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Dairy Farmers of America to pay $50M

MONTPELIER, Vt. — The cooperative Dairy Farmers of America has agreed to pay a total of $50 million to thousands of Northeast dairy farmers to settle antitrust allegations from a 2009 class-action lawsuit.

The lawsuit charged the cooperative, its marketing arm, Dairy Marketing Services, and Dallas-based Dean Foods with working together to monopolize the market for raw milk in the Northeast, driving down prices paid to dairy farmers.

DFA said in a statement Monday that it did not admit any wrongdoing under the terms of the settlement.

“While we believe the allegations against us were without merit and the activities of DFA, Dairy Marketing Service (DMS) and other affiliated milk marketing cooperatives in the Northeast benefited cooperative members and independent producers alike, the cost to continue to defend ourselves has become too great,” it said.

Benjamin Brown, a lawyer for the farmers, said the settlement was preliminary and the law firm did not want to comment now.

The settlement must be reviewed and approved by a judge. It covers farmers in Maryland, Virginia and the District of Columbia as well as Connecticut, Delaware, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont.

Dairy processor Dean Foods Co. agreed to a settlement of $30 million in 2011. Dean Foods also did not admit any wrongdoing. The settlement was divided among 9,000 to 10,000 farmers as well as the attorneys in the case, which amounted to an estimated average payment to farmers of between $2,500 and $5,700, the plaintiff’s attorney said.

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