Northern California Record

Friday, February 28, 2020

Judge approves $40 million settlement in DairyAmerica lawsuit over milk prices


By Payton Kuhn | May 26, 2019

Law 1063249 1920

FRESNO – As a result of a lawsuit against DairyAmerica and California Dairies Inc. from four dairy farmers who claimed the company misreported their milk prices, a judge for the U.S. District Court of the Eastern District of California ordered a $40 million settlement fund “for the benefit of almost 26,000 dairy-farmer claimants.”

Judge Anthony W. Ishii wrote in his May 8 order that the plaintiffs asserted the settlement was “fair, reasonable, and adequate.” 

"Plaintiffs calculate that, assuming a full award of fees, costs and expenses, the net settlement amount distributable will be approximately $26 million, to be distributed on a pro rata basis to the 26,000 claimants," the order states.

The practices, which allegedly occurred from 2002 through 2007, allegedly affected approximately 84,000 dairy farmers throughout the state. The plaintiffs filed the suit in 2009.

The plaintiffs claimed that throughout the six-year period, DairyAmerica had “shaped the raw milk prices paid to farmers by fraudulently modifying the data it reported to the USDA each week through various schemes and artifices,” the ruling states. They also alleged the defendants conspired to “artificially depress,” the price of milk products to increase their profits. 

As a result, the plaintiffs sued over allegations of charges of negligent misrepresentation, intentional misrepresentation, and Racketeer Influence and Corrupt Organizations Act conspiracy.

The counsel for the plaintiffs had requested $13.3 million in attorney fees, $825,000 in litigation expenses, a $90,000 service award for each named plaintiff, and a $10,000 service award for each former plaintiff, all of which to be paid out of the $40 million settlement fund. 

Ishii decided to reduce each service award portion in half. Thus, each named plaintiff will receive $45,000, and each unnamed will receive $5,000.

The four plaintiffs listed in the settlement case include Gerald Carlin, John Rahm, Paul Rozwadowski and Diana Wolfe.

Representing the plaintiffs were Benjamin D. Brown, Daniel A. Small, Victoria S. Nugent and George F. Farah the law firm of Cohen Milstein Sellers & Toll PLLC in Washington, D.C.

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U.S. District Court for the Eastern District of CaliforniaU.S. District Court for the Eastern District of California, Fresno Division

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