Dairy Legal Events

Final Payments to Farmer / Class Members in Southeast Milk Litigation Authorized by the Court

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“The Checks Will Soon Be in the Mail,” may be a better headline.

An historic and record-setting food industry  class action that began in July of 2007 is now approaching completion nine and one-half years later. Final Settlement payments to farmer/class members in the Southeast Milk Litigation have been authorized by Judge Ronnie Greer, US District Court, Eastern District of Tennessee, Greeneville Division. Judge Greer issued his Orders on December 6, 2016.

A total Settlement Fund of over $280 Million was reached in three different settlements: one with Dean Foods, the second with Southern Marketing Agency and related entities, and the third with Dairy Farmers of America and Related Entities.  Payments began in January of 2013, and completed via annual payments.

In short, the final payments to farmer/class members in the Southeast Milk Litigation will shortly be in mailboxes, and should be received before or shortly after Christmas, 2016.

Farmers / Class members should be watching their mailboxes. Since previous payments have come in rather ordinary envelopes, recipients are advised to pay detailed attention to each envelope in their mailboxes, being careful to not lose Settlement payments with heavy mail volume common at this time of year. These are not electronic payments.

The class action began in July of 2007, when two original complaints were filed in US District Court, Middle District of Tennessee.  One complaint was filed on behalf of co-op member farmers, and one on behalf of independent farmers (those not belonging to a co-op).  The two complaints were consolidated in July of 2008 and redirected to the Eastern District of Tennessee, Greeneville Division, presided over by The Honorable Judge Ronnie Greer.

Farmer/Plaintiffs were represented by a team of antitrust attorneys from Baker-Hostetler, Washington, DC.  Led by Robert Abrams, the team included Greg Commins, and Danyll Foix, and a host of others during the course of the litigation.  Local plaintiff counsels in the District court included Thomas Jessee of Johnson City, and Steve Terry and Gary Brewer, Brewer & Terry of Morristown, TN.  When the complaints were filed, the same attorneys were with Howrey LLP, a law firm which dissolved during the course of the litigation.

The amended complaint is a great summary and timeline of the activities which eventually led to the Dean Foods Settlement in January of 2012, (first payments took place in January of 2013) and the DFA/Related Entities Settlement in January of 2013.  It should be noted that all defendants have fulfilled the terms of their settlement agreements, and that many (but not all) of the individuals named in the actions are no longer active in the named organizations.

During the course of the litigation, nearly 2 Million pages of legal documents were generated, many of which can be found at the litigation website.

With a 4-page Order of December 6, 2016, Judge Ronnie Greer, presiding Judge, authorized the fifth and final distribution of Dean Settlement funds.  In a separate but parallel action, he authorized the distribution of the Residual DFA Funds in a 3-page Order.  With these Orders entered on the Court’s record, Rust Consulting, Claims Administrator, will quickly begin writing and mailing checks to over 6,000 class members.

The ORDERS THEMSELVES FOLLOW:

First, The Order Authorizing Distribution of the Final Dean Foods Settlement Payment:

Order Fifth Dean Distribution.pdf

PAGE 2 _ ORDER, DEAN FOODS SETTLEMENT DISTRIBUTION

Order Fifth Dean Distribution.pdf

PAGE 3 -ORDER, DEAN FOODS SETTLEMENT DISTRIBUTION

Order Fifth Dean Distribution.pdf

PAGE 4 -ORDER, DEAN FOODS SETTLEMENT DISTRIBUTION

(The Judge’s signature, and then keep scrolling down for the DFA Payment Order.)

Order Fifth Dean Distribution.pdf

Second: ORDER Authorizing Distribution of the RESIDUAL DFA SETTLEMENT Funds:

Order DFA Residual Distribution.pdf

PAGE 2: ORDER Authorizing Distribution of the Residual DFA SETTLEMENT Funds

Order DFA Residual Distribution.pdf

Page 3: ORDER Authorizing Distribution of the RESIDUAL DFA SETTLEMENT Funds:

Order DFA Residual Distribution.pdf

From having done extensive review of documents related to this class-action case, along with attending most of the courtroom hearings and then reporting on various matters related to this litigation,  it is my fervent hope that all farmers make every effort to more fully understand the BIG BUSINESS of what happens to affect their milk checks.

