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Deadline nearing for dairying deal

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Posted on August 8, 2011 |
By Andrea Suozzo



VERMONT — The deadline is drawing near for some 10,000 dairy farmers in the Northeast to file compensation claims in the sweeping Dean Foods antitrust settlement, which offers $30 million in monetary damages.

A portion of that money was allocated to be divided between farmers who produced and pooled raw milk on Federal Milk Marketing Order 1 between January 2002 and May 2011.

But Vermont Farm Bureau president Clark Hinsdale, a Charlotte dairy farmer himself, said he’s worried there are too many farmers in Vermont who will not file their claims by Aug. 23 in order to receive the portion of the settlement.

“There’s a lot of confusion,” he said. “People are unsure whether the final settlement is in their best interest. I see eligible Vermont farm families not necessarily getting what they deserve.”

The class-action lawsuit, initially filed in October 2009, accused three companies — Dairy Farmers of America (DFA), Dairy Marketing Services (DMS) and Dean Foods — of price-fixing and illegal monopolizing of the Northeast dairy market.

Dean, the largest dairy processing and distribution company in the country, chose to settle out of court, originally offering a $30 million payout and a guarantee that it would purchase 10 to 20 percent of its milk from independent suppliers — that is, not through DFA or DMS, which have in years past provided a full supply of milk to Dean.

Hinsdale said he and many others testified in opposition to the original settlement, pointing out that by buying milk from independent suppliers, Dean could undercut the prices of those selling through cooperatives.

Dean representatives said this spring that the company had already begun buying from other suppliers in a decision independent of the settlement. But the company removed the controversial clause from the settlement, so that monetary compensation is the only issue at stake at this time.

Hinsdale said there’s no clear downside to the settlement at this point, and said he has already filed his claim.

At this point, he said, anyone who qualifies should have received a mailing with a claim form from Rust Consulting, Inc., which is administering the settlement. In addition, most cooperatives are sending out mailings detailing the total number of pounds of milk their members produced and pooled between January 2002 and May 2011.

Though administration of the settlement is under way, the Vermont District Court submitted its final approval of the settlement last Wednesday. In its final approval, the court allotted $24 million of the settlement to go to dairy farmers, allocating $6 million to the attorneys for legal costs and fees.

Rust Consulting, Inc., has estimated that farmers stand to receive an average of anywhere between $2,500 and $5,700, with the final calculation based on the amount the court awards the attorneys, participation rates and the amount of milk each farmer produced.

Hinsdale also stressed that anyone who has gone out of the dairy business since 2002 and heirs of dairying relatives who have passed away need to be aware of the settlement as well, since they may also be eligible for a part of the settlement claim.

Diane Bothfeld, deputy secretary of agriculture for Vermont, said dairy farmers who think they may be eligible but haven’t received the paperwork should log onto nedairysettlement.com or call 1-888-356-0258, a toll-free line set up to offer information. She added that it’s important that farmers are informed on the settlement.

“I don’t think there’s a downside to signing up,” she said, “but farmers need to evaluate that for themselves.”

Hinsdale said he has heard some farmers choosing not to file a claim in order to have the option to file future suits against Dean Foods. But according to nedairysettlement.com, which was created to disperse information on the settlement, any farmer wishing to remove him or herself from the suit and maintain rights to sue Dean Foods over the same issue would have had to send in an exclusion notice by June 27.

“Unless you exclude yourself, you give up any right to sue Dean for the claims that this Settlement resolves,” states an informational document on that site.

“We’d certainly encourage people to submit claims,” said Kit Pierson, a partner at Cohen Milstein, which is representing the dairy farmers in the suit.

Bothfeld and Ryan Kriger, assistant attorney general, also cautioned farmers to be aware that at least one company is offering to fill out the claims paperwork for farmers for a third of the final payoff. This practice is not illegal, said Kriger.

“It’s up to the farmers to determine whether (this service) is worth a third of what they’re collecting,” he said. “But in this case, it’s a very simple form.”

Essentially, he said, farmers are asked to fill out their name, address and the amount of milk they produced over that period of time.

Hinsdale also said farmers must be aware that if there was any address or name change over the near 10-year period that the settlement addresses, they may get multiple production tallies from their co-op. He received five different mailings with different numbers, some addressed to his deceased father and some to him.

“I know how much milk I made last year, but I don’t intuitively know how much milk I made in an odd period of time like that,” he said.

Bothfeld said the Aug. 23 deadline is fast approaching, so farmers need to make that decision quickly.

“It’s a busy time of year for dairy farmers,” she said. “but if farmers want to take advantage of this, the time is now.”

She added that the lawsuit against DFA and DMS is still ongoing, and that there is the potential for future settlement.

In the meantime, however, Hinsdale said he is doing as much as he can to make sure dairy farmers in the state are aware of their options.

Cornwall dairy farmer John Roberts said his wife, Lisa, mailed out the claim paperwork last week, and that the process was reasonable.

“It was very simple to do,” he said. “We figured, Why not do it. If it’s enough to take Lisa and I out to dinner, that’s good, and if we can pay a bill with it, that’s even better.”

But it’s only a small piece in what he said needs to be larger reform.

“I’m more interested in whether we get a change to our pricing system,” he said.

Dairy farmers who think they may be eligible for a settlement payment are urged to visit nedairysettlement.com or call, toll-free, 1-888-356-0258.

Reporter Andrea Suozzo is at andreas@addisonindependent.com.

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