Notice: Competitive Impact Statements and Proposed Consent Judgments: Dairy Farmers of America, Inc., Et Al.

64984 Federal Register / Vol. 71, No.
214 / Monday, November 6, 2006 / Notices
containing information and arguments Environmental Response, 302–395–2600, Site Name: DuPont
pertinent to the subject matter of the Compensation, and Liability Act Newport NRDA DE–X009. Contacts:
investigations. Parties may file written (‘‘CERCLA’’), as amended, 42 U.S.C. Jane Biggs Sanger, Elizabeth LaSorte, or
testimony in connection with their 9601 et seq. and the Delaware Robert Newsome. An electronic version
presentation at the conference no later Hazardous Substance Cleanup Act of the Consent Decree and the DARP can
than three days before the conference. If (‘‘HSCA’’), 7 Del. C. Chapter 91 with be viewed at http://
briefs or written testimony contain BPI, respect to the release of hazardous apps.dnrec.state.de.us/intraviewer/
they must conform with the substances from DuPont-Newport session/frmmain.cfm.
requirements of sections 201.6, 207.3, chemical facility, located in Newport,
Robert Brook,
and 207.7 of the Commission’s rules. Delaware. Under the proposed Consent
Assistant Chief, Environmental Enforcement
The Commission’s rules do not Decree, the defendants will fund
Section, Environment and Natural Resources
authorize filing of submissions with the restoration projects on the ‘‘Pike Division.
Secretary by facsimile or electronic Property’’ as set forth in the Damage
[FR Doc. 06–9104 Filed 11–3–06; 8:45 am]
means, except to the extent permitted by Assessment and Restoration Plan
BILLING CODE 4410–15–M
section 201.8 of the Commission’s rules, (‘‘DARP’’, attached to the Consent
as amended, 67 FR 68036 (November 8, Decree), and the State of Delaware will
2002). Even where electronic filing of a hold an environmental covenant for the DEPARTMENT OF JUSTICE
document is permitted, certain Pike Property to protect it in perpetuity.
documents must also be filed in paper Defendants will reimburse each Trustee Antitrust Division
form, as specified in II (C) of the for its Damage Assessment Costs, and
Commission’s Handbook on Electronic make a payment to Delaware for United States v. Dairy Farmers of
Filing Procedures, 67 FR 68168, 68173 groundwater injuries. The total value of America, Inc.; Proposed Final
(November 8, 2002). the settlement as set forth in the Judgement and Competitive Impact
In accordance with sections 201.16(c) Consent Decree is $1.6 million. Statement
and 207.3 of the rules, each document The Department of Justice will receive
for a period of fifteen (15) days from the Notice is hereby given pursuant to the
filed by a party to the investigations Antitrust Procedures and Penalties Act,
must be served on all other parties to date of this publication comments
relating to the Consent Decree. 15 U.S.C. 16(b) through (h), that a
the investigations (as identified by proposed Final Judgement, Stipulation,
either the public or BPI service list), and Comments should be addressed to the
Assistant Attorney General, and Competitive Impact Statement have
a certificate of service must be timely been filed with the United States
filed. The Secretary will not accept a Environment and Natural Resources
Division, P.O. Box 7611, U.S. District Court for the Eastern District of
document for filing without a certificate Kentucky in United States of America
of service. Department of Justice, Washington, D.C.
20044–7611, and should refer to United and Commonwealth of Kentucky v.
Authority: These investigations are being States and the State of Delaware v. E.I. Dairy Farmers of America, Inc. and
conducted under authority of title VII of the Du Pont De Nemours & Company, Inc., Southern Belle Dairy Co., LLC, No. 6:03–
Tariff Act of 1930; this notice is published cv–206. On April 24, 2003, the United
pursuant to section 207.12 of the
and CIBA Specialty Chemicals
Corporation, D.J. Ref. 90–11–2–883/2. States and Commonwealth of Kentucky
Commission’s rules. filed a Complaint alleging that the
The Consent Decree may be examined
Issued: November 1, 2006. at the Office of the United States acquisition by DFA of an ownership
By order of the Commission. Attorney, for the District of Delaware, interest in Southern Belle Dairy Co.,
Marilyn R. Abbott, 1007 Orange Street, Suite 700, LLC (‘‘Southern Belle’’), violated
Secretary to the Commission. Wilmington, Delaware. During the Section 7 of the Clayton Act, 15 U.S.C.
[FR Doc. E6–18654 Filed 11–3–06; 8:45 am] public comment period, the Consent 18. An Amended Complaint was filed
BILLING CODE 7020–02–P Decree, may also be examined on the on May 6, 2004. The proposed Final
following Department of Justice Web Judgment, filed on October 2, 2006,
site, http://www.usdoj.gov/enrd/ requires DFA to divest its interest in
Consent_Decrees.html. A copy of the Southern Belle and use its best efforts to
DEPARTMENT OF JUSTICE
Consent Decree may also be obtained by cause its partner, the Allen Family
Notice of Lodging of Consent Decree mail from the Consent Decree Library, Limited Partnership, to divest its
Under the Comprehensive P.O. Box 7611, U.S. Department of interest in Southern Belle as well.
Environmental Response, Justice, Washington, DC 20044–7611 or Copies of the Amended Complaint,
Compensation, and Liability Act and by faxing or e-mailing a request to Tonia proposed Final Judgment, and
the Delaware Hazardous Substances Fleetwood (tonia.fleetwood@usdoj.gov), Competitive Impact Statement are
Cleanup Act fax no. (202) 514–0097, phone available for inspection at the
confirmation number (202) 514–1547. In Department of Justice in Washington,
Notice is hereby given that on requesting a copy from the Consent DC in Room 215, 325 Seventh Street,
September 29, 2006, a proposed Consent Decree Library, please enclose a check NW., and at the Office of the Clerk of
Decree in United States and the State of in the amount of $6.00 (25 cents per the United States District Court for the
Delaware v. E.I. Dupont De Nemours & page reproduction cost) payable to the Eastern District of Kentucky, London,
Company, Inc., and CIBA Specialty U.S. Treasury. Kentucky.
Chemicals Corporation, Civil Action No. A copy of the Consent Decree may Public comment is invited within 60
06–612 was lodged with the United also be obtained at the offices of the days of the date of this notice. Such
States District Court for the District of Delaware Department of Natural comments, and responses thereto, will
rwilkins on PROD1PC63 with NOTICES
Delaware. Resources and Environmental Control, be published in the Federal Register

