Wal-Mart, Target must face organic milk label suit

Wal-Mart Stores Inc., Target Corp. and Costco Wholesale Corp. must face a federal lawsuit accusing them of selling milk mislabeled as organic, a U.S. appeals court ruled.

A three-judge panel of the St. Louis-based court Wednesday revived consumer litigation against those and other retailers and the Aurora Dairy Corp. in Boulder, Colo., which produced the milk they sold under store-branded labels. The decision overrules a trial judge who dismissed the claims.

“Each defendant is alleged to have misrepresented the manner in which the dairy cows were raised and fed in violation of various state deceptive trade practices laws,” the appeals court said in a 33-page ruling.

The consumers seek unspecified compensatory damages for having allegedly bought “organic” milk that wasn’t authentically organic, together with statutory and punitive awards.

“Retail stores must be truthful in their representations about their store-brand food products,” and consumers should be able to pursue litigation if those statements are untrue, plaintiffs’ lawyer Elizabeth Fegan of Seattle-based Hagens Berman Sobol Shapiro said.

Sonja Tuitele, a spokeswoman for Aurora, declined to comment.

The media relations departments for the retailers didn’t immediately comment.

A lower-court judge ruled last year that the complaint filed by residents of states including California, New York, Florida, New Jersey and Texas was preempted by the federal statutory framework for regulating organic foods.