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Retailers to Face Organic Milk Consumers in Court

Organic milk consumers, who sued some of the nation’s biggest retailers in 19 separate class action lawsuits, are going to get their day in court.

After those actions were consolidated, U.S. District Court Judge E. Richard Webber dismissed the case in June 2009.  The U.S. Court of Appeals for the Eight Circuit has now remanded the case back down to the District Court for trial.

The three judge appeals panel said Webber was correct in finding the federal Organic Foods Protection Act (OFPA) preempts state laws on setting organic standards, but not state marketing or consumer protection measures.

At the center of litigation is Aurora Dairy Corporation, which was OFPA-certified to produce organic milk.

Aurora’s certified organic milk was later sold to consumers at Costco, Safeway, Target, Wal-Mart, and Wild Oats stores under the retailers’ brands or Aurora’s “High Meadow” brand.

The Eighth Circuit said Aurora has since 2003 continuously held organic certifications from QAI, a certifying agent, or the Colorado Department of Agriculture.  Its organic system plan covers multiple farms and a milk processing plant.

USDA threatened to revoke Aurora’s organic certification in 2007 for “willful violations” of OFPA, but the parties entered into a consent agreement later the same year. USDA had charged that Aurora was willfully selling non-organic milk as organic. The dairy agreed to retire some “nonorganic cows” and adhere to its organic management plan.

Organic milk consumers said Aurora and all the nationally known retailers involved knowingly made false statements on the labels of their milk cartons.

“For example, ” wrote the Eighth Circuit’s Chief Judge William Jay Riley, “several of the cartons featured depictions of pastoral scenes with cows grazing in pastures, and advertised the idyllic conditions under which the dairy cows lived.”

Aurora’s motto is “Cows First.” Wal-Mart said the milk was produced without the use of antibiotics or pesticides. Safeway said its cows “enjoy a healthy mix of fresh air, plenty of exercise, clean drinking water, and a wholesome, 100 percent organic diet.” Target said its milk came from “healthy cows that graze in organic pastures and eat wholesome organic feed.”

The consumers who are suing say none of those claims are true.

Writing for the court, Judge Riley upheld the role of state law to advance the federal standards for organic foods. “Preemption of state consumer protection law may actually diminish consumer confidence that organic products meet consistent standards, ” he ruled.

The Eighth Circuit decision compares the dual role state and federal governments play in occupational safety to the parts they play in regulating organic foods, saying “OFPA’s regulatory scheme is not ‘so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it.’ “

Congress acted in 1990 to replace a “patchwork of existing state regulation” with a national standard.

QAI, the federal certifying agent, was dismissed from the litigation.

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