk customers 
consider DFA and Dean to be their only practical options. Especially 
for customers like large supermarket chains, DFA and Dean are two of 
only three competitive Fluid Milk processors in these geographic 
markets, and they are often the two lowest-price options in these 
geographic markets.
    49. Customers often solicit bids from Fluid Milk processors and 
select the bidder that offers the lowest price. These customers often 
leverage a lower-priced bid from one supplier to obtain improved offers 
and lower prices from other bidders during individual negotiations. 
Even customers who use less formal procurement processes benefit from 
the presence of competitive alternatives, which constrain the prices 
that all Fluid Milk processors can charge. The Complaint alleges that 
Fluid Milk customers in the relevant geographic markets have 
historically used competing bids from DFA and Dean to obtain lower 
prices.

[[Page 33726]]

    50. As described above, the Complaint alleges that customers 
typically purchase Fluid Milk from processing plants located close to 
them because of shelf-life restrictions and the costs associated with 
transportation of the product. These transportation costs comprise a 
significant portion of the prices that Fluid Milk processors charge 
customers. Therefore, the lowest-price Fluid Milk processors available 
to customers typically are the ones located closest to them. For many 
Fluid Milk customers in the relevant geographic markets, DFA and Dean 
are two of the closest processing plants and, as the Complaint alleges, 
two of the most competitive or lowest-price options. The only other 
significant competitors selling Fluid Milk to customers in these 
markets are unlikely to substantially mitigate the loss of competition 
between DFA and Dean that would result from the acquisition.
    51. Many customers also have particular product and service 
requirements that not all Fluid Milk processors can meet. Supermarkets, 
convenience stores, schools, and other customers often require 
processors to arrange direct-store delivery, or ``DSD,'' where the 
processor delivers Fluid Milk to each of the customer's locations on a 
set schedule--sometimes as often as daily. Schools typically require 
milk to be packaged in small half-pint containers that require a 
separate bottling line and dedicated equipment. Only DFA and Dean, 
along with the third significant competitor in each of the relevant 
geographic markets, can satisfy these complex product and service 
requirements, while other smaller processors cannot.
5. The Acquisition Would Make It Easier for Competitors To Coordinate
    52. The Complaint alleges that by reducing the number of 
significant Fluid Milk processors in northeastern Illinois and 
Wisconsin and in New England from three to two, the acquisition would 
make it easier for the remaining two significant processors to 
coordinate. Markets, such as Fluid Milk markets, with few significant 
competitors, relatively homogenous products, and where demand for the 
product is not significantly affected by an increase in its price are 
susceptible to coordination because these features are among those that 
make coordination more likely to be effective and profitable.
    53. In addition, there is a history of anticompetitive 
coordination, including price fixing, bid rigging, and customer 
allocation in Fluid Milk markets in the United States and, in 
particular, in the sale of milk to schools. Numerous Fluid Milk 
processors, including Dean itself, have engaged in criminal collusive 
activities at various times over the last 40 years. Given this history 
of coordination among Fluid Milk processors and the reduction in the 
number of significant competitors in each of the relevant geographic 
markets, the acquisition makes coordination more likely to occur in 
these markets.
6. Potential Entrants and Merger Efficiencies Do Not Offset Competitive 
Harm From the Merger
    54. As alleged in the Complaint, entry by Fluid Milk processors 
outside the relevant geographic markets is unlikely to be sufficient or 
timely enough to offset the anticompetitive effects of the acquisition. 
Processors who do not currently serve these markets are unlikely to 
begin shipping a significant quantity of Fluid Milk into the relevant 
geographic markets due to the same factors that make them uncompetitive 
in these markets today, including transportation costs and the lack of 
necessary capabilities or levels of service. Any milk that could be 
shipped into the relevant geographic markets likely could not be 
competitively priced because of the high transportation costs. Nor 
could these processors economically deliver Fluid Milk to customers 
like schools because they lack local distribution networks.
    55. The construction of a new Fluid Milk processing plant to serve 
customers in either of the relevant geographic markets is very unlikely 
because of the high costs of building a Fluid Milk processing plant--
especially as Fluid Milk consumption continues to decline. Numerous 
Fluid Milk processing plants have closed in the last ten years across 
the United States, while only a few new plants have been built, and 
these newly-built plants were largely for retailers to supply their own 
stores. Finally, the two largest Fluid Milk processors in the country, 
Dean and Borden Dairy Company, have filed for bankruptcy.
    The Complaint also alleges that potential harm from the proposed 
merger is unlikely to generate verifiable, merger-specific efficiencies 
sufficient to outweigh the anticompetitive effects that are likely to 
occur in the provision of Fluid Milk in the relevant geographic 
markets.

