9th Circuit revives dairy farmers’ price-fixing suit

Plaintiffs claim dairy product manufacturers’ understated prices depressed raw milk prices

The 9th Circuit ruled yesterday that a price-fixing class action lawsuit against two dairy product manufacturers can moooo-ve forward.

In 2009, four dairy farmers sued DairyAmerica and its majority owner, California Dairies Inc., claiming they understated prices of its nonfat dry milk to the U.S. Agriculture Department (USDA). The USDA uses the product prices to set prices paid to farmers under Federal Milk Marketing Orders. The plaintiffs claim the manufacturers’ false information depressed raw milk prices and caused them to lose millions of dollars between 2002 and 2007.

A federal court dismissed the case in 2010, finding that the “filed rate doctrine,” which prevents people from suing over rates that government agencies review, barred the plaintiffs’ suit.

But yesterday, the 9th Circuit revived the case, saying the doctrine didn’t bar the suit because the USDA had investigated DairyAmerica’s conduct and found its reported rates were improper. An agency report found that the total value of raw milk was understated by $50 million between 2006 and 2007.

Read Thomson Reuters for more about the price-fixing case.

Read more InsideCounsel coverage of the dairy industry:

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Ashley Post

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