Northeast Dairy Farmers Reach Preliminary Settlement with Dean Foods

Company to Pay $30 Million and Purchase Raw Milk from Multiple Sources

Dec 24, 2010, 09:30 ET from Northeast Dairy Farmers

WASHINGTON, Dec. 24, 2010 /PRNewswire/ -- Today Northeast Dairy Farmers reached a settlement agreement with Dean Foods Company in their class action antitrust lawsuit against Dean, Dairy Farmers of America (DFA) and Dairy Marketing Services (DMS). The agreement will include $30 million in monetary damages and injunctive relief that calls for Dean to purchase a portion of its raw milk from multiple Northeast sources.

"This is a major win for dairy farmers in the Northeast who have been squeezed by monopolization and price-fixing," said Benjamin Brown, an attorney at Cohen Milstein Sellers & Toll, PLLC, which represents the plaintiff dairy farmers. "We are pleased that Dean Foods is working with plaintiffs to put this practice behind them."

The lawsuit -- Alice H. Allen, et al. vs. Dairy Farmers of America -- is far from resolved, however, added Kit A. Pierson of Cohen Milstein.

"The case is continuing against the remaining defendants, Dairy Farmers of America and its marketing affiliate Dairy Marketing Services," explained Pierson. "Still at issue are charges that the DFA -- the nation's largest cooperative -- monopolized a level of distribution of fluid milk in the Northeast and forced dairy farmers to join DFA or its marketing affiliate DMS to survive."

DFA and DMS have been named in the suit for engaging in monopolization, price-fixing, and other anticompetitive conduct.

"The fact that Dean has agreed to purchase raw milk from multiple sources is a big step in the right direction," said Robert Abrams of Howrey, LLP, which also represents the plaintiff dairy farmers. "What dairy farmers want is a choice between different bottlers. They have been living in a world that is monopolized and they pay the prices that are offered to them or they don't sell milk. What we want is choice and competition."

The next step is for the U.S. District Court for the District of Vermont -- where the lawsuit was filed in August 2009 -- to grant preliminary approval of the settlement agreement. Notice will then go out to the estimated 5,000 to 10,000 Northeast dairy farmers who could be eligible to file a claim for monetary damages.

Abrams added, "We are pleased that a settlement with Dean has been reached and look forward to a timely court approval."

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SOURCE Northeast Dairy Farmers