Motion Filed for 2nd Dean Foods Distribution in the Southeast Milk Litigation Settlement

Motion Filed for 2nd Dean Foods Distribution in the Southeast Milk Litigation Settlement

Court’s Approval of this Motion Affects Request of Distribution of DFA Payments

A Motion setting the stage for Round 2 of payments in the Southeast Milk Litigation was filed on Tuesday, July 30, with the United States District Court in Greeneville, TN.

Dairy Farmer Plaintiff attorneys, Baker-Hostetler, submitted their request for the second distribution to class members of the Dean Foods Settlement Funds. That 22-page motion, accompanied by a 158-page Claims Administrator’s Report, outlines several reasoned corrections to the original payouts in the first round of the Dean Settlement.

These corrections, which add 45 additional claimants and almost 676.3 billion pounds of milk to the ‘class-eligible’ category, had to be determined before other distributions, particularly the one-and-done $140 Million DFA Settlement distribution, could occur in the future.

The court filing is filled with details and descriptions of minute calculations that could mean differences of less than a hundred dollars to some, and more than several thousand dollars to others, of the now-expected 6,210 Class members.

Monetary differences will occur due to the adjustments in pounds claimed by individual class members and verified by the Claims Administrator. These ‘claim-eligible’ pounds create a pro-rata difference in a claimant’s share of the Net Settlement monetary pool, based on their percentage amount of ‘class-eligible’ pounds, now at the 72.9 billion level.

Because of the volume of pounds which determine the Settlement pool, payment percentages to class members who received their first Dean/SMA distribution checks in January will be lessened only a very negligible amount.

Corrections were made for the following reasons:
1.) 2 claims forms were not processed at all in the original payment round, and the claimants could prove delivery of materials to Rust with certified mail receipts. Those claims forms were paid later by Rust, who will be reimbursed out of this distribution payment.
2.) 24 claimants had upward readjustments verified and added to their previously claimed class-eligible pounds.
3.) 12 claim forms, previously thought to be duplicates and excluded, have been reviewed and verified to indeed be eligible. One claimant had questioned this matter directly with the Court via a letter.
4.) 3 claims were adjusted due to confusion about submissions/withdrawals by the ‘third-party’ filers who solicited farmers after Settlements were announced.
5.) 32 ‘late’ claimants who submitted claims after the first distribution, but who are otherwise eligible, may share in the second and future payments, but distribution will not be retroactive to amounts distributed in the first payment.
Numerous legal references applicable to each category of adding claimants are included in the Motion.

Denials of future payments may be ensured in two cases.
1.) 7 original claimants did not respond to audit requests by Rust by any deadline, and
2.) 5 SMA board members (no specific names mentioned), who submitted claims, even though they were expressly excluded by the Settlement Agreements entered with the Court, will be excluded. Alternate members to boards of all co-ops who settled are excluded as well. Two of the excluded alternate directors had filed letters directly with the Court, and their concerns were addressed with legal reasoning in the Motion.

There were 185 total pages of three complementary documents in this filing. The Claims Administrator’s report contains extensive documentation of the efforts by Rust Consulting in this Settlement.

Provided the numbers do not change per any adjustments by the Court, the estimated Net Settlement Fund for purposes of the second Dean Foods settlement payment to Class Members is $12,067,357.08. Dean Foods paid $19,100,500.14 into an escrow account on June 25, 2013, retaining $900,000 of the $20 Million payment total until some unspecified opt-out Class member issues are resolved. In keeping with previous terms of the agreement, $6,666,666.66 cents will be paid to the plaintiff attorney firm, and over $285,000 to Rust Consulting for Administration fees and reimbursements of claims paid by them. $75,184.19 was allocated for ‘make up” initial settlement payments to claimants.

Once ‘class-eligible’ pounds belonging to each legitimate claimant have been certified by the Court’s approval of this Motion, then, and only then, can a Motion be submitted requesting distribution of the DFA payments, expected to be sizable for many Class members.
Judge Ronnie Greer continues to preside over matters of this litigation, and the Court retains jurisdiction until the last Dean Foods payment is made in 2016.

How soon can farmers expect either the Dean Foods or DFA Settlement Checks in their mailbox? Case history provides some insight. A month passed this past winter between the time the Motion to Distribute the first Dean/SMA payment was entered and checks were received, with 10 months of audits and verifications preceding the Motion’s filing.
With no unexpected hitches, this Dean Foods payment may be received around or before the first week of September.

In the case of the DFA Settlement, six months have elapsed since the Settlement was announced. Allocations of Class-eligible milk will be determined by the Order approving this 2nd Dean Distribution Motion, so logic tells us that a motion requesting disbursement of the DFA funds may possibly be filed within a month-6 weeks.

However, this is a lengthy litigation that has seen many unexpected twists and turns. It stands to reason a Class member should plan on receiving the DFA check only when it appears in the mailbox.

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