III. Explanation of the Proposed Final Judgment

    The divestitures required by the proposed Final Judgment will 
remedy the loss of competition alleged in the Complaint by establishing 
independent Fluid Milk processing competitors in northeastern Illinois 
and Wisconsin and in New England. The proposed Final Judgment requires 
DFA to divest Dean's De Pere Plant, Franklin Plant, and Harvard Plant, 
related ancillary facilities (such as warehouses and sales offices), 
and tangible and intangible assets related to or used in connection 
with the processing, marketing, sale, or distribution of Fluid Milk and 
all other products by each of the Divestiture Plants. The divestitures 
are to occur within 30 days (with extensions that may be granted in the 
sole discretion of the United States not to exceed 60 days) after the 
entry of the Stipulation and Order by the Court.

(A) The Divestiture Plants

    The proposed Final Judgment defines three sets of divestiture 
assets, one for each Divestiture Plant. Each set of assets must be 
divested in such a way as to satisfy the United States in its sole 
discretion, after consultation with the Plaintiff States, that they can 
and will be operated by the purchaser as a viable, ongoing business 
that can compete effectively in the market for the processing and sale 
of Fluid Milk in the relevant geographic market. Defendants must use 
their best efforts to accomplish the divestitures as expeditiously as 
possible and must cooperate with potential divestiture buyers.
    The proposed Final Judgment requires that a single divestiture 
buyer acquire both the De Pere Plant and the Harvard Plant, unless the 
United States exercises its discretion to permit separate purchasers. 
The United States prefers that the Harvard Plant and De Pere Plant be 
sold together because the plants will likely be able to more 
successfully compete if operated jointly. Though the Harvard Plant and 
De Pere Plant could each operate independently, divesting them to the 
same buyer would more closely replicate for the buyer the advantages 
that Dean held before the transaction, including, among others, the 
ability for the plants to (1) assist each other with operations and 
distribution, including the capability to serve as backup for each 
other, (2) serve a contiguous set of customers, and (3) share the 
regional ``Dean's'' brand. The United States maintains the sole 
discretion to approve separate buyers for the Harvard Plant and De Pere 
Plant under the proposed Final Judgment if it can be demonstrated to 
the United States that separate buyers can restore the competition that 
the Complaint alleges would have been lost by the transaction. The 
Franklin Plant, which is in a different geographic market than the 
Harvard and De Pere Plants, may be divested to a different purchaser.

[[Page 33727]]

