[Federal Register Volume 62, Number 183 (Monday, September 22, 1997)]
[Notices]
[Pages 49527-49535]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-25077]


-----------------------------------------------------------------------

DEPARTMENT OF JUSTICE

Antitrust Division


Proposed Final Judgment and Competitive Impact Statement; United 
States v. Mid-America Dairymen, Inc., Southern Foods Group LP, and Milk 
Products LLC

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. Sec. 16 (b)-(h), that a proposed Final 
Judgment, Stipulation, and Competitive Impact Statement have been filed 
with the United States District Court for the Northern District of 
Texas in United States v. Mid-America Dairymen, Inc., Southern Foods 
Group LP, and Milk Products, LLC, Civil No. 3:97 CV 2162-P. The 
proposed Final Judgment is subject to approval by the Court after the 
expiration of the statutory 60-day public comment period and compliance 
with the Antitrust Procedures and Penalties Act, 15 U.S.C. Sec. 16 (b)-
(h).
    On September 3, 1997, the United States filed a Complaint seeking 
to enjoin a transaction in which Mid-America Dairymen, Inc. (``Mid-
America'') would acquire the voting stock of Borden/Meadow Gold Dairies 
Holdings, Inc. (``Borden/Meadow Gold''). Mid-America, through its 
affiliate Southern Food Group LP (``Southern Foods''), and Borden/
Meadow Gold are two of the primary, and often the only, bidders to 
supply milk to school districts in Eastern Texas and Louisiana, and 
this transaction would have combined them to create a monopoly in many 
of those school districts. The Complaint alleged that the proposed 
acquisition would substantially lessen competition in providing milk to 
school districts in Eastern Texas and Louisiana in violation of Section 
7 of the Clayton Act, 15 U.S.C. Sec. 18.
    The proposed Final Judgment orders Mid-America to sell the Texas, 
Louisiana and New Mexico assets to be acquired from Borden/Meadow Gold 
and, to the extent it sells them to a purchaser who has already agreed 
to buy them (Milk Products LLC), to limit the financing that Mid-
America had agreed to provide to the purchaser. In the event Mid-
America does not sell to that purchaser, it must divest the assets to a 
purchaser who has the capability to compete effectively in the 
manufacture, sale and distribution of dairy products in New Mexico, 
Texas and Louisiana. A Competitive Impact Statement filed by the United 
States describes the Complaint, the proposed Final Judgment, and 
remedies available to private litigants.
    The public is invited to comment within the statutory 60-day 
comment period. Written comments should be addressed to Roger W. Fones, 
Chief, Transportation, Energy and Agriculture Section, U.S. Department 
of Justice, Antitrust Division, 325 Seventh Street, N.W., Suite 500, 
Washington, D.C. 20530 (telephone: (202) 307-6351). Comments must be 
received within 60 days. Such comments, and the responses thereto, will 
be published in the Federal Register and filed with the Court.
    Copies of the Complaint, Stipulation, proposed Final Judgment, and 
Competitive Impact Statement are available for inspection in Room 215 
of the U.S. Department of Justice, Antitrust Division, 325 Seventh 
Street, N.W., Washington, D.C. 20530 (telephone: (202) 514-2481), and 
at the office of the Clerk of the United States District Court for the 
Northern District of Texas, 1100 Commerce Street, Dallas, Texas 75242. 
Copies of these materials may be obtained upon request and payment of a 
copying fee.
Constance K. Robinson,
Director of Operations, Antitrust Division.

Stipulation and Order

    It is stipulated by and between the undersigned parties, through 
their respective attorneys, that:
    1. The Court has jurisdiction over the subject matter of this 
action and over each of the parties hereto, and venue of this action is 
proper in the Northern District of Texas.
    2. The parties consent that a Final Judgment in the form hereto 
attached may be filed and entered by the Court, upon the motion of any 
party or upon the Court's own motion, at any time after compliance with 
the requirements of the Antitrust Procedures and Penalties Act (15 
U.S.C. Sec. 16(b)-(h)), and without further notice to any party or 
other proceedings, provided that plaintiff United States has not 
withdrawn its consent, which it may do at any time before the entry of 
the proposed Final Judgment by serving notice thereof on defendants and 
by filing that notice with the Court.
    3. The defendants shall abide by and comply with the provisions of 
the proposed Final Judgment pending entry

[[Page 49528]]

of the Final Judgment, or until expiration of time for all appeals of 
any court ruling declining entry of the proposed Final Judgment and 
shall, from the date of signing of this Stipulation, comply with all 
terms and provisions of the proposed Final Judgment thereof as though 
the same were in full force and effect as an order of the Court.
    4. This Stipulation shall apply with equal force and effect to any 
amended proposed Final Judgment agreed upon in writing by the parties 
and submitted to the Court.
    5. In the event plaintiff United States withdraws its consent, as 
provided in Paragraph 2, above, or if the proposed Final Judgment is 
not entered pursuant to this Stipulation, the time has expired for all 
appeals of any Court ruling declining entry of the Final Judgment and 
if the Court has not otherwise ordered continued compliance with the 
terms and provision of the Final Judgment, then the parities are 
released from all further obligations under this Stipulation, and the 
making of this Stipulation shall be without prejudice to any party in 
this or any other proceeding.
    6. Defendants represent that the divestiture ordered in the 
proposed Final Judgment can and will be made, and that they will later 
raise no claims of hardship or difficulty as grounds for asking the 
Court to modify any of the divestiture provisions contained therein.
    7. The parties request that the Court acknowledge the terms of this 
Stipulation by entering the Order in this Stipulation and Order.

      Respectfully submitted.

    For Plaintiff United States of America:
Joel I. Klien,
Assistant Attorney General.
A. Douglas Melamed,
Deputy Assistant Attorney General.
Roger W. Fones,
Chief, DC Bar # 303255.
Donna N. Kooperstein,
Assistant Chief, PA Bar # 26770.
Joan S. Huggler,
DC Bar # 927244.
Michael P. Harmonis,
PA Bar # 17994.
Robert D. Young,
DC Bar # 248260.

Attorneys, Antitrust Division, U.S. Department of Justice, 325 
Seventh St. N.W., Washington, D.C., (202) 307-6456, (202) 616-2441.

    Dated: September 2, 1997.

    For Defendant Mid-America Dairymen, Inc.
W. Todd Miller,
DC Bar # 414930.

Baker & Miller PLLC, Suite 615, 700 Eleventh Street, NW, Washington, 
D.C. 20001, (202)-637-9499, (202-637-9394 (Facsimile).
Attorneys for Mid-America Dairymen, Inc.

    Dated: September 2, 1997.

