After having its first counterclaim against Texas-based Dairy, LLC, dismissed, Nova Scotia-based startup Milk Moovement has filed a second counterclaim accepted by a federal judge that Dairy, LLC, maintains a monopoly and has been locking competitors out the market.
The case began when Dairy, LLC, sued Milk Moovement at the end of 2021 for allegedly compelling Visalia-based California Dairies to provide trade secrets after the milk cooperative left Dairy, LLC, to contract with Milk Moovement.
Dairies and dairy coops rely on software for pricing information — whether it be fluid milk, powder or cheese.
According to an opinion on the original case text, Dairy, LLC, alleged that in a call with Milk Moovement, California Dairies had generated reports using their software, going against the user agreement.
In response, Milk Moovement filed its own lawsuit claiming that Dairy, LLC, was using the courts to keeps it monopoly, but the Eastern District Court in Sacramento dismissed the claim, saying it is a First Amendment right to be able to sue, according to an attorney with the case speaking on background.
Milk Moovement is being represented by San Francisco-based BraunHagey & Borden LLP.
Attorneys for Milk Moovement changed their complaint, claiming that Dairy, LLC, was not only a monopoly, but that its user agreements were keeping businesses from leaving and new companies from acquiring market share.
According to the countersuit case file, the reports California Dairies had given Milk Moovement were nothing more than the milk cooperative’s own information on an Excel spreadsheet.
An attorney for Milk Moovement said Dairy LLC’s restrictive agreements don’t allow companies to reveal information about their own business.
Dairy LLC provides service to 80% of the market, according to the case file.
“Customers were not free to walk away from the agreements and purchase products from the supplier of their choice,” according to the case file.
Proving an anti-trust claim requires three tiers. First, attorneys have to define the market.
When Sirius Radio and XM Radio were set to merge, they would have had 100% market share in satellite radio. But they successfully argued that satellite radio was not the only competition they faced. Attorneys argued they are competing with traditional radio as well as internet radio.
Attorneys also have to prove market control and that Dairy LLC’s actions negatively affect the market.