In this action the United States and Division of Air and Waste Management, and filed with the Court. Comments
the State of Delaware sought claims for Site Investigation and Restoration should be directed to Mark J. Botti,
natural resource damages brought Branch, 391 Lukens Drive, New Castle, Chief, Litigation I Section, Antitrust
pursuant to the Comprehensive Delaware 19720, Main phone number: Division, U.S. Department of Justice,
VerDate Aug<31>2005 17:31 Nov 03, 2006 Jkt 211001 PO 00000 Frm 00065 Fmt 4703 Sfmt 4703 E:\FR\FM\06NON1.SGM 06NON1
Federal Register / Vol. 71, No. 214 / Monday, November 6, 2006 / Notices 64985
1401 H St., NW., Suite 4000, criminal bid-rigging conspiracy consummated, Southern Belle competed
Washington, DC 20530 (202–307–0001). involving school milk. The former with a number of these dairies in
owners of Southern Belle and Flav-O- addition to NDH dairies such as Flav-O-
J. Robert Kramer II,
Rich engaged in that conspiracy and Rich.
Director of Operations, Antitrust Division. pled guilty to conspiring with each 10. In December 2001, DFA, through
United States District Court, Eastern other for more than a decade to rig NDH, acquired control and influence
District of Kentucky, London Division school milk bids. over all significant business decisions of
5. Because many of the affected Flav-O-Rich and other NDH dairies.
United States of America, and school districts are small or rural
Commonwealth of Kentucky, Plaintiffs, Flav-O-Rich processes approximately 30
districts, often in the mountains, it is million gallons of fluid milk per year
v. Dairy Farmers of America, Inc., and unlikely that other dairies will enter or
Southern Belle Dairy Co., LLC, and had annual revenues of
expand into these markets to eliminate approximately $70 million in 2001.
Defendants the anticompetitive effects of the Flav-O-Rich distributes and sells school
Civil Action No.: 03–206–KSF acquisition. Indeed, Southern Belle’s milk primarily in the eastern two-thirds
Filed: former owner, in the course of of Kentucky and Tennessee.
debarment proceedings following the
Amended Complaint 11. In February 2002, DFA, through
criminal conviction, explained that
The United States of America, acting entry was unlikely in many of these its partially owned subsidiary, Southern
under the direction of the Attorney very districts, and that the elimination Belle Dairy Co., LLC, (‘‘Southern Bell
General of the United States, and the of Southern Belle as a competitor would subsidiary’’), acquired control and
Commonwealth of Kentucky, by and reduce competition and cause prices to influence over all significant business
through its Attorney General, bring this rise. decisions of Southern Belle. DFA and
civil action to obtain equitable relief subsidiaries controlled in who or in part
against defendants, including II. Defendants by DFA contributed approximately $18
compelling the Dairy Farmers of 6. Defendant Dairy Farmers of million of the $19 million purchase
America, Inc. (‘‘DFA’’) to divest its America, Inc. (‘‘DFA’’) is a Kansas price for Southern Belle. The Allen
interest in the Southern Belle dairy corporation with its headquarters and Family Limited Partnership (‘‘AFLP’’)
located in Somerset, Kentucky, and principal place of business in Kansas contributed the remaining $1 million,
allege as follows: City, Missouri. DFA is the largest dairy which DFA guaranteed AFLP could
farmer cooperative in the world. In recover any time after February 26,
I. Nature of the Action 2001, it had approximately 25,500 2005. DFA and its subsidiaries own a
1. Up until February 2002, DFA, members in 48 states, and sold 50% common equity interest and almost
through its subsidiaries, operated the approximately 45.6 billion pounds of 100% preferred equity interest (around
Flav-O-Rich dairy in London, Kentucky raw milk. DFA had over $7.9 billion in $4,000,000), and 100% credit interest
(‘‘Flav-O-Rich’’) and competed revenues in 2001. (around $13,000,000) in Southern Belle.
vigorously against the Southern Belle 7. DFA owns a 50% common equity 12. DFA formed its Southern Belle
dairy, located thirty miles away in interest and approximately 92% subsidiary to acquire the Southern Belle
Somerset, Kentucky (‘‘Southern Bell’’), preferred equity interest (around dairy after it became clear that its NDH
to supply milk to school districts $500,000,000) in National Dairy subsidiary could not acquire the dairy
located in Kentucky and Tennessee. Holdings, L.P. (‘‘NDH’’). It also has a based on the Department of Justice’s
That competition resulted in lower 50% interest in Dairy Management LLC, September 1998 challenge.
prices and better service for school which is the managing arm of NDH.
Based on its financial interests in NDH, 13. In planning how DFA would
districts that provide milk to students.
2. In February 2002, DFA, through DFA has the rights to between 50% and control the Southern Belle subsidiary
another subsidiary, acquired control of 75% or more of NDH’s profits. In after they formed it, DFA and AFLP
Southern Belle, eliminating that forming NDH, DFA and its partners in agreed, among other things, that DFA
important competition. When it made NDH agreed, among other that DFA must approve any decision to commit
that acquisition, DFA understood that must approve any decision to commit Southern Belle to any contracts or
the Department of Justice had in NDH to any contracts or expenditures expenditures exceeding $150,000, as
September 1998 successfully challenged exceeding $50,000, to appoint new NDH well as hiring and compensation
a merger involving the very same officers, or change the compensation decisions for Southern Belle’s officers.
dairies, under different ownership, (e.g., increase the salary) of NDH’s DFA also gained the right to control the
because it would have substantially officers. supply of raw milk to the dairy and,
lessened competition in violation of 8. DFA is the sole supplier of raw based on its debt and equity holdings,
Section 7 of the Clayton Act. milk and is the contractually preferred the rights to between 50% and 75% of
3. Southern Belle and Flav-O-Rich are supplier of raw milk to Flav-O-Rich and the dairy’s profits.
the only two dairies or two of only a few other NDH dairies. DFA also sells more 14. Defendant Southern Belle Dairy
dairies that bid to supply school milk in raw, unprocessed milk to dairies in Co., LLC, is a Delaware limited liability
many parts of Kentucky and Tennessee. Kentucky and Tennessee than does any company with its headquarters and
In 45 school districts, the acquisition other entity. principal place of business in Somerset,
has created a monopoly. In 55 other 9. In addition to its controlling Kentucky, where it owns and operates
districts, the number of bidders has interests in Flav-O-Rich, DFA also owns the Southern Belle dairy. Southern Belle
effectively declined from three to two, financial interests in several other processes approximately 25 million
reducing competition substantially. dairies that sell school milk in parts of gallons of fluid milk per year and had
4. History in this region has Kentucky and Tennessee, including five annual revenues of approximately $65
demonstrated that less competition additional NDH dairies, three Turner million in 2001. Southern Belle
results in higher prices. Many school Holdings dairies, and one Ideal distributes and sells school milk
districts in this area previously had to American dairy. Until February 2002, primarily in the eastern two-thirds of
pay higher prices as victims of a when the instant acquisition was Kentucky and Tennessee.
64986 Federal Register / Vol. 71, No. 214 / Monday, November 6, 2006 / Notices
III. Jurisdiction and Venue processed for human consumption, may methods in the event of a small but
15. This Complaint is filed under be unflavored or flavored with chocolate significant increase in the price of
Section 15 of the Clayton Act, as or fruit flavorings, and does not include school milk.
extended shelf life (ESL) milk or ultra 25. The manufacture, distribution,
amended, 15 U.S.C. 25, and by the
high temperature (UHT) milk, which are and sale of school milk constitutes a
Commonwealth of Kentucky under 15
produced by different manufacturing relevant product market or line of
U.S.C. 26, to prevent and restrain
processes, generally cost significantly commerce within the meaning of
defendants from continuing to violate
more than fluid milk, and have Section 7 of the Clayton Act.
Section 7 of the Clayton Act, as
numerous significant physical VI. The Relevant Geographic Markets
amended, 15 U.S.C. 18, and under the
differences compared with fluid milk,
provisions of K.R.S. § 367.110 et seq. 26. Individual school districts
such as shelf stability, and a
16. Defendants, on their own or generally solicit bids for school milk,
significantly different taste, among other
through their subsidiaries, transport and although sometimes groups of school
attributes.
sell school and other milk in the flow 20. School milk is fluid milk that is districts solicit bids for school milk for
of interstate commerce in Kentucky and processed, distributed, and sold to some or all of the school districts in the
Tennessee and are engaged in interstate school districts, usually in half pint group. School districts usually decide
commerce and in activities substantially containers, pursuant to contracts with which dairy to award with a school milk
affecting interstate commerce. school districts. While these contracts contract on an individual basis
Defendant DFA also buys and sells raw may also include other products, school (regardless of whether they solicit bids
milk in interstate commerce. This Court milk accounts for the vast majority of individually or as part of a group).
has jurisdiction over the subject matter the dollar value of these contracts. Several school districts belong to a
of this action and the parties pursuant 21. The U.S. Department of group of school districts that (1) requires
to Section 12 of the Clayton Act, 15 Agriculture (‘‘USDA’’) sponsors several its members to solicit bids for school
U.S.C. 22, and 28 U.S.C. 1331, 1337(a) programs to reimburse schools for meals milk only through that group, and (2)
and 1345. and snacks served to students from requires bidders to submit a uniform bid
17. Both of the defendants transact lower income families. To qualify, for all of the districts in the group. Each
business and are found in the Eastern schools must offer mild to every school district typically requires its
District of Kentucky. Defendant student, regardless of the income of that school milk supplies to deliver to each
Southern Belle’s principal place of student’s family. If schools want to school within the school district. School
business is in this district. Venue is receive the federal reimbursements, they districts vary with respect to how many
proper in this judicial district pursuant cannot substitute other products for schools must be served, the distance
to 15 U.S.C. 22 and 28 U.S.C. 1391. school milk, regardless of the milk’s between the schools, the size of the
cost. schools in the school district, and other
IV. History of Collusion on School Milk
22. Individual school districts attributes. Each school district has its
Sales in the Relevant Markets
generally solicit bids from dairies to own requirements with respect to the
18. In late 1993, Southern Belle and supply them with school milk. frequency of deliveries (typically every
Flav-O-Rich pled guilty to the felony of Sometimes, groups of school districts day or every other day, because schools
conspiring to raise the price of school solicit bids to supply school milk to generally cannot store more than a
milk by agreeing on which dairy would some or all of the school districts in the limited amount of milk), the time of
submit the lowest bid for which school group, but each individual school deliveries, the quantity of deliveries,
district. The conspiracy existed from at district usually chooses (even if it products included, cooler requirements,
least the late 1970s through July 1989, solicited bids as part of a group) the and specific or individual service
and resulted in substantial harm to over dairy to which it will award its requirements.
thirty school districts. Southern Belle business. 27. Due to the high level of service
paid a $375,000 criminal fine; Flav-O- 23. Schools require many important requirements of schools, the high
Rich paid $1,000,000. No others were services in connection with the supply frequency of delivery required, the
charged with participating in this of school milk. These services often small volume delivered at each stop, the
conspiracy. The current acquisition include frequent delivery (usually every seasonal nature of the business, and
recreates the effect of this conspiracy in day or every other day because schools other factors, the viable suppliers of
many of those same school districts generally cannot store more than a school milk are generally limited to
harmed by the conspiracy for over a limited amount of milk); delivery to all those dairies that already have
decade. See United States v. Southern or almost all schools in a district; significant local distribution in the area.
Belle Dairy Co., [1998–1996 Transfer reordering of milk; stocking milk in the Dairies that do not currently have
Binder] Trade Reg. Rep. (CCH) ¶ 45,092, coolers; rotating products; retrieving nearby routes are generally not viable
at 44,599 (E.D. Ky. Nov. 13, 19920; spoiled and damaged products; suppliers of school milk to such school
United States v. Flav-O-Rich, Inc., providing quick emergency shipments districts. These factors limit school
[1998–1996 Transfer Binder] Trade Reg. (to guarantee a school has enough milk districts’ choice of suppliers.
Rep. (CCH) ¶ 45,092, at 44,605 (N.D. Ga. on hand so it will not lose school meal 28. Dairies charge different prices to
Dec. 22, 1992). reimbursements); the return of milk different school districts or groups of
before holidays; specific times of school districts (‘‘price discriminate’’),
V. The Manufacture, Distribution, and
delivery (e.g., early morning so as not to based on, among other things, the
Sale of School Milk Is a Relevant
conflict with times when students are number of competing dairies in the area,
Product Market
present); specific access requirements the strength of competition in these
19. Dairies purchase raw milk from (e.g., providing keys to drivers); allotting localized school milk markets, and the
dairy farmers and agricultural credit for retrieved products; cleaning unique service and other requirements
cooperatives, pasteurize and package and maintaining coolers; and other of schools.
the milk, and distribute and sell the requirements. 29. Accordingly, each school district,
processed product. Fluid milk (‘‘fluid 24. School districts would not switch or group of school districts that requires
milk’’P is raw milk that has been to alternative products or delivery its members to use the school milk
supplier who submits a winning bid debarment proceedings in 1998 that school milk in the relevant geographic
that is uniform for that entire group, competition would decrease and prices markets will be substantially lessened;
constitutes a relevant geographic market would rise if it could not bid. It said that b. Actual and potential competition
or section of the country within the Southern Belle was an ‘‘important between Southern Belle and Flav-O-
meaning of Section 7 of the Clayton Act. supplier to very small school districts in Rich (or other dairies in which DFA has
School districts harmed by the Kentucky and Tennessee,’’ especially in financial interests) in the manufacture,
acquisition include those, among others, the ‘‘rural districts in the mountains of distribution, and sale of school milk in
listed in Attachment A (‘‘Merger-to- eastern Kentucky.’’ (Letter from Joseph the relevant geographic markets will be
Monopoly Markets’’) and Attachment B L. Ruby, Wiley Rein & Fielding, to substantially lessened; and
(‘‘Merger-to-Duopoly Markets’’). Yvette Jackson, Acting Administrator, c. Prices for school milk in the
Food and Consumer Service, USDA, Jan. relevant geographic markets will likely
VII. Harm to Consumers increase.
23, 1998, at 2, copy provided in
30. Competition between Southern Attachment C.) It also said that those 39. DFA’s partial acquisition of
Belle and Flav-O-Rich (or other dairies school districts would be unlikely to Southern Belle violates Section 7 of the
in which DFA has financial interests) find any new school milk entrants to Clayton Act, as amended, 15 U.S.C. 18,
resulted in lower prices and better replace the lost competition if it could and K.R.S. § 367.110 et seq.
service for many school milk customers not bid. X. Relief Requested
in Kentucky and Tennessee. Southern 36. Entry by new competitors or
Belle’s competitive presence forced 40. Plaintiffs request that this Court:
expansion by existing dairies in the a. Adjudge the acquisition of
these other dairies to lower their manufacture, distribution, and sale of
respective bid prices for school milk Southern Belle by defendant DFA to
school milk will not be timely, likely, or violate Section 7 of the Clayton Act, as
contracts. sufficient to defeat any increase in
31. Before DFA’s acquisition of amended, 15 U.S.C. 18, and K.R.S.
prices or decrease in the level of service § 367.110 et seq.
Southern Belle, school milk markets in in the affected school milk markets. A
Kentucky and Tennessee had very few b. Compel DFA to divest all of its
dairy is unlikely to enter a school milk interests (including common equity,
competitors and thus were already market, even after a small but significant
highly concentrated. These markets preferred equity, credit interests, raw
price increase, unless it already services milk procurement authority, etc.) in
have become much more concentrated a substantial number of existing
as a result of the acquisition. Southern Belle, and take any further
commercial fluid milk customers from actions needed to place Southern Belle
32. In many of these markets,
its route trucks in the school district. in the same or comparable competitive
Southern Belle and Flav-O-Rich (or
This is true because school milk position as existed prior to the
other dairies in which DFA has
business is usually used to ‘‘fill out’’ a acquisition;
financial interests) are clearly the two
dairy’s existing commercial fluid milk c. Permanently enjoin and restrain
dairies able to supply school milk most
route truck business, as schools require DFA, including any of its subsidiaries or
economically, and would benefit (at the
the regular (e.g., every day or every joint ventures, and all persons acting on
expense of consumers) by acting
other day) delivery of school milk along behalf of any of these entities, from
together at DFA’s direction to raise one
with a number of important labor- acquiring or maintaining, in whole or
or both of their bids. Because it shares
intensive and time-consuming services, part, any simultaneous legal or
each dairy’s profits, DFA has a financial
which would not be economical but for beneficial interests (including common
incentive to encourage, facilitate, or
the existing fluid milk customer equity, preferred equity, credit interests,
enforce such cooperation. And, with
accounts. Thus, only dairies with or raw milk procurement authority) in
DFA’s control or influence over critical
existing straight truck delivery routes in both Southern Belle and Flaw-O-Rich;
business decisions of the dairies, the
an area can compete efficiently for d. Compel DFA, including any of its
dairies are likely to cooperate. Reducing
school milk business in that area. Entry subsidiaries or joint ventures, and all
the number of independent bidders
or expansion into the school milk persons acting on behalf of any of these
from two to one in these markets makes
business also requires substantial entities, to provide plaintiff United
it very likely that prices will rise or the
investment in specialized States of America with notification at
level of service will decrease for these
manufacturing assets and infrastructure, least 30 calendar days prior to any
districts.
33. In a number of other school including the high cost of installing a acquisition, in whole or in part, of any
districts, Southern Belle and Flav-O- dedicated half pint filler. legal or beneficial interests (including
Rich (or other dairies in which DFA has 37. Neither entry nor expansion common equity, preferred equity, credit
financial interests) are two of only three prevented Southern Belle and Flav-O- interests, or raw milk procurement
likely bidders. Reducing the number of Rich from successfully carrying a authority) in any fluid milk processing
independent bidders from three to two decade-long criminal bid rigging operation;
in these markets makes it very likely conspiracy against many of these same e. Allow any school district or school
that prices will rise or the level of school milk districts. Such long-lasting purchasing cooperative to terminate or
service will decrease for these districts. collusion would not have been possible rescind any contract to supply school
34. The effect of DFA’s acquisition of if higher prices easily attracted new milk entered into with defendants on or
control and influence over Southern competitors. after February 20, 2002, including but
Belle is to substantially lessen not limited to eliminating any
IX. Violations Alleged
competition, or to tend to create a restrictions on or disincentives to
monopoly in violation of Section 7 of 38. DFA’s acquisition of Southern terminating or rescinding such contracts
the Clayton Act. Belle through its partially owner and otherwise refunding or returning
Southern Belle subsidiary will likely consideration paid in advance pursuant

