Dairy farmers co-op settles suit for $50M

The cooperative Dairy Farmers of America has agreed to pay a total of $50 million to thousands of dairy farmers in the Northeast to settle antitrust allegations from a 2009 class-action lawsuit.

The lawsuit filed in U.S. District Court in Vermont charged the cooperative, its marketing arm, Dairy Marketing Services, and Dallas-based Dean Foods with working together to monopolize the market for raw milk in the Northeast, driving down prices paid to dairy farmers.

The settlement covers farmers in Rhode Island, Delaware, Connecticut, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Vermont, Virginia and the District of Columbia.

DFA said in a statement that it did not admit any wrongdoing under the terms of the settlement.

“While we believe the allegations against us were without merit and the activities of DFA, Dairy Marketing Service and other affiliated milk marketing cooperatives in the Northeast benefited cooperative members and independent producers alike, the cost to continue to defend ourselves has become too great,” it said.

Benjamin D. Brown of Cohen, Milstein, Sellers & Toll in Washington, D.C., who represented the farmers, said that as the settlement is preliminary and must be reviewed and approved by a judge, the firm did not want to comment.

Dairy processor Dean Foods Co. agreed to a settlement of $30 million in 2011. Dean Foods also did not admit any wrongdoing. The settlement was divided among 9,000 to 10,000 farmers as well as the attorneys in the case, which amounted to an estimated average payment to farmers of between $2,500 and $5,700, Brown said.