DFA and Dairy Farmers Settle Lawsuit Just Before Jury Selection Begins in Antitrust Trial

Two days before the jury draw in an antitrust case brought by class action opt-out plaintiffs, more than 115 dairy farms, against defendants Dairy Farmers of America, Inc., and Dairy Marketing Services, LLC (collectively DFA), the parties stipulated to dismissal with prejudice. The District of Vermont filing did not indicate the nature of the settlement they reached. Judge Christina Reiss’s Monday order granting dismissal comes more than three years after the plaintiffs filed their amended complaint.

The opt-outs’ case arises from an earlier class action, Alice H. Allen et al. v. DFA and DMS, also before Judge Reiss. The opt-outs removed themselves from class action proceedings after the court granted preliminary settlement approval in February 2016. Their May 2017 amended complaint whittled down the claims to those remaining after summary judgment in the Class Action. 

The opt-outs plaintiffs’ case brought Sherman Act Section 1 and 2 claims for “the Defendants’ vice-grip on the Northeast milk industry (that) has tightened and choked some of the last remaining vestiges of competition.” In essence, they claimed that DFA “ostensibly a not-for-profit corporation,” organized as a “cooperative marketing association,” worked with co-conspirators to lower milk prices in the Northeast and gained a huge share of the milk processor. The complaint also alleged that the plaintiffs believe DFA threatened or threatened retaliation against farmers who opted out of the Class Action in favor of joining the present suit.  

Suits against DFA, now-bankrupt Dean Foods, and other supposed co-conspirators are proceeding around the country. Earlier this week, the United States, Massachusetts, and Wisconsin asked the Northern District of Illinois court overseeing a proceeding against the co-op to enter final judgment in their favor. The judgment sought would require DFA’s divestiture of milk processing assets formerly owned by Dean Foods, and would appoint an oversight trustee.   

Another case in the Middle District of North Carolina brought by plaintiffs Food Lion, LLC, and Maryland and Virginia Milk Producers Cooperative Association, Inc., also seeking injunctive relief, is proceeding through discovery. Earlier this week, a magistrate judge partly granted the plaintiffs’ motion to compel discovery from DFA.

The opt-out dairy farmers are represented by Nystrom Beckman & Paris LLP and Primmer Piper Eggleston & Cramer PC.

DFA is represented by Latham & Watkins LLP, Baker & Miller PLLC, and Sheehey Furlong & Behm P.C.