Farmers in Settlement Want Lawyers Out
Burlington — After nearly six years in a national class action lawsuit against major powers in the milk-pricing market, some dairy farmers want to fire their lawyers.
Jonathan Haar, a dairy farmer, just finished two days of essentially prosecuting his own attorneys in U.S. District Court for alleged misconduct in reaching a $50 million settlement with the Dairy Farmers of America, a marketing co-op based in New Hampshire.
Haar and his wife, Claudia, own Haarvest Farms in upstate New York and represent one of four subclasses in the class action suit, Allen v. Dairy Farmers of America. Their farm is one of about 8,900 farms across the northeastern United States that are affected as part of the case filed in U.S. District Court in Burlington in 2009. The case against the lawyers was heard Monday.
“We believe that they failed to represent the class fundamentally,” Haar said. His lawyers include two large antitrust firms and one individual lawyer. “All along they made decisions we feel are detrimental to our class.”
The case in question alleges that Dairy Farmers of America Inc. conspired to become the sole seller of Grade A milk in the Northeast. The nonprofit cooperative, according to the case, is not member-focused, and it forced small farmers to join in order to avoid market pressures that would put them out of business.
Farmers also allege that DFA used a closely affiliated for-profit company, Dairy Marketing Services, to become the sole buyer of Grade A milk and drive down milk prices. They allege that the defendants violated federal antitrust laws, and, when directed to take action to remedy the situation, thwarted instructions by the U.S. Department of Justice and several state’s attorneys.
If approved, the proposed $50 million settlement would end the six-year case. The money is in addition to a previous $30 million settlement from Dean Foods Co. But a handful of farmers who are opposing it said lawyers are focusing on reaching a cash settlement and are not representing their interests.
“If it was $50 billion, it couldn’t be enough if it doesn’t address the behavioral problem,” Haar said.
“It’s never been about the money for me,” said Garret Sitts, another farmer in New York. “I want a market that’s not controlled by the defendants.”
According to the settlement document, lawyers for the farmers reached the agreement just before going to trial last summer. They drafted the settlement agreement July 1 and soon submitted it to U.S. District Judge Christina Reiss.
Six thousand farmers have signed onto the settlement, according to Kit Pearson, the lead attorney on the case. He said it is similar yet stronger than a settlement reached by dairy farmers in the Southeast region of the U.S., and that it would avoid a lengthy appeals process. He said the payout for the average farmer is in the $5,000 range.
Before Reiss gave the settlement final approval, about a half-dozen farmers submitted a document alleging misconduct by two firms and one lawyer: Cohen Milstein, BakerHostetler and David Balto. Pearson, from Cohen Milstein, said he respects the farmers he represents, but he maintains their allegations are not true.
“As attorneys, our responsibility is to make a decision that’s beneficial to the farmers as a whole,” Pearson said. If the settlement is ratified, the case would effectively end without a trial.
Under the agreement, DFA would deny the antitrust claims; it would not enter into any full supply agreements for Grade A milk within the Northeast region; and any new supply agreements would need to be ratified by the DFA board. There would also be a provision against retaliating against farmers.
DFA would also let small farmers freely leave the cooperative; it would change practices that farmers alleged were only benefiting executives; and it would agree to be more transparent in accounting methods and the handling of conflicts of interest.
Haar said there isn’t any teeth in the language to restore market power to the small dairy farmers. If DFA is able to maintain such substantial market power over his milk, Haar said, it can figure out a way to get the money back from farmers like him.
Reiss is the only one with the power to decide if the farmers should have new counsel, court documents said. Reiss is not expected to issue a ruling for several weeks.