‘Southeast Milk’ settlement fund motion filed

A motion to approve and distribute settlement funds in the “Southeast Milk” class action lawsuit was filed with the U.S. District Court for the Eastern District of Tennessee Greenville Division on Dec. 21.

The plaintiff motion in the suit (Sweetwater Valley Farm, Inc., et al. v. Dean Foods, et al., No. 2:07-CV-208), lays out a plan to distribute $145 million in settlement funds from Dean Foods and Southeast Marketing Agency (SMA) and James Baird, less attorneys’ fees and administrative costs. 

The initial payment calls for distribution of about $35.5 million, after deducting attorneys’ fees and administrative expenses. Assuming the court approves the motion, 6,165 claims will be eligible for settlement payments. The document contains more than 250 pages of claims (by claimant number) authorized to receive a class action settlement under the motion.

Rust Consulting, class action and claims administrator, proposed to distribute the Dean and SMA/Baird settlement funds to each class member on a pro rata basis, based on each member’s reported production of class-eligible milk sold in Federal Orders #5 and #7 beginning in 2001.

Rust analyzed 7,363 claims, and conducted additional audits of approximately 11% of the claims, comparing the amount of class-eligible milk stated in the forms with actual milk production and sales records or written confirmation of the same provided to farmers by USDA market administrators or their cooperatives.

Rust recommended payments on 281 late, but otherwise eligible claim forms.

In addition, Rust identified 1,198 claim forms that were not eligible to participate in the settlements. These claims are ineligible because they were duplicates; claimants were members of the boards of directors of Dairy Farmers of America or SMA; the farms claimed were not located in Federal Orders 5 or 7; or because the claimants failed to respond to multiple requests for information needed to demonstrate the claimants’ eligibility.

The settlement required Dean to pay $140 million into a settlement fund over approximately four years. Dean made an initial payment of $60 million in February 2012, and will pay $20 million each of the next four years.  SMA/Baird paid $5 million into the fund in August 2012.

A trial is scheduled to begin Jan. 15 for remaining defendants: National Dairy Holdings LP, Dairy Farmers of America, Inc., Dairy Marketing Services, LLC, Mid-Am Capital, LLC, and Gary Hanman.

For more i nformation, visit http://www.southeastdairyclass.com/