Organic dairy settles deceptive marketing class action for $7.5 million

Posted on: September 19th, 2012 by Steve Larson

Aurora Organic Dairy, a major organic milk producer said it has agreed to settle a five-year-old consumer lawsuit over alleged deceptive marketing claims for $7.5 million.  The Boulder, Colorado-based producer, which said its organic certifications were not challenged by the consumer class action suit at the end, admitted no wrongdoing but settled Friday to avoid the cost and distraction of prolonged litigation. Spokeswoman, Sonja Tuitele, said Saturday that legal costs alone could have run to $10 million if the drawn-out case continued.

In 2007, the U.S. Department of Agriculture and Aurora signed a 2007 consent agreement that required the producer to adopt more stringent practices or risk losing its organic certification.  During a monitored, one-year probationary period, Aurora agreed to give its cows daily access to pastures but not to over-graze them. It also agreed to eliminate cows that had not been properly transitioned from conventional herds while implementing a more stringent transition process.  Organic industry watchdog groups like Wisconsin-based Cornucopia Institute criticized President George W. Bush’s administration for not extracting tougher penalties from Aurora.

According to Sonja Tuitele, the civil suit was unrelated to USDA consent agreement.  In the civil suit, both the district court and the appellate court dismissed the original claims in the lawsuit that challenged the validity of Aurora Organic Dairy’s organic certificates and the organic labeling of its products.  The only remaining claims in the lawsuit relate to marketing and imagery on the milk cartons that allegedly misled consumers. 

If a federal court in St. Louis approves the settlement, consumers can get $10 rebates without a receipt and up to $30 with receipts. A planned website will explain how to file for rebates.