Alice H. Allen et al. v. Dairy Farmers of America and Dairy Marketing Services

On December 9, 2011 Chief Judge Christina Reiss of the United States District Court for the District of Vermont denied Plaintiffs’ motion for certification of a proposed class of dairy farmers who alleged that Defendants conspired to monopsonize dairy farmers in the northeastern United States and to suppress raw milk prices. Judge Reiss’s opinion referred extensively to expert and reply reports submitted by Compass Lexecon expert, Professor Joseph Kalt, on behalf of Defendants Dairy Farmers of America (a dairy farmer cooperative) and Dairy Marketing Services (a “cooperative of cooperatives”), both of whom are owned by dairy farmers. Judge Reiss’s opinion quoted Professor Kalt’s conclusion that Plaintiffs’ theory of monopsonization was “complex and novel” in that they claimed “that so many cooperatives owned and run by farmers have acted to harm the very farmers who own and run those cooperatives.” Judge Reiss held that Plaintiffs had “not sustained their burden of proffering ‘significant’ proof that causation and damages may be established by common proof” and also that there is “a fundamental conflict” within the class proposed by plaintiffs. Professor Kalt was supported by Charles Augustine and Andrew Lemon of Compass Lexecon’s Boston office, in cooperation with another economic consulting firm. The defense team was led by Steve Kuney at Williams & Connolly LLP.