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Dean Foods’ Southeast lawsuit payments nearing the end

Progressive Dairyman Editor Dave Natzke Published on 03 August 2016

The last in a series of five payments to settle a class-action lawsuit between southeast U.S. dairy farmers and Dean Foods is expected by early fall, according to Farrah Newberry, executive director of Georgia Milk Producers Inc.

About 6,000 dairy farmers and class members in Federal Milk Marketing Orders (FMMO) 5 (Appalachian) and 7 (Southeast) will split about $12 million of the $20 million payment. The plaintiff’s attorney teams, Baker-Hostetler of Washington, D.C, and Brewer & Terry of Morristown, Tennessee, will split the remaining $6.66 million.

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The settlement stems from a lawsuit originally filed in 2007 (Sweetwater Valley Farm Inc., et al. v. Dean Foods, et al., No. 2:07-CV-208) in the U.S. Federal Court Eastern District of Tennessee. The lawsuit alleged Dean Foods, Dairy Farmers of America (DFA) and others violated antitrust laws in the marketing of fluid milk in the southeast U.S., beginning in 2001.

The lawsuit was eventually split, with Dean Foods settling in 2011 for $140 million. Dean made an initial payment of $60 million into a settlement in February 2012, with structured payments of $20 million in each of the next four years. The final payment was scheduled for 2016.

Separately, a lawsuit involving remaining defendants – DFA, Dairy Marketing Services LLC, Mid-Am Capital LLC, National Dairy Holdings LP and Gary Hanman, the former DFA chief executive officer – was settled in January 2013 for about $168 million. Of that total, about $18 million, paid over two years, was placed into a fund to incentivize stronger Class I utilization rates in FMMOs 5 and 7.

An additional defendant, Southeast Marketing Agency (SMA) and James Baird, paid $5 million into the fund in August 2012.

Neither Dean nor DFA admitted wrongdoing in reaching the settlements.  PD

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