updated 10/17/2007 8:27:09 AM ET 2007-10-17T12:27:09

A lawsuit filed Tuesday claims Boulder-based Aurora Organic Dairy milk fails to meet federal organic standards and asks a judge to stop the company from selling its product.

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The dairy, one of the nation's largest organic milk producers, has repeatedly said its organic certifications are valid.

The lawsuit filed in federal court in St. Louis by customers Kristine Mothershead and Leonie Lloyd of St. Louis claimed the dairy sold milk labeled as organic, at prices much higher than nonorganic milk, when it knew it didn't meet standards for organic certification.

The lawsuit comes less than two months after the dairy announced an agreement with the U.S. Department of Agriculture over its operations, following a USDA investigation of complaints regarding the dairy's organic certification.

USDA officials said they had found that the dairy had not ensured its cows were converted to organic cows, which involves the amount of organic feed the animals consume. Dairy officials said they were selling off 1,000 cows from its farm in Platteville that were in question.

Dairy officials said in a statement that if the case goes to trial, they will prevail.

"There is absolutely no basis for claims we defrauded consumers by selling milk that isn't organic _ none whatsoever. ... Our milk is and always has been organic," Marc Peperzak, Aurora Organic Dairy chairman and CEO, said in the statement. "Our USDA consent agreement makes clear that all of our organic certifications are valid."

Peperzak added, "We are confident in the outcome and will defend our company, our products and our reputation against any and all false claims."

The suit sought class-action status and unspecified monetary damages, along with the injunction. A similar lawsuit was expected to be filed Wednesday in federal court in Denver, according to The Cornucopia Institute.

The Cornucopia, Wis.-based institute, a farm policy group, had filed the complaints leading to the USDA investigation.

Mark Kastel of the institute said the group was incensed that Aurora Organic Dairy was allowed to continue operating with no fines levied, despite the USDA's findings.

"Some people think when they buy organic milk that they're investing in farmers who care for their animals in a different way, not gigantic farms," Kastel said.

Aurora Organic Dairy, which has said its mission is making organic dairy products more affordable, expects more than $100 million in sales this year and provides milk to grocery stores or chains that sell it under their own private labels, the lawsuit said.

"The agenda of the activists is clear," Peperzak said. "They want to drive up the price paid by American consumers for organic milk, shrinking the market, harming consumers and slowing the spread of organic agriculture. If they win, consumers lose."

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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