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

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

Farmers seek $419 Million in Damages at January trial

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 www.southeastdairyclass.com, a court-monitored website. Additional reporting on the litigation may be found at www.milkshedsblog.com.

10.12.2012