VIII. Entry Is Difficult have the following effects, among to such contracts (i.e., making such
35. To maintain its ability to sell others: contracts voidable in the sole discretion
school milk, the former owner of a. Competition generally in the of the school districts or purchasing
Southern Belle told the USDA during manufacture, distribution, and sale of cooperatives);
f. Award plaintiffs the costs of this Williamsburg Independent, KY Foods, Inc. (‘‘Southern Belle’’), we would
action; and Wolfe County, KY like to supplement the administrative record
g. Award plaintiffs such other and Clay County, TN made at the meeting of January 15, 1998, in
further relief as is proper. connection with certain issues raised at the
ATTACHMENT B—Merger-to-Duopoly
hearing, and also to propose certain actions
Respectfully submitted, Markets
to assure that a repeat of the alleged reporting
For Plaintiff United States of America: Allen County, KY violations will not occur in the future.
R. Hewitt Pate, Barbourville Independent, KY Southern Belle desires to supplement the
Assistant Attorney General. Barren County, KY record with the following documentation,
Bath County, KY which is attached:
J. Bruce McDonald, Butler County, KY
Deputy Assistant Attorney General. Carter County, KY The Termination of Mr. Christian
Mark J. Botti, Caverna Independent, KY At our meeting, Mr. Hallberg expressed
Chief, Litigation I Section. Corbin Independent, KY interest in reviewing documentation relating
Dated: March 30, 2004. Fayette County (Lexington), KY to Mr. Christian’s probation as of May 1997,
For Plaintiff Commonwealth of Kentucky: Franklin County, KY leading to his termination for performance
Glasgow Independent, KY reasons. The following documentation is
David R. Vandeventer, Green County, KY
Assistant Attorney General, Kentucky Bar No. enclosed:
Greenup County, KY Exh. 1. A May 15, 1997 ‘‘agenda’’ for a
72790, Office of the Attorney General of Hart County, KY
Kentucky, 1024 Capital Center Drive, meeting with Mr. Christian.
Knox County, KY Exh. 2. A May 15, 1997 memo by Mr.
Frankfort, KY 40601, 502–696–5385. Larue County, KY Christian’s superior, Mike Chandler,
Dated: March 30, 2004. Lawrence County, KY summarizing a meeting with Mr. Christian at
John R. Read, Logan County, KY which he was informed of his need to
Assistant Chief, Litigation I Section. Menifee County, KY improve performance or face termination,
J.D. Donaldson, Jody A. Boudreault, N. Metcalfe County, KY with a review to take place in two months.
Christopher Hardee, Richard S. Martin, Middlesboro Independent, KY
Richard D. Cooke, Ihan Kim, Monticello Independent, KY Southern Belle’s Contracts Under $100,000
U.S. Department of Justice, Antitrust Morgan County, KY At our meeting, Ms. Landos sought
Division, 1401 H Street, NW., Suite 4000, Ohio County, KY information concerning the number of school
Washington, DC 20530, 202–307–0001. Owensboro Independent, KY milk contracts under $100,000 that were
Rowan County, KY serviced by Southern Belle. Attached hereto
ATTACHMENT A—Merger-to-Monopoly Russell Independent, KY as Exh. 3 are two lists, showing actual 1996–
Markets Russellville Independent, KY 97 and projected 1997–98 sales by school
Adair County, KY Simpson County, KY districts.
Ashland Independent, KY Taylor County, KY The lists show that, for 1996–97, Southern
Bell County, KY Alcoa City, TN Belle serviced 46 districts. Of those, 33
Berea Independent, KY Anderson County, TN districts had sales under $100,000. Of the 33
Boyd County, KY Blount County, TN districts, 16 had sales under $50,000.
Boyle County, KY Bristol City, TN Projected sales for 1997–98 show that
Breathitt County, KY Campbell County, TN Southern Belle is currently servicing 55
Campbellsville Independent, KY Carter County, TN districts. Of these, 39 districts are projected
Casey County, KY Clinton City, TN to have sales under $100,000. Of the 39
Clay County, KY Cocke County, TN
districts, 20 are projected to have sales under
Elizabethon Independent, TN
Clinton County, KY $50,000.
Green County, TN
Cumberland County, KY These figures reveal that Southern Belle is
Greenville City, TN
East Bernstadt Independent, KY an important supplier to very small school
Hawkins County, TN
Estill County, KY districts in Kentucky and Tennessee. As the
Hamblen County, TN
Fairview Independent, KY maps we provided show, many of these are
Johnson City, TN
Garrard County, KY rural districts in the mountains of eastern
Johnson County, TN
Harlan Independent, KY Kentucky. These districts would likely find
Knox County, TN
Harrodsburg Independent, KY it difficult to attract alternative suppliers
Macon County, TN
Hazard Independent, KY Maryville City, TN from more distant locations.
Jackson County, KY Metro Davidson (Nashville), TN It is of equal interest that for two years in
Jenkins Independent, KY Rogersville City, TN a row, Southern Belle has been the low
Jessamine County, KY Sevier County, TN bidder in the Fayatte County district (that is,
Laurel County, KY Sullivan County, TN Lexington, Ky.), which has sales of over
Lee County, KY Unicoi County, TN $600,000, and attracts multiple bids from
Leslie County, KY Union County, TN competing dairies.
Letcher County, KY Washington County, TN As mentioned above, in addition to
Lincoln County, KY supplementing the record with this
Madison County, KY ATTACHMENT C additional documentation, Southern Belle
McCreary County, KY would like to suggest that it undertake
WILEY, REIN & FIELDING
Mercer County, KY certain changes in its current procedures,
Montgomery County, KY January 23, 1998 which it hopes will prevent the recurrence of
Oneida Baptist, KY By Messenger any reporting difficulties in the future.
Owsley County, KY As a preface to doing so, we note that
Perry County, KY Ms. Yvette Jackson, Southern Belle, having been on the verge of
Pineville Independent, KY Acting Administrator, Food and Consumer bankruptcy and liquidation, is now a strong
Pulaski County, KY Service, U.S. Department of Agriculture, competitor and often the low bidder for
3101 Park Center Drive, Room 1008,
Rockcastle County, KY school milk and other government contracts.

Russell County, KY Alexandria, VA 22302. Southern Belle has been able to continue in
Science Hill Independent, KY Re: Southern Belle Dairy Company, Notice of business and to attract a merger partner in
Somerset Independent, KY Suspension and Debarment Broughton Foods, whose purchase of
Wayne County, KY Dear Ms. Jackson: On behalf of the Southern Belle means the continuing
Whitley County, KY Southern Belle Dairy division of Broughton presence of a competitive dairy in the
southeastern Kentucky region. The proposed Belle would appreciate the ability to bid on Hours of work:
debarment for reporting violations would these contracts, and submits that it is in the 8:00 a.m. to 3:00 p.m.—Mon. through
undermine much of the progress that government’s interest to permit Southern Thurs.—In market
Southern Belle has made, with FCS’s Belle to compete for them. We therefore 3:00 p.m. to 5:00 p.m.—Mon. through
assistance and under its compliance program, request that, if at all possible, this matter be Thurs.—Office
over the past few years. It would also resolved promptly so that Southern Belle 8:00 a.m. to 12:00 p.m.—Friday—In market
unavoidably require the consolidation of may participate in the bidding for at least 12:00 p.m. to 5:00 p.m.—Friday—Office
routes and the layoffs of many Southern Belle some of these contracts.
employees. Debarment would therefore hurt Very truly yours, Exhibit 2
the local Somerset, Kentucky economy and May 15, 1997
/s/ Joseph L. Ruby
would reduce competition for government Harold Soper and I met with Steve
dairy contracts in the region. Joseph L. Ruby
cc: Philip Cline, Martin Shearer, Steven Christian at the Louisville Branch. We
Going forward, to insure that timely and
Diamond, Esquire. reviewed his job description and asked him
accurate reporting is carried out under the
if there was anything that he could not do,
Compliance Agreement, all Southern Belle Exhibit 1
management will be informed that they are or was unwilling to do. Steve said that he did
to report actual or suspected misconduct to Agenda not want to make sales calls or call on
an Ethics Committee member within 24 Meeting with Steve Christian existing business. We stressed that all Branch
hours. Furthermore, the Ethics Committee May 15, 1997 Managers did this and that it was an
(which now has two new members from Items to be discussed: important part of his job.
Broughton Foods) will implement new Company expectations in the following After reviewing the Job Description, we
procedures whereby, when a violation is areas, provided Steve with some basic forms to
reported, it will convene quickly using 1. Call on new business: document sales calls and to be filled out by
telephone and fax, conduct an investigation, This should be done on a consistent basis the routemen when they have prospect or
and make a timely report. and should be scheduled so that we are not need price information.
Finally, it appeared that there was a wasting time. We discussed with Steve the need to create
concern that the minutes of the September 2. Call on existing business: a better work environment for the routemen
26, 1997 Ethics Committee may not have We need to continue to see existing as several had complained that they had been
captured the discussion at that meeting with business but not spend all our time on this mistreated in some way. One routeperson
complete accuracy. It has been the practice effort. reported that he was not receiving mail
to have the minutes of each meeting kept by 3. Respond to call sheets by routemen: communication from Somerset, another said
one member, and not reviewed as a matter of This need to be followed-up on and results he was being used around the Branch for jobs
course until the next meeting. To eliminate put in writing to the routemen with a copy that were not related to his route.
accuracy concerns in the future, Southern to Zone Sales Manager. We stressed to Steve that these matters, as
Belle will undertake to have the minutes 4. Fill out a customer call sheet daily and well as others, must be improved. And that
typed and distributed to all members by the send to the Zone Sales Manager. if he did not make some improvement during
business day following the meeting, so that 5. Oversee and have responsibility for the next two months, he would be fired. I
any omissions can be corrected immediately. Branch operations, this does not mean to stay asked Steve if he understood what he was
In closing, Southern Belle would like to in the office. Steve can get a daily report from being asked to do, and he said he did.
point out that there are a number of Kentucky Larry when he is in the office from 3:00–5:00 We made an agreement to meet within two
state government contracts which are p.m. months to review his progress.
traditionally bid in February, including 6. Will also be responsible for other duties /s/ Mike Chandler
contracts for parks, universities, state assigned by the Zone Sales Manager, such as
hospitals, and vocational schools. Southern school bids, etc. Exhibit 3
PROJECTED FROM ACTUAL 8/97–12/97

School system Contract No. 1997–98 Sales
Adair County Schools .................................................................................................................................. 21627 95,893.38

Barbourville City Schools ............................................................................................................................. 22238 17,608.30
Bath County Schools ................................................................................................................................... 29192 84,831.85
Berea Community Schools .......................................................................................................................... 21352 26,750.62
Bowling Green City Schools ........................................................................................................................ 27981 122,667.00
Boyle County Schools ................................................................................................................................. 26130 37,890.91
Breathitt County Schools ............................................................................................................................. 33238 143,257.60
Bristol City (TN) Schools ............................................................................................................................. 34728 81,402.62
Burgin City Schools ..................................................................................................................................... 26097 14,299.24
Campbell County Schools ........................................................................................................................... 29969 250,504.95
Clarksville Community (IN) .......................................................................................................................... 34815 30,299.82
Corbin City Schools ..................................................................................................................................... 24627 72,999.58
Cumberland County Schools ....................................................................................................................... 30004 41,371.73
Danville City Schools ................................................................................................................................... 25979 56,280.46
East Bernstadt School ................................................................................................................................. 21157 17,540.36
Estill County Schools ................................................................................................................................... 25799 89,665.39
Fayette County Schools .............................................................................................................................. 21100 608,675.03
Green County Schools ................................................................................................................................ 26795 42,321.70
Greeneville City Schools ............................................................................................................................. 30007 44,520.96
Harrodsburg City Schools ............................................................................................................................ 33160 31,790.80
Hart County Schools .................................................................................................................................... 28389 66,226.97
Hazard Independent Schools ...................................................................................................................... 34848 27,636.88

Jackson Independent Schools ..................................................................................................................... 34847 14,163.46
Knox County Schools (KY) .......................................................................................................................... 21278 183,628.12
Larue County Schools ................................................................................................................................. 29988 74,432.16
Lee County Schools .................................................................................................................................... 24621 56,578.79
Lexington Private Schools ........................................................................................................................... 15121 35,552.81
PROJECTED FROM ACTUAL 8/97–12/97—Continued

School system Contract No. 1997–98 Sales
Lincoln County Schools ............................................................................................................................... 24191 164,317.71

Macon County Schools ................................................................................................................................ 23173 88,989.91
Madison County Schools ............................................................................................................................. 25545 229,139.64
McCreary County Schools ........................................................................................................................... 24237 140,930.13
Meade County Schools ............................................................................................................................... 28454 153,510.34
Menifee County Schools .............................................................................................................................. 24919 32,323.89
Mercer County Schools ............................................................................................................................... 21763 52,000.58
Metcalfe County Schools ............................................................................................................................. 28395 59,048.89
Monroe County Schools .............................................................................................................................. 26543 77,986.33
Monticello City Schools ............................................................................................................................... 21575 25,423.20
Montgomery County Schools ...................................................................................................................... 24157 132,973.99
Morgan County Schools .............................................................................................................................. 29503 103,785.66
Nashville Metro Schools .............................................................................................................................. 23505 335,067.84
Pickett County Schools ................................................................................................................................ 26661 28,096.62
Pulaski County Schools ............................................................................................................................... 19140 294,978.80
Putnam County Schools .............................................................................................................................. 27240 221,463.07
Rockcastle County Schools ......................................................................................................................... 21088 87,306.99
Rowan County Schools ............................................................................................................................... 28846 82,248.66
Russell County Schools ............................................................................................................................... 26382 101,533.70
Science Hill School ...................................................................................................................................... 29991 13,520.93
Simpson County Schools ............................................................................................................................ 33154 70,436.38
Somerset City Schools ................................................................................................................................ 13449 45,378.31
Taylor County Schools ................................................................................................................................ 26781 74,838.52
Van Buren County Schools ......................................................................................................................... 27118 26,809.74
Wayne County Schools ............................................................................................................................... 26404 89,391.06
West Clark Community (IN) ......................................................................................................................... 32001 60,298.90
Whitley County Schools ............................................................................................................................... 32580 202,722.31
Williamsburg City Schools ........................................................................................................................... 20425 27,033.50
Total ...................................................................................................................................................... .............................. 5,390,347.09
Actual
School system Contract No. 1996–97 sales
Adair County Schools .................................................................................................................................. 21627 95,893.38

