The Burnett Dairy Cooperative and chief executive officer (CEO) Dan Dowling have filed a civil lawsuit against Four Cubs Farm and Cris, Nicki and Ben Peterson.
The suit was filed with the Burnett County clerk of courts office in February. The complaint outlines several allegations against the Petersons and their involvement with the co-op’s attempt to purchase a bankrupt brewery, Empire Farmstead Brewery in New York state.
The 42-page complaint states, the Peterson’s “engaged in a campaign of defamation and deception that has sullied the reputation of the Cooperative… and robbed the Cooperative of a chance at expansion into a critical market that has cost the Cooperative and its members millions of dollars.”
The co-op is not seeking an exact amount of money in the lawsuit. They did explain that because of Four Cubs Farm they are losing $50,000 per month.
The co-op and Dowling, as plaintiffs, are seeking judgement in their favor “in an amount to be determined at trial, including damages for lost profits, other consequential damages, indirect damages and incidental damages” and punitive damages.
This lawsuit was filed in response to the civil lawsuit filed by Four Cubs Farm against the co-op, CEO Dan Dowling and the entire board of directors. Both lawsuits revolve around the events that led to and followed the co-op’s attempt to purchase a brewery in New York.
The complaint states that after Cris had served on the co-op’s board of directors for three years, she lost her re-election bid and then became “a bitter enemy of the Cooperative, its Board of Directors and its management.”
The complaint continues to allege Cris was telling community members the election was rigged and was falsely claiming the co-op was “engaged in unfair milk pricing.”
Burnett Dairy Cooperative receives more over 1.5 million pounds of milk each day from local farmers. The co-op uses the Somatic Cell Count (SCC) to maintain its quality of milk.
SCC is the standard used across the country and around the world for milk quality. Every co-op member is required to produce milk that is less than 400,000 cells per milliliter on a 90-day rolling average.
The complaint alleges Four Cubs milk was “on the lower-end of the Cooperative’s quality scale.”
On October 1, 2019, the co-op notified Four Cubs Farm, giving them 30 days to correct the issue. It was not a termination from the co-op. The co-op alleges they spent thousands of dollars helping Four Cubs with their quality deficiencies.
The following week, on October 8, the Petersons requested records relating to the Empire Farmstead Brewery.
The complaint states the process of purchasing the bankrupt brewery began in February 2019. The co-op’s board saw the purchase a chance to expand into the East Coast market.
“A substantial portion of the Cooperative’s customers are located in the East Coast market and, therefore, it was more efficient for the Cooperative to base resources at a location with efficient for the Cooperative to base resources at a location that placed them in close proximity to the market,” the complaint states.
Then the board discussed the property value of Empire Brewery, which was preparing to file for Chapter 11 bankruptcy. An appraisal report accessed the property value alone at $2,875,000.
The complaint alleges that the Petersons were contacting counsel for the Empire sellers claiming they represented a number of co-op members that opposed the sale.
“The Peterson Parties’ counsel then disclosed the Cooperative’s confidential strategy not to raise its bid,” the complaint alleges. “Counsel for the Peterson Parties extinguished any chance of the Cooperative acquiring Empire.”
The complaint alleges that a competing bidder, Feldmeier Equipment, “heard the false information being spread by the Peterson Parties and that the Cooperative would not increase its bid.”
In late October the co-op’s board unanimously voted to terminate Four Cubs from the co-op.
According to online records, there is nothing scheduled in the case. However, the lawsuit filed by Four Cubs Farm could be heading to a jury trial, following a motion hearing Tuesday.