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Judge Rejects Lawsuits Claiming "Organic" Milk Is Fake

Group charges factory farms gaming the organic system

By Mark Huffman
ConsumerAffairs.com

June 9, 2009

Can you tell which of these farms produces organic milk?

A U.S. District Court judge in St. Louis has rejected 19 class-action lawsuits filed by consumers who are claiming fraud in the sale of "organic" milk. The suits claimed the milk labeled as organic actually came from large dairy operations that do not meet the federal government's strict rules for organic products.

Consumers in 40 states had brought the lawsuits, alleging fraud in the manufacture of organic milk sold as storebrands in Wal-Mart, Target, Safeway, Costco and other national chains served by Aurora Dairy. Lawyers for the plaintiffs said that a 2007 federal investigation found the Aurora Dairy had "willfully" violated 14 different federal organic regulations.

The Cornucopia Institute, a Wisconsin-based group promoting small-scale farming, says a handful of large dairy operations like Aurora are making a difficult time in the organic industry much worse. By skirting strict federal regulations and creating a surplus of what the group calls "phony" organic milk, they are flooding the market and driving prices so low than small organic producers who follow the rules are being driven out of business.

The Cornucopia Institute estimates that as much as 30-40 percent of milk labeled as organic is now coming from giant industrial operations, milking as many as 7000 cows each.

Lawyers representing consumers involved with the class-action lawsuits vow that they will appeal the judge’s initial ruling, especially in light of a recent Supreme Court decision that clearly gives citizens the right to sue corporations that allegedly act illegally even though federal regulatory agencies provide statutory authority over certain industries.

According to Mark Kastel, the Senior Farm Policy Analyst for The Cornucopia Institute, the dismissal was a huge setback "because Bush Administration officials had substantially softened USDA penalties recommended by enforcement staff for Aurora’s organic transgressions." Cornucopia said it first alerted the USDA to Aurora's violations by filing formal legal complaints with the agency.

"The very essence of the checks and balances system in our three branches of government provides for citizens to seek remedy, when regulatory agencies fail to enforce laws passed by Congress," said Gary Cox, a Columbus, Ohio-based attorney with experience in the organic industry. "It is our contention that a judicial review of the alleged misconduct by these giant corporations, and the lack of enforcement by the USDA, is not only appropriate but imperative."

The outcome of the pending suits will not only impact consumers but many organic dairy farmers whose livelihoods are now threatened by the giant corporate dairy marketers.

Meanwhile, there's a glut of organic milk on the market, meaning dairy processors who package and distribute organic products are reducing supplies and cutting the prices they pay to farmers. Dean Foods, the nation's largest milk processor, and owner of the Horizon Organic brand, and H. P. Hood, a giant Boston-based milk bottler, that controls the Stonyfield milk label, have both terminated contracts with farmers Cornucopia alleges.

"I have invested my life in building this dairy farm, and Hood encouraged many dairy producers to make major investments and ramp-up for organic production, now my entire livelihood and the financial future of my family is at risk," said Kevin Poetker who milks 200 cows near Waterloo, IL, near St. Louis.

Cornucopia is organizing an effort to pressure the Obama Administration to take a different tack on the issue than its predecessor. The groups says thousands of letters, mostly from organic farmers, have been sent to President Obama and USDA secretary Tom Vilsack asking them to immediately intervene and undertake aggressive enforcement of organic regulations.

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