Dean Foods Settlement Moves Forward – Essentially the Same Settlement Previously Rejected by Judge

The class action lawsuit settlement between Dairy Farmers of America (DFA)’s national marketing branch, Dairy Marketing Services (DMS), and thousands of northeastern dairy farmers is moving forward – with DFA agreeing to pay $50 million in damages to be divided among the farmers.

The long-running lawsuit accuses the dairy cooperative of trying to drive down milk prices by colluding to monopolize the market for raw milk in the Northeast.

Surprisingly, this is almost the same settlement that a federal judge rejected back in March, on the grounds that the average payout per dairy farm of $4,000 was inadequate and that the attorneys would be the primary beneficiaries of this agreement if their fees and costs were approved.

After some additional negotiating, the settlement was slightly amended but the settlement amount remained the same (the Associated Press article covering this story offers no explanation as to why). Despite the plaintiff’s attorney making a statement about the settlement being fair and reasonable, some of the class representatives remain in opposition to the deal.

“We remain opposed to it. It’s fundamentally the same settlement that the judge correctly recognized…that the primary beneficiaries were counsel,” said dairy farmer Jonathan Haar (Associated Press).

 

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Judge Rejects Final Approval of Dean Foods Settlement

In July 2014, Dairy Farmers of America (DFA) and its marketing branch Dairy Marketing Services (DMS) settled a five-year class-action lawsuit that alleged the organizations conspired with Dean Foods to manipulate unpasteurized milk prices in the Northeast, forcing farmers to join DFA or market through DMS. As part of the settlement, DFA and DMS agreed to pay $50 million to farmers affected by their manipulation.

However, a federal judge has denied final approval of the settlement, which would have worked out to an average of $4,000 paid to each of the more than 7,000 dairy farmers, in part due to the dismayed reactions of dairy farmers to the settlement. The judge said, “the financial compensation of approximately $4,000 per dairy farm was characterized as ‘functionally irrelevant,’ as it reflects the cost of one ‘tractor tire.’” (Burlington Free Press).

Realmilk.com is a consumer education project of the Weston A. Price Foundation, a nutrition education nonprofit based in Washington, D.C. Visit their website, westonaprice.org.

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