Bath County Schools ................................................................................................................................... 29192 84,831.85
Berea Community Schools .......................................................................................................................... 21352 26,750.62
Bourbon County Schools ............................................................................................................................. 23293 95,217.02
Boyle County Schools ................................................................................................................................. 26130 37,890.91
Burgin City Schools ..................................................................................................................................... 26097 14,299.24
Campbell County Schools ........................................................................................................................... 29969 250,504.95
Caverna Independent Schools .................................................................................................................... 28461 35,597.42
Clinton City Schools .................................................................................................................................... 23381 30,363.58
Clinton County Schools ............................................................................................................................... 26260 57,222.29
Cumberland County Schools ....................................................................................................................... 30004 41,371.73
Danville City Schools ................................................................................................................................... 25979 56,280.46
East Bernstadt School ................................................................................................................................. 21157 17,540.36
Estill County Schools ................................................................................................................................... 25799 89,665.39
Fayette County Schools .............................................................................................................................. 21100 608,675.03
Garrard County Schools .............................................................................................................................. 24200 78,654.92
Greeneville City Schools ............................................................................................................................. 30007 44,520.96
Hardin County Schools ................................................................................................................................ 33249 367,140.54
Harrodsburg City Schools ............................................................................................................................ 33160 31,790.80
Hart County Schools .................................................................................................................................... 28389 66,226.97
Knox County Schools (KY) .......................................................................................................................... 21278 183,628.12
Lee County Schools .................................................................................................................................... 24621 56,578.79
Lexington Private Schools ........................................................................................................................... 15121 35,552.81
Lincoln County Schools ............................................................................................................................... 24191 164,317.71
Macon County Schools ................................................................................................................................ 23173 88,989.91
Madison County Schools ............................................................................................................................. 25545 229,139.64
McCreary County Schools ........................................................................................................................... 24237 140,930.13
Menifee County Schools .............................................................................................................................. 24919 32,323.89
Mercer County Schools ............................................................................................................................... 21763 52,000.58
Metcalfe County Schools ............................................................................................................................. 28395 59,048.89
Monroe County Schools .............................................................................................................................. 26543 77,986.33
Monticello City Schools ............................................................................................................................... 21575 25,423.20

Montgomery County Schools ...................................................................................................................... 24157 132,973.99
Morgan County Schools .............................................................................................................................. 29503 103,785.66
Pickett County Schools ................................................................................................................................ 26661 28,096.62
Powell County Schools ................................................................................................................................ 31815 91,315.15
Pulaski County Schools ............................................................................................................................... 19140 294,978.80
Actual
School system Contract No. 1996–97 sales
Putnam County Schools .............................................................................................................................. 27240 221,463.07

Rockcastle County Schools ......................................................................................................................... 21088 87,306.99
Russell County Schools ............................................................................................................................... 26382 101,533.70
Science Hill School ...................................................................................................................................... 29992 13,520.93
Simpson County Schools ............................................................................................................................ 33154 70,436.38
Somerset City Schools ................................................................................................................................ 13449 45,378.31
Van Buren County Schools ......................................................................................................................... 27118 26,809.74
Wayne County Schools ............................................................................................................................... 26404 89,391.06
Whitley County Schools ............................................................................................................................... 32580 202,722.31
Total ...................................................................................................................................................... .............................. 4,786,071.13
United States District Court, Eastern between them concerning DFA’s Series B Preferred Capital Interest, and
District of Kentucky, London Division acquisition of a partial interest in any and all lines of credit or other loans
Southern Belle Dairy Co., LLC, without that Mid-Am has extended to the
United States of America, et al.,
further Court proceedings except as set Southern Belle Dairy, and any interest
Plaintiffs, v. Dairy Farmers of America,
out below; in the Southern Belle Dairy acquired
Inc., Defendant And whereas, DFA has entered into a from AFLP.
Civil Action No.: 6:03–206–KSF written agreement with AFLP to E. ‘‘Mid-Am’’ means Mid-Am Capital
facilitate the resolution of this matter; LLC, a subsidiary of DFA and a
Final Judgment
And whereas, DFA has represented to Delaware limited liability company with
Whereas, plaintiffs, the United States the United States that the divestitures its headquarters in Kansas City,
of America and the Commonwealth of required below can and will be made Missouri, its successors and assigns, its
Kentucky, and defendant Dairy Farmers and that DFA will later raise no claim subsidiaries and divisions, and their
of America, Inc. (‘‘DFA’’), by their of hardship or difficulty as grounds for directors, officers, managers, agents, and
respective attorneys, have consented to asking the Court to modify any of the employees.
the entry of this Final Judgment without divestiture provisions contained below; F. ‘‘Southern Belle Dairy’’ means the
this Final Judgment constituting any Now therefore, before any testimony Southern Belle Dairy Co., LLC, a
evidence against or admission by any is taken, without trail or adjudication of Delaware limited liability company that
party regarding any issue of fact or law; any issue of fact or law, and upon owns and operates a milk processing
And whereas, the United States of consent of the parties, it is ordered, plant located in Pulaski County,
American and the Commonwealth of adjudged and decreed: Kentucky, and all related assets,
Kentucky have concluded, after due including all rights and interests in it,
investigation and careful consideration I. Jurisdiction including all property and contract
of the relevant circumstances, including This Court has jurisdiction over the rights, all existing inventory, accounts
the claims asserted in the Amended subject matter of and each of the parties receivable, pertinent correspondence
Complaint, and the legal and factual to this action. The Complaint states a and files, customer lists, all related
defenses thereto, that the public interest claim upon which relief may be granted customer information, advertising
is served by entering into a Stipulation, against DFA under Section 7 of the materials, contracts or other
to avoid the uncertainties of litigation Clayton Act, as amended (15 U.S.C. relationships with suppliers, customers
and to assure that the benefits of this § 18), and under the provisions of and distributors, any rights, contracts
Final Judgment are obtained; K.R.S.§ 367.110 et seq., but, by virtue of and licenses involving intellectual
And whereas, DFA agrees that venue this Final Judgment, DFA has not and property, trademarks, tradenames or
and jurisdiction are proper in this Court; does not admit either the allegations set brands, computers and other physical
And whereas, DFA agrees to be bound forth in the Complaint or any liability or assets and equipment used for
by the provisions of this Final Judgment wrongdoing. production at, distribution from, or
pending its approval by the Court; associated with, that plant or any of its
And whereas, the essence of this Final II. Definitions
distribution branches and locations.
Judgment is the prompt and certain As used in this Final Judgment: G. ‘‘Stipulation’’ means the
divestiture of the Divestiture Assets by A. ‘‘Acquirer’’ means the entity or Stipulation signed by the United States,
DFA; entities to whom DFA or the trustee the Commonwealth of Kentucky, and
And whereas, DFA, despite its belief divest the Divestiture Assets. DFA in this matter.
that it has good defenses to the claims B. ‘‘AFLP’’ means the Allen Family
asserted against it in the Amended Limited Partnership, managed by Robert III. Applicability
Complaint, has nevertheless agreed to Allen. A. This Final Judgment applies to
enter into this Final Judgment to avoid C. ‘‘DFA’’ means Dairy Farmers of DFA, as defined above, and to all other
further expense, inconvenience, the America, Inc., a Kansas corporation persons in active concert or
uncertainties of litigation, and the with its headquarters in Kansas City, participation with any of them who
distraction of burdensome and Missouri, its successors and assigns, its receive actual notice of this Final
protracted litigation, and thereby to put subsidiaries and divisions, and their Judgment by personal service or
to rest this controversy with respect to directors, officers, managers, agents, and otherwise.
the United States of America and the employees. B. DFA shall require, as a condition
Commonwealth of Kentucky; D. ‘‘Divestiture Assets’’ means any of the sale or other disposition of all or
And whereas, DFA, the United States and all of DFA’s interests in the substantially all of DFA’s assets or of
of America, and the Commonwealth of Southern Belle Dairy including DFA’s lesser business units that include the
Kentucky desire to resolve disputes Series A Preferred Capital Interest and Divestiture Assets, that the purchaser
agrees to be bound by the provisions of F. DFA shall use commercially divestiture to an Acquirer acceptable to
this Final Judgment. DFA need not, reasonable efforts to cause to be the United States (after consultation
however, obtain such an agreement from provided to the Acquirer and the United with the Commonwealth of Kentucky) at
the Acquirer of the Divestiture Assets. States information relating to the such price and on such terms as are
personnel involved in the operation of then obtainable upon reasonable effort
IV. Divestitures
the Southern Belle Dairy to enable the by the trustee, subject to the provisions
A. DFA is ordered and directed Acquirer to make offers of employment. of Sections IV, V, and VI of this Final
within five days after notice of the entry DFA shall not interfere with any Judgment, and shall have such other
of this Final Judgment by the Court, to negotiations by the Acquirer to employ powers as this Court deems appropriate.
divest the Divestiture Assess in a any employee whose primary Subject to Section V(D) of this Final
manner consistent with this Final responsibility is the production, sale, Judgment, the trustee may hire at the
Judgment to an Acquirer acceptable to marketing, or distribution of products cost and expense of DFA any
the United States in its sole discretion, from the Southern Belle Dairy. investment bankers, attorneys, or other
after consultation with the G. DFA shall not take any action that agents, who shall be solely accountable
Commonwealth of Kentucky. The will impede in any way the operation of to the trustee, reasonably necessary in
United States, in its sole discretion, after the Southern Belle Dairy of the the trustee’s judgment to assist in the
consultation with the Commonwealth of divestiture of the Divestiture Assets. divestiture.
Kentucky, may agree to an extension of H. Unless the United States, in its sole C. DFA shall not object to a sale by
this time period for any divestiture of discretion, after consultation with the the trustee on any ground other than the
up to thirty additional calendar days. Commonwealth of Kentucky, otherwise trustee’s malfeasance. Any such
DFA agrees to use its best efforts to consents in writing, the divestiture objections by DFA must be conveyed in
divest the Divestiture Assets as pursuant to the Section IV, or by trustee writing to the United States and the
expeditiously as possible. appointed pursuant to Section V, of this trustee within ten calendar days after
B. DFA shall also use commercially Final Judgment, shall include the entire the trustee has provided the notice
reasonable efforts to cause AFLP to Divestiture Assets and shall be required under Section VI.
divest its interests in the Southern Belle accomplished in such a way as to satisfy D. The trustee shall serve at the cost
Dairy to an acquirer acceptable to the the United States, in its sole discretion, and expense of DFA, on such terms and
United States in its sole discretion, after after consultation with the conditions as the United States
consultation with the Commonwealth of Commonwealth of Kentucky, that the approves, after consultation with the
Kentucky. Southern Belle Dairy will be a viable, Commonwealth of Kentucky, and shall
C. In accomplishing the divestitures ongoing dairy. The divestiture, whether account for all monies derived from the
ordered by this Final Judgment, DFA pursuant to Section IV or Section V of sale of the assets sold by the trustee and
promptly shall make known to one or this Final Judgment. all costs and expenses so incurred. After
more potential purchasers the (1) Shall be made to an Acquirer that, approval by the Court of the trustee’s
availability of the Divestiture Assets. in the United States’ sole judgment, accounting, including fees for its
DFA shall inform any potentially after consultation with the services and those of any professionals
qualified purchaser making inquiry Commonwealth of Kentucky, has the and agents retained by the trustee, all
regarding a possible purchase of the intent and capability (including the remaining money shall be paid to DFA
Divestiture Assets that such assets are necessary managerial, operational, and the trust shall then be terminated.
being offered for sale. technical and financial capability) of The compensation of the trustee and
D. DFA shall use commercially competing effectively in school and any professionals and agents retained by
reasonable efforts to cause to be fluid milk markets in Kentucky and the trustee shall be reasonable in light
furnished to all prospective Acquirers, Tennessee; and of the value of the Divestiture Assets
subject to the customary confidentiality (2) Shall be accomplished so as to and based on a fee arrangement
assurances, all information and satisfy the United States, in its sole providing the trustee with an incentive
documents relating to the Divestiture discretion, after consultation with the based on the price and terms of the
Assets and the Southern Belle Dairy Commonwealth of Kentucky, that none divestiture and the speed with which it
customarily provided in a due diligence of the terms of any agreement between is accomplished, but timeliness is
process except such information or an Acquirer and DFA give DFA the paramount.
documents subject to the attorney-client ability unreasonably to raise the E. DFA shall use its best efforts to
privilege or attorney work-product Acquirer’s costs, to lower the Acquirer’s assist the trustee in accomplishing the
doctrine. DFA shall make available such efficiency, or otherwise to interfere in required divestiture. While the trustee
information to the United States and the the ability of the Acquirer to compete shall have the right to sell the
Commonwealth of Kentucky at the same effectively. Divestiture Assets, DFA shall use
time that such information is made commercially reasonable efforts to cause
available to any other person. V. Appointment of Trustee AFLP to divest its interests in the
E. DFA shall use commercially A. If DFA has not divested the Southern Belle Dairy to an acquirer
reasonable efforts to obtain permission Divestiture Assets within the time acceptable to the United States in its
for prospective Acquirers of the period specified in Section IV(A), DFA sole discretion, after consultation with
Divestiture Assets to have reasonable shall notify the United States of that fact the commonwealth of Kentucky. The
access to personnel and to make in writing. Upon application of the trustee and any consultants,
inspections of the physical facilities of United States, the Court shall appoint a accountants, attorneys, and other
the Southern Belle Dairy; access to any trustee selected by the United States and persons retained by the trustee shall
and all environmental, zoning, and approved by the Court to effect the have full and complete access to the
other permit documents and divestiture of the Divestiture Assets. personnel, books, records, and facilities
information; and access to any and all B. After the appointment of a trustee of the business to be divested, and DFA
financial, operational, or other becomes effective, only the trustee shall shall develop financial and other
documents and information customarily have the right to sell the Divestiture information relevant to such business as
provided as part of a due diligence Assets. The trustee shall have the power the trustee may reasonably request,
process. and authority to accomplish the subject to reasonable protection for
trade secret or other confidential VI. Notice of Proposed Divestitures with DFA as a condition for the sale of
research, development, or commercial A. Within two business days the Divestiture Assets.
information. DFA shall take no action to following execution of definitive IX. Affidavits
interfere with or to impede the trustee’s divestiture agreement, DFA or the
accomplishment of the divestiture. A. Within twenty calendar days of
trustee, whichever is then responsible DFA’s signing the Stipulation, and every
F. After its appointment, the trustee for effecting the divestiture required thirty calendar days thereafter until the
shall file monthly reports with the herein, shall notify the United States divestiture has been completed under
United States, the Commonwealth of and the Commonwealth of Kentucky of Sections IV or V, DFA shall deliver to
Kentucky, DFA, and the court setting the proposed divestiture required by the United States an affidavit as to the
forth the trustee’s efforts to accomplish Sections IV or V of this Final Judgment. fact and manner of its compliance with
the divestiture ordered under this final If the trustee is responsible, it shall Section IV or V of this Final Judgment.
Judgment. To the extent such reports similarly notify DFA. The notice shall Each such affidavit shall include the
contain information that the trustee set forth the details of the proposed name, address, and telephone number of
deems confidential, such reports shall divestiture and list the name, address, each person who, during the preceding
not be filed in the public docket of the and telephone number of each person thirty calendar days, made an offer to
Court and DFA’s copy of the reports not previously identified who offered or acquire, expressed an interest in
shall have such confidential information expressed an interest in or desire to acquiring, entered into negotiations to
redacted. Such reports shall include the acquire any ownership interest in the acquire, or was contacted or made an
name, address, and telephone number of Divestiture Assets, together with full inquiry about acquiring, any interest in
each person who, during the preceding details of the same. the Divestiture Assets, and shall
month, made an offer to acquire, B. Within fifteen calendar days of describe in detail each contact with any
expressed an interest in acquiring, receipt by the United States of such such person during that period. Each
entered into negotiations to acquire, or notice, the United States may request such affidavit shall also include a
was contacted or made an inquiry about from DFA, the proposed Acquirer, any description of the efforts DFA has taken
acquiring, any interest in the Divestiture other third party, or the trustee if to solicit buyers for the Divestiture
Assets, and shall describe in detail each applicable additional information Assets, and to provide required
contact with any such person. The concerning the proposed divestiture, the information to prospective purchasers,
trustee shall maintain full records of all proposed Acquirer, and any other including the limitations, if any, on
potential Acquirer. DFA and the trustee such information. Assuming the
efforts made to divest the Divestiture
shall furnish any additional information information set forth in the affidavit is
Assets.
requested within fifteen calendar days true and complete, any objection by the
G. If the trustee has not accomplished of the receipt of the request, unless the United States to information provided
such divestiture within six months after parties shall otherwise agree. by DFA, including limitation on
its appointment, the trustee shall C. Within thirty calendar days after information, shall be made within
promptly file with the Court a report receipt of the notice or within twenty fourteen calendar days of receipt of such
setting forth (1) the trustee’s efforts to calendar days after the United States has affidavit.
accomplish the required divestiture, (2) been provided the additional B. Within twenty calendar days of
the reasons, in the trustee’s judgment, information requested from DFA, the DFA’s signing the Stipulation, DFA
why the required divestiture has not proposed Acquirer, and third party, and shall deliver to the United States an
been accomplished, and (3) the trustee’s the trustee, whichever is later, the affidavit that describes in reasonable
recommendations. To the extent such United States shall provide written detail all actions DFA has taken and all
reports contain information that the notice to DFA and the trustee is one, steps DFA has implemented on an
trustee deems confidential, such reports stating whether or not it objects to the ongoing basis to comply with the
shall not be filed in the public docket proposed divestiture. If the United Stipulation. DFA shall deliver to the
of the Court. The trustee shall at the States provides written notice that it United States an affidavit describing any
same time furnish such report to the does not object, the divestiture may be changes to the efforts and actions
United States and the Commonwealth of consummated, subject only to DFA’s outlined in DFA’s earlier affidavits filed
Kentucky who shall have the right to limited right to object to the sale under pursuant to this section within fifteen
make additional recommendations Section V(C) of this Final Judgment. calendar days after the change is
consistent with the purpose of the trust. Absent written notice that the United implemented.
The trustee shall at the same time States does not object to the proposed C. DFA shall keep all records of all
furnish the report to DFA, but with all Acquirer or upon objection by the efforts made to preserve and divest the
confidential information redacted. The United States, the divestiture proposed Divestiture Assets until one year after
Court thereafter shall enter such orders under Sections IV or Section V shall not such divestiture has been completed.
as it shall deem appropriate to carry out be consummated. Upon objection by
X. Compliance Inspection
the purpose of the Final Judgment, DFA under Section V(C), the divestiture
proposed under Section V shall not be A. For the purposes of determining or
which may, if necessary, include
consummated unless approved by the securing compliance with this Final
extending the trust and the term of the
Court. Judgment, or of determining whether
trustee’s appointment by a period
the Final Judgment should be modified
required by the United States. VII. Financing or vacated, and subject to any legally
H. If necessary in the trustee’s DFA shall not finance all or any part recognized privilege, from time to time
judgment to divest the Divestiture of any purchase made pursuant to duly authorized representatives of the
Assets, DFA shall use its best efforts to Section IV or V or this Final Judgment. Untied States Department of Justice or
assist the trustee in dissolving the the Commonwealth of Kentucky,
Southern Belle Dairy under Delaware VIII. Supply Contracts including consultants and other persons
Statute 6 Del. C. § 18–802, or such other DFA shall not require the Acquirer to retained by either of them, shall, upon
applicable statutes and laws. enter into a supply contract for raw milk written request of a duly authorized
representative of the Assistant Attorney term of this Final Judgment without the Southern Belle Dairy Co., LLC
General in charge of the Antitrust prior written approval of the United (‘‘Southern Belle’’) violated Section 7 of
Division or the Attorney General for States. Unless the United States the Clayton Act (‘‘Section 7’’), 15 U.S.C.
Kentucky, and on reasonable notice to otherwise agrees in writing, DFA will 18.1 An Amended Complaint was filed
DFA, be permitted: urge any partnership, joint venture, on May 6, 2004.
Access during DFA’s office hours to limited liability company, or other firm The Amended Complaint alleged that
inspect and copy, or at plaintiffs’ option, to in which it has an equity interest, not the acquisition may substantially lessen
require DFA provide copies of, all books, to acquire the Divestiture Assets or any competition for the sale of milk sold to
ledgers, accounts, records and documents in interest in Southern Belle Dairy during schools in one hundred school districts
the possession, custody, or control of DFA, the term of this Final Judgment; such in eastern Kentucky and Tennessee. On
relating to any matters contained in this Final urging shall include, among other August 31, 2004, the District Court
Judgment; and things, voting its interest, if applicable,granted summary judgment to DFA and
To interview, either informally or on the against such an acquisition.
record, DFA’s officers, employees, or agents,
Southern Belle. The government
who may have their individual counsel XII. Retention of Jurisdiction appealed, and on October 25, 2005, the
present, regarding such matters. The Court of Appeals reversed the grant of
interviews shall be subject to the reasonable This Court retains jurisdiction to summary judgment as to DFA and
convenience of the interviewee and without enable any party to this Final Judgment remanded the case for trial. The Court
restraint or interference by DFA. to apply to this Court at any time for of Appeals affirmed the dismissal of
further orders and directions as may be Southern Belle, leaving DFA as the only
B. Upon the written request of a duly
necessary or appropriate to carry out or defendant. See United States v. Dairy
authorized representative of the
construe this Final Judgment, to modify Farmers of America, 426 F.3d 850 (6th
Assistant Attorney General in charge of
any of its provisions, to enforce Cir. 2005).
the Antitrust Division or the Attorney
compliance, and to punish violations of On October 2, 2006, the United States
General for Kentucky, DFA shall submit
its provisions. filed a proposed Final Judgment that
written reports and interrogatory
responses, under oath if requested, XIII. Expiration of Final Judgment requires DFA to divest its interest in
relating to any of the matters contained Southern Belle and use its best efforts to
Unless this Court grants an extension,
in this Final Judgment as may be require its partner, the Allen Family
this Final Judgment shall expire ten
requested. Limited Partnership (‘‘AFLP’’), to also
years from the date of its entry.
C. No information or documents divest its interest in Southern Belle.
obtained by the means provided in this XIV. Public Interest Determination DFA has proposed divesting its interest
section shall be divulged by the United Entry of this Final Judgment is in the and AFLP’s interest in Southern Belle to
States or the Commonwealth of public interest. Prairie Farms Dairy, Inc. (‘‘Prairie
Kentucky to any person other than an Farms’’), and the government has
Dated: lllllllllllllllll approved Prairie Farms as a suitable
authorized representative of the
executive branch of the United States or Court approval subject to procedures of buyer of DFA’s and AFLP’s interest in
the Commonwealth of Kentucky, except Antitrust Procedures and Penalties Act, 15 Southern Belle. The proposed Final
in the course of legal proceedings to U.S.C. 16. Judgement is designed to eliminate the
which at least one of the plaintiffs is a lllllllllllllllllllll anticompetitive effects of the
party (including grand jury United States District Judge acquisition alleged in the Amended
proceedings), or for the purpose of FILED ELECTRONICALLY Complaint.
securing compliance with this Final United States District Court, Eastern The government and DFA have
Judgment, or as otherwise required by District of Kentucky, London Division stipulated that the proposed Final
law. Judgment may be entered after
D. If at the time information or United States of America, et al. compliance with the APPA. Entry of the
documents are furnished by DFA to the Plaintiffs, v. Dairy Farmers of America, proposed Final Judgment would
plaintiffs, DFA represents and identifies Inc., et al., Defendants terminate this action, except that the
in writing the material in any such Civil Action No.: 6:03–206–KSF Court would retain jurisdiction to
information or documents to which a construe, modify, or enforce the
claim of protection may be asserted Competitive Impact Statement provisions of the proposed Final
under Rule 26(c)(7) of the Federal Rules Pursuant to Section 2(b) of the Judgment and to punish violations
of Civil Procedure, and DFA marks each Antitrust Procedures and Penalties Act thereof.
pertinent page of such material, (‘‘APPA’’ or ‘‘Tunney Act’’), 15 U.S.C. II. The Alleged Violations
‘‘Subject to claim of protection under 16(b)–(h), plaintiff United States of
Rule 26(c)(7) of the Federal Rules of America files this Competitive Impact A. The Defendants
Civil Procedure,’’ then the plaintiffs Statement relating to the proposed Final Dairy Farmers of America (‘‘DFA’’) is
shall give DFA ten calendar days notice Judgment submitted for entry in this a Kansas milk marketing cooperative
prior to divulging such material in any civil antitrust proceeding. with its headquarters and principal
legal proceeding (other than a grand jury place of business in Kansas City,
I. Nature and Purpose of This
proceeding). Missouri. DFA is the largest dairy
Proceeding
XI. Reacquisition of the Divestiture cooperative in the world. DFA sells raw
The United States and the
Assets milk in interstate commerce. In 2005,
Commonwealth of Kentucky
DFA had 20,000 members in 49 states,
Other than acquiring AFLP’s interests (collectively, the ‘‘government’’) filed a
marketed 59.7 billion pounds of raw