    For Defendant Southern Foods Group LP:
Jerry L. Beane,
TX Bar #01966000.

Strasburger & Price LLP, Suite 4300, 901 Main Street, Dallas, Texas 
75202, (214-651-4521), (214)-651-4330 (Facsimile).
Attorneys for Southern Foods Group LP

    Dated: September 2, 1997.

    For Defendant Milk Products LLC:
Jerry L. Beane,
TX Bar #01966000.

Strasburger & Price LLP, Suite 4300, 901 Main Street, Dallas, Texas 
75202, (214-651-4521), (214)-651-4330 (Facsimile).
Attorneys for Milk Products LLC

    Dated: September 2, 1997.

    Upon Review of this Stipulation by the parties, the Court 
acknowledges by this Order that the parties have consented to the 
terms specified in this Stipulation and the entry of the Final 
Judgment subject to the provisions of the Antitrust Procedures and 
Penalties Act (15 U.S.C. Sec. 16 (b)-(h)).

So Ordered on this ________ day of ________________, 1997.

----------------------------------------------------------------------
United States District Court Judge

Final Judgment

    Whereas, plaintiff, United States of America (hereinafter ``United 
States''), having filed its complaint herein on September 3, 1997, and 
plaintiff and defendants, by their respective attorneys, having 
consented to the entry of this Final Judgment without trial or 
adjudication of any issue of fact or law herein and without this Final 
Judgment constituting any evidence against or an admission by any party 
with respect to any issue of law or fact herein;
    And Whereas, defendants have agreed to be bound by the provisions 
of this Final Judgment pending its approval by the Court;
    And Whereas, prompt and certain divestiture is the essence of this 
agreement to assure that competition is not substantially lessened;
    And Whereas, defendants have represented to plaintiff that the 
divestiture required below and the relief related thereto can and will 
be made and that defendants will later raise no claim of hardship or 
difficulty as grounds for asking the Court to modify any of the 
provisions contained below:
    Now, Therefore, before the taking of any testimony and without 
trial or adjudication of any issue of fact or law herein, and upon 
consent of the parties thereto, it is hereby
    Ordered, Adjudged and Decreed:

I

Jurisdiction

    This Court has jurisdiction of the subject matter of this action 
and each of the defendants hereto. The complaint states a claim upon 
which relief may be granted against each defendant under Section 7 of 
the Clayton Act, as amended, 15 U.S.C. Sec. 18.

II

Definitions

    As used in this final judgment:
    A. Mid-America means Mid-America Dairymen, Inc., a Kansas 
corporation with headquarters in Springfield, Missouri, its members, 
directors, officers, employees, affiliates, joint venture or limited 
liability company partners, successors or assigns, and any agent or 
representative thereof.
    B. Southern Foods means Southern Foods Group LP, a partnership 
organized under the laws of Delaware with headquarters in Dallas, 
Texas, its members, directors, officers, employees, affiliates, joint 
venture or limited liability company partners, successors or assigns, 
or any agent or representative thereof.
    C. Milk Products means Milk Products LLC, the limited liability 
company formed by Allen A. Meyer to receive certain dairy processing 
assets located in New Mexico, Texas and Louisiana formerly owned by 
Borden/Meadow Gold Dairies Holdings, Inc., its members, directors, 
officers, employees, affiliates, joint venture or limited liability 
company partners, successors or assigns, or any agent or representative 
thereof.
    D. Divestiture Asserts or the Assets means the Borden/Meadow Gold 
assets located in New Mexico, Texas and Louisiana that Mid-America will 
acquire through purchase of the voting stock of Borden/Meadow Gold 
Dairies Holdings, Inc.
    E. The Marks means certain trademarks described in a Sublicense 
Agreement between Southern Foods and Milk Products, which include 
Borden, Elsie and other trademarks granted to Mid-America and/or 
Southern Foods by license from Borden, Inc. and BDH Two, Inc.
    F. Divest or Divestiture means the complete relinquishing of all 
rights and equity and other interests in the Divestiture Assets, 
provided that if Mid-America divests the Assets to Milk Products, it 
may extend to Milk

[[Page 49529]]

Products the Loan defined herein. Divestiture also means to grant an 
exclusive, royalty-free sublicense to use the Marks in Texas, Louisiana 
and New Mexico and a non-exclusive, royalty-free sublicense to use the 
Marks in Alabama, Arkansas, Florida, Mississippi, Tennessee, and 
Mexico.
    G. Milk Products Loan or the Loan means the approximately $40 
million advanced by Mid-America or Mid-Am Capital LLC for the purchase 
by Milk Products of the assets located in New Mexico, Texas and 
Louisiana held by Borden/Meadow Gold Dairies Holdings, Inc., and for 
which Milk Products has executed Note Purchase Agreements and other 
related debt instruments setting forth the terms of the loan 
arrangements.

III

Applicability

    A. The provisions of this final judgment shall apply to the 
defendants, Mid-America Dairymen, Southern Foods Group, and Milk 
Products, their respective successors and assigns, and to all other 
persons in active concert or participation with any of them who shall 
have received actual notice of this final judgment by personal service 
or otherwise.
    B. Each defendant shall provide written notice to the plaintiff no 
later than 10 days subsequent to the effective date of any action 
whereby the defendant (1) changes its name or corporate or 
organizational structure; (2) liquidates or otherwise ceases operation; 
or (3) declares bankruptcy. Such notice shall include a full 
explanation of the action that invokes this provision and shall include 
full documentation required to be filed with any judicial, 
administrative or other official entity in connection with that action.

