Nation's Largest Retailers Accused of Organic Fraud
The legal filings in federal courts in Seattle, Denver, and in Minneapolis, against the retailers, come on the heels of class action lawsuits against Aurora Dairy Corporation, based in Boulder, Colorado. The suits against Aurora and the grocery chains allege consumer fraud, negligence, and unjust enrichment concerning the sale of organic milk. This past April, Aurora officials received a notice from the USDA detailing multiple and "willful" violations of federal organic law that were found by federal investigators.
"This is the largest scandal in the history of the organic industry," said Mark Kastel of The Cornucopia Institute, a Wisconsin-based farm policy research group. Cornucopia's own investigations in 2005 first alerted USDA of Aurora's improprieties.
Five lawsuits against the retailers have been filed so far. And law firms based in Seattle, St. Louis, New York and other cities have filed at least eight lawsuits against Aurora, representing plaintiffs in over 30 states.
Aurora, with $100 million in annual sales, provides milk that is sold as organic and packaged as store-brand products for many of the nation's biggest chains. Besides Wal-Mart, Target, Costco, and Safeway, Aurora serves as supplier to 15 other national and regional chains.
Independent investigators at the USDA concluded earlier this year that Aurora-with five dairy facilities in Colorado and Texas, each milking thousands of cows-had 14 "willful" violations of federal organic regulations. One of the most egregious of the findings was that from December 5, 2003, to April 16, 2007, the Aurora Dairy "labeled and represented milk as organically produced, when such milk was not produced and handled in accordance with the National Organic Program regulations."
The stores sell Aurora's milk under their own in-house brand names in cartons marked "USDA organic," and typically with pictures of pastoral farm 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.""This is the perfect example of modern-day Agri-business bullies literally stealing the milk money from an unsuspecting public," said Washington state consumer Rachael Doyle.