Personal Injury Law

Court Rules That Retailers Have No Duty to Investigate Suppliers Compliance with Organic Regulations

By Kenneth Odza

An important ruling was issued last week dismissing claims that milk produced by an organically certified dairy and labeled as organic was not really organic. Plaintiffs in the action asserted violations of various states' laws because they claimed that they paid more for the milk because it was labeled as "organic.'

A federal judge in the Eastern District of Missouri granted a Rule 12(b)(6) motion to dismiss on a multitude of cases pending against the dairy, various retailers selling the dairy products and others (originally these suits were filed in various federal courts around the country but were consolidated for pretrial purposes by the United States Judicial Panel on Multi-District Litigation or MDL).

The judge ruled that claims against the dairy were preempted because a 'conflict exists between federal and state law' (otherwise known as 'conflict preemption'). As explained in the opinion, conflict preemption exists where 'a party's compliance with both federal and state law would be impossible or where state law would pose an obstacle to the accomplishment of congressional objectives.' Here, the court found that for 'plaintiff's claims to succeed, the Court would have to invalidate the regulatory scheme established under the OFPA [Organic Foods Production Act] and NOP [National Organic Program].' The court concluded that if plaintiffs were to prevail 'producers would be liable even where fully certified and authorized to use these terms and seals.'

For the retailer defendants, the judge ruled that because plaintiffs' claims against the dairy are preempted, 'the retailer Defendants cannot be liable.' But the court went further and dealt explicitly with the plaintiffs' claims that the retailers 'should have investigated' the dairy's activities to ensure compliance with the OFPA and NOP. The court rejected these arguments:

The Retailer Defendants did not have any duty to inspect [the dairy's] facilities, or the facilities of any of their other organic producers. Imposing such a requirement 'would place an undue burden on the distributor who is least likely to have access to such information.'

This should be good news for organic retailers. Hopefully, this decision will reduce their legal exposure to consumer labeling claims going forward.

Full post as published by Food Liability Law Blog on June 05, 2009 (boomark / email).