Man in violation of privacy law

Breaking news and expert analysis on legal and compliance issues

[Back To Home][Back To Archives]

From Antitrust Law Daily, May 20, 2013

Final Settlement in Southeastern Dairy Farmers' Antitrust Class Action Approved

By Jeffrey May, J.D.

The federal district court in Nashville, Tennessee, has given final approval to a $158.6 million settlement on behalf of Southeastern dairy farmers resolving an antitrust class action against national milk marketing cooperative Dairy Farmers of America, Inc. (DFA) and other remaining defendants. In addition to the monetary payment, the settling defendants agreed to implement changes to how they conduct their business in the Southeast. The court also awarded $53 million for class counsel's attorney fees, nearly $800,000 for class counsel’s unreimbursed out-of-pocket expenses, and an additional $10,000 incentive award for each of the 16 class representatives (In Re: Southeastern Milk Antitrust Litigation, May 17, 2013, Greer, J.).

The class action alleged a wide-ranging conspiracy among bottlers, processors, marketers, and cooperatives to suppress milk prices paid to dairy farmers for milk in the Southeastern United States. In June 2012, the court approved a settlement with Dean Foods Co., the largest milk bottler in the southeast, and two other defendants. Dean Foods agreed to pay $140 million. Southern Marketing Agency, Inc., which handles coordination of hauling and transportation of its six member dairy cooperatives’ milk, and an individual who served as SMA’s manager (as well as an officer of several milk transport companies), agreed to pay $5 million under a separate settlement approved at that time.

The court concluded that this latest settlement with DFA, Dairy Marketing Services, LLC, Mid-Am Capital, LLC, National Dairy Holdings, LP, and former DFA CEO Gary Hanman was a “fair, reasonable, and adequate” resolution of a very complex class action case. The monetary recovery for each class member would provide an estimated average payment of approximately $13,000 per farm, after deducting the requested fees and expenses. The settlement would allow class members to recover nearly 40 percent of the total amount of damages claimed on behalf of the class, before trebling, the court explained.

The settlement also will “meaningfully change the way milk is marketed in the Southeastern United States,” according to the court. “The agreement provides to class members significant and valuable non-monetary benefits which likely go beyond the extent of structural relief which could have been ordered by the Court in the event of an injunction after successful prosecution of the case by the plaintiffs at trial.”

For “compelling proof of the adequacy of the settlement,” the court pointed out that 92 percent of the 7,730 potential class members had filed timely claim forms. “The overwhelming positive class response highlights the fairness of the settlements to unnamed class members and weighs in favor of approval of the settlement,” in the court's view. Moreover, no class member objected to the terms of the agreement.

Attorney Fees, Costs. In a separate decision, the court approved the request for attorney fees of $52,866,666.67, which is equal to one-third of the current settlement. The award was based on the percentage-of-the-fund method rather than the lodestar method. The percentage-of-the-fund method was more efficient and less time consuming for the court to administer, the court explained.

Although large, the percentage requested was within the range of fees often awarded in common fund cases. The court noted that, when combined with fees of $48,333,333 awarded last year as part of the Dean settlement, the total fee award amounted to $101.2 million. The court rejected an argument from objectors that the fee award for this settlement should be limited and calculated only on the basis of time and expenses incurred since the preceding Dean settlement. With respect to the request for $798,237.66 as reimbursement for their out-of-pocket expenses, the court concluded that the expenses were legitimate and reasonable.

The court also approved additional incentive awards for 16 class representatives in the amount of $10,000 each. The class representatives had extensive involvement in the litigation and deserved the additional compensation, which was deemed reasonable in light of other incentive awards approved by courts in the Sixth Circuit.

The case is Master File No. 2:08-MD-1000, MDL No. 1899.

Attorneys: Robert G. Abrams (Baker Hostetler LLP) for Scott Dairy Farm, Inc. Brandon J.B. Boulware (Rouse Hendricks German May PC) for Dairy Farmers of America, Inc.

Companies: Dairy Farmers of America, Inc.; Dean Foods Co.; Southern Marketing Agency, Inc.; Dairy Marketing Services, LLC; Mid-Am Capital, LLC; National Dairy Holdings, LP

MainStory: TopStory Antitrust TennesseeNews

Antitrust Law Daily

Introducing Wolters Kluwer Antitrust Law Daily — a daily reporting service created by attorneys, for attorneys — providing same-day coverage of breaking news, court decisions, legislation, and regulatory activity.


A complete daily report of the news that affects your world

  • View full summaries of federal and state court decisions.
  • Access full text of legislative and regulatory developments.
  • Customize your daily email by topic and/or jurisdiction.
  • Search archives for stories of interest.

Not just news — the right news

  • Get expert analysis written by subject matter specialists—created by attorneys for attorneys.
  • Track law firms and organizations in the headlines with our new “Who’s in the News” feature.
  • Promote your firm with our new reprint policy.

24/7 access for a 24/7 world

  • Forward information with special copyright permissions, encouraging collaboration between counsel and colleagues.
  • Save time with mobile apps for your BlackBerry, iPhone, iPad, Android, or Kindle.
  • Access all links from any mobile device without being prompted for user name and password.