in the Southern Belle Dairy for resale to civil antitrust Complaint under Section
the Acquirer, DFA may not directly or 15 of the Clayton Act, 15 U.S.C. 25, on 1 The Commonwealth of Kentucky joined this
indirectly reacquire in whole or in part April 24, 2003, alleging that the lawsuit under 15 U.S.C. 26, and also sought relief
the Divestiture Assets or any interest in acquisition by Dairy Farmers of pursuant to the provisions of K.R.S. § 367.110, et
the Southern Belle Dairy during the America, Inc. (‘‘DFA’’) of its interest in seq.
milk in the United States, and had over solicit school milk bids together.2 As a bidding as a result of a small but
$8.9 billion in revenues. practical matter, these school districts significant increase in school milk
Southern Belle Dairy Co., LLC are unable to turn to additional school prices. This is supported by the lack of
(‘‘Southern Belle’’) owns the Southern milk suppliers, who would not bid for new entry into these markets when
Belle dairy processing plant. Southern their school milk contracts even if the competition between Southern Belle
Belle is a Delaware limited liability price of school milk were to increase by and Flav-O-Rich has been reduced.
company with its headquarters and a small but significant amount. First, in the 1980s, these two dairies
principal place of business in Somerset, The Amended Complaint alleged that rigged bids for school milk contracts for
Kentucky. Southern Belle processed DFA’s acquisition of its interest in many of the school districts affected by
approximately 25 million gallons of raw Southern Belle would lessen the acquisition. Despite an increase in
milk in 2001 and had annual revenues competition substantially in the sale of school milk prices, new entry did not
of approximately $65 million that year. school milk in each of the school occur in these markets to undermine the
Southern Belle sells fluid milk in districts identified in the Amended bid-rigging conspiracy, which lasted for
interstate commerce, including milk to complaint. These districts receive over ten years. Second, competition
school districts in Kentucky and school milk bids from Southern Belle between Southern Belle and Flav-O-
Tennessee. and dairies operated by National Dairy Rich was eliminated in some districts
Holdings, LP (‘‘NDH’’), a dairy holding when Southern Belle was suspended
B. The Acquisition company also 50 percent-owned by from bidding on certain school milk
Southern Belle was formed by DFA on DFA. Some affected districts and groups contracts from 1998 to 2000 by the U.S.
February 20, 2002. It acquired the assets of districts also receive bids from a third Department of Agriculture for violating
of the Southern Belle dairy plant on supplier. One of the NDH-operated provisions of an antitrust compliance
February 25, 2002. On February 26, dairies that serves the affected school program. Again, for those districts
2002, DFA’s joint venture partner AFLP districts is the Flav-O-Rich dairy, affected by the loss of Southern Belle as
acquired 50 percent of Southern Belle. located in London, Kentucky, only 30 a bidder for school milk contracts,
The purchase price of the Southern miles from the Southern Belle plant in relative prices for school milk rose and
Belle dairy plant was approximately Somerset, Kentucky. The transaction new entry did not occur to return prices
$18.7 million: $2 million in common lessened competition for school districts to a competitive level.
equity; $4 million in preferred equity; receiving milk contract bids from both For all of these reasons, the
and the rest paid through of a line of Southern Belle and NDH because, as a government concluded that the
credit. DFA and AFLP each contributed result of the transaction, both Southern transaction would substantially lessen
$1 million in exchange for each Belle and NDH were 50 percent-owned competition in the sale of school milk
receiving 50 percent of the common by DFA. Since any contracts won by in the school districts in Kentucky and
interests in Southern Belle. A subsidiary Southern Belle from NDH, or vice versa, Tennessee identified in the Amended
of DFA contributed $4 million in through aggressive bidding would likely Complaint, by increasing prices and/or
exchange for preferred equity interests reduce DFA’s profits, reduced reducing quality, all in violation of
and extended to Southern Belle the line competition between Southern Belle Section 7 of the Clayton Act. Indeed, the
of credit used to finance the remaining and NDH is in DFA’s interest. government found evidence that, after
In 45 of the school districts listed in the transaction, bids to districts where
$12.7 million of the purchase price.
the Amended Complaint, the effect of Southern Belle and Flav-O-Rich were
C. Anticompetitive Effects of the the acquisition has been to establish a the only bidders were higher than bids
Acquisition monopoly, with only Southern Belle received by other districts with only two
and Flav-O-Rich (or another NDH dairy) bidders, though this was not true before
The Amended Complaint alleged that
as possible milk suppliers. In these the transaction.
the manufacture, distribution, and sale
districts, the acquisition would give
of school milk constitutes a relevant III. Explanation of the Proposed Final
DFA the incentive and ability to
product market. Milk is a product that Judgment
encourage, facilitate, or enforce
has special nutritional characteristics The divestiture requirement of the
cooperation between Southern Belle and
and no practical substitutes. Dairies sell NDH to raise prices or decrease the level proposed Final Judgment will eliminate
milk to schools with special services, or quality of service provided to these the anticompetitive effects identified in
including storage coolers, daily or school districts. In 55 school districts the Amended Complaint by requiring
every-other-day delivery to each school, listed in the Amended Complaint, the DFA to divest its interest in Southern
constant rotation of old milk, and acquisition has reduced the number of Belle. In addition, the proposed Final
replacement of expired milk. Moreover, independent competitors from three to Judgment requires DFA to use
school districts must provide milk in two, making it likely that the remaining commercially reasonable efforts to cause
order to receive substantial funds under bidders will bid less aggressively against AFLP to divest its interest in Southern
Federal school meal subsidy programs. each other. Belle. The proposed Final Judgment
There are no other products that school The Amended complaint also alleged requires the United States, in
districts would substitute for school that entry into the affected markets by consultation with the Commonwealth of
milk in the event of a small but other dairies or distributors would not Kentucky, to approve any buyer of
significant price increase. be timely, likely, or sufficient to deter DFA’s and AFLP’s interests in Southern
The Amended Complaint alleged that the anticompetitive effects caused by Belle. The divestitures must be
the relevant geographic markets in the acquisition. Dairies or distributors accomplished in such a way as to satisfy
which to assess the competitive effects not currently competing in the affected the United States, in its sole discretion,
of the acquisition are the school districts markets would be unlikely to start after consultation with the
in eastern Kentucky and Tennessee Commonwealth of Kentucky, that

