Personal Injury Law

Aurora Dairy Organic Milk Case: Eighth Circuit Preempts Some Claims And Remands Others

By Richard Goldfarb

As we reported some time ago, a class action suit was pending in the Eastern District of Missouri against Aurora Dairy, its organic certifier and certain retailers for violation of state consumer protection laws. The district court had dismissed the case on the grounds that all claims were preempted by the Organic Foods Production Act of 1990 (OFPA), and the plaintiffs appealed to the court of appeals for the Eighth Circuit. On September 15, the Eighth Circuit affirmed the dismissal of some of the claims and remanded the remaining claims to the district court.

Nineteen class action suits across the nation had been consolidated into a single action in the Eastern District of Missouri. In a consolidated class action, the plaintiffs made claims against Aurora Dairy Corporation, a certified organic dairy located in Boulder, Colorado, QAI, Inc., a certifying agent under the National Organic Program administered by the USDA, which had certified Aurora's milk as organic, and certain retailers who had sold Aurora's milk under Aurora's brand as well as under their own store brands. A total of 57 counts were brought against the several defendants, on theories ranging from violation of state consumer protection laws to violation of implied warranties under the Uniform Commercial Code to unjust enrichment and negligence per se. The district court dismissed all the claims on the grounds of so-called 'conflict preemption', where allowing states to regulate an area would conflict with Congress's regulation scheme.

The Eighth Circuit agreed with the conflict preemption analysis as it related to QAI, the certifying agent, which was dismissed from the case in full, and as it related to the labeling of the products as 'organic' based on the certification by QAI.

To the extent the class plaintiffs, relying on state consumer protection or tort law, seek to set aside Aurora's certification, or seek damages from any party for Aurora's milk being labeled as organic in accordance with the certification, we hold that state law conflicts with federal law and should be preempted.

The court of appeals disagreed, however, with the district court on other claims, stating,

Preempting state law claims unrelated to the decision to certify, and certification compliance, does not advance the purpose of establishing national standards for organic foods. Nor does preemption of the facts underlying certification advance the goals of assuring consumers that organics meet a consistent standard, or in facilitating interstate commerce in organics.

The court remanded the case to the district court to determine, based on the standards in its decision, which claims would survive against Aurora and the retailers. This was due in part to the district court having not decided, on the grounds that it was moot, motions by the defendants to strike the consolidated complaint and by the plaintiffs' motion to the amend it. Thus, the district court's first task would be to decide those motions before it can determine what claims, if any survive.

Full post as published by Food Liability Law Blog on September 24, 2010 (boomark / email).