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Letter: Northeast antitrust lawsuit settlement agreement falls short

Published on 30 March 2016

Northeast U.S. dairy farmers have until April 29 to submit written comments on a revised settlement agreement in a six-year-old milk marketing class-action antitrust lawsuit. This letter expresses opposition to the settlement.

Editor’s note:

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A revised settlement agreement in a six-year-old northeast U.S. milk marketing class-action antitrust lawsuit (Allen v. Dairy Farmers of America, Inc.) was sent to dairy farmers in March.

Read Northeast milk marketing antitrust lawsuit settlement agreement revised

Read Northeast antitrust lawsuit plaintiff urges settlement, by Alice H. Allen

Farmers have until April 29 to submit written comments on the settlement agreement, and a “fairness hearing” will be held on May 13, in the U.S. District Court for the District of Vermont.

Jacob Ricker, with the National Dairy Producers Organization, submitted the following letter opposing the settlement agreement.

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Peter and Marilyn Southway, newly appointed plaintiff class representatives in the Northeast Dairy Farmers of America (DFA) and Dairy Marketing Services (DMS) class action, make one excellent suggestion in a letter they have been distributing in favor of the proposed settlement in that case…that dairy farmers should “carefully study” the agreement prior to reaching their own decisions.

Yes, study the injunctive aspects of the settlement the Southways outline that will supposedly “improve the future of our dairy market.”

• Study the full-supply agreement provisions. You’ll learn that they are temporary and do not apply to existing agreements.

• Study the milk testing provisions. You’ll learn these are temporary, too. And you’ll have to know in advance which three samples per year to question.

• Study the new DFA advisory council and farmer ombudsperson positions. Again, temporary. And you’ll learn these positions have no binding authority on DFA, they only make suggestions. Confidentiality requirements of these positions prevent any whistle-blowing capabilities on behalf of farmers. You’ll learn that the ombudsperson is not charged with “advocating for farmers,” but has a more neutral specified responsibility of “facilitating the resolution of individual complaints” with a goal statement of “promoting fairness.”

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• Study the source of compensation for these new positions. It’s not the settlement, it’s DFA. Who will they answer to?

• Study the farmer transparency provision. You’ll learn that the request for release of “critical” and “telling” documents cannot come from farmers, but must come from the subclass counsel in order to prevent opposition by DFA. And like all the other conduct provisions, this one’s temporary, too.

• Study the release and covenant not to sue. Research the California and South Dakota laws mentioned. You’ll learn that a waiver of these may prevent your participation in any future claims against DFA.

• Study your right to voice opposition to this settlement and still collect your $4,000 average payment should it be approved. What is the function of a “hearing” if not to hear from both sides? The “opt out” provision is not new to this settlement. But it is just as impractical as ever for an individual farmer with limited resources and access to information.

While you’re studying, you may also learn how the settlement provides for substantial incentive awards to subclass representatives.

After all that studying, you will be well-equipped to decide who are the dissenters spreading misinformation to further their own interests, and who is calling out with clarity what has been intentionally hidden within the settlement to allow DFA to return to business as usual ASAP. The choice is yours to make.

National Dairy Producers Organization is proud to be a nationwide group empowering fellow dairy farmers with information to act on their own to change the industry for their benefit. To this end, NDPO encourages you to study the likelihood of this settlement to affect the dire milk marketing conditions in the region caused by DFA’s management, and achieve a profitable future. If you, like many other Northeast dairymen, have your doubts and believe that true relief can only be found at a jury trial, NDPO has provided a convenient method to voice opposition by filling out and returning the last page of their current newsletter.

Whether or not this settlement will provide lasting market improvement, one thing is for certain … the lawyers win $17 million in DFA member equity either way if it is approved.

Jacob Ricker

National Dairy Producers Organization PD

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