identified in Attachments A and B of 2 These groups of school districts require bidders
Southern Belle will be a viable, ongoing
the Amended Complaint, either as to charge the same price to the entire group, require dairy business capable to competing
successful bidders to serve all of group’s districts
individual districts or, where at the same price, and require the group’s members effectively in the sale of school and
applicable, as groups of districts that to accept the group bid. fluid milk in Kentucky and Tennessee.
The effect of these divestitures would be the divestiture. The proposed Final provisions of Section 5(a) of the Clayton
to restore competition between Judgment allows the United States to Act (15 U.S.C. § 16(a)), the proposed
Southern Belle and NDH, with the delay the appointment of the trustee for Final Judgment has no prima facie effect
divestiture of AFLP’s interest allowing a thirty days. If a trustee is appointed, the in any subsequent private lawsuit that
buyer of Southern Belle to acquire the proposed Final Judgment provides that may be brought against DFA or
entire dairy as a going concern, rather DFA will pay all costs and expenses of Southern Belle.
than as a 50 percent owner in the trustee. The trustee’s commission
V. Procedures Available for
conjunction with AFLP. During the will be structured so as to provide an
Modification of the Proposed Final
divestiture process, DFA is prohibited incentive for the trustee based on the
Judgment
from taking any steps to degrade the price obtained and the speed with
operations of Southern Belle, and the which the divestiture is accomplished. The parties have stipulated that the
entire Southern Belle dairy business is After his or her appointment becomes proposed Final Judgment may be
to be sold through the divestiture, effective, the trustee will file monthly entered by the Court after compliance
instead of piecemeal, so it can and will reports with the Court and the United with the provisions of the APPA,
be operated by the purchaser as a viable, States setting forth his or her efforts to provided that the United States has not
ongoing business that can compete accomplish the divestiture. At the end withdrawn its consent. The APPA
effectively in the relevant markets. In of six months, if the divestiture has not conditions entry upon the Court’s
addition, DFA is not permitted to been accomplished, the trustee and the determination that the proposed Final
finance any part of a purchaser’s United States will make Judgment is in the public interest.
acquisition of the Southern Belle dairy recommendations to the Court, which The APPA provides a period of at
and is prohibited from requiring the shall enter such orders as appropriate, least sixty (60) days preceding the
purchaser to enter into a raw milk in order to carry out the purpose of the effective date of the proposed Final
supply contract with DFA as a condition trust, including extending the trust or Judgment within which any person may
of the divestiture. the term of the trustee’s appointment. submit to the United States written
The government and DFA reached The divestitures required by the comments regarding the proposed Final
agreement on the terms of the proposed proposed Final Judgment eliminate the Judgment. Any person who wishes to
Final Judgment and signed the harm to competition identified in the comment should do so within sixty (60)
Stipulation on May 15, 2006. That same Amended Complaint by making days of the date of publication of this
day, DFA and AFLP executed an option Southern Belle completely independent Competitive Impact Statement is
agreement giving DFA the ability to from DFA and NDH, including the Flav- published in the Federal Register, or the
purchase AFLP’s ownership interest in O-Rich dairy. Prairie Farms’ purchase of last date of publication in a newspaper
Southern Belle. This option agreement Southern Belle accomplishes this goal of of the summary of this Competitive
allows DFA to sell the dairy in its the proposed Final Judgment. Prairie Impact Statement, whichever is later.
entirety rather than just DFA’s partial Farms will be purchasing Southern All comments received during this
ownership interest in the dairy. Not Belle as a complete going concern, period will be considered by the
only would a complete transfer of including the plant in Somerset, Department of Justice, which remains
Southern Belle to a new owner Kentucky, distribution facilities, free to withdraw its consent to the
eliminate the government’s concerns equipment, and trademarks. The proposed Final Judgment at any time
about DFA’s ownership interests in both government believes that Prairie Farms prior to the Court’s entry of judgment.
Southern Belle and Flav-O-Rich, the can capably operate and manage The comments and the response of the
divestitures also eliminate the Southern Belle, as it already owns and United States will be filed with the
possibility of anticompetitive effects as operates several dairy processing plants. Court and published in the Federal
a result of DFA’s ability to influence The government believes that Southern Register.
AFLP, its long-time business partner. Belle will continue to bid on school Written comments should be
In exchange for DFA’s agreement to milk contracts under Prairie Farms’ submitted to: Mark J. Botti, Chief,
divest its interest in Southern Belle and ownership, including against Flav-O- Litigation I Section, Antitrust Division,
use its best efforts to have AFLP do the Rich and other NDH dairies. The U.S. Department of Justice, 1401 H St.
same, and so that DFA could find a divestiture of DFA’s and AFLP’s NW., Suite 4000, Washington, DC
buyer for the dairy, the government interests in Southern Belle to Prairie 20530.
agreed in a letter agreement with DFA Farms has allowed the government to The proposed Final Judgment
dated May 15, 2006, not to file the secure relief more quickly than if the provides that the Court retains
Stipulation and proposed Final matter had gone to trial. In addition, this jurisdiction over this action, and the
Judgment until the earlier of 120 days relief is equal to, and probably exceeds, parties may apply to the Court for any
after signing the Stipulation, or DFA the relief that the government could order necessary or appropriate for the
gave notice that it executed an have obtained after a victory at trial. modification, interpretation, or
agreement with a buyer. A copy of this enforcement of the Final Judgment.
letter agreement is provided as Exhibit IV. Remedies Available to Potential
A to this Competitive Impact Statement. Private Litigants VI. Alternatives to the Proposed Final
If DFA was not able to find a buyer for Section 4 of the Clayton Act (15 Judgment
Southern Belle after 120 days had U.S.C. 15) provides that any person who The government considered, as an
elapsed, DFA agreed that the has been injured as a result of conduct alternative to the proposed Final
government could file the Stipulation prohibited by the antitrust laws may Judgment, a full trial on the merits of
and proposed Final Judgment. bring suit in Federal court to recover the Amended Complaint against DFA,
If a buyer for Southern Belle were not three times the damages the person has continuing the litigation and seeking the
found by five days after DFA receives suffered as well as costs and reasonable divestiture of DFA’s interest in Southern
notice of the entry of the proposed Final attorneys’ fees. Entry of the proposed Belle and other injunctive relief
Judgment, the Final Judgment provides Final Judgment will neither impair nor requested in the Amended Complaint.
that the Court will appoint a trustee assist the bringing of any private The government is satisfied, however,
selected by the United States to effect antitrust damage action. Under the that the divestitures and other relief
contained in the proposed Final harm third parties. See United States v. consent decree even though the court
Judgment will preserve competition in Microsoft Corp., 56 F.3d 1448, 1458–62 would have imposed a greater remedy).
the relevant markets alleged in the (D.C. Cir. 1995). Moreover, the Court’s role under the
Amended Complaint. The government With respect to the adequacy of the APPA is limited to reviewing the
believes that by requiring DFA to divest relief secured by the decree, a court may remedy in relationship to the violations
its interest in Southern Belle, as well as not ‘‘engage in an unrestricted that the United States has alleged in its
using its best efforts to have AFLP evaluation of what relief would best Amended Complaint, and does not
simultaneously divest its interest in the serve the public.’’ United States v. BNS, authorize the Court to ‘‘construct [its]
remaining 50 percent of the dairy, the Inc., 858 F.2d 456, 462 (9th Cir. 1988) own hypothetical case and then
relief obtained in the proposed Final (citing United States v. Bechtel Corp., evaluate the decree against that case.’’
Judgment has allowed the government 648 F.2d 660, 666 (9th Cir. 1981)); see Microsoft, 56 F.3d at 1459. Because the
to secure relief more quickly than if the also Microsoft, 56 F.3d at 1460–62. ‘‘court’s authority to review the decree
matter had gone to trial. In addition, the Courts have held that: depends entirely on the government’s
relief is equal to, and probably exceeds, exercising its prosecutorial discretion by
[t]he balancing of competing social and
the relief that the government could political interests affected by a proposed
bringing a case in the first place,’’ it
have obtained after a victory at trial. antitrust consent decree must be left, in the follows that ‘‘the court is only
first instance, to the discretion of the authorized to review the decree itself,’’
VII. Standard of Review Under the and not to ‘‘effectively redraft the
Attorney General. The court’s role in
APPA for Proposed Final Judgment protecting the public interest is one of complaint’’ to inquire into other matters
The APPA requires that proposed insuring that the government has not that the United States did not pursue.
consent judgments in antitrust cases breached its duty to the public in consenting Id. at 1459–60.
brought by the United States be subject to the decree. The court is required to In its 2004 amendments to the
to a sixty (60)-day comment period, after determine not whether a particular decree is Tunney Act, Congress made clear its
the one that will best serve society, but
which the Court shall determine intent to preserve the practical benefits
whether the settlement is ‘‘within the reaches
whether entry of the proposed Final of the public interest.’’ More elaborate of utilizing consent decrees in antitrust
Judgment ‘‘is in the public interest.’’ 15 requirements might undermine the enforcement, adding the unambiguous
U.S.C. 16(e)(1). In making that effectiveness of antitrust enforcement by instruction ‘‘[n]othing in this section
determination, the Court shall consider: consent decree. shall be construed to require the court
(A) The competitive impact of such to conduct an evidentiary hearing or to
Bechtel, 648 F.2d at 666 (emphasis
judgment, including termination of alleged require the court to permit anyone to
added) (citations omitted).4 In making
violations, provisions for enforcement and intervene.’’ 15 U.S.C. 16(e)(2). This
its public interest determination, a
modification, duration of relief sought, language codified the intent of the
anticipated effects of alternative remedies district court must accord due respect to
original 1974 statute, expressed by
actually considered, whether its terms are the government’s prediction as to the
Senator Tunney in the legislative
ambiguous, and any other competitive effect of proposed remedies, its
history: ‘‘[t]he court is nowhere
considerations bearing upon the adequacy of perception of the market structure, and
compelled to go to trial or to engage in
such judgment that the court deems its views of the nature of the case.
necessary to a determination of whether the extended proceedings which might have
United States v. Archer-Daniels-
consent judgement is in the public interest; the effect of vitiating the benefits of
Midland Co., 272 F. Supp. 2d 1, 6
and prompt and less costly settlement
(D.D.C. 2003).
(B) The impact of entry of such judgment through the consent decree process.’’
Court approval of a final judgment
upon competition in the relevant market or 119 Cong. Rec. 24,598 (1973) (statement
markets, upon the public generally and requires a standard more flexible and
of Senator Tunney). Rather:
individuals alleging specific injury from the less strict than the standard required for
violations set forth in the complaint a finding of liability. ‘‘[A] proposed [a]bsent a showing of corrupt failure of the
decree must be approved even if it falls government to discharge its duty, the Court,
including consideration of the public benefit,
in making its public interest finding, should
if any, to be derived from a determination of short of the remedy the court would * * * carefully consider the explanations of
the issues at trial. impose on its own, as long as it falls the government in the competitive impact
15 U.S.C. 16(e)(1)(A) and (B) 3 As the within the range of acceptability or is statement and its responses to comments in
United States Court of Appeals for the ‘within the reaches of public interest’ ’’ order to determine whether those
District of Columbia Circuit has held, United States v. Am. Tel. & Tel. Co., 552 explanations are reasonable under the
under the APPA a court considers, F. Supp. 131, 151 (D.D.C. 1982) circumstances.
among other things, the relationship (citations omitted) (quoting United United States v. Mid-American
between the remedy secured and the States v. Gillette Co., 406 F. Supp. 713, Dairymen, Inc., 1977–1 Trade Cas.
specific allegations set forth in the 716 (D. Mass. 1985)), aff’d sub nom. (CCH) ¶ 61,508, at 71,980 (W.D. Mo.
government’s complaint, whether the Maryland v. United States, 460 U.S. 1977).
decree is sufficiently clear, whether 1001 (1983); see also United States v.
Alcan Aluminum Ltd., 605 F. Supp. 619, VIII. Determinative Documents
enforcement mechanisms are sufficient,
and whether the decree may positively 622 (W.D. Ky. 1985) (approving the In formulating the proposed Final
Judgment, the United States considered
3 In 2004, Congress amended the APPA to ensure 4 Cf. BNS, 858 F.2d at 464 (holding that the DFA’s agreement with AFLP, dated May
that courts take into account the above-quoted list court’s ‘‘ultimate authority under the [APPA] is 15, 2006, giving DFA the option to
of relevant factors when making a public interest limited to approving or disapproving the consent purchase AFLP’s interest in Southern
determination. Compare 15 U.S.C. 16(e) (2004) with decree’’); United States v. Gillette Co., 406 F. Supp.
15 U.S.C. 16(e)(1) (2006) (substituting ‘‘shall’’ for 713, 716 (d. Mass. 1975) (noting that, in this way,
Belle. This agreement, a determinative
document as described in Section 2(b)
‘‘may’’ in directing relevant factors for court to the court is constrained to ‘‘look at the overall
consider and amending list of factors to focus on picture not hypercritically, nor with a microscope, of the APPA, 15 U.S.C. 16(b), is
competitive considerations and to address but with an artist’s reducing glass’’); see generally available for public inspection at the
potentially ambiguous judgment terms). On the Microsoft, 56 F.3d at 1461 (discussing whether ‘‘the
points discussed herein, the 2004 amendments did remedies [obtained in the decree are] so
office of the Department of Justice in
not alter the substance of the Tunney Act, and the inconsonant with the allegations charged as to fall Washington, DC, Room 200, 325
pre-2004 precedents cited below remain applicable. outside of the ‘reaches of the public interest’ ’’). Seventh Street, NW., and at the office of
the Clerk of the United States District Farmers of America, et al. limited liability company (‘‘Southern Belle’’);
Court for the Eastern District of Dear Todd: This letter sets forth the and
Kentucky, London, Kentucky, as Exhibit agreement among the Department of Justice WHEREAS, DFA is or will become the
(‘‘the Department’’), the Commonwealth of owner of the [REDACTED] of Series A
B to this Competitive Impact Statement.
Kentucky (‘‘the Commonwealth’’), and Diary Preferred Capital Interest and the
Dated: October 2, 2006. Farmers of America, Inc. (‘‘DFA’’) regarding [REDACTED] of Series B Preferred Capital
Respectfully Submitted, the Stipulation and proposed Final Judgment Interest in Southern Belle, plus all lines of
Jon B. Jacobs, Richard Martin, N. Christopher in this matter. Except as discussed below, the credit or other loans from Mid-Am Capital,
Hardee, Richard D. Cooke, Ihan Kim, Department and the Commonwealth agree L.L.C., (‘‘DFA Interests’’); and
Attorneys, Litigation I Section, Antitrust not to file the Stipulation and proposed Final WHEREAS, DFA is a defendant in an
Division, United States Department of Judgment with the Court until the earlier of action filed by the United States of America
(1) 120 calendar days after DFA’s signing of through its Department of Justice (‘‘DOJ’’)
Justice, City Center Building, 1401 H. Street
the Stipulation or (2) the day after DFA gives and by the Commonwealth of Kentucky and
NW., Suite 4000, Washington, DC 20530.
notice to the United States and the pending in the United States District Court
Telephone: 202–307–0001. Facsimile: 202–
Commonwealth pursuant to Section VI.A of for the Eastern District of Kentucky originally
307–5802. E-mail: ihan.kim@usdoj.gov.
the proposed Final Judgment that DFA has titled United States of America and the
Certificate of Service executed a divestiture agreement with a Commonwealth of Kentucky v. Dairy Farmers
This certifies that I caused a true and proposed Acquirer of the Divestiture Assets. of America, Inc. and Southern Belle Dairy
correct copy of the foregoing Competitive During this period, however, the Department Co., LLC, Civil Action No. 6:03–cv–206–KSF
Impact Statement to be served on October 2, and the Commonwealth reserve the right to (the ‘‘DOJ Litigation’’);
2006, in the manner indicated: file the Stipulation and proposed Final WHEREAS, DFA and AFLP have been in
Judgment with the Court under seal should discussions regarding the possibility of
David A. Owen, Esq., Greenebaum Doll & entering into a purchase agreement
they, in their sole discretion, determine after
McDonald, PLLC, 300 West Vine Street— (‘‘Purchase Agreement’’) relating to all of the
giving 15 days written notice of its reasons
Suite 1100, Lexington, KY 40507, Counsel for AFLP Interests, subject to and conditioned on
to DFA that DFA is not complying with the
Dairy Farmers of America, Inc. (via e-mail (i) full and final settlement of the DOJ
terms of the Stipulation and proposed Final
and first-class mail). Litigation and (ii) DFA’s ability and the DOJ’s
Judgment. The Department will exercise its
W. Todd Miller, Esq., Baker & Miller, acceptance and/or acquiescence to DFA
sole discretion under this letter agreement
PLLC, 2401 Pennsylvania Ave., Suite 300, concurrently entering into a definitive
and the Final Judgment in good faith in light
Washington, DC 20037, Counsel for Dairy purchase agreement relating to the sale of the
of the relevant facts, law, and public policy.
Farmers of America, Inc. (via e-mail and first- DFA and AFLP Interests and/or the sale of all
Beginning immediately with DFA’s signing
class mail). of the Stipulation, DFA must comply with all or substantially all of the operational assets
John M. Famularo, Esq., Stites & Harbison obligations and prohibitions set forth in the of Southern Belle Dairy (‘‘Assets’’) with a
PLLC, 250 West Main Street, Suite 2300, Stipulation and proposed Final Judgment third-party purchaser (‘‘Acquirer’’), pursuant
Lexington, Kentucky 40507, Counsel for including keeping the Department and the to which an Acquirer would purchase both
Dean Foods Company (via e-mail and first- Commonwealth informed as to DFA’s actions the DFA and the AFLP Interests and/or the
class mail). seeking an Acquirer. Assets from DFA (the ‘‘Acquisition
John L. Fleischaker, Esq., R. Kenyon If this accurately sets forth the agreement Agreement’’); and
Meyer, Esq., Jeremy S. Rogers, Esq., Dinsmore among the Department, the Commonwealth WHEREAS, in furtherance of the
& Shohl LLP, 1400 PNC Plaza, 500 West and DFA, please execute a copy of this letter discussions and as a condition precedent to
Jefferson Street, Louisville, Kentucky 40202, on behalf of DFA and return the copy to me. the DFA’s obligation to purchase the AFLP
Counsel for Chicago Tribune Company (via e- Interests from AFLP, and for the additional
mail and first-class mail). Sincerely,
Mark J. Botti, consideration set forth herein, the AFLP
Charles E. Shivel, Jr., Esq., Stoll Keenon desires to grant, and herein does grant, to
Ogden PLLC, 300 West Vine Street—Suite For the United States Department of Justice.
DFA an option to purchase the AFLP
2100, Lexington, KY 40507, Counsel for Maryellen B. Mynear, interests according to the terms and subject
Southern Belle Dairy Co., LLC (via e-mail and For the Commonwealth of Kentucky. to the conditions set forth in this Agreement.
first-class mail). Agreed: NOW, THEREFORE, in consideration of the
J. Jackson Eaton, III, Esq., Gross, McGinley, premises herein and the representations,
W. Todd Miller,
LaBarre & Eaton, LLP, P.O. Box 4600—33 warranties, covenants and agreements
Counsel for Dairy Farmers of America, Inc.
South Seventh Street, Allentown, PA 18105, contained herein, the receipt and legal
Counsel for Southern Belle Dairy Co., LLC Date: May 15, 2006
sufficiency of which are hereby
(via e-mail and first-class mail). cc. David A. Owen.
acknowledged, the parties hereto agree as
Maryellen B. Mynear, Esq., Office of the follows:
Kentucky Attorney General, 1024 Capital Exhibit B—Determinative Document
Pursuant to 15 U.S.C. 16(b): Option 1. Grant of Option. AFLP hereby grants to
Center Drive, Suite 200, Frankfort, KY 40601, DFA an unconditional, irrevocable option
Counsel for Commonwealth of Kentucky (via Agreement Between Dairy Farmers of
America, Inc. and Allen Family Limited (the ‘‘Option’’) to purchase, subject to the
e-mail and first-class mail). terms and conditions hereof, the AFLP
Partnership
/s/ Ihan Kim, Interests for the total sum of [REDACTED]
Attorney for Plaintiff, United States of Redacted (‘‘Purchase Price’’) payable in cash at the
America. Public Version time of closing. The Option shall terminate
upon the earliest to occur of: (i) the written
Exhibit A—Letter Agreement Between the Option Agreement mutual agreement of DFA and AFLP to
United States, Commonwealth of Kentucky, terminate the Option; or (ii) the delivery of
This OPTION AGREEMENT is dated and
and Dairy Farmers of America, Inc. at least ten (10) days prior written notice
made effective as of the 15th day of May,
U.S. Department of Justice 2006, among DAIRY FARMERS OF from DFA to AFLP that DFA has decided to
AMERICA, INC., a Kansas cooperative terminate the Option. The Option may only
Antitrust Division
marketing association (‘‘DFA’’), and ALLEN be exercised during the period from the date
May 15, 2006 FAMILY LIMITED PARTNERSHIP, a hereof through the first date to occur of
Via Hand Delivery Pennsylvania limited partnership (‘‘AFLP’’). clause (i) or (ii) of the immediately preceding
sentence (the ‘‘Option Period’’).