(B) Brands and Licenses

    Branded milk represents a distinct minority of total Fluid Milk 
sales at the Divestiture Plants. The majority of Fluid Milk sales are 
for private-label products--that is, products labeled with the brand of 
the retailer rather than the manufacturer. Nevertheless, in order to 
protect the viability of the Divestiture Plants and related businesses 
that will be divested, the proposed Final Judgment requires a 
combination of brand divestitures and brand licenses that are based 
upon a fact-specific analysis of the historic sales by each individual 
Divestiture Plant.
    The brands used at each of the Divestiture Plants varies among a 
combination of local or sub-regional, regional, and national brands. 
The local or sub-regional brands include Garelick Farms, which is used 
at the Franklin Plant, and Morning Glory and Farm Fresh, which are both 
used at the De Pere Plant. The regional ``Dean's'' brand is used at the 
De Pere Plant and the Harvard Plant. Dean's national brands--used at 
all three Divestiture Plants--are Dairy Pure and Dean's chocolate milk 
brand, TruMoo. Dean typically uses Dairy Pure as a cobrand with local 
or sub-regional brands and regional brands, including the Garelick 
Farms, Morning Glory, and Farm Fresh brands used at the Divestiture 
Plants.
    The local or sub-regional brands--Garelick Farms, Morning Glory, 
and Farm Fresh--will transfer to the divestiture buyers of the plants 
where the local or sub-regional branded products are sold. Garelick 
Farms will transfer to the buyer of the Franklin Plant. Morning Glory 
and Farm Fresh will transfer to the buyer of the De Pere Plant. 
Transferring ownership of these brands will place the divestiture 
buyers in the same position as Dean was before the transaction with 
respect to these local or sub-regional brands.
    The buyer(s) of the Divestiture Plants will receive licenses--
rather than ownership--to use the national and regional brands (i.e., 
Dairy Pure, TruMoo, and ``Dean's'') in geographic areas that cover 
nearly all of each of the Divestiture Plants' existing sales 
footprints. The proposed Final Judgment provides licenses rather than 
ownership for these brands because the brands are used across the 
United States. Most Dean plants sell at least some TruMoo, ``Dean's,'' 
and Dairy Pure brand products, and an overwhelming majority of the 
sales for these brands come from Dean plants that DFA has acquired and 
is retaining. In contrast, the local or sub-regional brands that are 
being divested are used at a smaller number of Dean plants in smaller 
areas surrounding the Divestiture Plants.
    The divestiture buyer of each Divestiture Plant will receive 
transitional licenses to the national brands, TruMoo and Dairy Pure. 
Because Dairy Pure frequently is cobranded, the divestiture buyer will 
be able to use the transitional license to continue to cobrand products 
while it changes its packaging and rebrands its products. The TruMoo 
brand makes up a small percentage of the sales at the Divestiture 
Plants and is not necessary for the future viability of the Divestiture 
Plants and related business. Therefore, the divestiture buyers will 
each receive a transitional license for the TruMoo brand. They will 
also receive a perpetual license to the intellectual property, product 
formulas, technology, and know-how for TruMoo because consumers value 
the taste of the TruMoo milk and the divestiture buyers will benefit 
from the ability to perpetually offer chocolate milk with the same 
taste. These TruMoo licenses will permit each buyer to transition 
chocolate milk sales to its local or sub-regional brand, the ``Dean's'' 
brand, or another brand of its choice while continuing to use the same 
chocolate milk formula perpetually.
    If the buyer of the Harvard Plant and the De Pere Plant are the 
same, as the proposed Final Judgment anticipates, the buyer will 
receive a perpetual license to the ``Dean's'' brand that it could use 
for sales within a multistate area set forth in the proposed Final 
Judgment from either or both plants. If the buyers of the two plants 
are different, the buyer of the Harvard Plant, and not the buyer of the 
De Pere Plant, will receive a perpetual license to the ``Dean's'' 
brand. This accounts for the fact that the Harvard Plant sells more 
than two times the amount of ``Dean's'' brand Fluid Milk as compared to 
the De Pere Plant and the buyer of the Harvard Plant will not receive a 
perpetual license or ownership of any other brand. If a separate buyer 
acquires the De Pere Plant, it will receive a transitional license to 
the ``Dean's'' brand. This transitional license will give the buyer the 
opportunity to move sales to its local or sub-regional brands or 
another brand.
    The proposed Final Judgment requires these transfers and licenses 
so that the divestiture buyers will be placed, to the greatest extent 
possible, in the same position as Dean prior to the transaction and 
will have the ability to operate the Divestiture Plants as independent 
and ongoing business concerns.
1. Franklin Plant
    Under the proposed Final Judgment, the divestiture buyer of the 
Franklin Plant will own the local and sub-regional brands used at the 
Franklin Plant and receive transitional licenses for the national 
brands. The Franklin Plant currently uses the Garelick Farms brand and 
the national brands Dairy Pure and TruMoo. Garelick Farms branded 
products are sold throughout New England. Ownership of the Garelick 
Farms brand will transfer to the buyer of the Franklin Plant. The buyer 
of the Franklin Plant will also receive a non-exclusive, royalty-free, 
paid-up, irrevocable, nationwide two-year transitional license for both 
the Dairy Pure and TruMoo national brands. The Dairy Pure license 
ensures that the buyer will have sufficient time to transition away 
from the cobranding of Dairy Pure with Garelick Farms. Similarly, the 
TruMoo license will permit the buyer time to transition its chocolate 
milk to the Garelick Farms brand or develop its own chocolate milk 
brand. In order to ensure consistency in the quality of the TruMoo 
branded products and to allow the divestiture buyer to offer its own 
chocolate milk brand without altering the taste that consumers may 
prefer, the divestiture assets also include a non-exclusive, royalty-
free, paid-up, irrevocable, perpetual, nationwide license to the 
intellectual property, including the formula and know-how, for the 
TruMoo products.
2. Harvard Plant
    Under the proposed Final Judgment, the divestiture buyer of the 
Harvard Plant will receive perpetual licenses to the regional 
``Dean's'' brand and transitional licenses for the national brands. The 
Harvard Plant currently uses the regional ``Dean's'' brand and the 
national brands Dairy Pure and TruMoo. Because the Harvard Plant relies 
on the ``Dean's'' brand for its branded sales, the buyer will receive 
an exclusive, royalty-free, paid-up, irrevocable, perpetual license to 
use the ``Dean's'' brand in Illinois, Wisconsin, Indiana, and the Upper 
Peninsula of Michigan. Further, the buyer will receive a non-exclusive, 
royalty-free, paid-up, irrevocable, perpetual license to use the 
``Dean's'' brand in Minnesota, Iowa, and the Lower Peninsula of 
Michigan. The geographies where the buyer's license is exclusive 
represents the primary area where the Harvard Plant sells its products. 
The addition of the non-exclusive geographies ensures that the buyer 
will be able to offer the same brand to more distant customers

