- Tuesday, Nov. 12th: Bankruptcy documents filed
- Wednesday, Nov. 13th: Court pleadings and Orders entered for ongoing operations
- Wednesday, Nov. 13th: By close of day, over 125 document filed on court’s docket in less than 48 hours.
- Thursday, Nov. 14th: Word received farmers would receive payment for their previous month’s milk.
- Monday, Nov. 18th: Payments expected to be delivered to farmers
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.)
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.
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.
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.
National Ice Cream Day (July 17th) has been served up with a spoonful (well, several spoonfuls) of local farm dairyliciousness !
In East Tennessee, in the very heart of Big Orange Country, ice-cream lovers are lucky to have many great flavors of ice cream available, which are produced using milk from local dairy farms. Those many flavors are found in two different commercially available brands. Both brands, Cruze Farm, and Mayfield, are popular and iconic in their own right. And both brands support local economies all the way from cow-to-consumer!
Cruze Farm is a single farm which has elected to pursue the difficult path of being a single producer-handler. They market several types of fluid milk, and are especially known for their buttermilk. With a very memorable branding program featuring stylish milkmaids clad in gingham, Cruze Farm has become an East Tennessee and southeast favorite over the past 25-or-so years. They recently opened a seasonal pop-up-shop near Market Square, a food hot-spot, in downtown Knoxville, TN.
Mayfield is a beloved commercial brand founded over a century ago in Athens, TN, and still based there, now under the Dean Foods umbrella. Mayfield ice cream can be found in several states in the southeast and now expanding it’s geographic reach up the Eastern seaboard.
Due to its market scope, Mayfield supports many regional farms in the southeast, in turn contributing to local agribusiness and economies in the areas where those farms and cows are located. Dairy cows eat lots of feed, formulated and balanced in many different ways, with many different grains and forages. Mayfield products, and the consumers who buy them, also support many area grain and hay farms who supply those cows with feedstuffs. This is one way that a ‘regional food system’ which supports medium-sized family farms, continues to be sustainable.
On National Ice Cream Day, it seemed a natural fit to visit the new Cruze Ice Cream Shop. Many East Tennessee minds apparently were thinking alike, as a line out the door signaled the ice cream boutique’s popularity!
Knoxville Food Tours, which has hosted nearly 6500 guests in over 700 tours, had a lively group ending their culinary tour of the downtown area with cones and cups! We talked about how #NationalIceCreamDay is really a ‘thing!’ Did you know #JulyIceCreamMonth and Ice Cream Day were official declarations of Ronald Reagan?
A member of the group, Katrina, also professed her love for ice cream’s parent – Milk!
A group of folks who struck up a conversation as they made their way through line discovered they had several connections and common acquaintances through the UT College of Agriculture. (A couple already knew each other.) It made for a great afternoon to spend time catching a sidewalk breeze and relishing the tasty treats! From chocolate to strawberry to peach, a smorgasbord of flavors filled the cups and cones.
And anyone who knows Emily already knew what flavor she was savoring – Coffee!
National Ice Cream Day in Big Orange Country could only end with a nightcap of Orange Ice Cream, this time courtesy of Mayfield Dairy, even it it was accented with a bit of pineapple.
Local Cows. Community. Conversation. Local Farms. Ice Cream. Local Economies.
National Ice Cream Day in Tennessee. That’s how we ‘bowl!’
A MILKSHED – just exactly what is it?
For the purposes of this blog, a ‘milkshed’ is all of the factors and people related to bringing milk to a consumer. Those factors include:
- Cows, mainly, but sometimes other mammals such as goats, sheep, water buffalo, or camels. In my view, nut-based and plant-based beverages are not part of a true milkshed; they belong in a faux-milkshed. However, I will freely acknowledge that sometimes allergies to mammalian milks necessitate the existence of the milk-alternative beverages.
- Farms and crops and feed for cows (Some farms have cows, some farms grow feed for others who have the cows. Sometimes a farm does all of that, but often not in today’s world.)