IV

Divestiture

    A. Defendant Mid-America is hereby ordered and directed in 
accordance with the terms of this Final Judgment, within 65 days of the 
filing of this Final Judgment, or five days after notice of entry of 
this Final Judgment by the Court, whichever is later, to divest the 
Divestiture Assets and the Marks to a purchaser acceptable to the 
United States. Plaintiff may, in its sole discretion, extend the time 
period for an additional period of time, not to exceed 90 calendar days 
in total.
    B. Unless the United States otherwise consents in writing, the 
divestiture of the Assets and the Marks pursuant to Paragraph IV (A), 
or by a trustee appointed pursuant to Paragraph V of this Final 
Judgment, shall include all of the Assets and the Marks to be divested 
to a purchaser in such a way as to satisfy the United States in its 
sole discretion that the Assets and the Marks can and will be used by 
the purchaser as part of a viable, ongoing business engaged in the 
manufacture, sale and distribution of dairy products in New Mexico, 
Texas and Louisiana. The divestiture, whether pursuant to Paragraph IV 
or V of this Final Judgment shall be made to a purchaser for whom it is 
demonstrated to the sole satisfaction of the United States that (1) the 
purchaser has the capability and intent of competing effectively in the 
manufacture, sale and distribution of dairy products in New Mexico, 
Texas and Louisiana; (2) the purchaser has or soon will have the 
managerial, operational, and financial capability to compete 
effectively in the manufacture, sale and distribution of dairy products 
in New Mexico, Texas and Louisiana; and (3) none of the terms of any 
agreement between the purchaser and Mid-America give Mid-America the 
ability unreasonably to raise the purchaser's cost, to lower the 
purchaser's efficiency, or otherwise to interfere in the ability of the 
purchaser to compete effectively in the manufacture, sale and 
distribution of dairy products in New Mexico, Texas and Louisiana.
    C. The Divestiture of the Assets and the Marks to Milk Products, if 
accomplished in accordance with this Final Judgment within twenty-four 
hours following the acquisition by Mid-America of the voting stock of 
Borden/Meadow Gold, is acceptable to the United States and no further 
approval of plaintiff pursuant to this Paragraph IV or Paragraph IX is 
required.

V

Apppointment of Trustee

    A. In the event that Mid-America has not divested the Divestiture 
Assets and the Marks within the time specified in Paragraph IV (A) of 
this Final Judgment, the Court shall appoint, on application of the 
United States, a trustee selected by the United States to effect the 
divestiture of the Divestiture Assets and the Marks.
    B. After the appointment of a trustee becomes effective, only the 
trustee shall have the right to accomplish the divestiture of the 
Assets and the Marks. The trustee shall have the power and authority to 
accomplish the divestiture at the best price then obtainable upon a 
reasonable effort by the trustee, subject to the provisions of 
Paragraphs V and IX of this Final Judgment, and shall have such other 
powers as the Court shall deem appropriate. Subject to Paragraph V (C) 
of this Final Judgment, the trustee shall have the power and authority 
to hire at the cost and expense of Mid-America any investment bankers, 
attorneys, or other agents reasonably necessary in the judgment of the 
trustee to assist in the divestiture, and such professionals and agents 
shall be accountable solely to the trustee. The trustee shall have the 
power and authority to accomplish the divestiture at the earliest 
possible time to a purchaser acceptable to the United States, and shall 
have such other powers as this Court shall deem appropriate. Mid-
America shall not object to a sale by the trustee on any grounds other 
than the trustee's malfeasance. Any such objections by defendants must 
be conveyed in writing to plaintiffs and the trustee within ten (10) 
calendar days after the trustee has provided the notice required under 
Paragraph IX of this Final Judgment.
    C. The trustee shall serve at the cost and expense of Mid-America, 
on such terms and conditions as the Court may prescribe, and shall 
account for all monies derived from the sale of the assets sold by the 
trustee and all costs and expenses so incurred. After approval by the 
Court of the trustee's accounting, including fees for its services and 
those of any professionals and agents retained by the trustee, all 
remaining money shall be paid to Mid-America and the trust shall then 
be terminated. The compensation of such trustee and of any 
professionals and agents retained by the trustee shall be reasonable in 
light of the value of the Divestiture Assets and the Marks and based on 
a fee arrangement providing the trustee with an incentive based on the 
price and terms of the divestiture and the speed with which it is 
accomplished.
    D. Mid-America shall use its best efforts to assist the trustee in 
accomplishing the required divestiture. The trustee and any 
consultants, accountants, attorneys, and other persons retained by the 
trustee shall have full and complete access to the personnel, books, 
records, and facilities of defendants, and defendants shall develop 
financial or other information relevant to such assets as the trustee 
may reasonably request, subject to reasonable protection for trade 
secret or other confidential research, development, or commercial 
information. Mid-America shall take no action to interfere with or to 
impede the trustee's accomplishment of the divestiture.

[[Page 49530]]

    E. After its appointment, the trustee shall file monthly reports 
with the parties and the Court setting forth the trustee's efforts to 
accomplish the divestiture ordered under this Final Judgment. If the 
trustee has not accomplished such divestiture within six (6) months 
after its appointment, the trustee thereupon shall file promptly with 
the Court a report setting forth (1) the trustee's efforts to 
accomplish the required divestiture, (2) the reasons, in the trustee's 
judgment, that the required divestiture has not been accomplished, and 
(3) the trustee's recommendations; provided, however, that to the 
extent such reports contain information that the trustee deems 
confidential, such reports shall not be filed in the public docket of 
the Court. The trustee shall at the same time furnish such report to 
the parties, who shall each have the right to be heard and to make 
additional recommendations consistent with the purpose of the trust. 
The Court shall enter thereafter such orders as it shall deem 
appropriate in order to carry out the purpose of the trust, which may, 
if necessary, include extending the trust and the term of the trustee's 
appointment by a period requested by the plaintiffs.

VI

Divestiture of the Loan

    If Mid-America sells the Divestiture Assets to Milk Products,
    A. Mid-America shall reduce its holdings in the Milk Products Loan 
as follows:
    (1) to $30 million or less by December 31, 1997;
    (2) to $13 million or less by September 1, 1998; and
    (3) to zero by September 1, 1999.
    B. Mid-America may sell off any portion of the Milk Products Loan 
in order to meet the requirements of Paragraph VI(A), provided that no 
third party purchaser of all or part of the Loan shall (1) be 
affiliated in any way with Mid-America or (2) be a person engaged in 
the production, sale or delivery of milk in the sales area of Milk 
Products.
    C. In connection with sale of the Milk Products Loan pursuant to 
Paragraph VI(A), Mid-America shall not provide a guarantee to any third 
party purchaser, provided, however, that Mid-America may, in its 
discretion, after it has reduced its holdings in the Loan to not more 
than $13 million, guarantee some or all of the remaining $13 million. 
Any guarantee by Mid-America must be without recourse against Milk 
Products for any sums paid by Mid-America by virtue of the guarantee.
    D. At no time while Mid-America holds all or part of the Milk 
Products Loan shall Mid-America (1) require that Milk Products seek 
approval from, or give notice to, Mid-America before incurring any 
indebtedness, or (2) place any restriction on Milk Products' ability to 
conduct its operations as it sees fit.