W. Todd Miller, Esq., Recitals 2. Option Grant Payment. Upon the
Baker & Miller, PLLC, 2401 Pennsylvania WHEREAS, AFLP is the owner of one execution of this Option Agreement by the
Avenue, NW., Suite 300, Washington, DC hundred percent (100%) of the common parties hereto, DFA shall remit to AFLP the
2005 member interest (‘‘AFLP Interests’’) of amount of One Thousand Dollars ($1,000)
Re: United States of America, et al. v. Dairy Southern Belle Dairy Co., LLC, a Delaware and other good and valuable consideration,
the receipt of which is hereby acknowledged AFLP and DFA Interests and/or the Assets by of this Agreement until the earlier to occur
by AFLP for the grant of the Option by AFLP DFA. of (i) the purchase of all of the AFLP Interests
pursuant to this Agreement. (e) AFLP shall not change the authorized pursuant to the exercise of the Option or (ii)
3. Exercise of Option by DFA. or issued AFLP or DFA Interests or grant any the termination of the Option Period.
(a) DFA shall exercise the Option for the option or right to purchase such Interests (c) AFLP hereby represents and warrants to
AFLP Interests, but only upon (i) full and other than as set forth herein. DFA and covenants for the benefit of DFA
final settlement of the DOJ Litigation and (ii) (f) AFLP shall not amend the that at Closing, AFLP shall deliver such
DFA’s ability and DOJ’s acceptance and/or organizational document of Southern Belle. executed instruments of assignment, as
acquiescence to DFA concurrently entering (g) AFLP shall not damage or cause the loss applicable, evidencing the sale and transfer
into a definitive Acquisition Agreement of any material customer, asset or property of of the AFLP Interests to DFA or a bill of sale
relating to the sale of the AFLP and DFA Southern Belle Dairy. and any other documents, instruments or
Interests and/or the sale of all or substantially (h) AFLP shall not incur any indebtedness certificates necessary to evidence the transfer
all of the Assets with an Acquirer during the or borrow money in excess of Three Hundred of any of the Assets.
Option Period. The Option may not be Thousand Dollars ($300,000). 6. Representations, Warranties and
exercised in part, but may only be exercised (i) AFLP shall not cause a material change Covenants of DFA. DFA hereby represents
for all of the AFLP Interests subject to this in the accounting methods used by Southern and warrants to AFLP as follows: (i) DFA has
Agreement and as set forth in the Purchase Belle Dairy. the requisite corporate power and authority
Agreement. (j) AFLP shall not enter into a sale or to execute and deliver this Agreement and to
(b) At the closing (‘‘Closing’’), DFA shall transfer of any of the assets of Southern Belle perform its obligations hereunder; (ii)
pay to AFLP the Purchase Price by wire Dairy except in the ordinary course of contingent on and subject to full and final
transfer of immediately available funds to an business. settlement of the DOJ Litigation and the
account designated by such AFLP or by (k) AFLP shall not enter into any contract simultaneous execution of an Acquisition
delivery of a certified check to the AFLP or agreement to do any of the foregoing. Agreement with an Acquirer as described
address listed on the signature page to this 5. Representations, Warranties and herein and subject to the conditions set forth
Agreement. Covenants of AFLP. herein, the execution and delivery of the
At the Closing, and upon confirmation of (a) AFLP hereby represents and warrants to Agreement by DFA and the performance of
the satisfaction of the conditions set forth in DFA the following: (i) AFLP has sole and its obligations hereunder, have been duly and
Section 3(a)(i) and (ii) above, simultaneously exclusive record title to and ownership of the validly authorized by the Board of Directors
with the payment of the Purchase Price as AFLP Interests that are the subject of this of DFA and no other corporate proceedings
provided for hereinabove, (i) DFA will Agreement; (ii) the AFLP Interests are free on the part of the DFA or consents from for
execute the Acquisition Agreement pursuant and clear of any liens, restrictions, claims, filings with any person or entity or regulatory
to terms and conditions mutually agreed charges, options, rights of first refusal or body, other than the provisions of the
between DFA and such Acquirer. encumbrances, with no defects of title Revised and Restated Limited Liability
4. Conditions Precedent to Closing by DFA. whatsover, except as provided in the Second Company Agreement of Southern Belle, are
AFLP, as manager of Southern Belle Dairy, Amended and Restated Limited Liability necessary to authorize this Agreement, for
LLC, hereby represents and warrants to DFA Company Agreement of Southern Belle Dairy DFA to perform its obligations hereunder;
as follows: Co., LLC; (iii) with respect to any AFLP (iii) this Agreement has been duly and
(a) AFLP shall offer to furnish to all Interests which were acquired by gift or validly executed and delivered by DFA; and
prospective Acquirers from DFA, subject to inheritance, all federal and state estate or gift (iv) this Agreement constitutes a legal, valid
customary confidentiality assurances, all tax returns, as the case may be, required to and binding obligation of the DFA
information and documents relating to the be filed were duly and timely filed, and all enforceable against DFA in accordance with
AFLP Interests or Assets of the Southern taxes payable with respect thereto were paid; its terms, subject to full and final settlement
Belle Dairy provided in a due diligence (iv) AFLP has the requisite power and of the DOJ Litigation and ability of DFA to
process except such information or authority to execute and deliver this simultaneously execute of an Acquisition
documents subject to the attorney-client Agreement and to consummate the Agreement with an Acquirer of the Assets
privilege or attorney work-product doctrine. transactions contemplated hereby; (v) the and/or the DFA and AFLP Interests from
AFLP shall make available such information execution and delivery of this Agreement and DFA, and subject to the conditions set forth
to the United States and the Commonwealth the consummation of the transactions herein.
of Kentucky at the same time that such contemplated hereby have been duly and 7. Amendments: Entire Agreement. This
information is made available to any such validly authorized by AFLP and authorized Agreement may not be modified except by
prospective Acquirer. by the required governing body prior to the written instrument executed by the parties
(b) AFLP shall permit prospective date hereof and no other proceedings on the hereto. This Agreement contains the entire
Acquirers from DFA of the AFLP Interests part of AFLP or consents from or filings with agreement among the parties hereto with
and/or the Assets to have reasonable access any person or entity or regulatory body are respect to the transactions contemplated
to personnel and make inspections of the necessary to authorize this Agreement, for hereby and supersedes all prior
physical facilities of the Southern Belle AFLP to perform its obligations hereunder or understandings, representations, warranties,
Dairy; access to any and all environmental, to consummate the transactions promises and undertakings between the
zoning and other permit documents and contemplated hereby, except as provided in parties hereto with respect to the transactions
information; and access to any and all the Second Amended and Restated Limited contemplated hereby.
financial, operational or other documents Liability Company Agreement of Southern 8. Assignment. Neither of the parties hereto
and information customarily provided as part Belle Dairy Co., LLC; (vi) this Agreement has may assign any of its rights or obligations
of a due diligence process. been duly and validly executed and under this Agreement or the Option created
(c) AFLP shall provide the Acquirer from delivered by AFLP; and (vii) this Agreement hereunder to any other person without the
DFA and the United States information constitutes a legal, valid and binding express written consent of the other party.
relating to the personnel involved in the obligation of AFLP, enforceable against AFLP 9. Validity. If any term, provision, covenant
operation of the Southern Belle Dairy to in accordance with its terms. or restriction contained in this Agreement is
enable the Acquirer to make offers of (b) AFLP hereby covenants that, during the held by a court or a federal or state regulatory
employment. AFLP shall not interfere with period described in the following sentence, it agency of competent jurisdiction to be
any negotiations by the Acquirer to employ will maintain ownership interest in and to all invalid, void or unenforceable, the remainder
any employee whose primary responsibility of the AFLP Interests, and will not, directly of the terms, provisions and covenants and
is the production, sale, marketing or or indirectly, offer for sale, sell, distribute, restrictions contained in this Agreement shall
distribution of products from the Southern grant any option, right to purchase, suffer any remain in full force and effect, and shall in
Belle Dairy. lien or encumbrance upon, pledge, no way be affected, impaired or invalidated;
(d) AFLP shall not take any action that will hypothecate or otherwise dispose of any of provided that each party is able to receive
impede in any way the operation of the the AFLP Interests. The restrictions in the substantially all of the rights and
Southern Belle Dairy or the divestiture of the foregoing sentence shall apply from the date substantially all of the benefits it is to have
had/or receive, as applicable, under this MID–AM CAPITAL, L.L.C. Native American and other tribal
Agreement. By: Dairy Farmers of America, Inc., as sole organizations, public interest and
10. Notices. All notices, requests, claims, manager. advocacy groups, and other private
demands and other communications By: /s/ David G. Meyer. citizens and stakeholders. Due to the
hereunder shall be deemed to have been duly Name: David G. Meyer. large volume of comments submitted by
given when delivered in person, by fax, Title: Senior Vice President/Finance.
telecopy, or by registered or certified mail
each entity, ETA worked during
[FR Doc. 06–8795 Filed 11–3–06; 8:45 am] calendar year 2005 to organize and
(postage prepaid, return receipt requested) at
the address set forth on the signature page BILLING CODE 4410–11–M analyze the public comments, make
hereto. appropriate revisions to agency policy
11. Governing Law. This Agreement shall guidance on the common measures, and
be governed by and construed in accordance DEPARTMENT OF LABOR assess the feasibility of implementing
with the laws of the State of Delaware the proposed EMILE reporting
applicable to contracts made and to be Office of the Secretary requirements in several States.
performed entirely in that State and without ETA has reconciled the public
regard to any of its conflicts of law principles Submission for OMB Review: comments and made appropriate
which could result in the application of the Comment Request revisions to the original EMILE
laws of another jurisdiction. proposal, which has been re-named to
12. Counterparts. This Agreement may be October 31, 2006.
the Workforce Investment Streamlined
executed in multiple counterparts, each of The Department of Labor (DOL) has
which shall be deemed to be an original, but Performance Reporting (WISPR) system.
submitted the following public
all of which shall constitute one and the This revised proposal will replace the
information collection request (ICR) to
same agreement. This Agreement may be current quarterly reporting requirements
the Office of Management and Budget
executed by facsimile signature, which shall of the following seven ETA activities:
(OMB) for review and approval in Wagner-Peyser Act, Veterans
constitute a legal and valid signature for all
purposes hereof. This Agreement shall not be accordance with the Paperwork Employment and Training Service, the
effective until counterparts executed by Reduction Act of 1995 (Pub. L. 104–13, Workforce Investment Act (WIA) Adult,
AFLP and DFA have been delivered to each 44 U.S.C. Chapter 35). A copy of this WIA Dislocated Worker, WIA Youth,
of them. ICR, with applicable supporting and Trade Adjustment Assistance Act
13. Costs. Except as otherwise expressly documentation, may be obtained by programs, and National Emergency
provided for herein, each of the parties calling the Department of Labor. A copy Grants.
hereto shall bear and pay all costs and of this ICR, with applicable supporting The Department is seeking or has
expenses incurred by it or on its behalf in documentation, may be obtained at
connection with the transactions already received separate OMB
http://www.reginfo.gov/public/do/ clearances on revisions to the following
contemplated hereunder, including fees and
PRAMain, or contact Ira Mills on 202– program reporting systems to
expenses of its accountants and counsel.
14. Additional Documents. In the event of
693–4122 (this is not a toll-free number) incorporate standardized data collection
the exercise of the Option by DFA, DFA and or e-mail: Mills.Ira@dol.gov. necessary to implement a set of common
AFLP agree to execute and deliver all other In July 2004, ETA solicited comments performance measures: National Farm
documents and instruments and take all from the general public on the Worker Jobs Program, Indian and Native
other action that may be reasonably establishment of a single, streamlined American Program, Senior Community
requested in writing by the other party hereto reporting and recordkeeping system, Service and Employment Program, and
in order to consummate the transactions formally called the ETA Management entities receiving H–1B Technical Skills
provided for by such exercise and to Information and Longitudinal Training or Responsible Reintegration of
effectuate the intents of this Agreement, but Evaluation (EMILE) reporting system.
not including any indemnities, warranties,
Youthful Offenders grants. These
The notice of 60-day public comment on programs will continue to report
representations or similar covenants other
than with respect to good title to the AFLP
the proposed EMILE reporting system separately, and the data elements
interests to be assigned and transferred. was published in the Federal Register collected for these programs have been
In Witness Whereof, each of the parties has on July 16, 2004 (Vol. 69, No. 136, pages aligned, to the extent practicable, with
caused this Agreement to be executed 42777–42779). The proposed EMILE those in the proposed WISPR System.
individually or on its behalf by its officers reporting system was designed to The decision to not include these
thereunto duly authorized, all as of the date streamline 12 ETA program reporting programs in the WISPR System was
first above written. systems into one comprehensive based on concerns about burden (time
ALLEN FAMILY LIMITED PARTNERSHIP reporting structure that would allow for and resources) expressed by many
consistent, comparable analysis across commenters.
By: /s/ Robert W. Allen.
Name: Robert W. Allen.
ETA funded employment and training While the proposed WISPR System
Title: General Partner, 2400 Ballybunion programs, using the definitions for a set represents a comprehensive data
Road, Center Valley, Pennsylvania 18034. of common performance measures collection and reporting approach, it is
initially specified in Training and important to note that every effort has
DAIRY FARMERS OF AMERICA, INC. Employment Guidance Letter (TEGL) been made to establish common data
By: /s/ David A. Geisler. 15–03, Common Measures Policy, and definitions and formats with minimum
Name: David A. Geisler. subsequently revised by TEGL 17–05, burden to grantees. At its foundation,
Title: Senior Vice-President/Legal, 10220 Common Measures Policy for the the proposed WISPR System organizes
North Ambassador Drive, Kansas City, Employment and Training customer information that is maintained
Missouri 64153. Administration’s (ETA) Performance by states in order to run their day-to-day
Acknowledgement and Consent Accountability System and Related operations, and includes a minimum
Performance Issues. level of information collection that is
The undersigned specifically