- Farmers (farm families, farm managers, and farm workers)
- Agribusiness, livestock supply, farm supply companies, and veterinarians: those who provide products and services that farms need to stay in business
- Milk Handlers (milk brokers, co-ops, or farm owners /individuals) – those responsible for selling milk from farms to milk plants
- Transport systems – responsible for delivery of milk from farm to plant – includes trucking companies, and those who drive the trucks, those who service those trucks
- Milk processing plants – safety labs, quality control labs, equipment, assembly lines, and some very expensive and very sanitary equipment.
- Distribution networks – from the milk plant to retail outlets such as stores, restaurants, or ice cream trucks! Sometimes, depending on shelf-life of the product, warehouses and then to retailers or restaurants.
- Retailers – Groceries, restaurants, fast-food chains, convenience stores, caterers, ice cream parlors, cheese-mongerers, etc.
- REGULATIONS! And again REGULATIONS! Did you know the dairy industry is one of the most heavily regulated industries in the world? At every step of the way, from farmer to retailer, there are volumes and volumes of local, state, federal, and in some cases, international regulations.
- LAWS and legal events: Along with regulations, many local, state, federal, and again, international laws touch that tall, cold, glass of milk.
- The consumer- the person who drinks a glass of milk or kefir, enjoys yogurt for breakfast, or eats a big bowl of ice cream as part of a celebration. THANK YOU, to each and every consumer and afficionado of milk everywhere!
At every level of that milkshed – there are people, and jobs. And those who supply equipment and services for every level of the dozen steps of a milkshed above. (Really, there may be way more than a dozen – this is just how it worked out at this writing.) Some of those people know only one level or niche of a milkshed, while others know and have experienced several aspects of a milkshed. Those who have ‘been there and done it’ are the ones I trust the most with accurate information about a complicated industry.
There are those who milk the cows, the farm families who live and manage the farm business (and it is a business), the milk fieldmen and fieldwomen who connect the milk plant or milk company and their quality standards with the farm, writers and media folks who communicate to the public and within the different levels of the milkshed about industry events, farm kids, youth, college students and professors, and business executives – and more! Well, you get the picture – at least the start.
100 years ago, a milkshed was often as close as the backyard shed when the family cow was kept in a lot not far from the back door. Almost every residence had one cow. If they didn’t have a cow, there was a nearby creamery, but the consumer pretty much knew where the cows and farms were that supplied that creamery. Today, we live in a national or global milkshed that runs from coast-to-coast, and then around the world.
I am based in East Tennessee, but travel across the Southeast, so that is the local/regional milkshed with which I’m most familiar. However, my working knowledge and travel expands to a much wider base, from coast-to-coast, and border-to-border, and even ‘across the pond’ just a bit.
Those are the basics, but the reality is a Milkshed is much more complicated and intertwined than the very simplified explanation you see on this page. Feel free to ask questions about anything milk! Many of the answers I will know, some I will have to bring others in on, and some questions – well, answers may still be needed, just as answers are still needed for a lot of life issues.
I hope you enjoy the journey with me!
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.
FARMLAND, the film, was about to come to New York City in the evening, but in fact ‘farmland’ already had.
Even in those tall concrete canyons collectively called the Big Apple, Farmland is everywhere. It is found on every street corner, in every high rise, on every fashion runway, in every sidewalk food stand, on every morning show. How so, one might ask?
All a person has to do is look beyond the visible, to the invisible farms that are found in every cop’s doughnut to the most elegant gourmet dinner to the cotton in designer dresses to see the foundation of the hustle and bustle of city life. Much as blood courses through the veins to keep a human body alive, farmland courses through urban byways everywhere to provide their lifeblood.
Compelled to visit the World Trade Center site (to be featured in a later post), after breakfast I headed down the street towards the Financial District. I didn’t have to walk far before seeing Farmland on (west) Broadway, in the form of a bucolic pasture scene on a FreshDirect truck. That company’s 2,500+ food-delivery jobs are dependent on farmland – somewhere.
