BY KEN LITTLE
There's been plenty of activity lately in the Southeast milk litigation case to be tried in U.S. District Court in Greeneville.
Trial is set for July 10 in Greeneville. The results could have ripple effects for milk producers and consumers across Tennessee and the Southeast.
The lawsuit claims that defendants such as Dean Foods Co. and Dairy Farmers of America (DFA), Inc., have violated federal antitrust laws, resulting in lower amounts paid for raw milk to dairy farmers through price-fixing and suppression of prices.
Defendants, which also include National Dairy Holdings LP, Dairy Marketing Services, Mid-Am Capital LLC and the Southern Marketing Agency, deny any wrongdoing.
Plaintiffs in the class-action lawsuit include independent dairy farmers, independent cooperative members, DFA members and supermarket chain Food Lion LLC.
FILED IN 2007
The complex civil action was filed in 2007. Since then, there have been several separate settlements by defendants, including a $140 million settlement in February with Dean Foods, which is the parent company of prominent Southeast consumer brands like Mayfield, Purity, Pet and Barber's.
Producers will benefit from the settlement, said Julie Martin, a communications provider for various agricultural groups and principal of AgriVoice Enterprises, located in Newport. Martin has monitored the case in court.
Martin said the Dean Foods settlement may provide individual farmers with an "average of $13,000," according to information obtained from a court-monitored website, http://www.southeastdairyclass.com.
Greene County is an appropriate venue for the wide-reaching civil action, which affects 14 states, Martin said.
There are about 50 active dairy farms operating in the county.
Greene County was also at one time Tennessee's biggest dairy producer, she said.
CLAIMS REQUIRED BY MAY 1
There are currently more than 7,000 claimants.
Forms must be submitted by May 1 to obtain part of the Dean settlement.
Martin said the figure could "vary widely" based on the total number of final claimants submitting claims forms by the May 1 deadline, and the total number of milk pounds reported for the class time frame, from Jan. 1, 2001, to the present.
"A majority of eligible farmers have received official claims forms from Rust Consulting, the claims administrator, in the mail," Martin said.
She said that if anyone who produced milk in that time period did not receive a claim form, they can be obtained by clicking the "Claim Form" tab at the Southeast Dairy Class website, or by contacting appropriate subclass lawyers or the claims administrator, who can be reached at 1-800-874-2297.
Martin cautioned about claimants partnering with out-of-state law firms and financial recovery groups that are offering assistance with the case. Such assistance could result in a substantial percentage of a settlement award going to legal fees, Martin said.
Most farmers "are perfectly capable of filling out [the paperwork] themselves," she said.
MOTION HEARING TUESDAY
A hearing will be held Tuesday in federal court in Greeneville on a motion by DFA Settlement subclass lawyers to reinstate DFA members into the litigation class.
If the motion is granted, Martin said, "rank-and-file DFA membership will become eligible for any potential damages enacted by either settlement or a positive jury verdict."
A $5 million settlement was also reached in February with defendant Southern Marketing Agency.
Members of the class include "in general, all dairy farmers, whether individuals, entities, or members of cooperatives who produced raw Grade A milk ... and sold that milk directly or through an agent to defendants or alleged co-conspirators" from 2001 to the present, Martin said.
The trial scheduled to begin July 10 in Greeneville will involve all defendants who have not settled, including National Dairy Holdings LP, Dairy Farmers of America Inc., Dairy Marketing Services LLC, Mid-Am Capital LLC and Gary Hanman, former CEO of DFA.
A 'LANDMARK' CASE
Martin said the Southeast milk antitrust litigation has "landmark" status.
The original terms of a Dean settlement were announced in July 2011, but DFA members were decertified from the class shortly afterward based on the court's finding of an intra-class conflict.
Judge J. Ronnie Greer reinstated DFA producer members in February into a "DFA settlement subclass," Martin said.
Up to decertification, all farmer-plaintiffs were represented by an attorney team now with Baker-Hostetler, a national law firm overseeing the liquidation of Bernard L. Madoff Investment Securities LLC, relating to the Madoff Ponzi scheme, Martin said.
"This is believed to be the largest legal settlement ever entered into by Dean Foods and is one of the largest civil settlements in the Eastern District of Tennessee," Martin said.
More information about the case is available on the Southeast Dairy Class website.
The civil trial could last a month, court officials said.
The outcome of the case could affect dairy producers throughout the Southeast.
"This case is about the illegal monopolization and lessening of competition in the Southeast United States among milk bottlers for the sale of processed milk to retail outlets and other customers," the 2007 civil complaint states.
Plaintiffs allege that the proposed class has more than 4,500 members in the Southeast, including about 1,500 independent dairy farmers and independent cooperative members.
The lawsuit contends that defendant Dean is the largest single milk bottler in the U.S.
Plaintiff Food Lion is one of the largest purchasers of milk from Dean in the Southeast, court documents state.
Dallas-based Dean Foods developed a monopoly in the sale of processed milk "after several years of acquisitions from milk bottling companies and through a variety of anti-competitive and wrongful actions," the lawsuit maintains.
Those include, the lawsuit states, "agreeing with competitors not to compete for sales of processed milk, purchasing and then closing milk bottling plants or converting them to other uses, terminating raw milk supply contracts with independent farm cooperatives who own competing milk bottling plants and replacing that raw milk supply with exclusive agreements with DFA."
The suit characterizes DFA as the largest dairy cooperative in the U.S. and contends that Dean retaliated against other independent farm cooperatives and milk bottlers "in an attempt to keep them from expanding into the Southeast United States," the lawsuit states.
WHAT PLAINTIFFS WANT
Lawyers representing Dean and several other defendants recently declined to comment on the lawsuit or did not immediately return calls.
A Food Lion spokeswoman recently said the company's position as a plaintiff is outlined in court documents.
The lawsuit requests that Greer find that defendants violated sections of the Sherman Antitrust Act and the Clayton Antitrust Act, that Food Lion and class action plaintiffs be granted relief, including "an appropriate final injunction divesting the defendants of such property as will be determined at trial to be necessary to promote competition."
The suit also requests that Food Lion and class-action plaintiffs recover three times the amount of damages determined to have been sustained through alleged acts of the defendants.
Another lawsuit filed in federal court in Milwaukee, Wis., naming Dean Foods as a defendant ended in March 2011 with a settlement before trial.
The lawsuit claimed that Dean Foods had a monopoly in the Midwest milk market.
The settlement hinged on the company's selling a milk-processing plant it owns in Wisconsin.
Also in 2011, a federal judge in Vermont granted approval to settlement of an antitrust suit that pitted Dean Foods against New England dairy farmers.
Dean Foods does not admit any wrongdoing in the Southeast settlement.