[[Page 33728]]

and will not be hampered in its ability to compete in those more 
distant geographies. The divestiture assets for the Harvard Plant also 
include the same transitional licenses to Dairy Pure and TruMoo, as 
well as the same perpetual license for the TruMoo intellectual 
property, as the divestiture assets for the Franklin Plant.
3. De Pere Plant
    Under the proposed Final Judgment, the divestiture buyer of the De 
Pere Plant will own the local brands that are primarily used by the De 
Pere plant and will receive transitional licenses for the national 
brands and regional ``Dean's'' brand. The De Pere Plant currently uses 
the local Morning Glory, Farm Fresh, and Jilbert brands, the national 
brands Dairy Pure and TruMoo, and the regional ``Dean's'' brand. 
Ownership of the Morning Glory and Farm Fresh brands, both of which are 
strong local brands, will transfer to the buyer of the De Pere Plant. 
The buyer of the De Pere Plant also will receive the same transitional 
licenses to Dairy Pure and TruMoo, as well as the same perpetual 
license for the TruMoo intellectual property, as the buyers of the 
Franklin Plant and the Harvard Plant. In addition to ownership of the 
local brands and licenses to the national brands, the De Pere Plant 
buyer will receive a two-year non-exclusive, royalty-free, paid-up, 
irrevocable, nationwide license to use the ``Dean's'' brand. This 
transitional license will ensure that, in the event that the buyer of 
the De Pere Plant is not the same as the buyer of the Harvard Plant, 
the De Pere Plant buyer will have sufficient time to transition away 
from cobranding. If, as expected, the buyer of the De Pere Plant is 
also the buyer of the Harvard Plant, the buyer will also be able to use 
the perpetual ``Dean's'' license from the Harvard Plant divestiture to 
cover sales from the De Pere Plant within the applicable geography. 
Though the De Pere Plant also sells some products under the local 
Jilbert brand, those sales are de minimis. Because of the very limited 
use of that brand, which is used primarily by a plant that is not 
subject to divestiture, the Jilbert brand is not a part of the De Pere 
divestiture assets.

(C) Other Provisions

    In order to preserve competition and facilitate the success of the 
potential divestiture buyers, the proposed Final Judgment contains 
additional obligations for Defendants. Paragraph IV(C) of the proposed 
Final Judgment requires Defendants to facilitate each buyer's hiring of 
employees whose jobs relate to the processing, marketing, sale, or 
distribution of Fluid Milk or any other products by the Divestiture 
Plants. In particular, the proposed Final Judgment requires that 
Defendants provide each buyer, the United States, and the Plaintiff 
States, with organization charts and information relating to the 
employees and make employees available for interviews. It also provides 
that Defendants must not interfere with any negotiations to hire these 
employees by a buyer of these assets. In addition, for employees who 
elect employment with a buyer, Defendants must waive all non-compete 
and non-disclosure agreements, vest all unvested pension and other 
equity rights, and provide all benefits that the employees would 
generally have been provided if the employees had continued employment 
with Defendants. This provision will help to ensure that the buyers 
will be able to hire qualified employees for the Divestiture Plants and 
related businesses.
    Paragraph IV(G) of the proposed Final Judgment facilitates the 
transfer of customers and other contractual relationships from 
Defendants to each buyer. Defendants must transfer all contracts, 
agreements, and customer relationships. For those contracts, 
agreements, or customer relationships that extend beyond the 
Divestiture Plants, Defendants must transfer the relevant portions of 
those contracts, agreements, or customer relationships. For contracts 
or agreements that require another party's consent to transfer, 
Defendants must use their best efforts to accomplish the transfer. The 
paragraph also requires Defendants to send a letter to any customer of 
a Divestiture Plant that does not have a written contract within five 
business days of the closing of the divestiture of the relevant 
Divestiture Plant. The letter, which is subject to the prior approval 
of the United States, must notify each such customer that the buyer of 
the Divestiture Plant will be the customer's new supplier. This 
provision will help initiate contact between the buyer and the customer 
so that a relationship can be immediately established. Defendants may 
not interfere with any negotiations between a buyer and a customer or 
another contracting party. Finally, Defendants must release each buyer 
from any of Dean's obligations to purchase raw milk from DFA, allowing 
the buyer to seek its own suppliers for raw milk and not be beholden to 
DFA. Defendants are, however, required to enter into a supply contract 
for raw milk for a transitional period at the option of each buyer, as 
described below, to ensure that the buyer has an adequate supply as it 
takes over operations.
    Paragraph IV(H) of the proposed Final Judgment requires Defendants 
to use best efforts to help each buyer apply for and secure any 
necessary governmental approval for any governmental license or 
authorization that cannot be transferred to the buyer. This provision 
will help to facilitate the transition of the business to the buyer 
without disruption due to any issues involving governmental licensures 
or authorizations.
    Paragraph IV(I) of the proposed Final Judgment requires Defendants, 
at the option of each buyer, to enter raw milk supply agreements 
sufficient to meet each buyer's needs for up to three months. The 
United States, in its sole discretion, and upon the buyer's request, 
may approve an extension for up to an additional three months. This 
provision will help to ensure that the buyers will not face disruption 
to their supply of raw milk during this important transitional period.
    Paragraph IV(J) of the proposed Final Judgment requires Defendants, 
at the option of each buyer, to enter agreements to provide transition 
services for a period of up to six months (with an option for the 
United States, after consultation with the Plaintiff States, to extend 
the period for an additional six months, in its sole discretion) to 
facilitate the transfer and operation of the relevant divestiture 
assets. This paragraph further provides that employees of Defendants 
tasked with supporting these agreements must not share any 
competitively sensitive information of the buyers with any other 
employees of Defendants.
    Paragraph IV(L) of the proposed Final Judgment prohibits, for a 
period of one year, Defendants from soliciting business from customers 
supplied from a Divestiture Plant by initiating customer-specific 
communications for the portion of that customer's business that is 
covered by a contract, agreement, or relationship that is included in 
the divestiture assets. This prohibition will help each buyer establish 
and maintain important customer relationships.
    Paragraph IV(M) addresses the fact that the Franklin Plant is 
located on leased property. Dean had an unassignable option to acquire 
the land, which it had not exercised. Through the bankruptcy process, 
the otherwise unassignable option was assigned to DFA but cannot be 
further assigned to the divestiture buyer of the Franklin Plant. 
Paragraph IV(M) requires DFA, at the Franklin Plant buyer's request, to 
(1) exercise DFA's non-assignable option to purchase the real estate on 
which the

