Business

Judge approves $50m settlement to Northeast dairy farmers

An average of $4,000 will be paid to about 8,860 Northeast dairy farms by the Dairy Farmers of America.
Caleb Kenna/The New York Times
An average of $4,000 will be paid to about 8,860 Northeast dairy farms by the Dairy Farmers of America.

MONTPELIER — A federal judge on Tuesday approved a $50 million settlement to be paid by a national dairy marketing cooperative to thousands of Northeast dairy farmers.

Dairy Farmers of America will pay an average of $4,000 to about 8,860 farms to settle a lawsuit that accused the marketing group of trying to drive down milk prices.

The 2009 class-action lawsuit charged Dairy Farmers of America; its marketing arm, Dairy Marketing Services; and Dallas-based Dean Foods with working together to monopolize the market for raw milk in the Northeast.

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Dean Foods agreed to a separate $30 million settlement in 2011.

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The deals cover farmers in Delaware, Connecticut, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia, and the District of Columbia.

The settlement approved Tuesday offers farmers ‘‘a modest recovery,’’ but the $80 million total for the two deals ‘‘is not insubstantial when viewed against the backdrop of the risks of continued litigation,’’ US District Court Judge Christina Reiss wrote.

She had rejected a previous settlement proposal primarily due to some farmers’ opposition to it.

The amended settlement creates and funds an independent advisory council member for four years to review the financial records of the Dairy Farmers of America and Dairy Marketing Services.

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The council member also will serve as an advocate within the farmers’ group for higher pay prices and farmer equity, Reiss wrote.

It also establishes and funds a farmer ombudsperson for five years to investigate any complaints as well as creates an audit committee to monitor DFA’s compliance with the settlement, the judge wrote.

Dairy Farmers of America also has agreed to non-retaliation safeguards for dairy farmers and protocols to help them leave the group without penalty, the judge said.

The settlement is an excellent result for the farmers in terms of monetary relief and efforts to address anti-competitive concerns, said Kit Pierson, a Washington-based attorney for the plaintiffs.

‘‘We think it’s a very positive step forward,’’ he said.

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DFA spokeswoman Monica Massey said the group believed the allegations were without merit, but was pleased the judge approved the settlement because litigation is both costly and distracting.

‘We think it’s a very positive step forward.’

‘‘For these reasons, settling the matter is in the best interest of our members,’’ she said.