| NEW YORK
NEW YORK Jan 22 The Dairy Farmers of America, a
large marketing cooperative, and four other defendants have
reached a $158.6 million settlement in a class action lawsuit
that accused them of a conspiracy to control the raw milk market
in the Southeast.
The settlement, which requires court approval, means the
parties will avoid a trial, which was supposed to start this
month in Greeneville, Tenn.
It was the third and final settlement in litigation brought
by a group of dairy farmers. The milk bottler Dean Foods Co
previously settled for $140 million and the Southern
Marketing Agency and one of its managers settled for $5 million.
Filed in 2007, the lawsuit alleged the defendants took a
variety of steps to control prices of raw milk. The plaintiffs
claimed, for instance, that the Dairy Farmers of America signed
exclusive supply contracts with Dean Foods. According to the
plaintiffs, those deals excluded competition from independent
milk farmers and cooperatives in 14 states in the Southeast.
Other settling defendants in the agreement filed
electronically on Monday included National Dairy Holdings LP;
Dairy Marketing Services LLC; and Mid-Am Capital LLC. Gary
Hanman, the former CEO of the Dairy Farmers of America, was also
part of the settlement.
The Dairy Farmers of America said it would pay $140 million
to plaintiffs in the class. It added that an additional
refundable $18.6 million would be paid into a fund over two
years to be made available for farmers if certain market
conditions go unmet.
In addition to the payments, the settlement also requires
the Dairy Farmers of America to make certain changes to its
business regarding its accounting, reporting and communications
On a conference call with reporters on Tuesday, Richard
Smith, the current president and chief executive of the Dairy
Farmers of America, said the settlement would not hurt any of
its farmer members and that it was not an admission of any
"The cooperative remains healthy and we're looking forward
to getting this behind us," Smith said.
Robert Abrams, an attorney with Baker & Hostetler who
represented the plaintiffs, said the monetary settlements
recovered for dairy farmers were "exceptional."
The case is In Re: Southeastern Milk Antitrust Litigation,
U.S. District Court, Eastern District of Tennessee,