US anti-trust settlement follows class action lawsuit over alleged price fixing against dairy producers

US anti-trust settlement follows class action lawsuit over alleged price fixing against dairy producers

Dairy product consumers in 15 US states are able to share in a US$52m settlement following an antitrust lawsuit brought against some of the country's biggest dairy producers, who allegedly artificially inflated the price of milk and other dairy products by killing hundreds of thousands of cows.

The suit was originally filed in 2011 against companies including Land O' Lakes, as well as the National Milk Producers Federation (NMPF) – also known as Cooperatives Working Together (CWT) – Dairy Farmers of America, the Dairylea Cooperative and Agri-Mark.

According to the class-action suit, the defendants "engaged in a nationwide conspiracy to limit the production of raw farm milk by prematurely slaughtering cows, illegally causing the price of milk and other fresh milk products to artificially inflate".

Under the terms of the settlement, the CWT will pay out $52m in a combination of cash and in-store loyalty cards to be used for the purchase of fresh milk products.

Cheryl Leahy, general counsel for campaign group Compassion Over Killing, said the organisation was "proud to have spearheaded the research that led to this class action suit" brought by law firm Hagens Berman on behalf of "millions of consumers harmed by the dairy industry". Leahy said: "Not only was the price of milk artificially inflated, but this scheme ultimately also cost 500,000 young cows their lives."

However, NMPF president and CEO Jim Mulhern said: "It is important to note that the court has found no antitrust violation and CWT makes no admission of wrongdoing in this settlement. The activity at issue in this litigation – the herd retirement programme – has long since been terminated by CWT."

Mulhern said: "Our CWT leadership team, with support from the CWT membership, has worked diligently to put this legacy issue behind us. Settlement of this litigation is the most sensible and responsible course of action to maintain the current CWT export assistance programme and allow us to focus on the future."

"The CWT programme is poised for a quick rebound and a strong future," Mulhern said. "We will continue to focus on CWT's present mission of providing member cooperatives with export assistance, creating new export market opportunities and continuing to look for innovative ways to increase sales of milk and dairy products for participating cooperatives."

According to the settlement, Hagens Berman said consumers who bought milk or other fresh milk products such as yogurt, cottage cheese and cream cheese while a resident of states including Arizona, California, Massachusetts, Michigan and New Hampshire, at any point between 2003 to the present, may be eligible for reimbursement.

There will be two different levels of fixed cash payments, based on class member's purchases and the total number of class members making claims, Hagens Berman said. "Any remaining funds may be distributed in a second round using grocery loyalty cards to be automatically loaded with a fixed dollar amount, based on triggering purchases of milk or fresh milk products in the relevant states, or, depending on the funds remaining, distributed to the (states') attorneys general for the class jurisdictions for use in prosecuting consumer antitrust claims."