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Wal-Mart, Costco, Target, Safeway, and Wild Oats Sued for Defrauding Consumers with 'Organic' Milk from Factory Feedlots

  • Lawsuits: Costco, others sold 'organic' milk that wasn't organic
    By GENE JOHNSON
    The Associated Press, December 12, 2007
    Straight to the Source

From the Seattle Post-Intelligencer

SEATTLE -- Some of the nation's biggest retailers and grocery chains - Costco Wholesale Corp., Wal-Mart Stores Inc., Target Corp., Safeway Inc. and Wild Oats Markets Inc. - sold "organic" milk that wasn't organic, according to recently filed lawsuits.

The federal complaints focus on the stores' sale of milk from Colorado-based Aurora Organic Dairy, which recently agreed to change its practices after the U.S. Department of Agriculture found more than a dozen violations of organic standards.

The stores sell Aurora's milk under their own in-house brand names, such as Costco's Kirkland and Target's Archer Farms, in cartons marked "USDA organic," typically with pictures of pastures or other bucolic scenes.

"That's not even close to the reality of where this milk was coming from," said Steve Berman, a Seattle lawyer whose firm is among those suing. "These cows are all penned in factory-confinement conditions."

The lawsuits seek class-action status on behalf of people who bought the milk, and ask for their money back as well as punitive damages and attorneys' fees. Consumers typically pay more for organic food because they believe it is free of hormones or pesticides and produced with greater respect for the environment.

The legal disputes are the latest front in the battle over the organic food movement, with large corporate players insisting that they can do organic farming on a large scale, and sustainable family farms complaining that such operations aren't really organic and contribute to surpluses that drive down prices, making it harder for them to compete.

At the center is Aurora, of Boulder, Colo., one of the nation's largest dairies certified organic by the USDA. After a progressive farm-policy organization complained about Aurora's operations, the USDA last spring proposed revoking its organic certification for more than a dozen "willful violations" of the 1990 Organic Foods Production Act from 2003-06. Among them: that cows had little access to pasture, that Aurora moved its cows back and forth between conventional and organic farms, and that it sold milk as organic that did not meet federal standards.

The lawsuits cite those findings as evidence that the milk Aurora produced was falsely labeled as organic.

Aurora agreed to change some of its practices in a settlement with the USDA this summer, and it has reduced the number of cows at its Platteville, Colo., facility from 4,000 to about 975, said Aurora spokeswoman Sonja Tuitele. But it was allowed to keep its organic certification and was put on probation for a year.

Over the past 18 months, the company has also renovated its Platteville operation to increase its pastureland from 325 to 400 acres and make other improvements, Tuitele said.

"Any lawsuits claiming the milk we were selling was not organic have no merit," she said.

Aurora itself has been sued by some consumers, but lawsuits filed in federal court in Denver, Seattle, Minneapolis and San Francisco in the last two weeks are the first to accuse the retailers of misleading their customers into paying higher prices for milk they believed was organic.

Several of the companies declined to comment or did not respond to requests for comment, but Target, of Minneapolis, said it stands behind Aurora's organic milk, which it sells as Archer Farms.

"This lawsuit is inconsistent with the fact that the USDA has reviewed and confirmed the organic certification of Aurora dairy farms and its products," the company said. "It is disappointing that these types of lawsuits are attempting to override the USDA and regulate the organic industry and retailers with their own beliefs of what constitutes an organic product."

But Mark Kastel, co-founder of the Cornucopia Institute in Wisconsin, said overriding the USDA is exactly what's needed. The USDA should have revoked Aurora's certification, he said. The Cornucopia Institute is not involved in the lawsuits, but investigated Aurora and brought it to the USDA's attention, and Kastel said his group plans to sue the USDA for acting in an arbitrary and capricious manner in granting Aurora a "sweetheart deal."

He also said Cornucopia repeatedly told the sued companies about Aurora's practices.

"The USDA is ultimately responsible ... but it does not absolve the retailers from doing due diligence to make sure what they're representing is accurate, especially when they're putting their own name on the label," he said. "People who buy organic think built into that organic price is a different kind of environmental ethic, a more humane animal husbandry standard, and economic justice for family farmers. So when they find out otherwise ... they feel ripped off and betrayed, and rightfully so."

A USDA representative could not be reached after hours Wednesday, but the agency said in announcing the settlement it would ensure "that milk labeled as organic in the supermarket is indeed organic."

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