Archive for Dairy farmers of America

Dairy Lawsuit Settled with $50 Million Payout

Farmer-paymerntAccording to the Burlington Free Press, on August 5th, Dairy Farmers of America agreed to pay a sum of $50 million to about 9,000 Northeastern dairy farmers. The farmers filed a lawsuit against Dairy Marketing Services, accusing the marketing cooperative of working with Dean Foods to drive down the price of milk and monopolize the raw milk market. Each farmer would receive a payment of about $4,000. Some Northeastern dairy farmers are opposed to the deal. A judge, who had rejected a previous settlement proposed in March, still needs to approve the settlement.

In 2011, Dean Foods, a Dallas-based dairy processor, agreed to a $30 million lawsuit settlement payment. The money was paid to farmers in numerous states, including New Jersey, Pennsylvania, Maryland, Delaware, Rhode Island, and Connecticut.

The previous settlement was rejected by U.S. District Court Judge Christina Reiss on the grounds that some farmers opposed the deal. Based on the reasoning for the rejection of the previous deal, it is deemed likely by many that this settlement will be rejected as well.

The farmers opposing the deal argue that the $4,000 per farmer was insufficient financial compensation for the damages suffered. They also deemed the money not worth the possible retaliation they may face from both Dean Foods and Dairy Farmers of America. The farmers argued that the proposal’s injunctive relief left room to allow the two companies to continue trying to create a raw milk monopoly. For the farmers to agree to the deal, there would need to be a significant change in the way the defendants do business.

DFA-denies-wrongdoingIn the first lawsuit settlement proposal, the farmers’ attorneys requested $16.6 million plus expenses. The settlement payment amount remained $16.6 million plus expenses after negotiation. However, both sides agreed to address some of the concerns of the farmers by amending the settlement.

Kit Pierson, an attorney for the plaintiffs, stated that he believed the new settlement was in the best interest of the farmers. However, many farmers, including dairy farmer Jonathan Haar, continue to oppose the deal on the grounds that the primary beneficiaries were counsel.

When requested to comment, Dairy Farmers of America did not respond immediately. In a later statement, DFA denied any wrongdoing under the previous settlement’s terms. They argued that the cost to defend against the lawsuit had become too great, which is why they agreed to the second settlement.