Court allows false-label lawsuit against nation’s largest producer of store-brand organic milk

Court lets part of organic-milk case proceed

ST. LOUIS — Dairy consumers who sued several national chains and the largest U.S. provider of store-brand organic milk claiming they falsely labeled the milk can continue with their lawsuit under a federal appeals court ruling issued Wednesday.

The ruling from the Eighth U.S. Circuit Court of Appeals means a lower court must hear claims that Aurora Organic Dairy’s milk was deceptively marketed as coming from small farms with open pastures.

“Each defendant is alleged to have misrepresented the manner in which the dairy cows were raised and fed in violation of various state deceptive trade practices laws,” the ruling said.

The lawsuits against Aurora and retailers including Wal-Mart Stores Inc., Wild Oats Markets Inc., Target Corp. and Costco Wholesale Corp. also claimed Aurora’s milk should not be called organic.

But the court blocked that claim because the U.S. Department of Agriculture hasn’t withdrawn Aurora’s organic certification.

Aurora, based in Boulder, Colo., and the USDA reached an agreement in 2007 that included changes in Aurora’s operations and that allowed the company to retain its organic certification.

USDA proposed revoking Aurora’s organic certification after identifying “willful violations” of the organic standards, including the use of “non-organic cows” that didn’t eat organic feed or were possibly treated with hormones and antibiotics.

Aurora agreed to change its facility in Platteville, Colo., by reducing its herd and providing its herd daily access to pasture during the growing season.

Aurora spokeswoman Sonja Tuitele said the company couldn’t comment on the latest ruling because parts of the case remain in active litigation. She said the company distributes its milk nationwide and sells it under several “private label” brands that differ by store and region. She said the privately held company does not release revenue figures.

A spokesman for Wal-Mart, Greg Rossiter, said the retailer is “pleased that the court agreed that the dairy products were properly labeled as organic.”

Representatives for Costco and Wild Oats, which is now owned by Whole Foods Market, declined to comment on the remaining claims.

A Target spokeswoman said the company no longer carries Aurora milk, and the company would not comment on the litigation.

The lawsuit was filed after The Cornucopia Institute, a Wisconsin-based farm-policy group, questioned whether Aurora’s milk was truly organic.

Cornucopia spokesman Mark Kastel said Aurora’s deal with the USDA doesn’t change the fact that consumers pay a premium for Aurora’s products because they’re marketed as coming from smaller, organic farms in Colorado.

In fact, he said, much of the milk comes from industrial-scale operations in Texas.

“These are factory farms in the desert,” Kastel said. “Not only did (Aurora) violate the letter of the law, they violated the spirit of the law.”