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Settlement agreement reached in DFA Northeast lawsuit

Progressive Dairy Editor Dave Natzke Published on 30 September 2020

A settlement agreement has been reached in a lawsuit involving Dairy Farmers of America (DFA) and about 115 dairy farmers marketing milk in the northeast U.S. The agreement came one day before a jury trial, postponed from July due the COVID-19 pandemic, was scheduled to begin, Sept. 30. Details of the settlement were not made available at Progressive Dairy's deadline.

In the lawsuit (Sitts v. Dairy Farmers of America) filed in the U.S. District Court/District of Vermont, plaintiffs alleged DFA and others conspired to monopsonize milk marketing within Federal Milk Marketing Order #1, which covers Vermont, New Hampshire, New York, Massachusetts, Rhode Island, Connecticut, New Jersey, Delaware, Maryland and Virginia. (A monopoly is defined as a situation where there is a single supplier of a good or service; a monopsony is defined as a situation where there is a single buyer.)

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The farmers had opted out of a previous settlement agreement with DFA. That class action lawsuit (Allen v. Dairy Farmers of America) was initially filed in 2009 against Dean Foods and DFA. Dean Foods subsequently agreed to a separate $30 million settlement in 2011, and DFA reached a final $50 million settlement agreement in June 2016.

Prior to the agreement, attorneys with the U.S. Department of Justice (DOJ) filed an amicus brief, July 27, arguing that based on the allegations involved, the Capper-Volstead Act did not serve as a legal shield in DFA’s defense. DOJ attorneys also stated that DFA bore the burden of proof that it was protected under the Capper-Volstead Act.

In settling the lawsuit, DFA admitted no wrongdoing, and the lawsuit has been dismissed.

“Given the current environment with the COVID-19 pandemic, continuing to defend ourselves in this litigation became a logistical challenge,” according to a statement released by DFA. ”These challenges, coupled with the cost of settlement versus the continued cost of litigation, caused us to determine that it was in the best interest of our member-owners to put this matter behind us.”  end mark

Dave Natzke
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