If one wants to begin, they will read the 7-pages of legal documents above, then read the 60-page amended complaint , and  then re-read them, and re-read them, and then re-read them again.  Although these events described in these documents are now a part of dairy industry history, they will provide a foundation for understanding milk marketing. If a person does begin to read them, they need to remember that today’s markets will have changed, due to time, and the evolution of milk markets themselves.

Happy Reading!  Be Watching for those checks!

Sun Photo by Phil Gentry Federal Court House

 

 

 

$52 Million Settlement Brings On Bigger Picture Concerns

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NMPF and Related Entities settle CWT Class Action Lawsuit for $52 Million

No Guilt Admitted by Settlement

Name of Case: Edwards et al v. National Milk Producers Federation, et. al

Website containing several very pertinent court documents: www. boughtmilk. com

 (Note:  It is very troublesome to see that this case challenges the previous immunities, abilities, and parameters of the Clayton Act, Capper-Volsted, and the Sherman Act, important to the function of agricultural co-ops.  However, there will be many statements found in court transcripts, depositions, and other events in this suit which may shed light on the reasons for the Settlement.)

 BRIEF SUMMARY:

 The SETTLEMENT, DEFENDANTS, ATTORNEY FEES, and EXPENSES:

  • A Settlement Amount of $52 Million Dollars has been announced, in a 20-page  agreement dated August 11, 2016.
  • $26 Million is to be placed in an Escrow Account 30 days after preliminary approval [by the Court] of the Settlement Agreement.  The balance of $26 Million is to be deposited in same Escrow Account within 90 days after the Preliminary Approval is entered.
  • Documents indicate Settlement accounts will be funded by National Milk Producers, although member Co-ops Dairy Farmers of America (noted as successor to Dairylea by merger), Land O’Lakes, and AgriMark) are named in the court documents.
  • Attorneys Fees & Expenses to be deducted:  It is expected that approximately $17,333.333 million (1/3 of the Settlement Amount, along with a maximum of $2.4 million in expenses, shall be paid to plaintiffs’ counsel.  A maximum of $2 million is allowed for administration expenses.  Therefore, there is a total of $21.7 million to be deducted from the Settlement Amount of $52 Million, leaving approximately $30.3 million for distribution among class members.

Where will the Money to Fund the Settlement Money Come From?

The Settlement Agreement, as noted above, states that NMPF will fund the Settlement Accounts.  A valid question is “How will that $52 Million be replaced in the NMPF accounts?”  It is possible there could be an insurance policy that may cover this.  It is possible that NMPF may ask the defendant member co-ops for money to help fund the costs, but that would be between NMPF and the Boards of Directors of the Defendant Co-ops.  Producers should ask questions in their individual organizations if they are concerned about this matter

It is best to read the entire Settlement Agreement, along with other official court documents, which can provide thorough understanding.

Who are the class members eligible to file for damages?

CONSUMERS are Claimants:  Those consumers eligible for an estimated $30 damages/each are people who live in 15 states scattered over the country, plus the District of Columbia.   The final dollar amount will be determined by number of those who file claims Claims by Jan. 31, 2017.  The ‘Notice of Settlement’,  3 pages long, is the official court document which is the best reference, and is written per standards dictated by Federal Court Rules.  This map, which illustrates the states eligible to receive settlement monies, was downloaded from the boughtmilk.com website, which contains links to several pertinent court documents.

00_nmpf_settlement_states_f

BACKGROUND: 

The Lawsuit was filed in 2014 challenging CWT activity which began in 2003.  The suit was originally filed by several plaintiffs.  At least some or all of the individuals are associated with a group called Compassion over Killing.  Their Mission statement is:  “Working to end animal abuse since 1995, Compassion Over Killing exposes cruelty to farmed animals and promotes vegetarian eating as a way to build a kinder world.”  An article gives their perspective at the time of the filing.

And for those who want to know the many items that have been vetted, reviewed, and discussed in the course of the litigation, go back to the beginning, and read the “Complaint” (legal term), which set in motion the course of action.  This 52-pg. document is written by the plaintiffs, and was filed with the court in December of 2014.

