Dairy Farmers of America Class Action Settlement Delayed by Judge

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A Virginia judge denied preliminary approval of the Dairy Farmers of America Inc. and affiliated Dairy Marketing Services LLC’s proposed settlement in an antitrust class action lawsuit accusing the companies of using their dominant production power to fix milk prices in the Northeast.

The Dairy Farmers of America and Dairy Marketing Services filed a motion to approve a proposed class action settlement in early July. Under the terms of the proposed settlement, the cooperatives would have admitted no wrongdoing and offered to pay dairy farmers $50 million. The cooperatives also agreed not to bar other cooperatives from offering farmers better prices, not to enter into new full-supply agreements for two and a half years and implement auditing requirements. The settlement also offered attorneys for the plaintiffs $17 million in fees. The Class Members joined the Dairy Farmers and Dairy Marketing Services in the motion to approve the proposed settlement.

However, on July 9, U.S. District Judge Christina Reiss denied the motion to approve the Dairy Farms of America class action settlement because of procedural mistakes. In her order, Reiss noted that several Class Members indicated they would object to the proposed settlement, but the settlement proposal neglected to include information about these objections.

Reiss also found flaws in the draft notice and the draft summary notice proposed in the Dairy Farmers of America class action settlement. “Both the draft notice and the draft summary notice must make it clear that the release extends beyond [Dairy Farmers of America] and [Dairy Marketing Services] to certain related entities, extends beyond the legal claims in this lawsuit, and that class members should carefully review a full copy of the release and seek legal advice if they have any questions,” the judge wrote in her order. The judge dismissed the proposed settlement without prejudice, so it is likely the parties will resubmit the settlement plan after they have addressed the defects noted by the judge.

Several related class action lawsuits were filed against the Dairy Farmers of America and affiliated Dairy Marketing Service in the late 2000s. The cases were consolidated into a single class action lawsuit alleging that the Dairy Farmers and Dairy Marketing Service secretly collaborated with food supply companies to control milk prices and put down competition. The Class consists of farmers who produced milk from Jan. 1, 2002 until today. That Class was further broken down into a subclasses of farmers who are members of the Dairy Farmers of America and those who are not.

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 of America Antitrust 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 file a Claim Form or visit www.NortheastDairyClass.com for more details.