April 28, 2008
Organic consumers get milked?
Missouri lawyers at center of labeling suit
Don Downing
By Nora Lockwood Tooher
Missouri attorneys have hit a
Colorado dairy and five of the
nation’s biggest retailers with
lawsuits alleging they mislabeled milk as organic so they
could charge customers higher
prices. The milk fight is being
closely watched in the organic
food industry as a harbinger of
potentially costly legal battles
for the hearts and wallets of organic food shoppers.
The industry is in the throes
of a changeover, as small, independent farmers are squeezed
out of the market by large-scale,
commercial food manufacturers. The result, organic food
watchdogs claim, is that consumers are being hoodwinked
into buying high-priced, massproduced goods mislabeled as
organic.
“I think these lawsuits are
emerging because this is the
greatest crisis in organic standards in the United States in
the last 10 years,” said Ronnie
Cummins, national director of
the Organic Consumers Union,
in Finland, Minn. “We’ve got to
teach these people a lesson.”
The lawsuits allege that
Aurora Dairy, of Boulder, Colo.
– the largest private-label milk
producer in the country – did
not comply with the Organic
Food Productions Act and did
not have the right to call its milk
organic.
“The bottom line is that what
was represented as complying
with all the organic requirements – access to pasture, making sure all the cows have a documented history of being fed
organic feed – these things were
not done,” said John Campbell,
an attorney at Simon Passanante
in St. Louis, who filed the first
lawsuit against Aurora.
About a dozen plaintiffs’
firms around the country are
representing claimants in the
litigation.
So far, 19 suits seeking class
action status have been filed
against Aurora and the five retailers. The cases have been
consolidated for pretrial purposes in U.S. District Court in
the Eastern District of Missouri.
The retailers named in the
suits – Wal-Mart Stores, Target
Corp., Costco Wholesale Corp,
Safeway and Wild Oats Markets
– sold Aurora’s milk under their
own labels, including Target’s
Archer Farms and Costco’s
Kirkland Signature.
The lawsuits seek an injunction to halt the sale of Aurora’s
organic milk until the company
proves it is complying with federal organic regulations. Aurora
produces milk sold under storebrand labels for more than 20
retail chains and posted about
$100 million in sales in 2007.
Organic cash cow
Thousands of consumers paid
up to twice what they should
have for the allegedly mislabeled
milk, said Don Downing, managing partner of Gray Ritter &
Graham in St. Louis, which filed
one of the suits against Aurora.
On April 18, Downing was
named co-lead counsel in the
consolidated litigation along
with Chicago attorney Elizabeth
Fegan of Hagens Berman Sobol
Shapiro. Chip Robertson, of
Bartimus, Frickleton, Robertson
& Gorny in Jefferson City, was
named plaintiffs’ liaison counsel.
“If you put a certain word or
label – like organic – on a product that has value in the mind of
the consumers, and it’s costly to
comply with the requirements
to use that label, there’s always
a temptation certain companies
may try to shortcut the cost involved,” Downing said.
Susan Schneider, a law professor and director of the graduate
program in agricultural law at the
University of Arkansas, agreed
that consumers are demanding that organic food producers
meet federal requirements.
“If people are going to be paying more for a product and seek
out ‘organic,’ it is going to be very
important to them that it lives up
to their standards,” she said.
Fueled by concerns about
growth hormones and antibiotics in conventional milk, sales of
organic dairy products are soaring.
They are expected to account
for about 18 percent of the estimated $20 billion in organic
food sales in the U.S. this year,
according to the Cornucopia
Institute, a Wisconsin organic
food research group whose
complaints about Aurora led to a
U.S. Department of Agriculture
investigation.
USDA investigators identified 14 alleged violations of federal organic food regulations at
Aurora’s organic dairy farms.
The agency reported that from
Dec. 5, 2003, through April 16,
2007, Aurora “labeled and represented milk as organically
produced, when such milk was
not produced and handled in
accordance with the National
Organic Program regulations.”
The alleged violations included failing to pasture the cows,
moving conventional dairy
cows into organic milk production too quickly and using nonorganic feed.
‘Stick in the eye’
“They were operating these
feedlots without properly providing pasture for their cows as
part of their diets,” Kastel said.
“The average organic farm has
50 to 100 cows; their facilities
had 2,500 to 7,000 cows.
“This is just a stick in the eye
to both the consumer and the
ethical farmers who compete
with them,” he said.
Aurora spokeswoman Sonja
Tuitele said all of the complaints
have been resolved. And she
contended that the company has
been unfairly targeted by activist groups.
“We are a large-scale producer,” she said. “What it comes
down to is these are people
who don’t think there is a place
for [large] scale in organic, so
they’re attacking any large-scale
operators.”
After the USDA threatened to
revoke its organic dairy license,
in August 2007 Aurora agreed to
revamp its Platteville, Colo., facility by removing conventional
cows from the herd, reducing
the size of the herd and providing cows daily access to pasture
during the growing season.
Tuitele said those plans were
in the works anyway, and that
Aurora has also increased pasture size at its Platteville facility.
The company agreed not to
renew the organic certification for one of its facilities, in
Greeley, Colo., and to submit
organic systems plans for its
operations in Platteville and
Dublin, Texas.
Aurora was allowed to keep
its organic certification for its
other facilities, but was put on
probation for a year.
Schneider said the Aurora
controversy likely will put pressure on the USDA to enforce
organic food standards more
aggressively.
“That was one issue with the
dairies,” she commented. “Who’s
going to go out there and be
double-checking whether the
cows are in a pasture or a feedlot?”
Campbell predicted more organic food fraud lawsuits.
“I think you’re going to see
this uptick as you see organic
purchasing move up,” he said.
“My hope is the organic milk industry is better today than it was
six months ago because companies realize there’s real liability if
you try to cheat.”
What’s in a name
To be certified as organic –
and claim “organic” on product packaging – products must
meet regulations laid out by the
National Organic Program, an
arm of the U.S. Department of
Agriculture.
Any organic food operation
must be approved and monitored by an accredited
certifying agent, usually a state
agriculture agency or a farmer’s
association.
100 percent organic
The product must contain only
organically produced materials.
It must also include the name
and address of the “handler,” the
company that bottled or packaged the product. According to
the USDA, animals in an organic livestock operation must
be raised under conditions that
provide for “exercise, exercise,
freedom of movement, and reduction of stress appropriate to
the species.”
Organic
The product must contain at
least 95 percent organic ingredients, not counting added water
and salt.”
‘Made with organic ingredients’
The product must contain at
least 70 percent organic ingredients, not counting added water
and salt.
Source: USDA
Reprinted with permission from Missouri Lawyers Media, 319 North Fourth Street, Fifth Floor, St. Louis, MO 63102.
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