Comment On The Settlement Between Dean Foods And Northeast Dairy Farmers

[The proposed settlement between Dean Foods and Northeast dairy farmers, including farmers in Vermont, was formally announced Friday and has been filed with the federal district court.  Below is the reaction of Senator Patrick Leahy (D-Vt.), who held a Judiciary Committee field hearing in St. Albans this year on competition in dairy markets. Leahy also is the most senior member of the Senate Agriculture Committee.  Also below for reference is today's announcement of the settlement, by the plaintiffs.]

“This settlement is significant both for what it does now and for what it means for the future of our dairy industry. Economic concentration opens the door to anti-competitive practices that hurt farmers and consumers and skew dairy markets.  This puts big processors on notice that there's a price to pay for that.  Economic concentration in agriculture also is getting new scrutiny from the Justice Department and at several other levels.  For farmers and all Vermonters, it all adds up to a changing picture and a welcome way to close out a difficult year."

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Northeast Dairy Farmers Reach Preliminary Settlement with Dean Foods
Company to pay $30 million and Purchase Raw Milk from Multiple Sources

(WASHINGTON, DC – Dec. 24, 2010) Northeast Dairy Farmers today reached a settlement agreement with Dean Foods Company in their class action antitrust lawsuit against Dean, Dairy Farmers of America (DFA) and Dairy Marketing Services (DMS).  The agreement will include $30 million in monetary damages and injunctive relief that calls for Dean to purchase a portion of its raw milk from multiple Northeast sources.
“This is a major win for dairy farmers in the Northeast who have been squeezed by monopolization and price-fixing,” said Benjamin Brown, an attorney at Cohen Milstein Sellers & Toll, PLLC, which represents the plaintiff dairy farmers.  “We are pleased that Dean Foods is working with plaintiffs to put this practice behind them.”

The lawsuit – Alice H. Allen, et al. vs. Dairy Farmers of America — is far from resolved, however, added Kit A. Pierson of Cohen Milstein.

“The case is continuing against the remaining defendants, Dairy Farmers of America and its marketing affiliate Dairy Marketing Services,” explained Pierson. “Still at issue are charges that the DFA—the nation’s largest cooperative—monopolized a level of distribution of fluid milk in the Northeast and forced dairy farmers to join DFA or its marketing affiliate DMS to survive.”

DFA and DMS have been named in the suit for engaging in monopolization, price-fixing, and other anticompetitive conduct.

“The fact that Dean has agreed to purchase raw milk from multiple sources is a big step in the right direction,” said Robert Abrams of Howrey, LLP, which also represents the plaintiff dairy farmers. “What dairy farmers want is a choice between different bottlers. They have been living in a world that is monopolized and they pay the prices that are offered to them or they don’t sell milk. What we want is choice and competition.”
The next step is for the U.S. District Court for the District of Vermont—where the lawsuit was filed in August 2009—to grant preliminary approval of the settlement agreement.  Notice will then go out to the estimated 5,000 to 10,000 Northeast dairy farmers who could be eligible to file a claim for monetary damages.

Abrams added: “We are pleased that a settlement between the Northeast dairy farmers and Dean has been reached and we look forward to a timely court approval.”

For more information about the case, visit www.cohenmilstein.com

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