[[Page 33729]]

Franklin Plant is located, and (2) sell to the buyer of the Franklin 
Plant the real estate at the same price that DFA pays for the property 
under DFA's non-assignable option to purchase. This provision puts the 
buyer of the Franklin Plant in the same position as Dean before DFA 
acquired the Dean assets by providing the buyer with the same option to 
acquire the real estate that Dean had, even though the option is non-
assignable and therefore cannot be included in the Franklin Plant 
divestiture assets.
    If Defendants do not accomplish the divestitures within the period 
prescribed in the proposed Final Judgment, or if Defendants waive their 
right to first attempt to divest the Franklin Plant and related assets, 
or the Harvard Plant and De Pere Plant and their related assets, as 
permitted by Paragraph V(A) of the proposed Final Judgment, the 
proposed Final Judgment provides that the Court will appoint a 
divestiture trustee selected by the United States to effect the 
divestitures, or a portion thereof. If a divestiture trustee is 
appointed, the proposed Final Judgment provides that Defendants will 
pay all costs and expenses of the trustee. The divestiture trustee's 
commission will be structured so as to provide an incentive for the 
trustee based on the price obtained and the speed with which the 
divestiture is accomplished. After the divestiture trustee's 
appointment becomes effective, the trustee will provide monthly reports 
to the United States and Plaintiff States setting forth his or her 
efforts to accomplish the divestiture.
    At the end of an initial term of 60 days (with extensions that may 
be granted in the sole discretion of the United States not to exceed an 
additional 60 days), if the divestiture of the Divestiture Plants and 
other divestiture assets has not been accomplished, DFA can file a 
motion with the Court requesting that the Stipulation and Order be 
terminated and the Final Judgment be modified to allow DFA to retain 
those divestiture assets. This option for the divestiture assets to 
potentially revert back to DFA is included because of Dean's dire 
financial circumstance, the distressed condition of the Fluid Milk 
industry, the likelihood of additional Fluid Milk processing plant 
closures, and the desire to keep the plants operating, rather than 
shutting them down if buyers cannot be found. This will allow customers 
to continue having an adequate supply of Fluid Milk.
    The proposed Final Judgment contains a notification provision in 
Section XI designed to give the United States the opportunity to review 
all of Defendants' future acquisitions, including acquisitions of 
partial or indirect interests, that involve entities that have 
generated more than $1 million in revenue from the processing, 
marketing, sale, and distribution of Fluid Milk in the prior completed 
calendar year. Section XI requires DFA to notify the United States, and 
any Plaintiff State in which any of the assets or interests are located 
or whose border is less than 150 miles from any such assets or 
interests, in the same form, with some modifications, as it would for a 
Hart-Scott-Rodino Antitrust Improvements Act (the ``HSR Act'') filing, 
as specified in the Appendix to Part 803 of Title 16 of the Code of 
Federal Regulations. Notice must be made 30 calendar days before the 
acquisition. Section XI further provides for waiting periods and 
opportunities for the United States to obtain additional information 
similar to the provisions of the HSR Act before such acquisitions can 
be consummated. This provision ensures that the United States and 
relevant Plaintiff States will have the opportunity to review, for 
example, any future acquisitions of additional Dean assets by DFA. In 
particular, this provision would require advance notice of any attempt 
by DFA to acquire the Land O'Lakes plants in Woodbury, Minnesota; Sioux 
Falls, South Dakota; and Bismarck, North Dakota, which DFA did not 
include in its present acquisition due to the competitive concerns 
expressed to DFA by the United States.
    Section XII of the proposed Final Judgment prevents Defendants from 
reacquiring any part of or interest in the divestiture assets without 
prior consent from the United States, after consultation with the 
Plaintiff States. It also prevents Defendants from entering new 
collaborations or expanding existing collaborations involving the 
divestiture assets without prior consent.
    The proposed Final Judgment also contains provisions designed to 
promote compliance and make the enforcement of the Final Judgment as 
effective as possible. Paragraph XIV(A) provides that the United States 
retains and reserves all rights to enforce the provisions of the Final 
Judgment, including its rights to seek an order of contempt from the 
Court. Under the terms of this paragraph, Defendants have agreed that 
in any civil contempt action, any motion to show cause, or any similar 
action brought by the United States regarding an alleged violation of 
the Final Judgment, the United States may establish the violation and 
the appropriateness of any remedy by a preponderance of the evidence 
and that Defendants have waived any argument that a different standard 
of proof should apply. This provision aligns the standard for 
compliance obligations with the standard of proof that applies to the 
underlying offense that the compliance commitments address.
    Paragraph XIV(B) provides additional clarification regarding the 
interpretation of the provisions of the proposed Final Judgment. The 
proposed Final Judgment is intended to restore competition that the 
United States alleged would otherwise be harmed by the transaction. 
Defendants agree that they will abide by the proposed Final Judgment, 
and that they may be held in contempt of this Court for failing to 
comply with any provision of the proposed Final Judgment that is stated 
specifically and in reasonable detail, as interpreted in light of this 
procompetitive purpose.
    Paragraph XIV(C) of the proposed Final Judgment provides that if 
the Court finds in an enforcement proceeding that Defendants have 
violated the Final Judgment, the United States may apply to the Court 
for a one-time extension of the Final Judgment, together with such 
other relief as may be appropriate. In addition, to compensate American 
taxpayers for any costs associated with investigating and enforcing 
violations of the Final Judgment, Paragraph XIV(C) provides that in any 
successful effort by the United States to enforce the Final Judgment 
against a Defendant, whether litigated or resolved before litigation, 
that Defendant will reimburse the United States for attorneys' fees, 
experts' fees, and other costs incurred in connection with any 
enforcement effort, including the investigation of the potential 
violation.
    Paragraph XIV(D) states that the United States may file an action 
against a Defendant for violating the Final Judgment for up to four 
years after the Final Judgment has expired or been terminated. This 
provision is meant to address circumstances such as when evidence that 
a violation of the Final Judgment occurred during the term of the Final 
Judgment is not discovered until after the Final Judgment has expired 
or been terminated or when there is not sufficient time for the United 
States to complete an investigation of an alleged violation until after 
the Final Judgment has expired or been terminated. This provision, 
therefore, makes clear that, for four years after the Final Judgment 
has expired or been terminated, the United States may still challenge a 
violation that occurred during the term of the Final Judgment.

