Milk producer settles claims it misrepresented milk as organic

Text Size

Share this page on any of these social networking sites:
Share this page on any of these social networking sites: LinkedIn

 

Law Reporter Products

  • Abstract Sets
  • Court Documents
  • Injury Collections

Get More Info »

Search the Exchange »

Case in Point

October 2, 2012

Milk producer settles claims it misrepresented milk as organic 

The plaintiffs alleged violations of every state’s consumer protection or deceptive trade practices acts, fraud, negligence, negligent misrepresentation, breaches of express and implied warranties, breach of contract, and unjust enrichment in connection with the defendant’s violations of the Organic Foods Production Act. In re: Aurora Dairy Corp. Organic Milk Mktg. & Sales Pracs. Litig.

In 1990, Congress enacted the Organic Foods Production Act (OFPA), establishing standards for the sale of “organic” milk, including that it be free of antibiotics and pesticides and that the cows have pasture access. Aurora Dairy Corp. was certified as an organic milk producer. It represented that its cows lived outdoors year round, ate only organic feed, were never given antibiotics, and were given abundant pasture access. Aurora sold much of its organic milk to retailers, such as Costco and Target, for sale under the retailers’ private labels. The retailers’ containers made the same representations that Aurora made. Customers pay significantly more for organic milk. In May 2005, for instance, conventional milk averaged $2.02 per half gallon, while organic milk averaged $4.01 per half gallon.

In spring 2007, the U.S. Department of Agriculture announced that since at least 2003, Aurora had violated several provisions of the OFPA. The company had used milk produced by nonorganic cows that had been exposed to antibiotics and pesticides, denied lactating cows pasture access, and failed to provide only organic feed and bedding and maintain adequate records. Although the government proposed revoking Aurora’s certification, it opted for one year probation after the company agreed to several changes to how it treats its cows.

Customers filed 21 class action suits, which were consolidated in MDL in Missouri. The plaintiffs alleged violations of every state’s consumer protection or deceptive trade practices acts, fraud, negligence, negligent misrepresentation, breaches of express and implied warranties, breach of contract, and unjust enrichment.

The trial court dismissed the suit, holding that the OFPA preempted the plaintiffs’ claims because Aurora was a certified organic operation that was entitled to market its products as organic. The Eighth Circuit affirmed with respect to the plaintiffs’ claims that the defendants marketed milk as organic in accordance with OFPA certification standards when it was not. The court reversed on the false advertising claims under state consumer protection laws, however. (621 F.3d 781 (8th Cir. Sept. 15, 2010).)

Aurora agreed to pay $7.5 million. Class members who make valid claims, with or without proof of purchase, will receive $10. Those who bought more than 21 units of milk can receive up to $20 more. Aurora also agreed to remove all nonorganic cows from the organic herd; give all cows pasture access for at least 120 days per year, with a grazing density that does not exceed four animals per acre for lactating cows and five animals per acre for dry cows; and allow calves to remain at the operation until weaned, usually at 4 to 6 months of age. The parties will hire an independent monitor to enforce compliance.

Citation: In re: Aurora Dairy Corp. Organic Milk Mktg. & Sales Pracs. Litig., No. 4:08-md-01907 (E.D. Mo. Sept. 7, 2012).

Plaintiff counsel: AAJ members Don M. Downing and Thomas K. Neill, and Gretchen Garrison, all of St. Louis; AAJ members Elizabeth A. Fegan and Daniel J. Kurowski, both of Oak Park, Ill.; and Craig R. Spiegel, Seattle.


The American Association for Justice
777 6th Street, NW, Ste 200 • Washington, DC  20001 • 800.424.2725 or 202.965.3500

© 2014 AAJ