A recent Thomson Reuters story, “Attorneys Defend $53M in Fees Sought in Dairy Antitrust Settlement,” reports that attorneys for a class of dairy farmers are seeking final court approval of a $158.6 million settlement, with about a third going to plaintiffs’ counsel. Since the settlement, two class members wrote letters to the court in Greenville, Tenn., asking for a reduction in the attorneys’ fees. One of the members called the fees “obscenely excessive.”
Lawyers at Baker & Hostetler, which served as lead counsel for the class, countered that the letters offered no legal basis for the reduction in attorney fees. They also noted that their side had invested $53 million in attorney time plus $8 million in out-of-pocket expenses, “with no guaranty of any recovery much less a return.”
The underlying case involves control of the milk market in the American Southeast. The suit alleged that the defendants conspired to control the milk market in 14 states in the Southeast by excluding competition from independent milk farmers and cooperative. Defendants in the case include the Dairy Farmers of America and former CEO Gary Hanman, National Dairy Holdings, LP, Dairy Marketing Services LLC and Mid-Am Capital LLC. The total obtained from all the defendants, $303.6 million, represents the largest antitrust settlement in the Eastern District of Tennessee.
Even if the court approves the fees, there is some uncertainly about the allocation of those fees. That is because when the case started more than six years ago, Robert Abrams of Baker & Hostetler, the lead attorney for the plaintiffs, was a partner at Howrey, the defunct law firm that filed for bankruptcy in 2011. Allan Diamond, the Howrey trustee of Diamond McCarthy, who is seeking to recover assets for the estate, has indicted in court papers that he considers the fee recovered by Abrams in the dairy litigation as significant assets belonging to the estate.
The case is In Re Southeastern Milk Antitrust Litigation. For more information on this case, visit http://www.southeastdairyclass.com/