In a significant victory for dairy farmers involved in a national class action lawsuit accusing DairyAmerica, Inc., and California Dairies, Inc., of artificially depressing the price of milk products, a federal appeals court  reversed a lower court’s dismissal of the case.

The case – Gerald Carlin v. DairyAmerica and California Dairies, Inc. – claims that the nation’s largest marketer of nonfat dry milk and the California-based milk processing firm inflated their own profits at the expense of America’s dairy farmers by misreporting critical data used by the government to set raw milk prices.  The dairy farmer plaintiffs seek compensation for the millions of dollars lost due to this alleged price manipulation.

In overturning the February 2010 U.S. District Court ruling, the United States Court of Appeals for the Ninth District considered the “filed rate doctrine,” which bars certain lawsuits from recovering damages when government agencies, such as the United States Department of Agriculture (USDA), approve rates or prices for regulated industries, including the dairy industry.  The Court of Appeals ruled that the filed rate doctrine did not preclude dairy farmers from suing the dairy firms in this case because the USDA’s National Agricultural Statistics Service had concluded that the pricing data was incorrect.

"We are pleased with the court's decision and look forward to prosecuting this case on behalf of American dairy farmers," said plaintiffs’ lead counsel Benjamin Brown of Cohen Milstein Sellers & Toll PLLC.

The class action filed on behalf of approximately 50,000 dairy farmers who sold raw milk from January 2002 to April 2007 charges the dairy firms with “negligent misrepresentation, negligent interference with prospective economic advantage and unjust enrichment.”

DairyAmerica, a Fresno, Calif.-based joint venture between California Dairies and other dairy cooperatives, is a not-for-profit firm that markets and sells approximately 75 percent of U.S.-produced nonfat dry milk.  California Dairies, based in Visalia, Calif., owns milk processing plants that ship milk domestically and internationally.

Also representing the plaintiffs in the case are Berman DeValerio and Keller Rohrback L.L.P.