Scott Dairy Farm, Inc. et al v. Dean Foods Company et al

Filing 1316

MEMORANDUM OPINION AND ORDER re Motion to Opt Out filed by Malcolm E Forbes. For the reasons set forth herein, the Motion To Opt Out By Malcolm Forbes is DENIED. Signed by District Judge J Ronnie Greer on 6/6/2012. (FMM )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TENNESSEE
GREENEVILLE DIVISION

IN RE: SOUTHEASTERN MILK
ANTITRUST LITIGATION

THIS DOCUMENT RELATES TO:
Sweetwater Valley Farm, Inc., et al. v.
Dean Foods Co., et al., No. 2:07-CV 208.

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Master File No. 2:08-MD-1000
Judge J. Ronnie Greer

MEMORANDUM OPINION AND ORDER
Forbes Dairy, Inc. (“Forbes”), through its president, Malcolm E. Forbes, has filed an
untimely motion to opt out of this litigation and the settlement between plaintiffs, Dean Foods
Company, SMA and James Baird. [Doc. 1794]. Forbes is a Mississippi dairy farm unaffiliated with
any cooperative and located in Marion County, Mississippi, at 123 John Ford Home Road, Sandy
Hook, Mississippi. 1 Forbes is a named plaintiff in a class action lawsuit filed on April 26, 2011
on behalf of Mississippi dairy farmers in the United States District Court for the Southern District
of Mississippi, Hattiesburg Division, alleging antitrust and RICO violations (Andrews, et al v. Dean
Foods, et al., No. 2:11-CV-00097-KS-MTP). 2
Forbes asserts that he wishes to litigate the issues raised in this case on his own and does not
wish to participate in this litigation in any way. Forbes claims that he had no knowledge of the
litigation of this case until February 29, 2012, when he received claim forms and other information

1

The independent dairy farmer subclass certified in this class action case includes dairy farmers in
Federal Milk Market Orders 5 and 7. Mississippi is part of Order 7.
2

Forbes apparently obtained legal counsel, SE Dairy Litigation, LLC, to represent him on June 1,
2011 and he subsequently became a plaintiff in the Mississippi action.

by mail. Forbes states that the class notice mailed by Rust Consulting, Inc., the claims administrator
appointed by the Court, was addressed to 123 John Ford Road, Sandy Hook, Mississippi, an
incorrect address, and was not received. Forbes’s notice was mailed to the address for Forbes in the
payroll records produced by National Dairy Holdings, the defendant that purchased Forbes’s milk
and, according to Rust records, was not returned as undeliverable.3
On September 7, 2010, this Court certified an independent dairy farmer subclass composed
of all independent dairy farmers and independent cooperative members who produced Grade A milk
in Orders 5 or 7 and sold Grade A milk directly or through an agent to defendants or co-conspirators
during any time from January 1, 2001 to the present. [Doc. 934]. On January 19, 2011, the Court
approved a class notice plan to provide the best notice practicable to the members of the class as
required by Federal Rule of Civil Procedure 23. [Doc. 1255]. The Court-approved plan included
notice by mail to all prospective class members for whom plaintiffs had obtained addresses in
discovery, publication of half-page summary notices in Hoard’s Dairyman and Dairy Herd
Management, widely distributed monthly periodicals with distribution to dairy producers, and the
creation of a dedicated and neutral website- www.SoutheastDairyClass.com - and a toll free
telephone number. [Id.].

In its order, the Court specifically found that such notice was

constitutionally sufficient and in compliance with Rule 23 and established a deadline for class
members to opt out or request exclusion from the litigation of June 17, 2011.
Pursuant to Federal Rule of Civil Procedure 23(c)(2), the Court must give to class members
“the best notice that is practicable under the circumstances, including individual notice to all
members who can be identified through a reasonable effort.” To comport with the requirements of

3

Presumably, the claim forms mailed to Forbes in February, 2012, were also mailed to Forbes at
the address provided by NDH. Forbes does not explain why this mailing was received by him but the prior
one was not.