PRINCIPLES and LOCATIONS: 

  •  Plaintiffs law firm, Hagens, Berman, Sobol, Shapiro LLP is based in Seattle, Washington and Berkely, California.
  • The case has been heard in United States District Court, Northern District of California, Oakland Division. The Honorable Jeffrey S. White is the District Judge who has presided over the litigation. As such, he signed off on the Class Certification Order.
  • Court Documents name the defendants who include National Milk Producers Federation and member co-ops DFA, Land O’ Lakes, and AgriMark. Their legal teams are based in several states in the Eastern United States.

Should the Defendants have settled?

 This is a question which only those intimately involved – and who are well versed in both class action law and federal court case law –  are qualified to answer.  There would have been a far greater financial risk had the case gone on to trial, along with significant additional legal expenses. Millions of dollars, and the risks of being liable for even hundreds of millions of dollars, quickly add up in all class action suits.

RECISSION? APPEAL?  Can the Settlement be Invalidated?

In the Settlement Agreement, there are a few clauses which refer to “Recission,” which describe what will happen  if the Settlement Agreement is appealed, or some other events which could void the agreeement.  It is far too early to predict if such actions will take place, but due to the fact they are mentioned in this agreement,  they can always occur.  The lengthy settlement process in the Northeast Milk Litigation is an example of ‘anything can happen’ in a court of law.

 BIG PICTURE QUESTIONS are raised about long-term CO-OP IMMUNITIES:

  • In general, the class action lawsuit challenged CWT as a vehicle for price-fixing and as a violation of antitrust. Due to the stature of all of the parties involved in developing the CWT, along with the fact a decade passed from the time CWT was instituted and before this suit was filed, it is difficult to understand the impact of the allegations in this suit at this time.
  • The CWT was initiated in 2003, and this suit was filed in 2014. The CWT was well publicized, and legal teams would have had significant input into its design. Why was the CWT not challenged legally at its inception?
  • Did those who designed the CWT miss something at the time, or have times changed and events in the decade since diluted the abilities of Capper-Volsted, the Clayton Act, and how they relate to the Sherman Act?

Questions going forward for all Agriculture Co-ops:

  • Will more lawsuits of this nature be initiated by AR groups? How will we in agriculture get prepared for them?
  • What other kinds of challenges will Capper-Volsted, the Clayton Act, and the Sherman Act have to withstand going forward from any other type of consumer group?
  • As will all big picture events occurring in agriculture today, this settlement could have implications far beyond a $52 Million Dollar Settlement. Only time will tell.

UPDATE –

A Bloomberg writer has posted this article on Sept. 8.  In my opinion, radical wording in the headline which is very shortsighted and shows a lack of knowledge and research into the program’s early days.    This is another example of how words can harm a challenged industry of great people mostly trying to maintain their family farms, which are a treasure to them.   We in agriculture have got to figure out why folks think so little of us, and farms that do feed a world are taken so much for granted. .

The Huffington Post has posted this article.

What’s Missing: 2008-2010 Dairy Crisis saw farm prices down the drain, and Fast Food Dollars and Taxes were generated by the hamburger industry

One item left out of the discussion of any ‘big media’ report is that if the program were designed to raise prices, then the years of 2008-2010 saw some of the worst milk prices in history as paid to farmers.  Many farmers were forced to exit the business in those years, and if they didn’t exit, lost many years of equity. However, if any of those numbers were brought up during the course of the suit’s activity, then a thorough study of the transcripts is required.

And then, there’s no doubt that the slaughtered cows, which were slaughtered by elective choice of the owners, many who may have been facing financial walls, went into the fast-food industry as hamburger.  Event the HuffPo article admits that.  However, what is left out is the amount of income this generated for the fast food industry, along with the tax dollars generated.

This story continues to evolve, and many questions remain.

Southeast Milk Litigation: All Payments to be Finalized in Fall of 2016

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Sun Photo by Phil GentryFederal Court House

Sun Photo by Phil Gentry Federal Court House

(Greeneville, TN)  All payments to class members in the Southeast Milk Litigation (SEML) will be final this fall with the completion of up to two additional payments from different settlements in the historic Class Action.

