Case 5:09-cv cr Document 713 Filed 01/15/16 Page 1 of 9 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF VERMONT VS.
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1 Case 5:09-cv cr Document 713 Filed 01/15/16 Page 1 of 9 UNTED STATES DSTRCT COURT FOR THE DSTRCT OF VERMONT ALCE H. ALLEN AND LAURENCE E. ALLEN, ) cial ) Plaintijft ~ ) VS. ) ) DARY FARMERS OF AMERCA, NC. and ) DARY MARKETNG SERVCES, LLC ) ) Defendants ) CVL ACTON DOCKET O.5:09-CV SUPPLEMENTAL MEMORANDUM OF LAW N SUPPORT OF THE DARY FARMER SUBCLASSES' MOTON FOR PRELMNARY APPROVAL OF PROPOSED SETTLEMENT WTH DEFENDANTS DARY FARMERS OF AMERCA, NC. AND DARY MARKETNG SERVCES, LLC ntroduction Memorandum is presented by Non-DFA Subclass Representatives Stephen H. Taylor and Darrel J. Aubertine, through Subclass Counsel, Daniel Smith and Richard T. Cassidy.1 Messrs. Taylor and Aubertine moved for inclusion as additional Named Representatives primarily to pursue more material, injunctive relief than was provided in the original proposed i settlement rejected by the Court. 2 They also sought to assist with the difficulties in HOFF le:;cuhts i attorneylnamed Representative party communications that had arisen. n granting their motion and appointing Messiers Taylor and Aubertine, the Court stated that they were expected to 1 Order Granting Motion for Appointment of Additional Representative Party (August 11,2015; Doc. No. 682) (hereinafter "August 11 Order'). 2 Order (April, 2015; Doc. No. 642). Page 1 of9
2 Case 5:09-cv cr Document 713 Filed 01/15/16 Page 2 of 9 provide "fresh perspective and new expertise. 3 The Court had initial cause soon thereafter to make reference to their contemplated new role. While their joinder motion was under consideration, but before the Court had acted upon it, Subclass Counsel submitted a revised settlement proposal for final approval, or in the alternative, for preliminary approval. n recounting this procedural history of the revised, newly proposed settlement, the Court, which by then had granted the joinder motion, again indicated that, "[i]n light of the continuing lack of consensus among Subclass Counsel and Subclass Representatives regarding the best interests of the Dairy Farmers Subclasses, the court agreed that a fresh, perspective was appropriate.,,4 As part of its subsequent substantive review of the revised proposal, the Court further! ~~ the opinions of the new Subclass Representatives may be especially enlightening [with regard to the settlement process] as they are not yet entrenched in an adversarial relationship with Subclass Counsel. They may also prevail in persuading Subclass Counsel to engage in additional negotiations. 5 As the combined result of these two proceedings, Messrs. Taylor and Aubertine were! enabled to participate in a renewed settlement effort, as intended, and have now joined in submission of the product of this effort to the Court under Rule 23. They have joined the Class! i Motion for approval of the newly revised proposed settlement and the Supporting Memorandum. i -r HOFF 1~ClJ RT1S i The Memorandum provides the legal and factual grounds required by Rule 23 for preliminary approval of the new settlement. They concur also that, as set forth in the Supporting Memorandum, the Court should find "the proposed settlement appears to fall within the range ofl.l August 11 Order, at 13. The Order appointing Attorneys Smith and Cassidy states that "[[Jor the same reasons that the court appointed additional Subclass Representatives, the court concludes that the appointment of additional Subclass Counsel is in the best interests of the class." Order (September 23,2015; Doc. No. 700). 4 Entry Order Denying Renewed Motionfor Final Approval, or in the Alternative, Preliminary Approval, of Amended DFADMS Settlement, at 3 (September 1, 2015; Doc. No. 690) (hereinafter, "September 1 Order'). 5!d. at 7. Page 2 of9
3 Case 5:09-cv cr Document 713 Filed 01/15/16 Page 3 of 9 possible approval" under Rule 23. Kelen v. World Fin. Network Nat'! Bank, 302 F.R.D. 56, 68 (S.D.N.Y. 2014) [internal quotation marks omitted]. The Memorandum places the newly revised settlement proposal within the overall, protracted case history. Within this overall context, the Memorandum details the previous two stages of settlement proceedings to reach the Court and leading up to this, third, stage. The, Memorandum also details the provisions of the first, original settlement proposal that was preliminarily approved but ultimately finally denied by the Court, without prejudice, on April 1, 2015; the changes made to this original version and that resulted in the subsequent, revised proposal that was denied, both preliminarily and finally, by the September 1, 2015 Order cited.1 above; and the changes that have now been made to that revised motion, during the 90-day period ordered by the Court at the September 29, 2015 Status Conference, in which Messrs. Taylor and Aubertine were allowed to participate. 6 Messrs. Taylor and Aubertine provide this Supplemental Memorandum from the additional vantage point, and for the additional specific purposes, ascribed to them by the Court in the i August 11 and September 1 Orders. More particularly, the Memorandum provides Messrs. Taylor and Aubertine's "opinions" as to how the subsequent settlement proceedings have served to resolve the issues raised in the Court's September 1 Order. n sum, their "opinion" is that the product of the additional settlement process following y~hoff...l~cu RTS the September 1 Order, now including their involvement, has resulted in a newly revised settlement proposal that contains sufficient material improvement in the non-injunctive relief so as to pass muster under the applicable standard of review for the instant motion. 6 "ORDERED: parties have until 12128/2015 (90 days) to settle case. f parties are unable to reach a settlement, case will be set for trial." Minute Entry Order (September 29,2015; Doc. No. 703). n addition to establishing the hard deadline at the Status Conference, the Court reiterated much of the directive of its September 1 Order to Counsel and the Parties. Page 3 of9
