A Missouri federal judge has preliminarily approved a class action settlement in a multidistrict litigation involving the alleged mislabeling of organic milk. In re Aurora Dairy Corp. Organic Milk Mktg. & Sales Practices Litig., No. 4:08-md-1907-ERW, D.E. 321 (E.D. Mo. Sept. 14, 2012). Piggybacking on a 2007 report issued by the U.S. Department of Agriculture finding that Aurora Dairy Corp. failed to adhere to regulations required for labeling products as “organic,” numerous class actions were filed in state and federal court across the country, contending that Aurora—and the retailers who sold Aurora’s milk under their own brand and label—falsely advertised the product as organic.
The settlement is the culmination of a long history of litigation. Though initially prevailing in the trial court on a motion to dismiss on the ground that plaintiffs’ claims were preempted by the Organic Foods Production Act of 1990 (“OFPA”), 7 U.S.C. §§ 6501, et seq., and the National Organic Program (“NOP”) regulations, 7 C.F.R. 205, the Eighth Circuit reversed in part, finding no preemption to the extent plaintiffs’ false advertising claims were not based on the defendants’ organic certification or use of the “organic” label In re Aurora Dairy Corp. Organic Milk Mktg. & Sales Practices Litig., 621 F.3d 781 (8th Cir. 2010).
The settlement provides that claimants with proof of purchase can recover up to $30, and claimants without proof of purchase can recover a one-time $10 cash award. In addition, Aurora stipulated to an injunction under which its dairy animals must be provided daily access to pasture. A court monitor will be appointed to review Aurora’s compliance with the terms of the stipulated injunction. The defendants agreed not to oppose an application for attorneys’ fees of up to $2.5 million.