Highland farmers re-file case against Prairie Farms Dairy

The owners of a farm who claim they were wrongly terminated as members of an agricultural cooperative have refiled a suit against Prairie Farms Dairy.

In the new case filed Sept. 6 in Madison County Circuit Court, Michael and Denise Richter claim they purchased common stock and became members of Prairie Farms Dairy in 1980. In addition, they say they entered into a milk marketing agreement with Prairie Farms Dairy.

The Richters made similar claims in a 2006 lawsuit. After litigating the case for six years, they filed a motion to dismiss without prejudice, which Circuit Judge Dave Hylla granted in September 2012.

According to the new suit, the Richters elected to invest “substantial” amounts of capital and labor into the marketing agreement, believing they would remain members of Prairie Farms Dairy for as long as they chose.

However, on Oct. 6, 2005, the Richters learned that Prairie Farms Dairy terminated their membership, the complaint says. At the same time, Prairie Farms Dairy gave the Richters $15 to redeem their common stock, the plaintiffs claim.

Shortly before their membership termination, the Richters had temporarily ceased production of milk, but had hoped to resume within one year, according to the complaint. In fact, they kept their heifers with the plans of doing so, the suit states.

“At all times prior to the close of PFD’s 2005 fiscal year, plaintiffs were ignorant of PFD’s purported interpretation of Section 8 and believed that their membership interest in PFD was not subject to forfeiture for lack of patronage if they resumed production of milk and patronage of PFD within one year after their temporary cessation,” the complaint says. “PFD concealed, suppressed or omitted disclosure of its purported interpretation of Section 8 until after Sept. 30, 2005, which date was the close of its fiscal year in 2005.”

The Richters claim Prairie Farms Dairy acted illegally by terminating their membership without cause and by failing to tender the appraised value of common stock in Prairie Farms Dairy. The cooperative’s actions deprived the Richters of more than $50,000 they would have received had they been given their fair share of common stock, according to the complaint.

In their complaint, the Richters are asking the court to declare the termination of their membership invalid and are seeking damages of more than $200,000 and unspecified punitive damages, plus an order to purchase their common stock for its fair value. They are also seeking attorneys’ fees, costs and other relief the court deems just.

Todd W. Sivia and Jordan P. Koerner of Sivia Business and Legal Services in Edwardsville will be representing them.

Madison County Circuit Court case number: 13-L-1522.