Judge rejects co-operative settlement with Northeast dairy farmers

MONTPELIER, Vt. – A judge has rejected a proposed settlement between Northeastern U.S. farmers and the Dairy Farmers of America over an alleged effort to drive down prices paid to farmers.

U.S. District Court Judge Christina Reiss opposed the $50 million settlement because of opposition from farmers who said the payments would be inadequate. They also said some farmers’ lawyers would be the primary beneficiaries of the proposed settlement if legal fees and costs are approved.

The judge’s March ruling came in a 2009 class-action lawsuit that accused the co-operative, its marketing arm and Dallas-based Dean Foods with trying to monopolize the market for raw milk in the Northeast.

The settlement would have provided about $4,000 to each of about 7,000 dairy farmers. Dean Foods agreed to a separate $30 million settlement.