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Dean settles in class action dairy case for $140 million
By TIM THORNBERRY
Kentucky Correspondent

GREENVILLE, Tenn. — To say the Southeast Milk Antitrust Litigation (SEML) has been a long and complicated process is quite the understatement, since the roots of these cases can be traced back over a decade.

Since the original lawsuit date in 2007, there have been a series of actions involving courtrooms all over the eastern half of the country and many dairy farmers. Dean Foods Co., the defendant, has avoided a trial by offering one of the largest settlements in anti-trust litigation history, at $140 million.

In doing so, the company admitted no wrongdoing. According to court documents: “The Settling Defendant, despite its belief it is not liable for the claims asserted and that it has meritorious defenses to the claims alleged, has nevertheless concluded it will enter into this Agreement solely to avoid the further expense, inconvenience and burden of protracted litigation, and the distraction and diversion of its personnel and resources, and thereby to put to rest this controversy and to avoid the risks inherent in uncertain, complex litigation.”

Add to that another $5 million from a settlement with Southern Marketing Agency, Inc. (SMA) and James Baird, and plaintiff farmers could be on the receiving end of about $13,000 each.
The legal action looks like a Who’s Who of those involved in the dairy business, including defendants Dean Foods, National Dairy Holdings LP, Dairy Farmers of America, Inc. (DFA), Dairy Marketing Services, LLC, Mid-Am Capital LLC, SMA, James Baird, Gary Hanman and Gerald Bos, along with named co-conspirators Dairy.Com, Inc., The Kroger Co., Prairie Farms Dairy, Inc., Robert W. Allen, Jay Bryant, Herman Brubaker, Gregg L. Engles, Michael J. McCloskey, Allen A. Meyer and Pete Schenkel, all according to information on the SEML website.

At the basis of all this are complaints that these dairy giants conspired to artificially reduce the price of milk paid to producers for their Grade A milk.

The Dean’s settlement actually came last year but was put on hold when DFA members were decertified from the settlement. The court ultimately ruled they would be best served by separate counsel, which was appointed.

Upon review of previous litigation circumstances, including the Dean and SMA settlement proposals, the new counsel team concluded the proceedings were “fair, reasonable and adequate.” The terms of the settlement agreements were adopted and ratified for the DFA Subclass, according to information from Julia Walker of AgriVoice Enterprises. DFA members were officially reinstated last February.
Walker also reported, “This latest order only gives ‘Preliminary Approval’ to this unprecedented settlement fund, but defines procedures that must occur before ‘Final Approval’ and release of payments to farmers. Highlights follow:

•Farmer producers must fill out Settlement Claim Forms and mail them so they are received by the fund administrator no later than May 1

•Claim forms will be available at the litigation’s official website, www.southeastdairyclass.com

•A ‘Fairness Hearing,’ at which farmers may testify, is scheduled for Tuesday, May 15, beginning at 9 a.m. (at the U.S. Courthouse for the Eastern District of Tennessee in Greeneville)

•Farmers who wish to testify must file notice and supporting materials so the Court and respective attorneys receive information by May 1, 2012.”

Right now, the number of plaintiffs filing claims stands at more than 7,000 but, according to the SEML website: “All dairy farmers, whether individuals, entities or members of cooperatives, who produced raw Grade A milk in Order 5 or in Order 7 and sold that milk directly or through an agent to defendants or alleged co-conspirators at any time from Jan. 1, 2001, through the present are members of the Class.”

Meanwhile, trials for DFA, National Dairy Holdings, LP, Dairy Marketing Services, LLC, Mid-Am Capital, LLC and Hanman, former DFA CEO, have been set for July 10 in Greeneville.
4/18/2012