[[Page 33730]]

    Finally, Section XV of the proposed Final Judgment provides that 
the Final Judgment will expire ten years from the date of its entry, 
except that after five years from the date of its entry, the Final 
Judgment may be terminated upon notice by the United States to the 
Court and Defendants that the divestiture has been completed and that 
the continuation of the Final Judgment is no longer necessary or in the 
public interest.

IV. Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment neither impairs 
nor assists the bringing of any private antitrust damage action. Under 
the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 16(a), the 
proposed Final Judgment has no prima facie effect in any subsequent 
private lawsuit that may be brought against Defendants.

V. Procedures Available for Modification of the Proposed Final Judgment

    The United States and Defendants have stipulated that the proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least 60 days preceding the 
effective date of the proposed Final Judgment within which any person 
may submit to the United States written comments regarding the proposed 
Final Judgment. Any person who wishes to comment should do so within 60 
days of the date of publication of this Competitive Impact Statement in 
the Federal Register, or the last date of publication in a newspaper of 
the summary of this Competitive Impact Statement, whichever is later. 
All comments received during this period will be considered by the U.S. 
Department of Justice, which remains free to withdraw its consent to 
the proposed Final Judgment at any time before the Court's entry of the 
Final Judgment. The comments and the response of the United States will 
be filed with the Court. In addition, comments will be posted on the 
U.S. Department of Justice, Antitrust Division's internet website and, 
under certain circumstances, published in the Federal Register.
    Written comments should be submitted to: Eric D. Welsh, Acting 
Chief, Healthcare and Consumer Products Section, Antitrust Division, 
U.S. Department of Justice, 450 Fifth Street NW, Suite 4100, 
Washington, DC 20530.
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    As an alternative to the proposed Final Judgment, the United States 
considered a full trial on the merits against Defendants. The United 
States could have continued the litigation and sought preliminary and 
permanent injunctions against DFA's acquisition of certain assets from 
Dean. The United States is satisfied, however, that the divestiture of 
assets described in the proposed Final Judgment will remedy the 
anticompetitive effects alleged in the Complaint, preserving 
competition for the processing and sale of Fluid Milk in northeastern 
Illinois and Wisconsin and in New England. Thus, the proposed Final 
Judgment achieves all or substantially all of the relief the United 
States would have obtained through litigation, but avoids the time, 
expense, and uncertainty of a full trial on the merits of the 
Complaint.

