MONTPELIER, Vt. — A federal judge in Vermont is reviewing a proposed settlement of an antitrust lawsuit in which a major national milk processor would pay $30 million to Northeastern dairy farmers and change its milk buying practices in the region, at least temporarily.
The proposed settlement between farmers and Dallas-based Dean Foods, made public Friday, is "a major win for dairy farmers in the Northeast who have been squeezed by monopolization and price-fixing," said Benjamin Brown, a Washington-based lawyer for the farmers.
Dean Foods has begun to implement some of the changes sought by farmers, said company spokeswoman Marguerite Copel. She stressed that the company admits no wrongdoing, however.
In the proposed settlement filed in U.S. District Court in Burlington, Dean Foods said it would get between 10 percent and 20 percent of the raw milk it buys at three terminals in the Northeast from sources other than the Dairy Farmers of America cooperative and its Dairy Marketing Services affiliate for 30 months.
DFA and DMS also were named as defendants in the suit; they did not join the proposed settlement.
Farmers have complained for years that working together, Dean, DFA and DMS have come to dominate the milk-buying market and have held down the prices farmers are paid for their milk, making it difficult and sometimes impossible for many to remain in business.
"Economic concentration opens the door to anti-competitive practices that hurt farmers and consumers and skew dairy markets," Sen. Patrick Leahy, D-Vt., said in a statement. The settlement puts "big processors on notice that there's a price to pay for that."
The proposal calls for Dean Foods to place $30 million into a fund to settle antitrust claims brought by farmers and to broaden the sources for the milk it buys for plants in Lynn and Franklin, Mass., and in East Greenbush, N.Y., for at least 30 months.
Brown said the hope is that after the 30 months, Dean will not revert to its former practices because it will see the benefits of competition and realize the threat of more antitrust litigation.
The suit was brought as a class action, meaning between 5,000 and 10,000 farm families will have a chance for a share of the settlement fund remaining after the court approves the proposal and determines lawyers' fees and expenses, Brown said.
Monica Massey, vice president of communications for DFA, said the cooperative believes it has done no wrong and will continue to defend itself in the lawsuit.
"Further, the activities of DFA and other milk marketing cooperatives in the Northeast improved pay prices and the overall business climate for cooperative members and independent producers alike," she said in a statement.