VII

Acquisitions and Access to Information

    During any period in which Mid-America retains an ownership 
interest in Southern Foods,
    A. No member, officer, employee or agent of Southern Foods or Mid-
America (other than members, officers, employees, or agents of Land-O-
Sun Dairy LLC, who are not otherwise affiliated with Mid-America or 
Southern Foods) shall be employed by or serve as an officer, director, 
member, or agent of Milk Products.
    B. No member, officer, employee or agent of Milk Products shall be 
employed by or serve as an officer, director, member or agent of Mid-
America or Southern Foods (other than members, officers, employees or 
agents of Land-O-Sun Dairy LLC, who are otherwise not affiliated with 
Mid-America or Southern Foods).
    C. Neither Mid-America nor Southern Foods shall merge or 
consolidate with, acquire membership in or securities or assets of, or 
provide loans or other financing to (except for trade credit extended 
in the ordinary course of business) Milk Products, without having first 
obtained the written approval of the United States. Any request for 
such approval shall be directed to the Antitrust Division, U.S. 
Department of Justice, Transportation, Energy and Agriculture Section, 
with a copy to the Director of Operations.
    D. Mid-America, Southern Foods, and Milk Products shall not 
disclose to each other, directly or indirectly, any competitively 
sensitive information including, but not limited to, information 
concerning present or future prices or other terms or conditions of 
sale including discounts, slotting allowances, bids or price lists, 
costs, capacity, distribution, marketing plans or territories, supply, 
sales forecasts, customer relationships (including the identity of 
actual or potential customers or quantities sold to any particular 
customer).
    E. Notwithstanding Paragraph VII(D), Mid-America may, during any 
period in which it is a creditor of Milk Products, obtain and retain 
copies of the following information, solely to protect its interests as 
a creditor:
    (1) Copies of Milk Products' federal income tax returns for each 
year; and
    (2) quarterly financial statements, including a balance sheet, a 
statement of profits and losses, and a statement of cash flow, 
aggregated for the entire company. Nothing in this provision shall 
limit the information that a purchaser of any portion of the Milk 
Products Loan may request and obtain, subject to reasonable commercial 
credit practices.
    F. Nothing in this Final Judgment shall prohibit the orderly 
transfer of business records, reports or accounting materials from 
Borden/Meadow Gold to Southern Foods or to Milk Products, which shall 
be accomplished within 120 days of the closing of the transaction.

VIII

Sublicense Agreement

    A. Southern Foods, as sublicensor of the Marks, shall promptly 
notify Borden, Inc. and BDH Two, Inc., the owners of the Marks, of any 
unauthorized use of the Marks when such use comes to the attention of 
Southern Foods from any source, including Milk Products, and Southern 
Foods shall take all actions as may be required by Borden, Inc. and BDH 
Two, Inc. regarding the unauthorized use of the Marks.
    B. Neither Mid-American nor Southern Foods shall assert or claim 
that on any sublicensee of the Marks' sale of any equity interest in 
the sublicensee or any change in control or ownership in the 
sublicensee will affect or diminish the sublicensee's rights in or use 
of the Marks.
    C. Mid-American and Southern Foods shall ensure that the rights 
that any sublicensee obtains in the Marks are equal to all the rights 
and privileges that Southern Foods obtains for itself in its license of 
the Marks from Borden, Inc. and BDH Two, Inc.

IX

Notification

    Within two (2) business days following execution of a definition 
agreement, contingent upon compliance with the terms of this Final 
Judgment, any proposed divestiture pursuant to Paragraph IV, V or VI of 
this Final Judgment, Mid-America or the trustee, whoever is responsible 
for the divestiture, shall notify plaintiff of the proposed divestiture 
and provide documentation that the conditions set forth in Paragraphs 
IV through VII have been met.
    If the trustee is responsible, it shall similarly notify Mid-
America. The notice shall set forth the details of the proposed 
transaction and list the name, address, and telephone number of each

[[Page 49531]]

person not previously identified who offered to, or expressed an 
interest in or a desire to, acquire any ownership interest in the 
Assets, together with full details of same. Within fifteen (15) 
calendar days of receipt by plaintiff of such notice, plaintiff may 
request from Mid-America, the proposed purchaser, any other third 
party, or the trustee if applicable, additional information concerning 
the proposed divestiture and the proposed purchaser. Mid-America and 
the trustee shall furnish any additional information requested within 
fifteen (15) calendar days of the receipt of the request, unless the 
parties shall otherwise agree. Within thirty (30) calendar days after 
receipt of the notice or within twenty (20) calendar days after 
plaintiff has been provided the additional information requested from 
Mid-America, the proposed purchaser, any third party, and the trustee, 
whichever is later, the United States shall provide written notice to 
Mid-America and the trustee, if there is one, stating whether or not it 
objects to the proposed divestiture. If the United States provides 
written notice to Mid-America and the trustee that it does not object, 
then the divestiture may be consummated, subject only to Mid-America's 
limited right to object to the sale under Paragraph V(B) of this Final 
Judgment. Absent written notice that the United States does not object 
to the proposed purchaser or upon objection by the United States, a 
divestiture proposed under Section IV shall not be consummated. Upon 
objection by the United States, or by Mid-America in accordance with 
Section V(B), a divestiture proposed under Section V shall not be 
consummated unless approved by the Court.

X

Affidavits

    A. Within twenty (20) calendar days of the closing of any 
transaction in which Mid-America directly or indirectly acquires all or 
any part of the assets or capital stock of Borden/Meadow Gold, and 
every thirty (30) calendar days thereafter until the divestiture of the 
Divestiture Assets and the Loan has been completed pursuant to 
Paragraphs IV, V and VI of this Final Judgment, Mid-America shall 
deliver to plaintiff an affidavit as to the fact and manner of 
compliance with Paragraph IV, V and VI of this Final Judgment. Each 
such affidavit shall include the name, address, and telephone number of 
each person who, at any time after the period covered by the last 
report, made an offer to acquire, expressed an interest in acquiring, 
entered into negotiations to acquire or was contacted or made an 
inquiry about acquiring any interest in the Divestiture Assets or in 
the Loan, and shall describe in detail each contact with any such 
person during that period.
    B. Mid-America shall preserve all records of all efforts made to 
divest the Loan and the Assets. This provision shall not apply to 
divestiture of the Assets if they are sold pursuant to Paragraph IV(C) 
herein.