Around the corner and down a few blocks, to America’s commerce center.
43 companies – ADM, Dean Foods, Tyson, and Pilgrim’s Pride among them – are directly categorized as ‘food’ companies which are traded on the NYSE. In addition, there is an unknown amount of other companies, such as Martha Stewart Omnimedia, Walmart, and Kroger, who include food sales or food methodology in their portfolios, that are valued or devalued daily in the nation’s most prestigious exchange.
And then, the BULL!
While some think this global icon is merely a signatory for an active, expanding market, there is real reason for the symbolism: The food companies traded on Wall Street account for TRILLION$ of BIG DOLLAR$, and those Dollar$ are dependent on Farmland – somewhere. The farmland may be in Brazil, or Europe, or New Zealand, or coffee plantations in the tropics ($tarbuck$, anyone?). Best thing about this Bull? In the eyes of a farmer, he’s a low maintenance kind of livestock, since he requires no actual feed!
Onto the subway for a first time, and a few minutes later I arrive at Grand Central Station. Yep, Farmland here, too, and quite colorful!
Why not a Farmer’s Market in one of the nation’s busiest rail hubs? Workers from the city grabbing something fresh for supper as they catch a train on their evening ride really makes a lot of sense when you think about it. But what about the food sold in the Market? Could the tomatoes be some of those grown by one of my Tennessee neighbors? (We know they go to NYC through a broker).
At any given time of year, the lovely produce could come from any part of the globe, all starting on Farmland. Some will be traceable to the point of origin, some will not. Some will be grown in the States using plant protection agents that are monitored and approved by the FDA and the EPA, while some will be grown in countries with food safety standards not nearly as stringent as ours. Some will be organic, and some local (NY, CT, PA, or NE). All will require the fertile soil that is Farmland.
The Grand Central Dairy Case featured some wonderful regional milks:
One brand, Ronnybrook’s “Beyond Organic,” is processed on the farm where the cows live – a farmstead milk! This is about as local and fresh as you’ll find in New York City. I ‘sort of’ already knew the farm through registered Holstein circles. Hudson Valley Fresh is processed by a small family farm cooperative. One of the ten member-farms of the co-op, Dutch-Hollow, has just been announced to be the 2014 Dairy of Distinction by National Dairy Shrine!
On for a special lunch – I was meeting a treasured ‘long-lost’ Tennessee cousin, who works in New York City, at Fonda Del Sol, on Vanderbilt Avenue. Beef – from a farm and ranch somewhere – was on the menu, at a ‘Mad-Men’ kind of restaurant (Charles’ description, not mine!).
Hanger steak was plated, and what a treat! This cut has been promoted by farmer’s organizations such as National Cattlemen’s and Beef Industry Councils across the country. And since Tennessee is one of the nation’s leading cow-calf operations, this delicious bit of protein could have started on a farm in my neighborhood! Farmland – close to home – contributing to the New York Food economy. With beef quality and food safety measures all along the way, this delicious morsel could be eaten with no fear!
Time to head back to Tribeca to get ready for the purpose of the trip: Farmland, the Film. And for the umpteenth time, another coincidence. On top of the Tribeca Film building where the film was to be screened – well, see the sign:
Several years ago, I had the privilege to help launch a farmstead cheese operation. I had to wonder what launching would occur from this trip. No doubt, the previous 24 hours had set the stage for the screening.
New York City is not the only metropolis that has Farmland – somewhere – that runs through concrete canyons. They all do, but do their residents know how close they are, or how dependent they are – on Farmland?
Next up: a post about the screening event itself, and my impressions of Farmland, the Film.
(Greeneville, TN) A simple 4-page Court Order, a culmination point for one of the most complex farm and food class action litigations in United States history, will return $85 Million dollars to Southeast dairy farm communities in the coming weeks.
