Dairy consumers still waiting for lawsuit payout

APPEAL OF ATTORNEY FEES HAS DELAYED SETTLEMENT

Residents of Arizona and Oregon who expected to receive payouts by the end of 2019 from a federal class action lawsuit involving price-fixing of dairy products will have to keep waiting until an appeal of the settlement is heard, according to court documents.

In July 2017, a federal judge approved a $52 million settlement to resolve a lawsuit known as the Fresh Milk Products Antitrust Litigation. The settlement provides payments to residents of Arizona, Oregon, and 13 other states as well as the District of Columbia to resolve claims that a dairy industry program led to higher than necessary prices for milk, sour cream, yogurt, and other dairy products.

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Despite the 2017 court approval, the class action administrator is prevented from paying out any funds due to an appeal that challenges a provision of the settlement which gives nearly one-third of the $52 million to attorneys who handled the case. The matter is now in the hands of the U.S. Court of Appeals for the Ninth Circuit, with no estimate as to when a decision will be announced.

In addition to payment delays, the administrator reports a larger than expected number of number and organizations filed claims prior to the 2017 deadline. That means instead of $30-$50 per person as estimated when the $52 million fund was announced, each individual claimant is now expected to receive about $7. Organization claimants such as schools and daycares will receive about $190 each.

Payments will likely be issued within 90 days of resolution of the appeal unless one of the parties seeks consideration by the U.S. Supreme Court.  If the attorneys receive less of the settlement, then the claimants’ share will increase.

Court records show the anti-trust lawsuit filed in 2011 alleged several corporate dairies and food producers, as well as the National Milk Producers Federation and its Cooperatives Working Together (CWT) initiative fixed dairy prices from 2003-2010. At issue was a herd reduction program CWT administered which sought out dairy farmers wanting to cease milk production, usually by selling their herds for slaughter.

The program’s purpose, according to the NMPF, was to help struggling farmers by bringing America’s milk supply into balance with demand. At the time, neither Congress, the USDA nor the U.S. Department of Justice raised concerns about the program.

In addition to the 2017 consumer settlement, NMPF recently agreed to pay $220 million to resolve complaints from major retailers and dairy-to-business companies that argued the intent of the herd reduction program was to raise prices by reducing the supply of milk and other dairy products.