The multitdistrict litigation (MDL) court in Missouri before which nearly 20 putative class actions against Aurora Dairy Corp., an accredited organic certifying agent and several retailers had been consolidated for pre-trial proceedings, has dismissed the lawsuits with prejudice finding that federal organic food laws preempt the claims. In re Aurora Dairy Corp. Organic Milk Mktg. & Sales Practices Litig., MDL NO. 08-1907 (E.D. Mo., decided June 3, 2009). Relying on a U.S. Department of Agriculture (USDA) investigation that found the dairy in violation of national organic program requirements relating to pasturing and organic management, the plaintiffs alleged violations of various state consumer protection laws, breaches of express and implied warrantees, negligence per se, negligent misrepresentation, and unjust enrichment. The court discusses at length the program under which Aurora Dairy conducted its operations with the overall supervision and control of USDA. While the court found that the litigation claims were not expressly…
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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…
The Kansas Senate will apparently not try to override former Kansas Governor Kathleen Sebelius’s veto of a bill that would have required a disclaimer on dairy products made without artificial growth hormones. Sebelius, recently confirmed as U.S. Secretary of Health and Human Services, vetoed the bill in late April 2009 reportedly because it would have made it more difficult for consumers to get clear information. “Supporters of the bill claim it’s necessary to protect consumers from false or misleading information,” she was quoted as saying. “Yet there has been overwhelming opposition by consumer groups, small dairy producers and retailers to this proposed legislation.” Under the bill, manufacturers that have stated their product is not from cows supplemented with the genetically engineered bovine growth hormone (rbGH or rbST) would have had to document the claim and put a disclaimer on the product label. State Senator Marci Francisco, (D-Lawrence) a vocal opponent…
The D.C. Circuit Court of Appeals has determined that the owners of a dairy are not required to first exhaust administrative remedies before bringing a constitutional challenge to Agricultural Marketing Agreement Act amendments. Hettinga v. U.S., No. 07-5403 (D.C. Cir., decided April 3, 2009). The amendments codified certain rule changes that the Secretary of Agriculture made to a program that regulates payments from milk handlers (processors and distributors) to milk producers (farmers) and is intended to protect producers from price fluctuations. The plaintiffs sought an injunction against enforcement of the secretary’s rule, and, while that proceeding was pending before a federal court in Texas, Congress amended the law. The plaintiffs then filed a complaint in a D.C. district court alleging that “the Amendments are unconstitutional as a bill of attainder and a denial of due process and equal protection because only the Hettingas are subject to them.” The district court…
The Institute for Responsible Technology (IRT) has urged Governor Kathleen Sebelius (D-Kansas) to veto a bill passed by the Kansas Legislature on April 3, 2009, that restricts U.S. dairies from labeling their milk products free from genetically engineered bovine growth hormone (rbGH or rbST). Sebelius, who is vying to become the new U.S. Secretary of Health and Human Services, has until April 16 to veto the bill. According to the consumer advocacy group, which claims milk from hormone-treated cows can cause cancer, companies such as Wal-Mart, Starbucks and Dannon, and more than half of the nation’s top 100 dairies have committed to stop using rbGH in some or all of their products. The Kansas legislation would require all manufacturers that sell rbGH-free products in the state, including national brands, to add a large disclaimer on their packages stating that the hormone does not change the quality of the milk. See…
Food & Water Watch has called on supporters to tell the Food and Drug Administration (FDA) that they do not want milk protein concentrates (MPCs) in their dairy products. According to the advocacy group, unregulated imports of inexpensive MPCs “are driving down the price of domestically produced milk and putting American dairy farmers out of business.” Food & Water Watch also claims, “No one in the government is checking to make sure that they’re safe to eat, and now FDA is thinking about letting them be used to make yogurt.” FDA is apparently considering an industry proposal to change yogurt’s “standard of identity” to allow the use of MPCs. The organization explains in its call for action how MPCs are created and then used as an additive in processed cheeses, frozen dairy desserts, crackers, and energy bars. While most MPCs used in the United States are apparently imported, “MPCs have…
Aurora Dairy Corp., which is defending multidistrict litigation involving putative class claims that it sold its products as “organic” without following national organic program standards, has sued one of its insurance carriers in federal court seeking a declaration that the insurer has wrongly failed to provide defense coverage. Aurora Dairy Corp. v. Nationwide Agribusiness Ins. Co., No. 09-00346 (D. Colo., filed February 19, 2009). According to the complaint, “Aurora has been named in thirteen consumer class actions filed in the courts of six different states.” The claimants in those lawsuits allege a variety of causes of action including “that the milk provided by Aurora that they purchased allegedly exposed them, their families and their friends to pesticides, hormones, antibodies, and other chemicals and/or has generally caused them injury or damage.” Additional details about the underlying lawsuits appear in issues 251, 279 and 286 of this Update. Aurora claims that it has…
More than 200 Chinese families whose children were sickened after consuming melamine-contaminated milk products have reportedly filed suit against a group of 22 milk producers before the Supreme People’s Court in Beijing. Earlier class action suits filed in Chinese courts were not accepted, so it is unclear whether this action will proceed. According to Lin Zheng, who is coordinating the litigation for a group of volunteer lawyers, this lawsuit includes four dead children not previously accounted for in government statistics. Lin also indicated that the lawyers will file another lawsuit on behalf of the survivors of a fifth unacknowledged dead child. The government reported that six children died and nearly 300,000 became ill with kidney stones and other problems. The latest action includes a demand for more than $5.2 million in compensation. In a related development, a dairy middleman, convicted of selling 600 tons of melamine-tainted “protein powder” to dairy companies,…
The Food and Drug Administration (FDA) has apparently prevailed in proceedings seeking injunctive relief against two New Mexico dairies that “were not keeping adequate medication records to prevent unsafe drug residues in cattle offered for slaughter” and “were using medications for unapproved indications not specified on the drug label” without a valid veterinarian-client-patient relationship. The companies, Do-Rene and Clover Knolls Dairies, were warned about these violations in 2005 and 2008 following inspections and tissue sampling. Apparently, some of the dairies’ cows tested positive for illegal levels of a number of drugs, including one “expressly forbidden for use in lactating cows.” According to FDA, “These residues may cause allergic reactions in extremely sensitive individuals, and they may contribute to forming antibiotic-resistance in bacteria.” Future violations may result in civil or criminal penalties. See FDA Press Release, January 2, 2009.
The Kansas Department of Agriculture this week held its final hearing on a regulation that would ban labels advertising a dairy product as “rBGH free,” “rBST free” or “artificial growth hormone free.” As of January 2010, the measure would also require products marketed as “derived from cows not supplemented with growth hormones” to carry disclaimer language stating, “the FDA has determined that no significant difference has been shown between milk derived from rBST-supplemented and non-rBST-supplemented cows.” The department proposed the rules to reduce consumer confusion on the issue, but organic and environmental groups have since formed a coalition to lobby against the regulation. According to the Center for Food Safety, “94 dairy farmers; consumer, farm and agricultural groups; public health, animal protection and environmental organizations; food processors; and retailers” signed a letter to Kansas Governor Kathleen Sebelius (D), claiming that the “proposed rule puts unnecessary obstacles in the way of…
