UNITED STATES DISTRICT COURT

FOR NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

UNITED STATES OF AMERICA,

COMMONWEALTH OF 

MASSACHUSETTS,

and

STATE OF WISCONSIN,

Plaintiffs,

v. 

DAIRY FARMERS OF AMERICA, INC.

and

DEAN FOODS COMPANY,

 Defendants.

No. 20 C 2658

Judge Feinerman

MEMORANDUM IN SUPPORT OF UNOPPOSED MOTION OF THE UNITED STATES 

TO APPOINT DIVESTITURE TRUSTEE

Plaintiff, United States of America, submits this Memorandum in Support of the 

Unopposed Motion of the United States to Appoint Divestiture Trustee in the above-captioned 

case. This case arises from a civil antitrust Complaint filed jointly by the United States, the 

Commonwealth of Massachusetts, and the State of Wisconsin (collectively, “Plaintiffs”) on May 

1, 2020 (Docket No. 1).

The success of the proposed Final Judgment in remedying the competitive problems 

identified in the Complaint depends upon the timely divestiture of the Divestiture Assets that are 

defined in the proposed Final Judgment. Defendants, Dairy Farmers of America, Inc. (“DFA”) 

Case: 1:20-cv-02658 Document #: 35-1 Filed: 07/16/20 Page 1 of 8 PageID #:363
2

and Dean Foods Company (“Dean”), have not been able to successfully divest the Divestiture 

Assets in the time allotted under the proposed Final Judgment even though two extensions of the 

time period have been granted by the United States. Accordingly, this Court should appoint a 

Divestiture Trustee, pursuant to Section V of the proposed Final Judgment (Docket No. 4-2). 

The United States has informed Defendants that it is filing this motion, which, pursuant to the 

terms of the proposed Final Judgment, Defendants may not oppose. The Court may therefore 

proceed with the appointment. 

The United States has selected Jerry Sturgill of CRS Capstone Partners LLC

(“Capstone”) as the candidate Divestiture Trustee. Mr. Sturgill is a Managing Director of 

Capstone, an investment bank focusing upon midmarket financial services. Mr. Sturgill

possesses the expertise, experience, and the appropriate support from his firm to accomplish the 

successful divestiture of the Divestiture Assets.

I. INTRODUCTION

Plaintiffs brought this action to prevent and restrain Defendants from violating Section 7 

of the Clayton Act. The Complaint alleges DFA’s acquisition of Dean’s fluid milk processing 

plants would further consolidate the highly concentrated fluid milk markets in (1) northeastern 

Illinois and Wisconsin and (2) New England. If allowed to proceed, the likely result of 

Defendants’ transaction would be to substantially lessen competition for the processing and sale 

of Fluid Milk in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18. Plaintiffs have 

requested only injunctive relief.

At the same time that it filed the Complaint, Plaintiffs also filed an Asset Preservation 

and Hold Separate Stipulation and Order (“Stipulation and Order”) (Docket No. 4-1) and a 

proposed Final Judgment, which are designed to remedy the anticompetitive effects of the 

Case: 1:20-cv-02658 Document #: 35-1 Filed: 07/16/20 Page 2 of 8 PageID #:364
3

acquisition. The proposed Final Judgment requires the divestiture of three dairy processing 

plants and related assets identified in the proposed Final Judgment. The Tunney Act comment 

period is currently running and the United States will respond to comments at the end of the 

comment period.

A. Proposed Final Judgment

The proposed Final Judgment memorializes the parties’ agreement to settle the case 

through Defendants’ divestiture of rights, title, and interests in the De Pere, Franklin, and 

Harvard Plants and related assets, defined in the proposed Final Judgment as Divestiture Assets,

to assure that competition is not substantially lessened in these geographic markets. In essence, 

the proposed Final Judgment requires the prompt and certain divestiture of the Divestiture Assets 

to assure that competition in the processing, marketing, sale, or distribution of Fluid Milk in the 

relevant geographic markets is preserved. To this end, Section IV.A of the Final Judgment 

requires defendants to “use their best efforts to divest the Divestiture Assets as expeditiously as 

possible” to “an Acquirer or Acquirers acceptable to the United States, in its sole discretion.”

B. DFA’s Failure to Divest the Divestiture Assets

Section IV.A of the Final Judgment gave DFA thirty (30) calendar days “after the Court’s 

entry of the Asset Preservation and Hold Separate Stipulation and Order in this matter” to divest 

the Divestiture Assets. It further provided that the United States, “in its sole discretion, may 

agree to one or more extensions of this time period not to exceed sixty (60) calendar days in 

total[.]” 

Under the proposed Final Judgment, DFA had until June 1, 2020, to divest the 

Divestiture Assets. Because DFA was working diligently to achieve this objective, the United 

States extended the time period for DFA to complete the sale of the Divestiture Assets for thirty 

(30) additional calendar days on June 1, 2020. See Joint Status Report (Docket No. 20), at 4. 

Case: 1:20-cv-02658 Document #: 35-1 Filed: 07/16/20 Page 3 of 8 PageID #:365
4

The United States extended this time period for an additional fifteen (15) calendar days on July 

1, 2020, based on DFA’s representations and in anticipation of DFA entering into a contractual 

agreement during this period for the Harvard Plant and De Pere Plant. Accordingly, DFA had 

until July 15, 2020, to divest the Divestiture Assets. However, DFA has still not entered into a 

contract to sell these two plants. Under the proposed Final Judgment, the United States can only 

extend DFA’s time to sell the Divestiture Assets for another 15 days. There is no certainty that 

DFA will enter into a contract to sell the Harvard and De Pere Plants in this time. It is even more 

unlikely that DFA will be able to sell the Franklin Plant near Boston in this timeframe, thus 

ultimately necessitating the appointment of a Divestiture Trustee. It is now appropriate, pursuant 

to Section V.A of the Final Judgment, to appoint a Divestiture Trustee selected by the United 

States to complete the required divestiture of the Divestiture Assets. The United States requests 

that the Court transfer responsibility for the sale of the Divestiture Assets to the Divestiture 

Trustee upon appointment.

