FTC v. Dean Foods Co.

FTC v. Dean Foods Co., 384 U.S. 597 (1966), is a 1966 decision of the United States Supreme Court holding that the Federal Trade Commission (FTC) may sue in federal court to obtain a preliminary injunction to maintain the status quo against the consummation of a merger that the agency persuasively contends violates the antitrust laws.[1]

More broadly, the Dean Foods case stands for the proposition that a federal agency may, by invoking the All Writs Act, seek equitable relief in federal court against a person's threatened action that will substantially interfere with the agency's performance of its statutory duty and thus adversely affect the relevant court's ability to review the agency's ultimate order with respect to the threatened action.

Facts

Dean Foods and Bowman Dairy, two substantial competitors in the sale of milk in the Chicago area, agreed to a merger. Dean was the second largest firm and Bowman the third or fourth, and together they accounted for 23% of milk sales in the area.[2] The FTC filed an administrative complaint to prevent the merger and sought to maintain the status quo pending completion of administrative hearings by filing a petition with the United States Court of Appeals for the Seventh Circuit

Significance and aftermath

The reasoning of the Court is not limited to the FTC and by its terms would apply with equal force to any other federal agency in similar circumstances.

However, the principle may be limited to situations of great urgency. In FTC v. PepsiCo, Inc.,[10] the FTC sought a preliminary injunction against a merger and the Second Circuit denied it. The court said that, under Dean Foods, an injunction can issue only if the commission can show that "an effective remedial order, once the merger was implemented, would otherwise be virtually impossible, thus rendering the enforcement of any final decree of divestiture futile." The Second Circuit thought that the merger probably violated the antitrust laws but did not believe that effective relief would be “virtually impossible.”

In Sampson v. Murray,[11] the Supreme Court held Dean Foods inapplicable to a stay of a General Services Administration (GSA) dismissal, stating: "In direct contrast to the claim of the FTC in Dean Foods that its jurisdiction would be effectively defeated by denial of relief, the Commission here has argued that judicial action interferes with the normal agency processes. And we see nothing in the record to suggest that any judicial review available under the doctrine of Service v. Dulles would be defeated in the same manner as review in Dean Foods."

In the wake of similar decisions, in 1973, Congress passed specific legislation granting the FTC authority to bring suits in district courts to obtain preliminary injunctions to prevent consummation of mergers pending action before the FTC, under a legal standard requiring likelihoods of success on the merits rather than a defeat of the agency proceeding.[12] In addition, Congress passed the Hart-Scott-Rodino Act, which also created administrative clearance procedures having the effect of delaying consummation of mergers while agency evaluation of the competitive impact took place.

In 1984, the D.C. Circuit relied on Dean Foods as authority for issuance of an order to compel the FCC to act on a petition that it had allegedly delayed unreasonably in acting upon.[13]

litigants	Federal Trade Commission v. Dean Foods Co.
arguedate	March 28
argueyear	1966
decidedate	June 13
decideyear	1966
fullname	Federal Trade Commission v. Dean Foods Company, et al.
usvol	384
uspage	597
parallelcitations	86 S. Ct. 1738; 16 L. Ed. 2d 802; 1966 U.S. LEXIS 2985; 1966 Trade Cas. (CCH) ¶ 71,788
prior	356 F.2d 481 (7th Cir. 1966)
holding	The Federal Trade Commission (FTC) may sue in federal court to obtain a preliminary injunction to maintain the status quo against the consummation of a merger that the agency persuasively contends violates the antitrust laws.
majority	Clark
joinmajority	Warren, Black, Douglas, Brennan
dissent	Fortas
joindissent	Harlan, Stewart, White

FTC v. Dean Foods Co.

Facts

Ruling of Seventh Circuit

Ruling of Supreme Court

Significance and aftermath

See also

References