XI

Compliance Inspection

    Only for the purposes of determining or securing compliance with 
the Final Judgment and subject to any legally recognized privilege, 
from time to time:
    A. Duly authorized representatives of the plaintiff, including 
consultants and other persons retained by the United States, upon 
written request of the Assistant Attorney General in charge of the 
Antitrust Division, and on reasonable notice to defendants made to 
their principal offices, shall be permitted:
    (1) Access during office hours of defendants to inspect and copy 
all books, ledgers, accounts, correspondence, memoranda, and other 
records and documents in the possession or under the control of 
defendants, who may have counsel present, relating to enforcement of 
this Final Judgment; and
    (2) Subject to the reasonable convenience of defendants and without 
restraint or interference from them, to interview their officers, 
employees, and agents, who may have counsel present, regarding any such 
matters.
    B. Upon the written request of the Assistant Attorney General in 
charge of the Antitrust Division made to defendants' principal offices, 
defendants shall submit such written reports, under oath if requested, 
with respect to enforcement of this Final Judgment.
    C. No information or documents obtained by the means provided in 
Paragraph XI of this Final Judgment shall be divulged by a 
representative of the plaintiff to any person other than a duly 
authorized representative of the Executive Branch of the United States, 
except in the course of legal proceedings to which the plaintiff is a 
party (including grand jury proceedings), or for the purpose of 
securing compliance with this Final Judgment, or as otherwise required 
by law.
    D. If at the time information or documents are furnished by 
defendants to plaintiff, defendants represent and identify in writing 
the material in any such information or documents to which a claim of 
protection may be asserted under Rule 26(c)(7) of the Federal Rules of 
Civil Procedure, and defendants mark each pertinent page of such 
material, ``Subject to claim of protection under Rule 26(c)(7) of the 
Federal Rules of Civil Procedure,'' then ten (10) calendar days notice 
shall be given by plaintiff to defendants prior to divulging such 
material in any legal proceeding (other than a grand jury proceeding).

XII

Retention of Jurisdiction

    Jurisdiction is retained by this Court for the purpose of enabling 
any of the parties to this Final Judgment to apply to this Court at any 
time for such further orders and directions as may be necessary or 
appropriate for the construction or carrying out of this Final 
Judgment, for the modification of any of the provisions hereof, for the 
enforcement of compliance herewith, and for the punishment of any 
violations hereof.

XIII

Termination

    Unless this Court grants an extension, this Final Judgment will 
expire on the tenth anniversary of the date of its entry.

XIV

Public Interest

    Entry of this Final Judgment is in the public interest.

Dated:-----------------------------------------------------------------

----------------------------------------------------------------------
United States District Judge

Certificate of Service

    I hereby certify that a copy of the foregoing has been served upon 
the attorneys for Mid-America Dairymen, Inc., Southern Foods Group LP, 
and Milk Products LLC by placing a copy in the U.S. Mail, directed to 
each of the above named parties at the addresses given below, this 3rd 
day of September 1997.

Mid-America Dairymen, Inc., c/o W. Todd Miller, Baker & Miller PLLC, 
Suite 615, 700 Eleventh Street, NW., Washington, DC 20001.
Southern Foods Group LP, c/o Jerry L. Beane, Strasburger & Price LLP, 
Suite 4300, 901 Main Street, Dallas, Texas 75202.

[[Page 49532]]

Milk Products LLC, c/o Jerry L. Beane, Strasburger & Price LLP, Suite 
4300, 901 Main Street, Dallas, Texas 75202.
Joan S. Huggler,
DC Bar #927244, Attorney, Antitrust Division, U.S. Department of 
Justice, 325 Seventh St. NW., Suite 500, Washington, DC 20530, (202) 
307-6456, (202) 661-2441 (Facsimile).

Competitive Impact Statement

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

I

Nature and Purpose of the Proceeding

    The United States filed a civil antitrust Complaint on September 3, 
1997, alleging that the proposed acquisition by Mid-America Dairymen, 
Inc. (``Mid-America'') of the voting stock of Borden/Meadow Gold 
Dairies Holdings, Inc. (``Borden/Meadow Gold'') would violate Section 7 
of the Clayton Act, 15 U.S.C. Sec. 18, by combining the two main 
suppliers of milk to schools in Eastern Texas and Louisiana.
    The Complaint alleges that the acquisition of Borden/Meadow Gold's 
fluid milk processing plants in Eastern Texas and Louisiana by Mid-
America, owner of a substantial interest in Southern Foods Group LP 
(``Southern Foods''), would substantially lessen competition in the 
production, sale and distribution of milk to schools in the area where 
Borden/Meadow Gold and Southern Foods each has operations and competes 
for school milk business.
    The Complaint also alleges that the parties' proposed remedy--
divestiture of the overlapping facilities formerly held by Borden/
Meadow Gold to a newly-formed company called Milk Products LLC that 
would be financed in large part by a loan to Milk Products from Mid-
America affiliate Mid-Am Capital LLC--would not adequately replace the 
competition now provided by Borden/Meadow Gold in Eastern Texas and 
Louisiana.
    At the same time the suit was filed, a proposed settlement was 
filed that would permit Mid-America to complete the acquisition of 
Borden/Meadow Gold, yet preserve competition in the areas where the 
transaction would raise significant competitive concerns.
    The proposed Final Judgment orders Mid-America to divest the 
Borden/Meadow Gold assets in Texas, Louisiana and New Mexico to a 
purchaser acceptable to the United States. The Final Judgment would 
allow divestiture to Milk Products if the loan to Milk Products by Mid-
Am Capital is appropriately conditioned and sold off in its entirety 
within two years. If Mid-America divests the overlapping assets to Milk 
Products within 24 hours of its acquisition of the voting stock of 
Borden/Meadow Gold in accordance with the Final Judgment, no further 
approvals would be needed.
    If Mid-America does not divest to Milk Products, the assets must be 
divested to another purchaser within 65 days of the closing of the 
acquisition of the Borden/Meadow Gold voting stock (``the stock 
transaction''), which period may be extended by the United States to no 
more than 90 days. If the divestiture still has not occurred after 90 
days, the United States may ask the Court to appoint a trustee who 
shall assume the responsibility for selling those assets.
    The Final Judgment sets out the conditions for reduction of the 
loan amount advanced to Milk Products by Mid-Am Capital. The loan 
amount may be reduced in three segments, to reach zero by September 1, 
1999. The Final Judgment also imposes other restrictions on Mid-
America's ability to affect the competitive performance of Milk 
Products because of its creditor relationship through Mid-Am Capital.
    Finally, the Final Judgment contains provisions that limit 
communications and other interaction among Mid-America, Southern Foods, 
and Milk Products, with the purpose of minimizing or eliminating the 
opportunity or ability of any of them to affect competitive outcomes in 
school milk bid markets in Eastern Texas and Louisiana.
    The United States, Southern Foods and Milk Products have stipulated 
that the proposed Final Judgment may be entered after compliance with 
the APPA. Entry of the proposed Final Judgment would terminate this 
action, except that the Court would retain jurisdiction to construe, 
modify or enforce the provisions of the Final Judgment and to prevent 
violations of it.

