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A Vermont federal judge said that the $50 million class action settlement between Dairy Farmers of America Inc. and a class of farmers, who accused the group of a conspiracy to fix milk prices, is not in the best interest in the class and that’s why she denied final approval of the settlement.
According to U.S. District Judge Christina Reiss, their are complaints about settlement amount, the injunctive relief that some say is weak as well as making class farmers agree to not filing class action lawsuits against the dairy group in the future.
“The court cannot find that the proposed settlement’s monetary relief of $50 million is on its face inadequate or unreasonable,” Judge Reis wrote in her Wednesday ruling.
“However, when this amount is considered from the class’s perspective, in light of the broad proposed release, and the absence of what the remaining subclass representatives contend is meaningful injunctive relief, the receipt of approximately $4,000 per dairy farm could reasonably be perceived as a modest recovery,” the Vermont federal judge explained.
Reiss turned down preliminary approval to the first dairy farmers class action settlement submitted in July, saying that while several class members objected to the settlement, those objections were not included in the proposed settlement.
However, Reiss did go onto grant preliminary approval to the milk price fixing class action settlement in November, after another draft of the settlement was submitted.
The class action settlement is supposed to mean the end of a class action lawsuit filed against Dairy Farmers of America, Dairy Marketing Services LLC, and Dean Foods, alleging that they engaged in a price fixing conspiracy with Kraft Foods Inc. and Land O’Lakes Inc. in an effort to hurt the competition in the Northeast for raw Grade A milk in that region.
A $30 million class action settlement was reached with Dean Foods, allowing them to end their portion of the class action lawsuit in May 2011. Kraft and Land O’Lakes were never named as defendants in the class action lawsuit.
However, a group of about three dozen farmers say they object to the antitrust class action settlement with Dairy Farmers of America and Dairy Marketing Services because the $4,000 they will receive will be enough to purchase a new “tractor tire,” making it “functionally irrelevant.”
In addition, they also said that too many dairy farmers and milk producers were left out of the agreement, even though they too were affected by the alleged price fixing behavior, which led to the class action lawsuit in the first place.
According to Judge Reiss, some farmers would like “an expanded definition of the class to include all dairy farmers who pooled milk on Order 1 during the relevant time period, regardless of where they are physically located.”
They also object to the injunctive relief, which they say is “‘at the center of the issues that [the farmers] have sought,’ particularly ‘fundamental market change,'” but in this case doesn’t go far enough, as it leaves the possibility that the DFA and DMS may continue its price fixing practice and possibly retaliate against the farmers who are class members in this antitrust class action lawsuit.
The number of farmers objecting to the antitrust class action settlement is but a small percentage of the 9,000 farmers who were notified by the class counsel as possible Class Members, the class counsel says.
“While some courts have considered the number of objections relative to the total number of potential class members in analyzing the class’s reaction to the settlement, other courts have found that a class’s silence does not necessarily indicate approval and thus ‘a low level of vociferous objection is not necessarily synonymous with jubilant support,'” Judge Reiss explained.
“Here, the silence of the class does not establish wide-spread acceptance of the Proposed Settlement among dairy farmers in Order 1, nor does that silence establish the ‘fairness’ of the Proposed Settlement,” she added.
She had denied the final approval of the class action settlement without prejudice, which means that the parties may go back to the drawing board and attempt to address her concerns with a new proposed settlement agreement.
The non-DFA/DMS subclass is represented by Robert G. Abrams, Robert J. Brookhiser, Gregory J. Commins Jr., Terry L. Sullivan and Danyll W. Foix of BakerHostetler and Emily J. Joselson and Lisa B. Shelkrot of Langrock Sperry & Wool LLP.
The DFA/DMS subclass is represented by Kit Pierson, Benjamin D. Brown, Brent W. Johnson and Emmy L. Levens of Cohen Milstein Sellers & Toll PLLC, David A. Balto of the Law Offices of David A. Balto and Andrew D. Manitsky of Gravel & Shea PC.
DFA and DMS are represented by R. Jeffrey Behm and Ian P. Carleton of Sheehey Furlong & Behm PC, Steven R. Kuney, Kevin Hardy and Carl R. Metz of Williams & Connolly LLPand W. Todd Miller of Baker & Miller PLLC.
The Dairy Farmers Milk Price Fixing Class Action Lawsuit is Alice H. Allen et al. v. Dairy Farmers of America Inc. et al., Case No. 5:09-cv-00230, in the U.S. District Court for the District of Vermont.
UPDATE: On Feb. 8, 2016, a federal judge approved a $50 million settlement that will resolve claims by farmers alleging that Dairy Farmers of America Inc. and Dairy Marketing Services LLC engaged in a milk price-fixing conspiracy.
UPDATE 2: The Dairy Farmers class action settlement is now open!Click here to filea Claim Form or visit
www.NortheastDairyClass.com for more details.
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6 thoughts onDairy Farmer Antitrust Class Action Settlement Denied Final Approval
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UPDATE 2: The Dairy Farmers class action settlement is now open! Click here to file a Claim Form or visit http://www.NortheastDairyClass.com for more details.
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UPDATE: On Feb. 8, 2016, a federal judge approved a $50 million settlement that will resolve claims by farmers alleging that Dairy Farmers of America Inc. and Dairy Marketing Services LLC engaged in a milk price-fixing conspiracy.
My father was a dairy farmer in Texas. How do I find out if he is included in the class of farmers in this class action suit and if he is not, how does he join?