Antitrust Law Daily Wrap Up, TOP STORY: Dairy farmers seek final approval of $50M settlement in milk price fixing action, (Aug 7, 2015)

By Greg Hammond, J.D.

Dairy farmers, in a class action alleging that a dairy cooperative engaged in price fixing and monopolization of raw Grade A milk, have moved a second time for final approval of a $50 million settlement agreement. The federal district court in Burlington, Vermont, denied final approval of the settlement in March 2015, finding a lack of procedural and substantive fairness, largely due to the class’ negative reaction to the proposed settlement (Allen v. Dairy Farmers of America, Inc., Dkt. 5:09-CV-00230-cr).

The dairy farmers claim that their renewed motion for final approval should be granted because an earlier evidentiary hearing confirmed that settlement was the result of vigorous, arm’s-length negotiations between experienced and capable counsel and procedurally proper. Consequently, the farmers argue that the settlement is now subject to a strong presumption of fairness, reasonableness and adequacy under Second Circuit law.

The dairy farmers also claim that 7,550 farms have now submitted claims for relief, representing roughly 85 percent of the farms that were sent notice. Only a tiny fraction of farms have raised any objection. Moreover, the settlement has been revised, the farmers argue, and all of the revisions are favorable to the class, including: (1) the text was modified to address concern that the release might encompass conduct discussed in any pleading, rather than only the operative complaint; (2) revisions to the definition of “Released Claims,” “Release,” and “Released Parties”; (3) conduct restrictions imposed by the agreement were revised to confirm that restraints without a specified time period have no expiration date; and (4) the conduct restrictions regarding retaliation were strengthened.

In addition, the dairy farmers assert that the $50 million settlement achieves substantial financial relief, as well as substantial injunctive relief. Despite class representatives’ opposition to the settlement, the dairy farmers argue that based on the record—including resolution of the procedural concerns, the presumption of fairness now applicable to the settlement, the submission of claims by 7,550 farms, and the revisions to the settlement addressing issues previously raised by the court—the settlement should be given final approval and the farms that have not already submitted claims should be given a reasonable opportunity to do so.

Attorneys: Robert G. Abrams (Baker & Hostetler LLP) and Emily J. Joselson (Langrock Sperry & Wool, LLP) for Non-DFA/DMS Subclass. Kit A. Pierson (Cohen Milstein Sellers & Toll, PLLC), David A. Balto (The Law Offices of David A. Balto), and Andrew D. Manitsky (Gravel and Shea PC) for DFA/DMS Subclass.

Companies: Dairy Farmers of America, Inc.; Dairy Marketing Services, LLC

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