Disputes over Insurance Coverage for Organic Milk Litigation Consolidated
A federal magistrate in Colorado has consolidated two lawsuits that address whether Aurora Dairy Corp.’s insurers are required to defend or indemnify the organic dairy in a host of consumer class actions alleging that the company falsely certified its milk as organic. ACE Am. Ins. Corp. v. Aurora Organic Dairy Corp., No. 08-1236 (D. Colo., order entered May 20, 2009).
The putative class actions, consolidated before a multidistrict court in Missouri, claim that Aurora’s milk products do not conform to organic standards, citing a U.S. Department of Agriculture report that purportedly found shortcomings in Aurora’s organic operations. Among other matters, the claimants seek disgorgement for unjust enrichment.
Aurora sued Nationwide Agribusiness Insurance Co. seeking a declaration that the insurer was required to defend it in at least one of the pending class actions. The dairy also sued for bad faith, breach of contract and related claims. A group of insurers previously brought a declaratory judgment action against Aurora, claiming that the consumer actions against the dairy were not covered by their commercial liability policies because they did not allege bodily, property or other injury as specified in the policies. According to a news source, the plaintiffs in the latter suit sought to consolidate the insurance actions in a unopposed motion filed earlier in May 2009. See Product Liability Law 360, May 21, 2009.