due process, notice must be “reasonably calculated to reach interested parties.” Karkoukli’s, Inc.
v. Dohany, 409 F.3d 279, 283 (6th Cir. 2005) (quoting Mullane v. Cent.Hanover Bank & Trust Co.,
339 U.S. 306, 318 (1950)). “Due process does not, however, require actual notice to each party
intended to be bound by the adjudication of a representative action.” Fidel v. Farley, 534 F.3d 508,
514 (6th Cir. 2008) (citing DeJulius v. New England Health Care Employees Pension Fund, 429
F.3d 935, 942 (10th Cir. 2005)). “The reasonably calculated standard is now widely accepted as the
benchmark for resolving questions about the constitutionally of notice procedures.” Karkoukli’s,
409 F.3d at 283.
“A class member must have certain due process protections in order to be bound by a class
settlement agreement.” In re Diet Drugs Products Liability Litig., 431 F.3d 141, 145 (3d Cir. 2005).
The Rule 23(c)(2) standard also fulfills constitutional due process requirements. See Eisen v.
Carlisle and Jacquelin, 417 U.S. 156, 173-74 (1974). Notice by publication can satisfy due process
when information required to identify individual class members cannot be procured through
reasonable effort. See id. While individual notice, where reasonably possible, is required, when
class members’ names and addresses may not be ascertained by reasonable effort, publication notice
has been deemed adequate to satisfy due process. In re Prudential Ins. Co. of America Sales
Practices, 177 F.R.D. 216, 232 (D. N.J. 1997) (citing Mullane, 339 U.S. at 317-18). If a class
member receives the best notice practicable and fails to opt out by the deadline, he is bound by the
court’s actions concerning the class, including settlement and judgment. Amchem Products, Inc. v.
Windsor, 521 U.S. 591, 592-93 (1997).
The Court sees nothing in the procedure used here which would convince it to change its
previous conclusion that the notice given to class members was the best notice practicable under the
circumstances, complied with Rule 23, and satisfied the constitutional requirement of due process.

Forbes does not argue here that a more complete address could have been obtained for him through
reasonable effort. He also does not argue that the notice undertaken at the Court’s direction was not
the best notice practicable under the circumstances. He apparently argues only that he must be given
an opportunity to opt out after receiving actual notice. To allow class members who receive actual
notice of a class action after the opt out deadline to be given another opportunity to opt out, even
though the class member received constructive notice before the deadline, would simply defeat the
purpose of constructive notice by publication or the creation of the dedicated website and toll free
telephone number. This Court thus holds, consistent with Rule 23 and due process, that an opt out
deadline may bind a class member who has received the best notice practicable, regardless of
whether or not that class member has received actual notice. Although Forbes argues that he has
not been afforded minimal due process protection here, the Court finds otherwise.
Forbes’s address was obtained from payroll information provided by NDH, a defendant in
the instant litigation that purchased Forbes’s milk. The address used by Rust to mail notice to
Forbes was substantially similar to his actual address and was not returned as undeliverable by the
postal service. In addition, a subsequent mailing notifying Forbes of the settlement between
plaintiffs, Dean Foods, SMA and Baird, sent presumably to the same address, was in fact received
by Forbes. Further, Forbes employed legal counsel on June 1, 2011, 17 days prior to the opt out
deadline. Although little information has been provided to the Court about Forbes’s legal counsel,
it is inconceivable to the Court that Forbes’s lawyers did not have actual notice of this litigation at
the time.
The Court may treat as effective a tardy election to opt out “only if the delinquency is not
substantial or if there is good cause shown.” Manual For Complex Litigation, Fourth, § 21.321.
Forbes has not shown any excusable neglect and both the independent farmer plaintiffs and Dean

Foods object to his request. [Docs. 1863, 1865]. Although Forbes argues otherwise, Forbes cannot
show that it would be harmed by denial of its request since it has submitted a claim to participate
in the Dean, SMA and Baird settlements.

The interests of the parties and the settlements are

furthered by the Court enforcing the deadlines applicable to this action and the granting of such
relief clearly has an impact on the settlements in that defendants have a clear interest in obtaining
a settlement which includes as many of the class members as possible and, in the event the
settlement agreements are finally approved by the Court, obtaining releases which cover the broadest
number of class members. See Georgine v. Amchem Prods., Inc., 1995 WL 251402, at *1, *4 (E.D.
Pa. April 26, 1995) (“Factors to be considered in making this decision include: The interest of the
movants, the interest of the defendants, and the impact of granting the requested extensions on the
Settlement itself.”). None of the relevant factors weigh in favor of permitting movant’s untimely
request, especially where the only argument advanced in favor of the requested relief is that actual
notice is required to comply with minimal due process requirements, a position clearly contrary to
the law.
For the reasons set forth herein, the “Motion To Opt Out By Malcolm Forbes” 4 is DENIED.
So ordered.
ENTER:
s/J. RONNIE GREER
UNITED STATES DISTRICT JUDGE

4

Although styled as a motion by “Malcolm Forbes,” the body of the motion clearly indicates that
the movant is Forbes Dairy, Inc. The Court notes, without addressing the matter, that the motion was filed
on behalf of a corporation by its president who is not likely licensed to practice law or legally authorized to
file the motion and represent the corporation before this Court.