One of those payments will complete the cycle of payments in the Dean Foods portion of the Settlement. Individual recipients should expect to receive an amount similar to the previous Dean payments.

“Almost unbelievably, there are some uncashed checks from previous payments which need to be cleared before those payments can be finalized,” says John Harrison, Class Representative for the plaintiffs.

“Those uncashed checks must be accounted for or reconciled before final payments can be made, since everything must zero out before final closure of the Settlement accounts.”

Letters, some containing reissued checks, have been sent to the owners-of-record of those uncashed checks, with a reminder that those checks must be deposited within 30 days  of check issue (approximately, by the third week of August).

ANY QUESTIONS?  Act Immediately!  If anyone believes that they fall into this category of ‘uncashed checks,’ or if anyone believes they are due a payment which they have not received in previous cycles, they are asked to immediately contact the Attorneys-of-Record of each of the Litigation subclasses as follows:

Independent producers, as well as all other producers belonging to co-ops other than DFA, should contact Baker-Hostetler, by phone at 202- 861-1500, or via mail at:

Southeast Milk Litigation

Baker & Hostetler LLP

Attn: Robert Abrams, Greg Commins, or Danyll Foix
1050 Connecticut Ave., NW

Washington, DC 20036

 

DFA producers should contact Brewer & Terry, by phone at 423-587-2730, or via mail at

     Southeast Milk Litigation

Brewer & Terry, P.C   Attn:  Steve Terry or Gary Brewer

1702 W. Andrew Johnson Hwy

Morristown, TN   37816

The Dean Foods Settlement, a total of $140 Million dollars to be paid over five scheduled payments, was final in June of 2012, with four of those payments already paid to class members.   This fall’s payment will be the last.

The second expected payment, much smaller, will reflect the final apportionment of the Dairy Farmers of America and Related Entities Settlement, which received final approval by the Court in May of 2013.  The initial $140 Million Settlement phase was paid out in one lump sum at the end of December, 2013, and was prorated to individual class members according to production in defined time frames. This fall’s payments will distribute any remaining funds.

All activity in this case was conducted following Federal Class Action laws and directives, and all procedures took place accordingly, under the supervision of the Court.  Judge Ronnie Greer presided over the case.

The amounts of the total Settlement in this case, which totaled in excess of $280 million dollars, set a record in the US Federal Court, Tennessee, Eastern District of Tennessee, and is one of the highest ever reached in dairy or food industry history in the United States.  Terms of each of the Settlements state  that none of the defendants admitted guilt.

For court documents and more information on the litigation, please refer to www.southeastdairyclass.com.  In addition, various articles are posted at www.milkshedsblog.com, or please google search “Southeast Milk Litigation.”

SE Milk Litigation: Appeal Deadline Expires, Dean Foods Payment 3 may be processed

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Sun Photo by Phil GentryFederal Court House

The wait is apparently over for Dean Payment #3 per the Dean Foods/SMA Settlement Agreement in the Southeast Milk Litigation to be processed.

The deadline to file an Appeal to Judge Ronnie Greer’s October 16th, 2014 “Order Authorizing the Third Distribution of Dean Settlement Funds” has now expired. In this instance, an Appeal would have been filed with the US Court of Appeals for the 6th Circuit, located in Cincinnati, Ohio.

Unless official filing documents are received via the United States Postal Service at the Sixth Circuit offices with an appropriate postmark, payments can now be processed and mailed to producers.
Per Federal Court rules, there is a 30-day time frame in which an Appeal an Order may be filed, which may occur when Motions are filed prior to the entry of an Order.

According to court documents, a dairy farmer, who had become a board member of the SMA board following the Dean/SMA Settlement which became final in June of 2012, but prior to the DFA Settlement Agreement claims deadline of March 31,2013, received the first Dean Foods Settlement payment, but was denied the DFA Settlement Payment and Dean Payment #2.

This producer had filed a Motion asking the court to reinstate his eligibility for settlement payments, given the timing of his placement on the SMA Board. A clause was in all of the Settlement Agreements declaring Board Members of all defendant Co-ops to be ineligible for payments, but this specific instance of when a board position was filled was not addressed in the original documents, and so the Motion to reinstate was filed.