II

Description of the Events Giving Rise to the Alleged Violation

A. The Defendants and the Proposed Transaction
    Mid-America is the nation's largest cooperative of diary farmers, 
with some 18,000 members in 30 states. In addition to marketing the 
milk of its members, Mid-America has extensive ownership and other 
interests in dairy manufacturing and processing operations and in the 
sale of products and services related to dairying, such as farm 
equipment and cleaning supplies. Mid-America had revenues of more than 
$4 billion in 1996.
    Southern Foods in one of Mid-America's joint venture affiliates. It 
is organized as a partnership whose owners are Mid-America (50%) and, 
until recently, two individual owners of the remaining 50% share of the 
partnership. (One of these individuals is Allen A. Meyer, who will sell 
his interest in Southern Foods to Pete Schenkel, the other 25% owner, 
as a precondition to the divestiture of the Borden/Meadow Gold assets 
in Eastern Texas and Louisiana into Milk Products, of which Meyer will 
be the sole owner.) From its plants in Eastern Texas and Louisiana, 
Southern Foods sells a variety of dairy products including fluid milk 
for schools. In 1996, Southern Foods had revenues of more than $550 
million. Southern Foods operates eight fluid milk processing plants--
five in Eastern Texas and three in Louisiana. Southern Foods sells 
under a number of brand names including Oak Farms, Golden Royal, 
Midwest Farms, Sunnydell, Texas Bluebonnet, Schepps, Dairyland, Gooddy, 
Brown's Velvet, Medallion, Foremost, Barbe, and Guth.
    Milk Products is a newly-formed limited liability company that will 
purchase the Borden/Meadow Gold facilities whose marketing areas in 
Eastern Texas and Louisiana overlap with the marketing area of Southern 
Foods in these states.
    On May 22, 1997 Mid-America and Borden/Meadow Gold entered into an 
agreement whereby Mid-America would acquire all of the voting stock of 
Borden/Meadow Gold for $435 million. Mid-America would thereby acquire 
25 processing plants and related facilities in all states. On May 28, 
1997, Mid-America agreed that it would sell the to-be-acquired assets 
in Texas, Louisiana and New Mexico to Milk Products for $65 million and 
that the purchase would be financed in part by a loan from Mid-Am 
Capital of at least $35 million. The Loan amount was later increased to 
$40 million.
 B. Fluid Milk Sold to Schools
    Fluid milk is pasteurized milk sold for human consumption in liquid 
form. In addition to supermarkets and grocery stores, other major 
buyers of fluid milk are institutional customers such as schools, 
hospitals, military installations and prisons. Whereas supermarkets and 
other large grocery stores buy most of their milk packaged in gallon, 
half gallon an quart size containers, other customers, particularly 
schools, purchase most, if not all, of their milk in half pint 
containers, which is a

[[Page 49533]]

convenient size for storage and for serving to children in school 
cafeterias. Virtually all fluid milk processing plants package milk in 
gallons and half gallons, but not all of them produce half pints. 
Therefore, school districts that are looking for suppliers have a 
smaller universe of potential of potential sellers than do most retail 
outlets, warehouses and other customers.
    Most schools participate in the federally-funded National School 
Lunch Program and School and Breakfast Program. In order to receive 
reimbursement for meals served at lower than cost to eligible children 
in these programs, schools must offer eight ounces of milk as part of 
each meal they serve. It is thus important for many school districts, 
which often operate on limited budgets, to have a steady and reliable 
source of milk. There are no substitutes for milk that schools can use 
still received such reimbursement. Therefore, even a substantial rise 
in the price of milk to schools would not cause a school district to 
turn to another product.
    Schools also have special delivery and service needs that other 
buyers of fluid milk often do not have. Because their storage space and 
equipment such as coolers are often limited, many schools require 
frequent deliveries, sometimes as many as five days a week. Many 
schools specify that the milk be delivered at particular hours during 
the day. These factors, plus the seasonal nature of their purchases, 
generally dictate the methods to be used by their milk suppliers in 
servicing them. Most often, school milk is delivered on small (14 feet 
to 18 feet) route trucks that also carry milk and other dairy products 
for non-school customers such as small grocery or convenience stores, 
restaurants, or hospitals.
    School districts that require such service can obtain supplies only 
from a milk processor that has both the ability and the desire to 
package milk in half pint containers and also has an established small 
route truck distribution system in or near the school district. As a 
general rule, only such a processor can economically serve those 
districts.
    School districts purchase their milk on the basis of competitive 
bids that are requested annually. Contracts are usually awarded for a 
one-year term. Each bid cycle may produce a new set of bidders for that 
business in that time period.
C. Competition Between Southern Foods and Borden/Meadow Gold
    Southern Foods and Borden/Meadow Gold are the primary, and often 
the only, actual or potential suppliers of fluid milk to schools in 
Eastern Texas and Louisiana. These firms also compete with other 
processors for sales to supermarkets and grocery stores. These other 
processors do not compete for school milk, however, because they lack 
half-pint packaging equipment, small delivery truck routes, or both. 
Both Southern Foods and Borden/Meadow Gold also compete with others for 
the private label milk business of large wholesalers and retailers.
    In the school milk markets, however, Southern Foods and Borden/
Meadow Gold are often the only bidders for a particular school 
district. This is true both in large metropolitan areas such as Dallas/
Fort Worth, Waco, and San Antonio and in many other less populated 
areas of Eastern Texas. In the Houston area, and around Bryan and 
College Station, Southern Foods and Borden/Meadow Gold sometimes 
compete with one other milk processor. In most of Louisiana, the only 
third bidder to school districts is a small dairy processing firm 
located in Baton Rouge whose ability to serve schools is limited to an 
area about 50 miles around Baton Rouge.
    The Complaint alleges that, were Mid-America to retain the Borden/
Meadow Gold assets it will own as a result of the stock transaction, 
there would be a significant loss of competition for school milk 
business in Eastern Texas and Louisiana. This is because Mid-America 
would replace an independent firm (Borden/Meadow Gold) that is the most 
significant school milk competitor of Southern Foods, a Mid-America 
affiliate.
    The Complaint also alleges that the parties' proposed remedy--
divestiture of the Texas, Louisiana and New Mexico assets to Milk 
Products with a loan to Milk Products by a Mid-America affiliate, Mid-
Am Capital--is inadequate to cure the anticompetitive effects of the 
stock transaction. Mid-America has a substantial ownership interest in 
Southern Foods. The size and terms of the loan as originally proposed, 
together with Mid-America's financial interest in Southern Foods, could 
give Mid-America's financial interest in Southern Foods, could give 
Mid-America both the incentive and the ability to inhibit competition 
between Southern Foods and Milk Products.
    The Complaint alleges that school milk markets in many areas of the 
country have been subject to collusive behavior by dairy firms and that 
where collusion in these markets has been detected it has been shown to 
persist for many years. Thus, according to the Complaint, new entry 
into the provision of milk to schools in Eastern Texas and Louisiana by 
other processors is unlikely to counteract the anticompetitive effects 
of the stock transaction, even with the remedy as proposed by the 
parties.