II. DIVESTITURE TRUSTEE PROPOSED BY THE UNITED STATES

The United States moves this Court to appoint Jerry Sturgill, a Managing Director at 

Capstone, as the Divestiture Trustee. During his 31-year career, Mr. Sturgill has developed 

extensive experience representing both sides in public to private transactions as both a lawyer 

and as an investment banker focusing on various industries, including the food and beverage 

industry. Mr. Sturgill has worked on food and beverage transactions ranging from regional dairy 

transactions to the RJR-Nabisco merger. Mr. Sturgill’s CV attached is attached as Exhibit No. 1.

At Capstone, Mr. Sturgill provides merger and acquisition and financing resources to 

middle market companies domestically and internationally. Prior to joining Capstone, Mr. 

Case: 1:20-cv-02658 Document #: 35-1 Filed: 07/16/20 Page 4 of 8 PageID #:366
5

Sturgill worked at Outlook Capital Management, LLC, a regional investment banking boutique 

focused on the Western United States.

Although no longer practicing law, Mr. Sturgill has also worked as an attorney. Mr. 

Sturgill was a corporate law partner in the Finance Department at the New York office of 

Latham & Watkins LLP and in the Corporate Department of Stoel Rives LLP, focusing on 

private equity and other transactions while at both firms. 

Mr. Sturgill received his J.D. degree from J. Reuben Clark Law School and his B.A. 

degree from Brigham Young University. He served as a law clerk to the Hon. Eugene Wright, 

United States Circuit Judge, Ninth Circuit Court of Appeals. The United States has determined 

that Mr. Sturgill is well-suited to assume the responsibilities of Divestiture Trustee under the 

Final Judgment.

III. STATUS OF DFA-CAPSTONE NEGOTIATIONS

To facilitate the transition for the proposed Divestiture Trustee to begin marketing the 

Divestiture Assets, DFA and Capstone have recently entered into an agreement for Mr. Sturgill 

to provide initial services to familiarize himself with the matter, the Divestiture Assets, and 

Defendants’ efforts to date to market the asset. The agreement also permits Mr. Sturgill to 

provide services as the Divestiture Trustee, if appointed by the Court. Since reaching an 

agreement, Mr. Sturgill and Capstone have begun to familiarize themselves with the Divestiture 

Assets and the efforts which DFA took to market those assets. If the Court appoints Mr. Sturgill 

as Divestiture Trustee, he will immediately begin to undertake the duties of the Divestiture 

Trustee as established by the proposed Final Judgment. 

Case: 1:20-cv-02658 Document #: 35-1 Filed: 07/16/20 Page 5 of 8 PageID #:367
6

IV. CONCLUSION

For all of the foregoing reasons, the United States respectfully requests this Court to 

appoint Mr. Sturgill as Divestiture Trustee pursuant to Section V of the proposed Final 

Judgment. 

Dated: July 16, 2020

Respectfully submitted,

/s/ Karl D. Knutsen 

Karl D. Knutsen

Justin Heipp

Nathaniel J. Harris

Christopher A. Wetzel

U.S. Department of Justice

Antitrust Division

Healthcare and Consumer Products Section

450 Fifth Street, NW, Suite 4100

Washington, DC 20530

202-514-0976

karl.knutsen@usdoj.gov

Case: 1:20-cv-02658 Document #: 35-1 Filed: 07/16/20 Page 6 of 8 PageID #:368
7

CERTIFICATE OF SERVICE

I, Karl D. Knutsen, hereby certify that on July 16, 2020, I caused a copy of the foregoing 

Memorandum in Support of Unopposed Motion to Appoint Divestiture Trustee to be served 

on Defendants by mailing the document electronically to their duly authorized legal 

representatives as follows:

For Defendant Dairy Farmers of America, Inc.:

W. TODD MILLER

Baker & Miller

2401 Pennsylvania Ave., NW 

Washington, DC 20037

Tel: (202) 663-7822

Fax: (202) 663-7849

tmiller@bakerandmiller.com

MICHAEL G. EGGE

Latham & Watkins LLP 

555 Eleventh Street, NW, Suite 1000

Washington, DC 20004

Tel: (202) 637-2285

Fax: (202) 637-2201

michael.egge@lw.com

GARRET RASMUSSEN

Orrick Herrington & Sutcliffe LLP 

Columbia Center

1152 15th Street, N.W.

Washington, DC 20005

Tel: (202) 339-8481

Fax: (202) 339-8500

grasmussen@orrick.com

For Defendant Dean Foods Company:

ARTHUR J. BURKE

Davis Polk LLP

450 Lexington Ave.

New York, NY 

Tel: (212) 450-4352

Fax: (212) 701-5800

arthur.burke@davispolk.com

Case: 1:20-cv-02658 Document #: 35-1 Filed: 07/16/20 Page 7 of 8 PageID #:369
8

And other ECF registered users by ECF.

 /s/ Karl D. Knutsen

Karl D. Knutsen

Attorney for the United States

U.S. Department of Justice Antitrust Division

450 Fifth Street NW, Suite 4100

Washington, DC 20530

Tel.: 202-514-0976

Fax: 202-307-5802

E-mail: karl.knutsen@usdoj.gov

Case: 1:20-cv-02658 Document #: 35-1 Filed: 07/16/20 Page 8 of 8 PageID #:370