Mar­ket­ing group agrees to pay US$50 mil. to set­tle milk price suit


A na­tional dairy mar­ket­ing co­op­er­a­tive has agreed to pay a to­tal of US$50 mil­lion to thou­sands of North­east dairy farm­ers in an amended set­tle­ment of a long- run­ning law­suit ac­cus­ing the group of try­ing to drive down milk prices, but some farm­ers are still op­posed to the deal.

Un­der the pro­posal f i l ed Wed­nes­day, Dairy Farm­ers of Amer­ica would pay an av­er­age of US$4,000 to about 9,000 farm­ers. The set­tle­ment must be ap­proved by a judge, who re­jected a pre­vi­ous pro­posed deal in March.

The 2009 class-ac­tion law­suit charged Dairy Farm­ers of Amer­ica, its mar­ket­ing arm, Dairy Mar­ket­ing Ser­vices, and Dal­las-based dairy pro­ces­sor Dean Foods with work­ing to­gether to mo­nop­o­lize the mar­ket for raw milk in the North­east.

Dean Foods agreed to a set­tle­ment of US$30 mil­lion in 2011. It cov­ered farm­ers in Delaware, Con­necti­cut, Mary­land, Mas­sachusetts, New Hamp­shire, New Jersey, New York, Penn­syl­va­nia, Rhode Is­land, Ver­mont, Vir­ginia and the Dis­trict of Columbia.

U.S. Dis­trict Court Judge Christina Reiss re­jected the pre­vi­ous set­tle­ment pro­posal mainly be­cause some farm­ers op­posed it.

They ar­gued that they could be ex­posed to re­tal­i­a­tion by the groups and said the es­ti­mated fi­nan­cial com­pen­sa­tion of US$4,000 per farm was “func­tion­ally ir­rel­e­vant,” re­flect­ing the cost of one “trac­tor tire,” the judge wrote in her de­ci­sion. They also con­tended the pro­posal’s in­junc­tive re­lief was in­suf­fi­cient and would al­low the de­fen­dants to con­tinue prac­tices that led to the law­suit, Reiss said.

The judge said it ap­peared that there was strong op­po­si­tion to the pro­posed deal on the fol­low­ing grounds: the mon­e­tary re­lief was in­ad­e­quate if there were no sig­nif­i­cant changes to how de­fen- dants did busi­ness; the pro­posed re­lease was overly broad and, in light of the mod­est per farm re­lief, lawyers would be the pri­mary ben­e­fi­cia­ries of the pro­posed set­tle­ment if their fees and costs were ap­proved.

The farm­ers’ at­tor­neys re­quested fees of US$16.6 mil­lion plus ex­penses in the first set­tle­ment pro­posal.

Af­ter ne­go­ti­at­ing, the two sides agreed to amend the set­tle­ment to ad­dress some of those con­cerns but the set­tle­ment amount re­mained the same.

“We think it’s a fair and rea­son­able set­tle­ment and that it’s in the best in­ter­est of the farms,” said Kit Pier­son, a Wash­ing­ton­based at­tor­ney for the plain­tiffs.

But dairy farmer Jonathan Haar, of West Edme­ston, New York, who is a class rep­re­sen­ta­tive, op­poses the deal.

“We re­main op­posed to it. It’s fun­da­men­tally the same set­tle­ment that the judge cor­rectly rec­og­nized ... that the pri­mary ben­e­fi­cia­ries were coun­sel,” he said.

DFA did not im­me­di­ately re­spond to a re­quest for com­ment. It had said that it did not ad­mit any wrong­do­ing un­der the terms of the pre­vi­ous set­tle­ment and that the cost to con­tinue to de­fend it­self had be­come too great.

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