III

Explanation of the Proposed Final Judgment

    The proposed Final Judgment would preserve competition in the sale 
of fluid milk to schools in Eastern Texas and Louisiana. The Judgment 
reflects the intention of Mid-America to sell the Borden/Meadow Gold 
assets in Texas, Louisiana and New Mexico to Milk Products promptly 
following the closing of the stock transaction. Should that divestiture 
not occur, the proposed Final Judgment requires divestiture of these 
assets within 65 days of the stock transaction of the stock transaction 
or five days after notice of the entry of this Final Judgment by the 
Court, whichever is later, to a purchaser acceptable to the United 
States. That period could be extended by the United States to 90 days. 
Should Mid-America be unable to divest the assets to an acceptable 
purchaser within the appointed time, the Final Judgment requires that 
the United States request the Court to appoint a trustee, who will 
assume the responsibility of selling the assets to a purchaser 
acceptable to the United States. Under the terms of the proposed 
trusteeship, the trustee will have the incentive to quickly conclude a 
sale of the assets. After the appointment, the trustee will file 
monthly reports with the parties and the Court regarding the efforts 
made to sell the assets. If divestiture has not occurred within six 
months, the trustee and the parties will make recommendations to the 
Court, which shall enter such orders as are appropriate.
    The Final Judgment also places restrictions on the size and terms 
of the loan that Mid-America or its affiliate, Mid-Am Capital, will 
make to Milk Products in connection with divestiture of the assets to 
Milk Products. Financing for the purchase of the assets by Milk 
Products will come from two sources. One is a secured revolving loan 
provided by Bank of America. The other is a $40 million loan provided 
by Mid-Am Capital that is unsecured and not convertible to equity. The 
Final Judgment prohibits Mid-America and Mid-Am Capital from requiring 
that Milk Products obtain their approval before incurring any 
indebtedness and from interfering in any way in the operation of Milk 
Products' business because of the creditor relationship.

[[Page 49534]]

    The proposed Final Judgment also places limits on the length of 
time that Mid-American or Mid-Am Capital may hold the loan and 
restricts the amount of the loan that either may hold at any particular 
time. The Final Judgment requires Mid-America or Mid-Am Capital to 
terminate its interest in the loan by selling it to a third party 
purchaser or purchasers if necessary by no later than September 1, 
1999, and to reduce its interest in the loan before that at least by 
amounts sufficient to meet two interim goals. The Final Judgment 
recognizes that sale of the last portion of the loan (not to exceed $13 
million) may be facilitated if Mid-American were to guarantee that part 
of the loan. Nevertheless, the Judgment prohibits any guarantee that 
would allow Mid-American to recover from Milk Products any monies paid 
in its role as guarantor.
    The Final Judgment contains additional provisions that are designed 
to protect against anticompetitive effects that might occur because of 
Mid-America's relationships with Southern Foods and Milk Products. The 
Final Judgment prohibits Milk Products. The Final Judgment prohibits 
Milk Products, Southern Foods and Mid-America from exchanging 
competitively sensitive information among themselves and thereby 
dampening competition between Milk Products and Southern Foods in 
Eastern Texas and Louisiana.
    The Final Judgment also enjoins Southern Foods and Mid-America, in 
any period while Mid-America has an interest in Southern Foods, from 
sharing employees, members, officers, or agents with Milk Porducts. 
Such intermingling of personnel could easily inhibit vigorous 
competition between Milk Products and Southern Foods. Because the owner 
of Milk Products will retain his ownership interest in Land-O-Sun Dairy 
LLC, a Mid-American joint venture based in Tennessee which does not 
operate in Texas or Louisiana, the prohibition against sharing 
officers, employees or agents does not apply to Land-O-Sun's employees, 
members, officers or agents.
    Finally, the Final Judgment contains provisions that are designed 
to ensure that Milk Products or any purchaser of the divested assets 
will have full rights in and use of certain trademarks of Borden, Inc. 
and BDH Two, Inc. (``Borden''). Borden will grant to Mid-American and/
or Southern Foods an exclusive, royalty-free license to use the Borden, 
Elsie and other trademarks in Texas, Louisiana, and New Mexico and a 
non-exclusive license to use them in Alabama, Arkansas, Florida, 
Mississippi, Tennessee, and Mexico. The Final Judgment provides that 
Southern Foods, in term, will sublicense the Borden and Elsie marks to 
Milk Products and that Mid-American and Southern Foods will ensure that 
Milk Product's (or another purchaser's) rights in the marks will be 
equal to all the rights and privileges that Southern Foods obtains for 
itself in its license of the marks from Borden. Mid-American and 
Southern also are enjoined from asserting or claiming that a sale of an 
equity interest in Milk Products will affect or diminish Milk Products' 
rights in the marks.

IV

Remedies Available To Potential Private Litigants

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

V

Procedures Available for Modification of the Proposed Final Judgment

    The United States and the defendants have stipulated that the 
proposed Final Judgment may be entered by the Court after compliance 
with the provisions of the APPA, provided that the United States has 
not withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides that there be a period of at least sixty (60) 
days prior to the effective date of a proposed Final Judgment within 
which any person may submit to the United States written comments 
regarding the proposed Final Judgment. All comments will be given due 
consideration by the United States, which remains free to withdraw its 
consent to the Final Judgement at any time prior to entry. The United 
States will respond to the comments and file both the comments and the 
responses with the court.
    Any person believing that the proposed Final Judgment should be 
modified may submit written comments to: Roger W. Fones, Chief, 
Transportation, Energy, and Agriculture Section, Antitrust Division, 
United States Department of Justice, Suite 500, 325 Seventh Street, 
N.W., Washington, D. C. 20530.
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI

Alternative to the Proposed Final Judgment

    The United States considered, as an alternative to the proposed 
Final Judgment, a full trial on the merits of its Complaint in this 
case. Such litigation would involve all of the issues in this case, 
including the proposed remedy of the parties. In the view of the 
Department of Justice, a full trial on the merits is not warranted in 
this case because divestiture of the assets and loan, under the terms 
of the Final Judgment, as well as the additional relief relating to 
possible spillover effects stemming from the relationships of Mid-
America, Southern Foods and Milk Products, would preserve the 
competition adversely affected by the acquisition of the Borden/Meadow 
Gold voting stock by Mid-America. The proposed Final Judgment is 
designed to achieve fully adequate relief, while avoiding the expense 
and uncertainty of a full trial on the merits.