acknowledges and consents to the
ETA received comments from 161 necessary to comply with Equal
transactions as set forth in the Agreement unique entities, including state Opportunity requirements, hold states
and will cooperate to effectuate the workforce agencies and boards, local and grantees appropriately accountable
consummation of said transactions insofar as workforce investment areas, non-profit for the Federal funds they receive, and
legally necessary and reasonably appropriate. organizations and national associations, allow the Department to fulfill its

Notice: Competitive Impact Statements and Proposed Consent Judgments: Dairy Farmers of America, Inc., Et Al.

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Notice: Competitive Impact Statements and Proposed Consent Judgments: Dairy Farmers of America, Inc., Et Al.

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64984 Federal Register / Vol. 71, No.

214 / Monday, November 6, 2006 / Notices

Delaware. Resources and Environmental Control, be published in the Federal Register

Southern Belle subsidiary will likely consideration paid in advance pursuant

Rockcastle County, KY school milk and other government contracts.

PROJECTED FROM ACTUAL 8/97–12/97

Adair County Schools .................................................................................................................................. 21627 95,893.38

Hazard Independent Schools ...................................................................................................................... 34848 27,636.88

PROJECTED FROM ACTUAL 8/97–12/97—Continued

Lincoln County Schools ............................................................................................................................... 24191 164,317.71

Total ...................................................................................................................................................... .............................. 5,390,347.09

Adair County Schools .................................................................................................................................. 21627 95,893.38

Monticello City Schools ............................................................................................................................... 21575 25,423.20

Putnam County Schools .............................................................................................................................. 27240 221,463.07

Total ...................................................................................................................................................... .............................. 4,786,071.13

marketed 59.7 billion pounds of raw

in eastern Kentucky and Tennessee Commonwealth of Kentucky, that

sentence (the ‘‘Option Period’’).

The undersigned specifically

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