Judge Again Rejects $50M Settlement in Milk Price-Fixing Class Action

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A federal judge in Vermont once again rejected a proposed settlement of $50 million between Dairy Farmers of America Inc. and a group of farmers in a class action lawsuit.

The judge noted that the revised proposal did not address the concerns of some of the farmers who opposed the previous version of the settlement. She also mentioned that the Class Members would only receive about $4,000 in recovery for each farm, and as an opposed farmer explained, it was only enough to purchase a single tractor tire. The judge said she found the initial approval unfair and the changes in the revised proposal were not substantial enough in nature.

The initial milk price fixing class action lawsuit that was filed alleged that Dairy Farmers of America Inc. (DFA) and Dairy Marketing Services LLC (DMS) and Dean Foods Co. conspired with Land O’ Lakes and Kraft Foods Inc. to control the supply and purchase of Grade A raw milk. Dean Foods Co. settled at $30 million and was no longer a part of the case in May of 2011, leaving DMS and DFA as the remaining defendants.

In July 2014, the initial settlement announced in and was later given preliminary approval in November 2014. A group of farmers objected on the low per-farm payout that was anticipated and said that the proposal did not seek to prohibit the defendants from continuing to collude and also potentially retaliate against the farmers.

The revised settlement did address some of the concerns to the judge’s approval with respect to the expected conduct of the defendants. In the settlement, DFA was prohibited to retaliate against farmers or for seeking to sever relationships with the cooperative.

Additionally, the Class appears divided in their approval/disapproval, with some supporting, others very strongly against the proposed settlement, but with mostly no input from the Class at large. The Class was divided into subclasses to attempt to assist in moving forward, but communications appear to be strained. New Subclass Representatives were chosen due to adversarial relationships they had with Subclass counsel, and the judge thought this change may help to facilitate negotiations.

Judge Christina Reiss summarized her reasons for denial: “In this case, the Revised Settlement reflects some of the concerns the court expressed regarding the terms and conditions of the proposed release in the Initial Settlement. However, because the monetary settlement amount remains unchanged and the injunctive relief remains limited, it is anticipated that the Revised Settlement will engender the same or similar reaction from the class as the Initial Settlement: a minority of dairy farmers expressing modest support, a minority of dairy farmers expressing vehement opposition, and silence from the remainder of the class.”

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.

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.