VII. Standard of Review Under The APPA for the Proposed Final Judgment

    The Clayton Act, as amended by the APPA, requires that proposed 
consent judgments in antitrust cases brought by the United States be 
subject to a 60-day comment period, after which the Court shall 
determine whether entry of the proposed Final Judgment ``is in the 
public interest.'' 15 U.S.C. 16(e)(1). In making that determination, 
the Court, in accordance with the statute as amended in 2004, is 
required to consider:

    (A) the competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration of relief sought, anticipated effects of 
alternative remedies actually considered, whether its terms are 
ambiguous, and any other competitive considerations bearing upon the 
adequacy of such judgment that the court deems necessary to a 
determination of whether the consent judgment is in the public 
interest; and
    (B) the impact of entry of such judgment upon competition in the 
relevant market or markets, upon the public generally and 
individuals alleging specific injury from the violations set forth 
in the complaint including consideration of the public benefit, if 
any, to be derived from a determination of the issues at trial.

15 U.S.C. 16(e)(1)(A) & (B). In considering these statutory factors, 
the Court's inquiry is necessarily a limited one as the government is 
entitled to ``broad discretion to settle with the defendant within the 
reaches of the public interest.'' United States v. Microsoft Corp., 56 
F.3d 1448, 1461 (DC Cir. 1995); United States v. U.S. Airways Grp., 
Inc., 38 F. Supp. 3d 69, 75 (D.D.C. 2014) (explaining that the 
``court's inquiry is limited'' in Tunney Act settlements); United 
States v. InBev N.V./S.A., No. 08-1965 (JR), 2009 U.S. Dist. LEXIS 
84787, at *3 (D.D.C. Aug. 11, 2009) (noting that a court's review of a 
consent judgment is limited and only inquires ``into whether the 
government's determination that the proposed remedies will cure the 
antitrust violations alleged in the complaint was reasonable, and 
whether the mechanism to enforce the final judgment are clear and 
manageable'').
    As the U.S. Court of Appeals for the District of Columbia Circuit 
has held, under the APPA a court considers, among other things, the 
relationship between the remedy secured and the specific allegations in 
the government's complaint, whether the proposed Final Judgment is 
sufficiently clear, whether its enforcement mechanisms are sufficient, 
and whether it may positively harm third parties. See Microsoft, 56 
F.3d at 1458-62. With respect to the adequacy of the relief secured by 
the proposed Final Judgment, a court may not ``make de novo 
determination of facts and issues.'' United States v. W. Elec. Co., 993 
F.2d 1572, 1577 (D.C. Cir. 1993) (quotation marks omitted); see also 
Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152 F. 
Supp. 2d 37, 40 (D.D.C. 2001); United States v. Enova Corp., 107 F. 
Supp. 2d 10, 16 (D.D.C. 2000); InBev, 2009 U.S. Dist. LEXIS 84787, at 
*3. Instead, ``[t]he balancing of competing social and political 
interests affected by a proposed antitrust consent decree must be left, 
in the first instance, to the discretion of the Attorney General.'' W. 
Elec. Co., 993 F.2d at 1577 (quotation marks omitted). ``The court 
should bear in mind the flexibility of the public interest inquiry: the 
court's function is not to determine whether the resulting array of 
rights and liabilities is one that will best serve society, but only to 
confirm that the resulting settlement is within the

[[Page 33731]]

