The U.S. District Court, Eastern District of Kentucky, ruled yesterday that Southern Belle Dairy and Dairy Farmers of America, Inc. (DFA) did not violate antitrust laws in 2003.

The complaint, filed by the U.S. Department of Justice and the Commonwealth of Kentucky, alleged that DFA’s partial acquisition of ownership interest in Southern Belle, a milk processing facility in Somerset, Ky., violated Section 7 of the Clayton Act. In the lawsuit, the Department of Justice alleged that DFA’s joint venture relationships with Southern Belle and a National Dairy Holdings’ Flav-O-Rich plant in London, Ky., had given DFA the opportunity to substantially reduce future competition in the sale of milk to Kentucky and Tennessee schools.

Yesterday’s court ruling acknowledged that DFA is not involved in the day-to-day operations or management decisions of its joint ventures with Southern Belle or National Dairy Holdings. The Court found that DFA’s ownership interest in these partnerships did not create greater “incentives and opportunities for collusion.”

DFA had vigorously defended itself in the lawsuit and welcomed the Court’s ruling.

Tom Camerlo, dairy farmer chairman of DFA’s Board of Directors from Florence, Colo., says the ruling is very important to the co-op’s dairy farm families.

“The initial allegation that DFA was somehow engaged in school milk bid rigging was alarming and completely false,” says Camerlo. “This week the Court clearly vindicated DFA of any such involvement and noted that DFA’s access to information regarding school milk marketing decisions is ‘almost nil.’

DFA Press Release