3/11/24 | Court Denies Defendant’s Motion to Dismiss Price-Fixing Claims
In an order issued March 11, 2024, U.S. District Judge Margaret Strickland denied defendants’ motion to dismiss and rejected the argument that their conduct was exempt from liability under the Capper-Volstead Act, stating that “Plaintiffs plausibly allege conduct—conspiracy to depress payments to members—that is not the type the Capper-Volstead Act is intended to protect.”
Are you a Southwest dairy farmer who sold raw Grade A milk during 2015 to present? Southwest dairy cooperatives may have lowered the price and profit in an alleged price-fixing agreement. Fill out the form to find out your rights »
Hagens Berman has filed a nationwide class-action lawsuit against Dairy Farmers of America, Select Milk and Greater Southwest Agency, alleging a years-long price-fixing agreement, causing dairy farmers to receive significantly less for their raw Grade A milk than what it was worth.
AFFECTED DAIRY FARMS
Dairy farms in New Mexico, most of Texas (except the far eastern part of the state), eastern Arizona, the Oklahoma panhandle and southwestern Kansas are believed to have been affected by the Southwest dairy price-fixing agreement, which limited the money dairy farmers received for their Grade A raw milk, a market worth more than $3.5 billion annually.
Dairy farmers, both individuals and entities, that sold Grade A milk independently or directly through Dairy Farmers of America, Select Milk or Greater Southwest Agency in the Southwest United States from 2015 to the present may have rights under federal law to reclaim lost profits. The lawsuit seeks to represent all affected dairy farmers.
DAIRY FARM PRICE-FIXING ALLEGATIONS EXPLAINED
According to the lawsuit, for more than six years, Dairy Farmers of America, Select Milk and Greater Southwest Agency conspired to significantly depress payments to dairy farmers for raw Grade A milk. Ninety-nine percent of total U.S. milk production involves Grade A milk, and these massive dairy cooperatives control 75% of the Southwest dairy market. We believe they have abused their market power to dictate the price paid for raw Grade A milk to all Southwest dairy farmers.
The alleged loss in profits has been devastating to many farmers, causing some to borrow equity from their land to keep their business in operation. Some farmers have been forced to declare bankruptcy and close farms altogether.
According to the lawsuit, what the cooperatives pay member-farmers for raw Grade A milk has remained consistently low, even while cooperatives see record profits. In 2020, Dairy Farmers of America saw an income of approximately $515 million, yet only paid member-farmers $46 million, or just 8.9%.
METHODS OF DEPRESSING PAYMENT TO DAIRY FARMERS FOR RAW MILK
The lawsuit alleges Southwest dairy cooperatives reduced payments to farmers for raw milk while simultaneously maintaining as much raw milk volume as possible. This alleged scheme allows cooperatives to produce more value-added dairy products (cheese, yogurt, milk powder, etc.). However, according to the lawsuit, profits of value-added products are not reflected in the payments to farmers supplying the milk.
The lawsuit states Dairy Farmers of America and Select Milk unlawfully coordinated and shared pricing information with one another, while hiding critical pricing information from their members. This allegedly allowed them to conspire on the set price paid to farmers for raw Grade A milk and force smaller competitors to match their pricing to stay competitive.
The lawsuit also alleges that Dairy Farmers of America and Select Milk engage in increasingly frequent, selective non-pooling of milk, meaning cooperatives can upsell members’ milk without passing on those price increases to farmers.
YOUR RIGHTS AS A DAIRY FARMER
Hagens Berman believes Southwest dairy farmers have been cheated out of profits by the region’s large dairy cooperatives and have been subjected to a massive price-fixing agreement. Under federal antitrust law, the Sherman Act, we believe affected dairy farmers have rights to reclaim losses from this scheme, and to end the Southwest dairy cooperatives’ anticompetitive actions.
TOP ANTITRUST LAW FIRM
Hagens Berman is one of the most successful antitrust litigation law firms in the U.S. and has achieved more than $320 billion in settlements in lawsuits against food conglomerates, dairy cooperatives and other major entities. Hagens Berman achieved a $52 million settlement against the dairy industry for consumer price-fixing in 2016, and has since taken on the chicken, pork and turkey industries for illegally raising prices with more than $180 million in settlements preliminarily approved. The firm has also fought wage-fixing in the poultry industry, supporting workers. Your claim will be handled by attorneys experienced in antitrust law.
NO COST TO YOU
There is no cost or fee whatsoever involved in joining this investigation. In the event Hagens Berman or any other firm obtains a settlement that provides benefits to class members, the court will decide a reasonable fee to be awarded to the class's legal team. In no case will any class member ever be asked to pay any out-of-pocket sum.
