Posted: Thursday, September 23, 2010 10:00 AM
Judges open up case against claims on milk label
Dozens of consumers from across the U.S. will be able to resume their legal battle against a dairy company and several national retailers over allegations of mislabeled milk.
A federal appeals court has reopened a lawsuit against Aurora Organic Dairy and the retailers Costco, Wal-Mart, Target, Safeway and Wild Oats that was dismissed by a federal judge last year.
However, the plaintiffs must alter the legal strategy initially outlined in their 2008 consolidated complaint, which claimed that Aurora and the retailers had misrepresented conventionally produced milk as organic.
The plaintiffs alleged that Aurora and the retailers violated state consumer protection laws by labeling milk as "organic" even though it wasn't produced according to federal organic standards.
As part of the 2009 dismissal order, a federal judge ruled that consumers could not challenge the validity of Aurora's "organic" claim, since the milk was at all times certified as such by the USDA.
A three-judge panel from the 8th U.S. Circuit Court of Appeals has upheld that opinion, finding that USDA has the ultimate authority to designate milk as organic.
State consumer protection laws are pre-empted by the federal laws that govern organic labeling, according to the appellate ruling.
In other words, the judges ruled people can't sue a company under state law for falsely claiming a product is organic, as long as the federal government has deemed the product is organic.
Even so, Aurora and the retailers made other claims on their milk packages -- such as stating cows were pasture-raised and "antibiotic and hormone free" -- that can be challenged under state consumer protection laws, the 8th Circuit ruled.
"This is a victory for organic consumers and the integrity of the (organic) standard," said George Kimbrell, attorney for the Center for Food Safety, an activist group that filed a friend-of-the-court brief in the case.
If consumers weren't allowed to file lawsuits over misrepresentations, that would give companies "a perverse incentive to cheat the standard," since USDA financial penalties are relatively light, he said.
A spokesperson for Aurora Organic Dairy said the company was pleased the ruling preserved federal authority, preventing attempts under state law to change the meaning of "organic." Attorneys representing the company and several retailers could not be reached for comment.
It's unfortunate that the 8th Circuit decision does not allow consumers to challenge the USDA's oversight of organic certification, said Mark Kastel, co-founder of the Cornucopia Institute, an organic standards watchdog group.
Under the current legal reasoning, plaintiffs hypothetically wouldn't be able to challenge a company's organic certification under any circumstances, even if USDA officials ignore violations, he said.
Kastel said he's nonetheless heartened that plaintiffs will have legal recourse against claims by Aurora and the retailers.
"The organic meat and potatoes are still there," he said.
The controversy stems from a Cornucopia Institute investigation that concluded Aurora wasn't adhering to organic standards.
The group complained to USDA, which prompted an official to propose revoking Aurora's organic certification in 2007 due to "willful violations," such as denying cows access to pasture and milking cows that weren't certified as organic.
The USDA and Aurora eventually reached a settlement that allowed the dairy company to retain its organic certification. Between 2007 and 2008, more than 50 consumers filed suit against Aurora and retailers who stocked store brands of the company's milk.
Those lawsuits were consolidated into a single case in which plaintiffs demanded to be reimbursed for the premiums they had paid for Aurora's organic milk.
"There's a very large price increase, and people are willing to pay that price for an organic product," said Craig Spiegel, an attorney for the plaintiffs, during oral arguments earlier this year. "If they buy a non-organic product, they should get restitution or damages."