Dean to begin making payments to southeastern dairy farmers

A FEDERAL judge filed proceedings last week that will allow Dean Foods Inc. to begin making payments to dairy farmers in the southeastern U.S. to settle a class-action lawsuit the farmers brought against Dean and other parties that charged them with forming a monopoly in the southeastern dairy market and price-fixing.

Dean will pay $145 million to approximately 6,000 farmers, and the Southern Marketing Agency will pay an additional $5 million. Payments will range from $200 to $20,000 per farmer, or an average of $13,000 per claimant, to be distributed over a five-year period.

The lawsuit was brought against Dean, Dairy Farmers of America (DFA) and other parties in 2007 alleging that the defendants had acquired and closed a number of bottling plants in the Southeast or had converted them to other uses to decrease competition and, therefore, prices for milk in the region.

Dean, headquartered in Dallas, Texas, is the largest bottler and dairy processor in the U.S. The company reached the settlement two years ago to avoid trial (Feedstuffs, July 18, 2011).

DFA, headquartered in Kansas City, Mo., is a cooperative of milk producers and is the largest milk pooler in the U.S. DFA did not participate in the settlement.

At the time, about 7,200 producers were involved, including members of DFA, who were suing their own cooperative, and independent producers.

However, Judge J. Ronnie Greer vacated the settlement on the grounds that the DFA producers would benefit twice: once from the settlement and once from profit-sharing from their membership in DFA (Feedstuffs, Oct. 17, 2011).

Dean argued successfully that the original settlement should be reinstated, which Greer did last year (Feedstuffs, March 19, 2012). In an order Jan. 8, he authorized Dean and the marketing agency to begin making the payments.

Dean previously reached a settlement with northeastern dairy farmers in a similar class-action lawsuit (Feedstuffs, Jan. 3, 2011).

Greer has scheduled the trial for DFA and co-defendants to begin Jan. 22.

Volume:85 Issue:02

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