DFA agrees to $140 million settlement in antitrust lawsuit

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An agreement by Dairy Farmers of America (DFA) and related companies looks to end six years of litigation related to price-fixing allegations in the southeastern U.S.

“We make no admission of wrongdoing. It was a business decision (among other things, to avoid going to trial)…..  We will pay $140 million to the plaintiff class,” DFA President and Chief Executive Officer Rick Smith told the news media on Tuesday.

The $140 million will be broken out as follows:

  • DFA, the nation’s largest dairy cooperative, will pay $70 million
  • DFA’s finance subsidiary, Mid-Am Capital LLC, will pay $20 million
  • National Dairy Holdings LP, which DFA sold to a Mexican dairy processor in 2009, will pay $50 million.

Thousands of dairy farmers are eligilble for the payouts. 

Recipients include those farmers who sold milk to one or more of the defendants in the lawsuit and produce milk in federal orders 5 and 7, which cover all or parts of Missouri, Arkansas, Louisiana, Mississippi, Alabama, Tennessee, Kentucky, Georgia, Florida, South Carolina, North Carolina, Indiana and Virginia and West Virginia.

An additional $18.6 million will be put in a fund over the next two years to guarantee a stronger Class I utilization rate in federal orders 5 and 7.

The payment of money will not affect DFA’s day-to-day operations or its ability to market members’ milk, Smith said. “The cooperative remains healthy and we look forward to getting this behind us.”

“We have the cash on hand" to send to a fund established on behalf of the plaintiffs, Smith said.

With the money already in hand, DFA will not ask members directly for contributions, nor will member milk checks be affected.

Smith said many of the actions alleged in the lawsuit occurred 10 to 15 years ago and no longer reflect the way things are handled by the co-op or current market conditions.

The lawsuit, brought in 2007, claimed that DFA and Dean Foods conspired to fix raw milk prices in the Southeast by closing a number of bottling plants. Trial for the suit was scheduled to begin this month. 

In 2011, Dean Foods reached a separate settlement for $140 million. According to this report, Dean Foods will begin making payments to approximately 6,000 farmers.

In fact, distribution of funds from the Dean Foods settlement reportedly has begun.

However, it may take a while for the DFA funds to reach farmers, since there is at least one more court hearing ― a Fairness Hearing on April 3. That will give the court time to read the comments of anyone who objects to the settlement.

For more information on what’s next, go to the Southeast Milk Antitrust Litigation Website.  



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anita    
Indiana  |  January, 22, 2013 at 09:58 PM

I thought DFA was to be their to help the dairy farmers......

Johnny    
Abilene, Tx  |  January, 23, 2013 at 09:21 AM

DFA is a coop run and voted by farmers. Hey lots of money corrupts it leaders and they turn into mafia leaders it seems. I think there have been many shady deals by these leaders that are only there to help the dairy farmer. These guys NEED to be in JAIL, not solving the problem with a payout fine. Instead we farmers keep them and give bonuses?

Fabian    
Cleburne, TX  |  January, 23, 2013 at 08:56 AM

This really makes me want to make sure DFA dissolves into little pieces. I sure believed in the transparency of DFA while I was in the Board of the Southwest DFA area, yet now when all dairy farmers my size (500-1000cows) are feeling a major economic pinch, I feel that we have been deceived, taken advantaged of and literally raped at our own peril. I'm glad I'm no longer in the leadership (if I ever was), but I feel that DFA has betrayed who we stand for and who we will stand for in future generations. I have nothing more to lose anymore, so let it be.

Robet    
Louisians  |  January, 23, 2013 at 09:05 AM

The first dean food checks arrived yesterday to farmers.

Steve    
WI  |  January, 23, 2013 at 09:26 AM

CEO Smith says they have the cash on hand, of course they do, they stole it from the very farmers they they are supposed to be working for. Why would any farmer trust DFA with marketing there milk when they previously cheated them out of there money. Not only did they affect there own members but all daiymen in these mik marketing orders.

Jemi Jerseys    
PA  |  January, 23, 2013 at 10:27 AM

DFA is a piece of S*^%! they are no good and need to be split up. It is unbelievable how many farmers in the East still think they are ok? Next question how soon before the dairy farmers that need & deserve that money actually get it.

John    
January, 23, 2013 at 12:18 PM

I hope you mean figuaratively instead of literally

Debi    
King City, Mo.  |  January, 23, 2013 at 11:33 PM

This is NOT the first time DFA has had to pay back to the dairymen they are supposed to be helping! Before they "changed" their name to DFA, they were Mid-Am and previous to that they were Dairymen Inc. The money DFA will pay out is the capital retains monies they hold out of every producers check, keep for up to 7 years, and never pay that farmer one thin dimes worth of interest. They nit-pik the farmers to death with every little thing possible to keep part of their milk checks, from PPD's to new bacteria count charges. All they do is take, take, take!!!

    
December, 13, 2013 at 08:09 PM

therethieves


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