Federal Court Approves Final Settlement in Southeast Dairy Litigation

News / May 21, 2013

CLEVELAND, OH – May 21, 2013 – On Friday, May 17, 2013, Judge J. Ronnie Greer of the U.S. District Court for the Eastern District of Tennessee approved the final settlement agreement in the ongoing Southeast Milk Antitrust Litigation lawsuit brought by BakerHostetler’s antitrust team and led by group chair Bob Abrams. The order approved the third and final settlement in the case. It was entered between plaintiffs and defendant Dairy Farmers of America (DFA) and included payment of $158.6 million and substantial structural relief. The two previous settlements were reached in July 2011 with defendants Dean Foods for $140 million and Southern Marketing Agency and James Baird for $5 million plus changes in milk marketing conduct. In total, Abrams and the BakerHostetler team recovered more than $300 million for the class, which represents more than 70 percent of the estimated damages in the case.

As part of this recent settlement, BakerHostetler attorneys were able to secure changes to DFA’s business conduct in the dairy market that Judge Greer deemed “significant and valuable non-monetary benefits” in terms of structural relief that “likely go[es] beyond the extent of structural relief which could have been ordered by the Court in the event of an injunction after successful prosecution of the case by the plaintiffs at trial.” As Judge Greer put it, the “result obtained” is “extraordinary.”

“We are very proud of the results we were able to obtain on behalf of dairy farmers,” said Abrams. “This was a long and hard-fought battle, but in the end, we’ve essentially reformed the Southeast dairy market to significantly and positively impact competition.”

The lawsuit claimed violation of federal antitrust laws that negatively impacted Southeastern dairy farmers across 14 states. There were three settlement agreements in this case with a total award for the certified class of more than $300 million. The final settlement agreement was reached in January 2013 with DFA and other defendants/co-conspirators, totaling $158,600,000. The two previous settlements were reached in July 2011 with defendants Dean Foods for $140 million, as well as Southern Marketing Agency and James Baird for $5 million plus changes in milk marketing conduct.

In addition to the monetary award, DFA agreed to change its business conduct in the Southeast, including taking steps to increase raw milk prices; removing cancellation penalties on certain full-supply agreements with bottling plants and not entering into new full-supply agreements during the Settlement’s term; modifying membership agreements to improve farmer ability to change cooperatives; enhancing price-related information on milk checks; boosting transparency through auditing and disclosure commitments; and facilitating delegate votes on additional meaningful changes to conduct.

The BakerHostetler team working on behalf of the certified class of Southeastern dairy farmers was led by Abrams and includes Robert Brookhiser, Gregory Commins, Jr, Joanne Lichtman, Terry Sullivan, William DeVinney, Dan Foix, Carey BusenBridget Merritt and Nicole Skolout.


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