Producers who filed claims directly with Rust Consulting may expect that they will receive checks within a couple of weeks. Producers who used third-party filers may take a bit longer to receive their checks.
The amount in this cycle of checks will be similar to amounts producers received in the Dean Payment 2, paid to class members in September of 2013.

As far as future payments, producers can expect to receive their monies. Thus far, the defendants have been very responsible in depositing their monies in escrow accounts by the deadlines agreed upon in the original Settlement Agreements. This process is diligently monitored by the Court.

However, each payment cycle is always subject to various court proceedings, so the timing of receipts of payments by producers may vary. Two additional Dean Settlement Payments are set to be filed, one in 2015 and one in 2016. The possibility of an additional DFA payment remains if specified utilization rates are not reached by certain deadlines.

Class members should be aware that until the final payments are made, this is an ongoing legal matter, with a number of legal filings subject to changing subsequent payment schedules.

Producers will be notified of additional developments in this historic Class Action litigation when they occur. For a history of the case, including many official court documents, interested parties may visit http://www.southeastdairyclass.com.

Litigations are just one portion of the worldwide milkshed.

SE Milk Litigation – Payment Schedule Updates

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I, along with many other producer organizations, have been receiving questions regarding “When will the DFA Settlement Monies be received by farmers?” The answer: NOT anytime soon, and NOT until the proper reviews have been completed by first, the official Claims Administrator, Rust Consulting, followed by reviews and approvals of their work and official report by THE COURT!

As of Monday, August 19, an additional round of audit letters were received by several class members/producers in several states from Rust Consulting, the Claims Administrator. These letters were checking pounds claims discrepancies reported by Class members ranging from only a view pounds to several hundred thousand pounds. One producer reported that a phone call to Rust is all it took to correct the requested information.

However, that letter does state a response deadline (to Rust Consulting) of September 16 for verifying or correcting the information. Provided there is not another round of audit letters, and observing the January 2013 Dean Settlement payment process as an example, it is predicted that it will be late October AT THE EARLIEST before DFA Settlement Checks can be expected. Any delays will delay checks even further.

If anyone tells a producer to ‘expect payments anytime soon,” ask where they are getting their information. Unless that source can provide documents from the Court’s record, they are citing no official source. Speculation and ‘country-store discussions’ are not proper in this process!

The COURT is supervising this process, under the guidance of long-established Federal Court Rules. Documents filed on the Court’s record are the only source of accurate information, and are made public when there is official action. Here is the general sequence of events which will occur before checks can finally be issued:

1. The first step has been taken with the filing of a Motion requesting Payment #2 in the Dean Foods Settlement.
2. Requests were made in that document to alter some of the pounds claimed in the Dean Settlement, which in turn may affect the final allocation of pounds to an individual claimant in the DFA Settlement.
3. Those requests must be reviewed and approved by the Court before proceeding to the next step – the filing of a Motion requesting the Disbursement of the DFA Settlement Monies. Rust Consulting must complete their work before that Motion is filed.
4. Since the DFA Settlement will involve some substantial payments, and will be dispensed at one time, every care must be taken to make sure the pounds, and resulting monies, are allocated as fairly as possible and to the Court’s satisfaction before the Judge will approve issuing checks to producers.

To clear up a couple of other ongoing questions:
1.) The settlement checks will not be coming directly from DFA (Dairy Farmers of America. In accordance with Court procedure, DFA placed $140 Million in an escrow account earlier this year. The interest accrued by that fund becomes part of the Settlement fund. The eventual checks will come from Rust Consulting, Claims Administrator.

2.) There is no word yet on when the sealed documents, which DFA agreed to open to the public per terms of the Settlement Agreement, will be available for public review.

Please, Please, be patient. Most events in this case are not our area of expertise, are defined by Rules of Federal Court and process, and are dependent upon work performed by others, and are quite frankly, out of our control. News of important events concerning payments will be distributed as quickly as it becomes available. This is a complex legal event, and while the finish line is hopefully in sight, it is still a legal event, and the final outcome can be determined by a variety of factors.

(Note: photo at top is Greeneville, TN Federal Courthouse, the site of the hearings in the Southeast Milk Litigation, now in its sixth year.)