Overview
On May 9, 2019, Judge Anthony W. Ishii of the U.S. District Court for the Eastern District of California granted final approval to a $40 million settlement, resolving putative claims for tens of thousands of dairy farmers who alleged that cooperative DairyAmerica Inc. and affiliate California Dairies conspired to boost profits by artificially depressing the price of milk products paid to farmers.
The $40 million settlement is a remarkable recovery, considering it is 80% of the $50 million in damages estimated by the USDA Inspector General’s independent analysis based on the misreporting and approximately 50% of the total damages calculated by Plaintiffs’ experts.
In approving the settlement, Judge Ishii specifically noted “[a] 48% recovery for the class—and near full recovery for all actual claimants—weighs heavily in favor of approval.” He continued, by stating: “Suffice to say, the Court takes a favorable view of the breadth and depth of experience of Plaintiffs’ Counsel, recognizes the extraordinary efforts they made on behalf of the class, and (as stated above) finds the settlement amount extraordinary.”
On May 29, 2009, the Court appointed Cohen Milstein sole Interim Lead Class Counsel.
Case Background
Originally filed on March 6, 2009, plaintiffs, dairy farmers throughout the U.S. who sold raw milk that was priced according to a Federal Milk Marketing Order between Jan. 1, 2002, and April 30, 2007, claim that DairyAmerica Inc., and affiliate California Dairies, nation’s largest marketer of non-fat dry milk and the California-based milk processing firm inflated their own profits at the expense of America’s dairy farmers by misreporting critical data used by the government to set raw milk prices.
Specifically, Plaintiffs alleged that DairyAmerica misreported dairy product prices to the U.S. Department of Agriculture’s National Agricultural Statistics Service to lower the government-set amount its members would have to pay farmers for non-fat dry milk under provisions set under what’s known as a Federal Milk Marketing Order. During the alleged class period, DairyAmerica marketed and sold approximately 75% of the non-fat dry milk produced in the United States.
On August 7, 2012, after considering the briefs and oral argument delivered by Cohen Milstein’s Benjamin D. Brown, the United States Court of Appeals for the Ninth District reversed the lower court’s dismissal of this national class action lawsuit, thereby reviving the lawsuit.
In overturning the February 2010 U.S. District Court ruling, the Court of Appeals considered the “filed rate doctrine,” which bars certain lawsuits from recovering damages when government agencies, such as the United States Department of Agriculture (USDA), approve rates or prices for regulated industries, including the dairy industry. The Court of Appeals ruled that the filed rate doctrine did not preclude dairy farmers from suing the dairy firms in this case because the USDA’s National Agricultural Statistics Service had concluded that the pricing data was incorrect.