Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, November 29, 1994                   TAG: 9411290082
SECTION: BUSINESS                    PAGE: B6   EDITION: METRO 
SOURCE: MICHAEL STOWE STAFF WRITER
DATELINE:                                 LENGTH: Short

JUDGE DISMISSES MILK CONTRACT SUIT

West Virginia's attorney general and three county school boards in that state filed a lawsuit last December alleging that between 1984 and 1987 Valley Rich Dairy and Meadow Gold Dairies Inc. discussed what they would bid on milk contracts with school systems in Greenbrier, Monroe and Pocahontas counties.

The lawsuit accused the two companies of deciding in advance which company would get which contract and agreeing that the other company would not bid or would intentionally bid too high.

In a ruling filed in U.S. District Court in Roanoke last week, Judge Jackson Kiser granted the dairy companies' motion for summary judgment and ordered the suit dismissed.

Kiser wrote that he dismissed the suit on the ground that the testimony of the state's key witness, a former general manager of Valley Rich, was "inadmissible hearsay."

"Once [that] testimony is excluded, the evidence of fraudulent concealment all but evaporates," the judge's opinion said.

A similar lawsuit filed by Virginia's attorney general's office was settled out of court in January. While neither admitted any wrongdoing, Valley Rich and Meadow Gold agreed to pay Virginia $747,500. That money was shared among 10 school systems in Western Virginia.

Criminal charges also were brought against the companies. Both pleaded guilty in 1992 to federal antitrust violations. Meadow Gold paid a $1 million fine and Valley Rich $500,000.