Southeast Milk Litigation: Dean Payment #3 Authorized

Sun Photo by Phil GentryFederal Court House

A Court Order, entered this morning, Oct. 16th, at the Federal Courthouse in Greeneville, TN, in the Sixth District of U.S. Federal Court, authorizes distribution of Dean Settlement Payment #3 in the Southeast Milk Litigation.

A motion requesting authorization of this distribution, number 3 of 5 total, was filed with the Court on July 24, 2014. Several additional motions and responses were filed following this motion, which asked the Court for clarification concerning a claimant’s eligibility to receive Settlement Funds.

This request was filed on behalf of a party who became a board member of one of the defendant co-ops following the original Dean Foods/SMA Settlement Agreement, but before the DFA payment schedule was finalized.

As a part of the original Settlement Agreements, board members of the defendant co-ops were excluded from eligibility to receive settlement funds. The Court had to review and evaluate several lengthy documents before entering today’s Order.

Rust Consulting, the claims administrator, can now begin processing the checks and mailing them to Class Members. Members can expect to receive an amount similar to the checks they received in September of 2013.

Following this payment cycle, there will be two additional payments left in the Dean Foods Settlement sector of the SE Milk Litigation. Those payments are scheduled to occur in 2015 and 2016. The Dean Settlement payments were allocated in this manner:
a.) Payment 1 – 40% of total over 5-year payment period (Received by class members of January of 2013)
b.) Payment 2 – 15% of total (Received by class members in September/Early Fall of 2013)
c.) Payment 3 – 15% of total (Authorized Oct, 16, 2014; should be received by Nov. 2014)
d.) Payment 4 – 15% of total (Expected Fall of 2015)
e.) Payment 5 – 15% of total (Expected Fall of 2016) (Final Payment in Dean Foods Settlement)

Below are the four pages in today’s court order. These pages make references to several predecessor documents in the litigation, some of which may be found at the official website, http://www.southeastdairyclass.com.

DnPymnt3Orderp1

DnPymnt3Orderp2

DnPymnt3Orderp3

DnPymnt3Orderp4

DFA Denied Appeal – $419 Million at Stake in January Trial

 

DFA Denied Appeal on Recertification of Class in SE Milk Class Action Litigation

Farmers seek $419 Million in Damages at January trial

(Greeneville, TN) Dairy Farmers of America, Inc. (DFA) has been denied their Petition to Appeal the Recertification of the Class in the SouthEast Milk Litigation.

With that action, the Sixth Circuit Court of Appeals has upheld, for the second time, the work of District Judge Ronnie Greer in the Class Action litigation alleging that Antitrust and Price-Fixing activity was conducted by the nation’s second-largest milk co-op. The Order was entered September 14, 2012.

The Sixth Circuit Order states: “The district court’s orders certifying, decertifying, and recertifying the DFA subclass reflect that it closely examined the evidentiary record and conducted a ‘rigorous analysis’ of this record before finding that recertification was appropriate.”

Following the Appellate Order, Judge Greer followed with a District Court Order stating: “Now that the Sixth Circuit Court of Appeals has denied the defendants’ application for an interlocutory appeal, there is no impediment to this case proceeding to trial on January 15, 2013, as scheduled.

“It is hereby ORDERED that the parties proceed back to mediation within the next 45 days and that a report on the results of the mediation be filed ten (10) days thereafter.”

DFA, the nation’s 3rd largest agricultural co-op and 2nd ranking milk marketing co-op is accompanied at the defense table by related entities Dairy Marketing Services, LLC (DMS), Mid-Am Capital, LLC; National Dairy Holdings, LP (NDH); and Gary Hanman, the former CEO of DFA.

In 2012, DFA had over $9.87 billion in revenue and $2.1 Billion in Assets, according to USDA figures.

In layman’s terms, rank-and-file DFA members will be eligible to share in any monetary or injunctive relief gained from either settlement or a positive jury verdict, provided no additional evidence is presented which would again decertify the class during trial.

The amount at stake? Quoting a June 12, 2012 Defendant’s motion, “Plaintiffs [farmers] seek damages of approximately $419 million before trebling . . . If the Plaintiffs are successful at trial, that number automatically would be trebled to approximately $1.26 billion.” [Trebling is mandated per standard Federal Court rules.]

This complex litigation has already resulted in a $145 Million settlement from Dean Foods and Southern Marketing Agency (SMA). Those funds await distribution pending final audits and verification of milk pounds claims during the Class period which have been submitted by class members. It is expected distribution may occur before the end of the year.

The $140 Million Settlement from Dean Foods is believed to be the largest legal settlement ever entered into by the global dairy processing giant.

Injunctive relief, in the form of a change in marketplace structure, was also a portion of the SMA settlement. Per terms of those agreements, applications are now being taken for a new manager of SMA, a marketing agency-in-common.

Many official documents, including class notices in the litigation, can be found at http://www.southeastdairyclass.com, a court-monitored website.