4 Case 5:09-cv cr Document 713 Filed 01/15/16 Page 4 of 9. The Court's September 1, 2015 Order As noted above, the Court's September 1 Order was issued in response to the Subclass' Motion for final approval of a revised proposal settlement or, in the alternative, preliminary approval of that revised proposal. The Court denied both proposals. The Court's decision as to both was premised on the omission or inadequacy of the notice to be provided to the Class, in either instance. With regard to preliminary approval, more specifically, the Court noted that a number of procedural requirements had not been submitted, including a proposed notice or plan for its dissemination. The Order, however, reached beyond notice. From a procedural standpoint, the Court observed that, "[a]t this time, there appears to be no cessation in the hostility between Subclass Counsel and the opposing Subclass Representatives.,,7 The Court noted the "considerable rancor and either a lack of communication or dysfunctional communication" between Subclass Counsel and the opposing Representatives. 8 The Court found also that "the majority of Subclass Representatives are openly soliciting opposition to both the Revised Settlement and their Subclass Counsel.,,9 The Court also noted that Messrs. Taylor and Aubertine had not been LHOFF ~e;curts involved in the negotiation or proposal of the settlement. 10 Substantively, the Court identified that modifications had been made to the previously rejected proposed settlement. The scope of the proposed Release has been altered in several respects including the definitions of "released claims" and "released parties." The Revised Settlement clarifies the duration of some provisions for injunctive relief; modifies the anti-retaliation provision; extends the deadline for filing claims; and provides 7 September 1 Order, at 3. 8 d. at 2. 9 d. at 3. 10!d. at 7. Page 4 of9
5 Case 5:09-cv cr Document 713 Filed 01/15/16 Page 5 of 9 an opportunity for dairy farmers to opt back to the class for settlement purposes. Based on these modifications, the Court determined that "the Revised Settlement reflects some of the concerns the court expressed regarding the terms and conditions of the proposed release in the nitial Settlement.,,12 The Court further found, "[h]owever," that because the monetary settlement amount remains unchanged and the injunctive relief remains limited, it is anticipated that the Revised Settlement will engender the same or similar reaction from the class as the nitial Settlement: a minority of dairy farmers expressing modest support, a minority of dairy farmers expressing vehement opposition, and silence from the remainder ofthe class.,,13. The Newly Revised Proposed Settlement Directly Responds to the Court's Procedural and Substantive Concerns So As To Meet the Standard fori Preliminary Approval 14 To reiterate, Messrs. Taylor and Aubertine approached their involvement in the settlement proceedings with the Court's purposes for them in mind. Also, to reiterate, it is their "opinion", as requested by the Court, that the newly revised settlement is responsive to the Court's concerns as expressed in the September 1 Order, and meets the standard for preliminary approval. A. The Newly Revised Proposed Settlement Provides Substantial New njunctive Reliefl Again, from the outset, Messrs. Taylor and Aubertine primarily pursued joinder in this! case to participate in further negotiations aimed at more substantive, non-monetary relief. They have pursued this objective aggressively, and believe this objective has been achieved. TJHOFF le:;curts d. at d_ at d. 14 As described in detail in the Supporting Memorandum, the newly revised proposed settlement expressly provides for full notice to be provided to class members in accordance with the Court's directives. Page 5 of9
6 Case 5:09-cv cr Document 713 Filed 01/15/16 Page 6 of 9 The following list is drawn from the Supporting Memorandum. t is repeated here to accentuate for the Court that substantial additions were made as a result of the settlement process that followed the September 1 Order: Extension of the prohibition of renewal of full supply agreements, except in limited and specified circumstances, to a four-year period following final approval of the settlement by the District Court (Section 7.2(a)(1); Limitation on the power ofdfaldms to terminate farmer contracts (Section 7.2c); Creating and funding an Advisory, DFA, Northeast Council Member, for four years, charged with serving as an advocate within DFA for higher producer pay prices and equity return (Sections 7.2(d); o The Council Member has authority to independently review DF AlDMS financial records, in detail the first year and to monitor finances thereafter. Establishing a DF AlDMS Ombudsperson, for 5 years, to investigate and facilitate resolution of any complaints, including complaints relating to testing, voting rights or termination from DFAlDMS; (Sections 7.2(d); Prohibiting DF AlDMS from obtaining a controlling interest in the DairyOne milk testing organization (Section 7.2( e)); A series of safeguards to address concerns regarding the integrity of milk testing, including memorialization of a procedure to allow farmers to obtain "split samples" and secure testing at independent labs if they have concerns about the results of particular milk tests, and also annual receipt by the Ombudsperson of a report from the Market Administrator regarding discrepancies disclosed, or the lack thereof, by the Market Administrator's independent testing of the Dairy One laboratory (Sections 7.2(t), (g)); imposing procedural requirements on DFA's use of block voting in procedures [or amendments to federal Milk Market Order 1 amendments (Section 7(h)); M'i HOFF ~~CUf{TS Expansion of the non-retaliation provisions (Section 7(m)); and A provision affording any member of the Subclasses that does not wish to participate in the Settlement, or be bound by its terms, the right to opt out. (Section 9.1)). Messrs Taylor and Aubertine are of the opinion that these changes, alone, are sufficient to bring the newly revised proposed settlement "within the range of possible approval" under Rule Page 6 of9
