Federal Trade Commission v. Dean Foods Company

PETITIONER: Federal Trade Commission
RESPONDENT: Dean Foods Company
LOCATION: Congress

DOCKET NO.: 970
DECIDED BY: Warren Court (1965-1967)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 384 US 597 (1966)
ARGUED: Mar 28, 1966
DECIDED: Jun 13, 1966

Facts of the case

Question

Media for Federal Trade Commission v. Dean Foods Company

Audio Transcription for Oral Argument - March 28, 1966 in Federal Trade Commission v. Dean Foods Company

Earl Warren:

Federal Trade Commissioner -- Commission, petitioner versus Dean Foods Company et al.

Mr. Solicitor General.

Mr. Chief Justice, may it please the Court.

This case is here on certiorari to the Court of Appeals for the Seventh Circuit.

I would like to first reverse and give the question and then get to the facts because the two are so combined together, there’s only a single question before the Court, it’s whether or not a Federal Court of Appeals having ultimate review jurisdiction of a Federal Trade Commission merger proceeding may under the All Writs Statute issue an injunction to maintain the status quo pending the outcome of the administrative proceedings where the validity of a merger under Section 7 of the Clayton Act is pointed issue.

We emphasize that only the jurisdiction of the Court of Appeals is involved in this case because that was the ruling of the Seventh Circuit Court of Appeals.

We do not argue that in the circumstance of this case adaptable principles required the issuance of the injunction for the court below did not reach the merits of the question.

The Court of Appeals for the Seventh Circuit dismissed the petition of the Commission on the grounds that was simply without power to entertain it.

And so the facts be very briefly stated, around December 13 of last year, Dean Foods Company and Bowman Dairy Company agreed that Dean would acquire all of Bowman’s operating assets as of January 3 of this year.

The month prior granting to this agreement, Dean had asked the merger division of the Federal Trade Commission for its informal advice as to the legality of this proposed acquisition.

And after an immediate investigation, the merger division of FTC advised Dean that it would recommend that a complaint be issued against this acquisition.

Dean and Bowman were substantial competitors in the sale of package milk in Chicago area.

Bowman was the first or second largest seller of packaged milk while Dean was the third or fourth largest seller in that area.

All together, the four largest dairy companies had a combined market in the area.

The share exceeded 40% of that market.

Since the agreement between Dean and Bowman would eliminate Bowman as a competitor, there was we submit sufficient reason to believe that it would violate Section 7 of the Clayton Act in view of the high concentration in the Chicago milk market.

Dean, however, notified the Commission's staff on December 14th, that the purchase agreement between Bowman had been consummated and executed the day before which was December 13.

And on December 22, the Commission -- the Federal Trade Commission issued a complaint charging that Dean's acquisition of Bowman would substantially lessen competition in violation of Section 7 of the Clayton Act.

Now, Dean had told the Commission staff that shortly after a consummation agreement, it intended to dispose off Bowman's retail delivery milk routes, closed barriers of its plants and consolidate operations of the two companies and so the Commission on December 30 filed a petition in the Seventh Circuit which is the normal within dispute as the Court of Appeals which would have the ultimate jurisdiction to review any action by the Federal Trade Commission.

And in these pleadings, was sought an order under the All Writs Statute enjoining Dean and Bowman from taking any steps to carry out the purchase agreement pending completion of the Commission's adjudication of its complaint.

And in that, they alleged -- the Commission alleged that if Dean carried out its plans for the disposition of Bowman's assets, it would be virtually impossible to restore Bowman as a viable independent company, should the acquisition finally be adjudged and lawful.

The Commission wished to preserve the possibility of an effective remedy against this merger.

On January 4th, the Court of Appeals entered the temporary restraining order and agreement was held up on January of 19th, the Seventh Circuit dismissed the Commission petition for one of jurisdiction and at the same time it dissolve the temporary restraining order.

And three hours later, the purchase agreement was carried out and Dean begun effectuating the merger.

And on January 24th, Mr. Justice Clark entered the order stating most of the changes in the business in operation of Bowman pending the disposition of this petition for certiorari.

Byron R. White:

Who represented the Commission in the Court of Appeals?

The Commission's lawyers.

Byron R. White:

And the part -- the justice had no connection to that issue?

No sir.

The -- Mrs. Turner was here was the one who represented them in the Court of Appeals.