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Books closing on CWT herd retirement lawsuits

Progressive Dairy Editor Dave Natzke Published on 03 March 2021

The confounding cases of milk supply management in a litigious society are coming to a conclusion.

Settlement administrators of a class action lawsuit involving the National Milk Producers Federation’s (NMPF) Cooperatives Working Together (CWT) “herd retirement” program have put out a final claim deadline of April 23, 2021. The $220 million settlement in the lawsuit (First Impressions Salon Inc., et al. v. National Milk Producers Federation, et al) was reached in April 2020 in the U.S. District Court for the Southern District of Illinois. It involved wholesale buyers of dairy products and individual consumers who purchased butter and/or cheese directly from one or more CWT members during the period from Dec. 6, 2008, to July 31, 2013.

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Another class action suit (Winn-Dixie Stores Inc. v. the National Milk Producers Federation, Southeast Milk Inc., Dairy Farmers of America, Land O’Lakes, Dairylea Cooperative and Agri-Mark Inc.) was settled in the U.S. District Court/Middle District of Florida, Jacksonville Division. It was settled on Dec. 31, 2019, a week before the trial was set to begin. The amount of the settlement was not disclosed.

In August 2016, NMPF and major NMPF-member dairy cooperatives ended five years of litigation in a class action lawsuit, agreeing to settle for $52 million. The lawsuit (Matthew Edwards, et al. v. National Milk Producers Federation, aka Cooperatives Working Together, et al), was a consolidation of multiple similar lawsuits filed in several courts.

Program sought to fend off low farmer milk prices

All of the lawsuits alleged dairy cooperatives and their producer members conspired to raise milk and dairy product prices by sending dairy cows to slaughter to reduce milk supplies.

The CWT herd retirement program was created by NMPF during a period of growing milk supplies and declining prices, culminating in historically low farmer milk prices in 2009. Under the herd retirement program, CWT announced invitations for dairy producers to submit bids to sell their dairy herds and cease milk production in an attempt to bring milk supply in closer balance with demand. CWT conducted 10 herd retirements between 2003 and 2010.

During CWT creation, NMPF leaders said they believed the program fell under provisions of the Capper-Volstead Act, a 1922 law which provides farmers and agricultural producers certain exemptions from antitrust laws when marketing, pricing and selling their products through cooperative means. NMPF contended CWT’s structure was a federation of co-ops and producers working together to achieve stable milk prices.

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According to NMPF leaders at the time, CWT’s activities were vetted with the USDA, and no Capper-Volstead concerns were raised. The U.S. Department of Justice also raised no concerns.

However, defendant lawyers allege the herd retirement program was not covered under Capper-Volstead protection because it controlled pre-production milk supply by removing cows from production.

That Capper-Volstead Act question has never been resolved. The settlements do not mean that any law was broken or that the defendants did anything wrong, and no court has decided in favor of the plaintiffs or defendants.

NMPF declined comment on publicity related to the latest claims deadline announcement. In the past, NMPF has cited lawsuit settlements as a means to limit escalating legal costs.

As part of standard fees in class action lawsuits, plaintiff attorneys generally receive about one-third of the settlement total.  end mark

Dave Natzke
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