7 Case 5:09-cv cr Document 713 Filed 01/15/16 Page 7 of Kelen v. World Fin., 302 F.R.D. at This opinion is certainly buttressed when addition of the prior revisions made to the original proposal, as noted by the Court in its September 1 Order, is factored in. (As noted, these prior, additional changes included significant improvement in the definitions of released claims and released parties, clarification of the duration of some provisions for injunctive relief, modification of the anti-retaliation provision, and providing an opportunity for dairy farmers to opt back into the Class for settlement purposes. 16 U... HOFF.L~ CU1{TS, i B. A The Greater Majority of the Subclass Representatives Support the New Settlement and the New Subclass Representatives Will Actively Work to Help Dairy Farmers Consider t As noted, the Court's September 1 Order expressed concern about only a "minority of dairy fanners" expressing only "modest" support for the proposed revisions. Messrs. Taylor and Aubertine have here brought to bear their professional expertise, as contemplated by the Court, as well as their personal experience with the dairy industry. They have also taken this directive from the Court to heart, in two respects, in their capacity as Named Representatives for their Subclass and as individual members of the class. First, throughout the process, from both their professional and personal vantage points, they pursued only a settlement that they believed would have significant support of not only the, Subclass Representatives, but of the dairy farmers of both Subclasses. They have approached their involvement with the understanding that they will be expected to appear in court and to express their position as to any proposed settlement agreement. This has prompted their active 15 n response to the Court's further query in the September 1 Order, DFA was in fact amenable to renewed negotiations. These negotiations were conducted in person on three occasions, and by repeated additional telephonic conferences. One in-person session included participation by Rick Smith, DFA's CEO. As described in the supporting memorandum, the negotiations extended throughout the full course of the period allowed by the Court, practically until Christmas Eve. 16 September 1 Order, at 4. Page 7 of9
8 Case 5:09-cv cr Document 713 Filed 01/15/16 Page 8 of 9 involvement throughout the negotiations; they provided consistent input and assured that their respective "bottom line" concerns were considered and largely met. They have concluded that they can and do support the revised settlement, and will so testify. Second, Messrs. Taylor and Aubertine understand it is their shared responsibility to assist in providing notice and understanding to Subclass Members in advance of the Fairness Hearing. They will contact and encourage dairy farmers to provide their input to the Court whether inl writing and/or in person at the Fairness hearing (although many factors beyond their control willi,i affect farmer attendance at the hearing). At the least, they will work to engender considerationl and participation from their colleague farmers. Finally, based on their active and constructive involvement, Messrs. Taylor and Aubertine, expect that the new, additional Named Representatives for the DFAlDMS subclass will similarly appear and assist with this process. C. Subclass Representatives Taylor and Aubertine's and their Counsel's Efforts mproved Communication Among Subclass Counsel and the Subclass Representatives As the Court is well aware, Messrs. Taylor and Aubertine sought joinder in this case with the further purpose of improving communications among the dairy farmer representatives, and between the representatives and their Counsel. Their participation, and their Counsel's, along with the efforts of the new DF AlDMS Subclass Representatives, have indeed aided those e:; LHOFF CURTS communications. The newly revised proposed settlement is the product of a series of intensive collaborative and non-ad versarial meetings and discussions among the Subclass Representatives and Counsel.l This extensive range of meetings, conference calls and consultations during the 90 day period provided by the Court is cataloged in the Supporting Memorandum. Subclass Counsel and all Page 8 of9
9 Case 5:09-cv cr Document 713 Filed 01/15/16 Page 9 of 9 Subclass Representatives participated ill extensive discussions and a largely constructive exchange of views. Although this process did not achieve unanimjty (as the Subclass representatives that originally opposed a settlement continue to do so), as intended, Messrs. Taylor and Aubertine's experience and judgment, along with the fresh perspectives of the new representatives for the DF AlDMS Subclass, aided that process. Dated at Montpelier, Vermont this 15th day of January, STEPHEN H. TAYLOR and DARREL J. AUBERTNE BY: sldaniel Smith Daniel Smith, Esq. Dated at this 15th day of January, BY: s/richard T. Cassidy Richard T. Cassidy, Esq. -UHOFF l~curts ' i Page 9 of9
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