In an Order entered on December 11, 2013, US District Judge J. Ronnie Greer approved the disbursement of the DFA Settlement Funds in the Southeast Milk Litigation, following a Motion filed by Plaintiff’s Attorneys for the Dairy Farmer Class on November 26, 2013. The litigation is based in US District Court, Greeneville Division, Eastern District of Tennessee, in the Sixth Federal Circuit.
With that Order, checks can now be cut and distributed to 6,086 class members who will receive an average of $14,072.31 each. However, if farmers elected to use third-party representation, those farmers will receive anywhere from 15% to 30% less, depending on the percentage of fees charged by the third-party filer they elected to use.
Dairy Farmers of America, Inc., (DFA) and related entities National Dairy Holdings, LP (NDH), Dairy Marketing Services, LLC (DMS), Mid-Am Capital, LLC, and Gary Hanman entered into a Settlement Agreement in the class action lawsuit on January 17, 2013, and which was filed with the Court on January 21, 2013.
They were the last remaining defendants to settle in the complex litigation, originally filed in July of 2007, a tenure of six and one-half years. Other defendants Dean Foods, Southern Marketing Agency (SMA), and James Baird finalized their settlement agreements in February of 2012, with final approval by the Court in June of 2012. In the language of all settlements, none of the defendants admitted guilt to the allegations of antitrust and price-fixing for the purpose of depressing prices paid to dairy farmers in Federal Milk Marketing Orders 5 and 7, respectively the Appalachian and Southeast orders.
The settlement agreement for each defendant varies in the terms of the total monetary payments, the terms, timing, and length of the payout schedules, and the conduct changes in the marketplace which will take place over several years. The court retains enforcement and jurisdiction of the Settlement agreements until the last activities per the agreements are expected to occur by the year 2016.
The current DFA Gross Settlement Fund totaled $140 Million Dollars, equal to the Dean Settlement Amount. However, the Dean Food Settlement Funds will be distributed over annual payments until the fall of 2016, while DFA elected to borrow funds and make a one-time payment to settle the lawsuit. Honoring the Settlement Agreement, DFA placed the $140 Million in an escrow account in February, 2013. Any interest accrued by the escrow fund is accounted for in the distribution.
In keeping with the normal standards of Federal Class Action lawsuits of this nature, attorneys’ fees and expenses (thirty-three and one-third percent contingency), claims administrator expenses, certain miscellaneous expenses, and payments to named plaintiffs were deducted from the gross settlement fund to result in the net settlement fund of $85,644,095.34.
In accordance with Class Action procedure, a Fairness Hearing for the Plaintiffs/Farmer Class to make comments was held on April 3, 2013, with Final Approval of the DFA Settlement entered on the Court’s file on May 17, 2013. The Order of Approval had to survive an appeals time frame, and the Claims Administrator had to satisfy the Court’s requirements for meticulous audit and accounting procedures before the funds could be paid to class members.
Through the spring, summer, and fall, Claims Administrator Rust Consulting received claims forms, and conducted audits of the claims submitted.
There is a good possibility, but not a guarantee, that Class members will receive these checks before the end of the year. With the first Dean Foods/SMA Settlement payment issued in January, the Order for Disbursement was filed on January 8, and many farmers received checks beginning two weeks later, on January 22. With the second Dean payment, there was a month before checks were received following the Order.
In a separate portion of the DFA & Related Settlement Agreements, there were approximately 50 documents, a portion of the many confidential documents under seal during the course of the litigation, which the defendants agreed to finally open to the public. Many dairy industry stakeholders across the country have felt the information contained in those documents was as important as the monetary settlements. Those documents have yet to be opened, and it is unknown when they will be.
Too, there were terms in the Settlement Agreement concerning the public announcement of salaries of key DFA management and compensation for board members to be announced. Those announcements depended on actions of the applicable councils and committees within the DFA membership itself hinging on annual meeting dates. It is anticipated those actions should be resolved during the winter and spring of 2014.
Appropriate court documents and additional information should be appearing on the Litigation website,
www.southeastdairyclass.com, in the coming days.