A proposed class action settlement has been reached between Northeastern dairy farmers and Dean Foods, a national milk processor. In the lawsuit, pending in Vermont federal court, plaintiffs accuse Dean Foods of restricting its purchases of raw milk to two suppliers, the cooperative Dairy Farmers of America
(“DFA”) and its affiliate, Dairy Marketing Services (“DMS”). The plaintiffs, who brought suit on behalf of between 5,000 and 10,000 farmers, claim that Dean Foods’ purchasing practices have held down milk prices and made it a struggle for members of the class to stay in business. They allege that Dean Foods, DFA and DMS have engaged in unlawful monopolization and price fixing.
If approved, the settlement will require Dean Foods to pay $30 million to affected farmers. In addition, the company will be required to purchase 10 to 20 percent of the milk it gets from alternate sources within the region for at least 30 months. It is hoped that, after 30 months, the company will continue to expand the universe of sources from which it buys raw milk.
Although the settlement is still being reviewed by the judge, Dean Foods has begun changing its milk buying practices in accordance with the settlement terms. It continues to claim, however, that it has done nothing wrong. Taking a similar stance, the vice president of communications for DFA, Monica Massey, stated, “The activities of DFA and other milk marketing cooperatives in the Northeast improved pay prices and the overall business climate for cooperative members and independent producers alike.”
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