VII

Standard of Review Under the APPA for Proposed Final Judgment

    The APPA requires that proposed consent judgments in antitrust 
cases brought by the United States be subject to a sixty (60) day 
comment period, after which the court shall determine whether entry of 
the proposed Final Judgment ``is in the public interest.'' In making 
that determination, the court may consider--

    (1) the competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration or relief sought, anticipated effects of 
alternative remedies actually considered, and any other 
considerations bearing upon the adequacy of such judgment;
    (2) the impact of entry of such judgment upon the public 
generally and individuals alleging specific injury from the 
violations set forth in the complaint including consideration of the 
public benefit, if any, to be derived from a determination of the 
issues at trial.

15 U.S.C. Sec. 16(e). As the United States Court of Appeals for the 
D.C. Circuit has held, this statute permits a court to consider, among 
other things, the relationship between the remedy

[[Page 49535]]

secured and the specific allegations set forth in the government's 
complaint, whether the decree is sufficiently clear, whether 
enforcement mechanisms are sufficient, and whether the decree may 
positively harm third parties. See United States v. Microsoft, 56 F.3d 
1448, 1461-62 (D.C. Cir. 1995).
    In conducting this inquiry, ``[t]he court is nowhere compelled to 
go to trial or to engage in extended proceedings which might have the 
effect of vitiating the benefits of prompt and less costly settlement 
through the consent decree process.\1\ Rather,
---------------------------------------------------------------------------

    \1\ 119 Cong. Rec. 24598 (1973). See United States v. Gillette 
Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public interest'' 
determination can be made properly on the basis of the Competitive 
Impact Statement and Response to Comments filed pursuant to the 
APPA. Although the APPA authorizes the use of additional procedures, 
15 U.S.C. Sec. 16(f), those procedures are discretionary. A court 
need not invoke any of them unless it believes that the comments 
have raised significant issues and that further proceedings would 
aid the court in resolving those issues. See H.R. Rep. 93-1463, 93rd 
Cong. 2d Sess. 8-9, reprinted in (1974) U.S. Code Cong. & Ad. News 
6535, 6538.

absent a showing of corrupt failure of the government to discharge 
its duty, the Court, in making its public interest finding, should * 
* * carefully consider the explanations of the government in the 
competitive impact statement and its responses to comments in order 
to determine whether those explanations are reasonable under the 
---------------------------------------------------------------------------
circumstances.

United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. para. 
61,508, at 71,980 (W.D. Mo. 1977).
    Accordingly, with respect to the adequacy of the relief secured by 
the decree, a court may not ``engage in an unrestricted evaluation of 
what relief would best serve the public.'' United States v. BNS, Inc., 
858 F.2d 456, 462 (9th Cir. 1988), quoting United States v Bechtel 
Corp., 648 F.2d 660, 666 (9th Cir.), cert. denied, 454 U.S. 1083 
(1981); see also Microsoft, 56 F.3d at 1460-62. Precedent requires that

the balancing of competing social and political interests affected 
by a proposed antitrust consent decree must be left, in the first 
instance, to the discretion of the Attorney General. The court's 
role in protecting the public interest is one of insuring that the 
government has not breached its duty to the public in consenting to 
the decree. The court is required to determine not whether a 
particular decree is the one that will best serve society, but 
whether the settlement is within the reaches of the public 
interest.'' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree.\2\

    \2\ United States v. Bechtel, 648 F.2d at 666 (citations 
omitted) (emphasis added); see United States v. BNS, Inc., 858 F2d 
at 463; United States v. National Broadcasting Co., 449 F. Supp. 
1127, 1143 (C.D. Cal. 1978); United States v. Gillette Co., 406 F. 
Supp. at 716; see also Microsoft, 56 F.3d at 1461 (whether ``the 
remedies [obtained in the decree are] so inconsonant with the 
allegations charged as to fall outside of the `reaches of the public 
interest.' '') (citations omitted).
---------------------------------------------------------------------------

    The proposed Final Judgment, therefore, should not be reviewed 
under a standard of whether it is certain to eliminate every 
anticompetitive effect of a particular practice or whether it mandates 
certainty of free competition in the future. Court approval of a final 
judgment requires a standard more flexible and less strict than the 
standard required for a finding of liability. ``[A] proposed decree mut 
be approved even if it falls short of the remedy the court would impose 
on its own, as long as it falls within the range of acceptability or is 
`within the reaches of public interest.' (citations omitted).'' \3\
---------------------------------------------------------------------------

    \3\ United States v. American Tel. and Tel. Co.; 552 F. Supp. 
131, 150 (D.D.C. 1982), aff'd sub nom, Maryalnd v. United States, 
460 U.S. 1001 (1983), quotating United States v. Gillette Co., 
supra, 406 F. Supp. at 716; United States v. Alcan Aluminum, Ltd., 
605 F. Supp. 619, 622 (W.D. Key. 1985).
---------------------------------------------------------------------------

VII

Determinative Documents

    There are no determinative materials or documents within the 
meaning of the APPA that were considered by the United States in 
formulating the proposed Final Judgment.

    Dated: September 5, 1997.

      Respectfully submitted.
Joan S. Huggler,
DC Bar #927244.
Michael P. Harmonis,
PA Bar #17994.
Robert D. Young,
DC Bar #248260.

Attorneys, Antitrust Division, U.S. Department of Justice, 
Transportation, Energy and Agriculture Section, Suite 500, 325 
Seventh Street, N.W., Washington, D.C. 20530, (202) 307-6456.

Certificate of Service

    I hereby certify that I have caused a copy of the foregoing 
Competitive Impact Statement to be served on counsel for defendants in 
this matter in the manner set forth below:
    By first class mail, postage prepaid:

W. Todd Miller, Esquire, Baker & Miller PLLC, Suite 615, 700 Eleventh 
Street, N.W., Washington, D.C. 20530

(Counsel for Mid-America Dairymen, Inc.)

Jerry L. Beane, Esquire, Strasburger & Price LLP, Suite 4300, 901 Main 
Street, Dallas, Texas 75202

(Counsel for Southern Foods Group LP and Milk Products LLC)

    Dated: September 5, 1997.
Joan S. Huggler,
DC Bar #9272244.

Antitrust Division, U.S. Department of Justice, 325 Seventh Street, 
N.W., Suite 500, Washington, D.C. 20530, (202) 307-6456, (202) 616-
2441.

[FR Doc. 97-25077 Filed 9-19-97; 8:45 am]
BILLING CODE 4410-01-M