When is organic not organic? When it's Target's house brand milk, according to a lawsuit filed by an Indiana couple.

The class action suit, filed Dec. 14 in U.S. District Court, says Colorado-based Aurora Organic Dairy, which supplies Target, milked cows that didn't live the organic life. The suit could lead to more. Aurora also supplies milk to Wal-Mart.

This lawsuit is the latest round in a battle about large producers versus small dairy farms, and the consumer who pays more for milk labeled "organic."

The USDA rules don't dictate the size of farms, just the way the animals are treated. The large producers argue that if the organic food business is going to be anything but a small boutique market, they've got to be allowed to use large scale processing. The small dairy farms counter that when consumers buy milk labeled "organic," they picture it coming from small herds of cows that graze lazily on bucolic pastures.

The prize is a bite of the organic foods market that is growing while other segments remain stagnant. According to the Organic Trade Association, organic foods grew almost 21 percent in 2006. Organic markets worldwide, although immature, are expanding at a fast pace, too, with an average growth rate of 15 to 20 percent annually. By far the biggest market in Asia is Japan, according to a trade association report.

'Willful violations' The suit against Target dates back to 2005 when Cornucopia Institute, a Wisconsin organic watchdog group, was invited by a vendor to inspect Aurora's farms. After looking the place over, Cornucopia complained to the U.S. Department of Agriculture that Aurora's farms were really factories, according to Mark Kastel, Cornucopia co-director and senior farm policy analyst.

Following an investigation, Mark Bradley, associate deputy administrator of the National Organic Program of the USDA, wrote to Aurora last spring. "We identified willful violations of the Organic Foods Production Act of 1990," he wrote. "Due to the nature and extent of these violations, the NOP proposes to revoke Aurora Organic Dairy's production and handling certifications."

The letter went on with a list of violations, which the suit against Target repeats verbatim.

But the USDA didn't pull Aurora's certification. Instead, late last August the two came to an agreement where Aurora would address several key complaints. Aurora's Platteville, Colo., facility would have to provide its cows daily access to pasture during the growing season, "acknowledging that lactation is not a reason to deny access to pasture," according to the USDA.

The dairy had not given cows enough pasture to graze and also had diluted the herd by mixing in cows that had not been raised as organic calves, according to the feds. And its record keeping was not up to par. The USDA said Aurora had to improve on all counts.

"It was a sweetheart deal," said Kastel, adding that Cornucopia plans to file suit against the USDA after the first of the year because of the agreement.

Other lawsuits Target's defense is that Aurora has at no time lost its organic certification.

"We are not aware of any ongoing investigations of Aurora Dairy Farms," Target spokesperson Brandy Doyle said in a prepared statement. "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."

Patrick and Caryn Hudspeth, the plaintiffs, argue they paid a premium for what they thought was organic milk between Dec. 5, 2003 and Oct. 15, 2007, well before the USDA and Aurora came to terms. The Hudspeths are asking for a jury trial.

Similar suits against Aurora have been filed in St. Louis and Denver.

"The suit against Target is the latest in a series of copycat lawsuits inspired by the false claims of activist groups engaged in a smear campaign against large-scale organic producers," Aurora spokeswoman Sonja Tuitele said in an emailed statement.

Tuitele says the lawsuit will deter retailers from selling organic products, doing more harm than good to organic farmers large and small.

"To us, it is obvious that the activists' real goal is to limit the supply of organic milk and drive up the price paid by American families. This, too, would harm consumers and slow the spread of organic agriculture," she said.

At the Wedge Community Co-op at 21st Street and Lyndale in South Minneapolis, the largest single-site food co-op in the country with 2,500 customers a day, consumers made it clear they favored small producers over large, according to Barth Anderson, Wedge director of research and development coordinator.

The Wedge has never carried Aurora products, but it has carried milk from Horizon, whose parent company is Dean Foods. In 2004 the Wedge also began selling milk from Cedar Summit Farm, a small New Prague dairy.

"Our customers stopped buying Horizon," Anderson said. "Cedar Summit swept the legs right out from under Horizon."

The Wedge stopped carrying Horizon milk.

"Our clientele is the core of the core organic buyers," he said. "If David can slay Goliath so easily, maybe the other Goliath needs to pay attention."

Judith Yates Borger reports on legal affairs, science and other subjects. She can be reached at Judy@JudithYatesBorger.com.