Got non-fat dry milk?

You'll just have to trust Blawgletter that the U.S. Department of Agriculture sets minimum prices for milk producers.

Unless you want to read the 10-page SUMMARY of the process in Carlin v. DairyAmerica, Inc., No. 10-16448, slip op. at 8731-41 (9th Cir. Aug. 7, 2012).

Go ahead. We'll wait.

Ready?

Okay.

The milk-pricing system depends on private reporting of actual wholesale prices. DairyAmerica, a group of dairy co-ops, controlled around three-quarters of wholesale milk purchases in the U.S. (other than in the Golden State). DairyAmerica understated actual prices for non-fat dry milk from January 2002 until April 2007. And the low-balling of the NFDM prices had the effect of depressing what the dairies had to pay, and did pay, dairy farmers for their cows' milk.

When the farmers sued, DairyAmerica argued to the district court that the "filed-rate doctrine" barred the price-fixing claims. The doctrine, DA said, precluded it from buying milk products at prices that varied from the minimums the Ag Department published. The court agreed and dismissed the case.

The Ninth Circuit reversed. It held that the price-fixing claims did fall within the compass of the filed-rate doctrine but that the FRD didn't bar the milk producers' claims. The Department of Agriculture, the panel stressed, had disavowed the prices it had announced during the relevant time period:

We agree that the filed rate doctrine does not preempt or otherwise pose a preclusive bar to plaintiffs' lawsuit, because: (1) the federal agency itself detrmined that the FMMO prices were incorrect and (2) the policy considerations behind the doctrine to not justify applying the doctrine as a bar in this case.

Id. at 8760.

Will we see something along the same lines by the banks that set LIBOR? You betcha! Will they win? Carlin doesn't bode well.