Federal Trade Commission V. Dean Foods Co. - Facts

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 sales in the area. 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 for a temporary restraining order and preliminary injunction under the All Writs Act

The FTC argued that injunctive relief was needed because otherwise, Dean would eliminate Bowman as a competitive entity by selling off its milk routes and its plants and equipment. This would prevent restoration of Dean as an effective competitor if the merger was found unlawful. The FTC maintained that such preemptive action by Dean would effectively deprive the court of appeals of its appellate jurisdiction to review the FTC’s final order because any order would be meaningless as a practical matter. The Seventh Circuit dismissed the petition on the ground that the FTC lacked authority to seek such relief since Congress had no passed any statute giving the FTC authority to seek a preliminary injunction. At that point Dean began closing Bowman down and eliminating it as a business.