reaches of the public interest.'' Microsoft, 56 F.3d at 1460 (quotation 
marks omitted); see also United States v. Deutsche Telekom AG, No. 19-
2232 (TJK), 2020 WL 1873555, at *7 (D.D.C. Apr. 14, 2020). More 
demanding requirements would ``have enormous practical consequences for 
the government's ability to negotiate future settlements,'' contrary to 
congressional intent. Id. at 1456. ``The Tunney Act was not intended to 
create a disincentive to the use of the consent decree.'' Id.
    The United States' predictions about the efficacy of the remedy are 
to be afforded deference by the Court. See, e.g., Microsoft, 56 F.3d at 
1461 (recognizing courts should give ``due respect to the Justice 
Department's . . . view of the nature of its case''); United States v. 
Iron Mountain, Inc., 217 F. Supp. 3d 146, 152-53 (D.D.C. 2016) (``In 
evaluating objections to settlement agreements under the Tunney Act, a 
court must be mindful that [t]he government need not prove that the 
settlements will perfectly remedy the alleged antitrust harms[;] it 
need only provide a factual basis for concluding that the settlements 
are reasonably adequate remedies for the alleged harms.'') (internal 
citations omitted); United States v. Republic Servs., Inc., 723 F. 
Supp. 2d 157, 160 (D.D.C. 2010) (noting ``the deferential review to 
which the government's proposed remedy is accorded''); United States v. 
Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (``A 
district court must accord due respect to the government's prediction 
as to the effect of proposed remedies, its perception of the market 
structure, and its view of the nature of the case.''). The ultimate 
question is whether ``the remedies [obtained by the Final Judgment are] 
so inconsonant with the allegations charged as to fall outside of the 
`reaches of the public interest.''' Microsoft, 56 F.3d at 1461 (quoting 
W. Elec. Co., 900 F.2d at 309).
    Moreover, the Court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its complaint, and does not authorize the Court to 
``construct [its] own hypothetical case and then evaluate the decree 
against that case.'' Microsoft, 56 F.3d at 1459; see also U.S. Airways, 
38 F. Supp. 3d at 75 (noting that the court must simply determine 
whether there is a factual foundation for the government's decisions 
such that its conclusions regarding the proposed settlements are 
reasonable); InBev, 2009 U.S. Dist. LEXIS 84787, at *20 (``[T]he 
`public interest' is not to be measured by comparing the violations 
alleged in the complaint against those the court believes could have, 
or even should have, been alleged.''). Because the ``court's authority 
to review the decree depends entirely on the government's exercising 
its prosecutorial discretion by bringing a case in the first place,'' 
it follows that ``the court is only authorized to review the decree 
itself,'' and not to ``effectively redraft the complaint'' to inquire 
into other matters that the United States did not pursue. Microsoft, 56 
F.3d at 1459-60.
    In its 2004 amendments to the APPA, Congress made clear its intent 
to preserve the practical benefits of using consent judgments proposed 
by the United States in antitrust enforcement, Public Law 108-237 Sec.  
221, and added the unambiguous instruction that ``[n]othing in this 
section shall be construed to require the court to conduct an 
evidentiary hearing or to require the court to permit anyone to 
intervene.'' 15 U.S.C. 16(e)(2); see also U.S. Airways, 38 F. Supp. 3d 
at 76 (indicating that a court is not required to hold an evidentiary 
hearing or to permit intervenors as part of its review under the Tunney 
Act). This language explicitly wrote into the statute what Congress 
intended when it first enacted the Tunney Act in 1974. As Senator 
Tunney explained: ``[t]he court is nowhere compelled to go to trial or 
to engage in extended proceedings which might have the effect of 
vitiating the benefits of prompt and less costly settlement through the 
consent decree process.'' 119 Cong. Rec. 24,598 (1973) (statement of 
Sen. Tunney). ``A court can make its public interest determination 
based on the competitive impact statement and response to public 
comments alone.'' U.S. Airways, 38 F. Supp. 3d at 76 (citing Enova 
Corp., 107 F. Supp. 2d at 17).

VIII. Determinative Documents

    In formulating the proposed Final Judgment, the United States has 
considered one determinative document within the meaning of the APPA, a 
May 1, 2020 letter from Richard P. Smith, President and Chief Executive 
Officer of DFA, to the United States Department of Justice, Antitrust 
Division and to the Capper-Volstead Act Committee, United States 
Department of Agriculture (``Letter''). The Letter is included as 
Attachment 1 to this Competitive Impact Statement.
    DFA has previously asserted that the Capper-Volstead Act, 7 U.S.C. 
291-292, permits farmers and cooperatives collectively to market not 
only raw milk, but also processed Fluid Milk. The United States, 
however, does not agree with DFA's categorical assertion, which raises 
questions of fact and of unsettled law.
    Through the Letter, DFA has committed not to jointly process, 
market, or sell Fluid Milk with agricultural cooperatives or producers 
(other than its own farmer members) and has waived any right to assert 
in any legal, regulatory, administrative, or adjudicative proceeding 
that such conduct is exempt from the antitrust laws or otherwise 
permissible under Section 6 of the Clayton Act or the Capper-Volstead 
Act. The Letter, which provides additional detail, decreases the 
likelihood that DFA would harm competition through coordination on 
output and prices of Fluid Milk.

    Dated: May 26, 2020

Respectfully submitted,
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Karl D. Knutsen
Nathaniel J. Harris
U.S. Department of Justice, Antitrust Division, Healthcare and 
Consumer Products Section, 450 Fifth Street NW, Suite 4100, 
Washington, DC 20530, 202-514-0976, [email protected]

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