In The News
| April 28, 2009
Litigation Team Prevails in Landmark Price Discrimination Case on Behalf of Feesers
In a landmark decision that will likely have a dramatic effect on pricing practices in the food distribution industry, the United States District Court for the Middle District of Pennsylvania held that "Michael Foods has unlawfully discriminated as to price against Feesers, and Sodexho has unlawfully induced or received such price discrimination in violation of the Robinson-Patman Act."
The court enjoined egg and potato supplier Michael Foods, Inc. from discriminating as to price against Dewey & LeBoeuf client Feesers, Inc., and enjoined food management company Sodexho, Inc. from continuing to receive or induce such price discrimination.
This decision represents the culmination of over five years of litigation for Harrisburg-based food distributor Feesers, which brought the lawsuit in the hope of leveling the playing field between broadline food distributors like Feesers and food management companies and group purchasing organizations (GPOs).
Feesers filed its complaint against Michael Foods and Sodexho on March 17, 2004, alleging price discrimination in violation of the Robinson-Patman Act. A three-week bench trial took place in early 2008 before Judge Sylvia Rambo in the federal district court in Harrisburg, which resulted in the April 27, 2009 decision.
At trial, Michael Foods and Sodexho argued that Feesers and Sodexho were not in "actual competition" for purposes of the Robinson-Patman Act because Sodexho provides food management services to its customers, whereas Feesers is a food distributor. The court found, however, that both Feesers and Sodexho procure and distribute food for the same institutional customers and, thus, are in actual competition for the same food dollar.
Although the injunctions issued by the district court are binding only as to Michael Foods and Sodexho, it is now clear that price discrimination by food suppliers against distributors such as Feesers, and in favor of large-volume food management companies and GPOs such as Sodexho, will not be tolerated by the courts.
The Dewey & LeBoeuf team consisted of Partners Jeffrey Kessler, Eamon O'Kelly and John Collins, as well as Associates Susannah Torpey, Lisa Card, Jeff Newhouse and Cynthia McNutt, Legal Assistants Lauren Caplan and Ramona Van Ness, and former Associate Elizabeth Haley.
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