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United States v. Organic Pastures Dairy Co. LLC

March 5, 2009

UNITED STATES OF AMERICA, PLAINTIFF,
v.
ORGANIC PASTURES DAIRY COMPANY LLC, CORPORATION AND MARK MCAFEE, AN INDIVIDUAL, DEFENDANTS.



The opinion of the court was delivered by: Oliver W. Wanger United States District Judge

ORDER AFTER SCHEDULING CONFERENCE

Settlement Conference Date: 05/07/2009 10:30 Ctrm. 10

I. Date of Scheduling Conference

March 5, 2009.

II. Summary of Pleadings

1. The United States alleges that Defendants have sold raw milk in interstate commerce for human consumption, that Defendants' "pet food only" label is false and misleading, and that Defendants are making drug claims for their raw milk and raw milk products. The United States seeks to enjoin and restrain Defendants from violating:

a. 42 U.S.C. § 264, by engaging in conduct that may endanger the public health and safety by contributing to the introduction, transmission, or spread of communicable diseases between the states or into the United States, through their distribution, in interstate commerce, of raw (unpasteurized) milk and raw (unpasteurized) milk products in final package form for human consumption, in violation of 21 C.F.R. § 1240.61(a);

b. 21 U.S.C. § 331(a), by introducing or delivering, and causing to be introduced or delivered, into interstate commerce food that is misbranded within the meaning of 21 U.S.C. § 343(a)(1); and

c. 21 U.S.C. § 331(d), by introducing or delivering, and causing to be introduced or delivered, into interstate commerce, new drugs within the meaning of 21 U.S.C. § 321(p) that are neither approved under 21 U.S.C. § 355(a), nor exempt from approval pursuant to 21 U.S.C. § 355(i).

2. This statutory injunction proceeding is brought under the Public Health Service Act (the "PHSA"), 42 U.S.C. §§ 264 and 271, and the Federal Food, Drug, and Cosmetic Act (the "Act"), 21 U.S.C. § 332(a). The United States incorporates by reference its Complaint, filed November 20, 2008 (Doc. 1).

Answer to Complaint

3. Defendants have specifically admitted and denied various allegations. In summary, Defendants deny selling raw milk in interstate commerce for human consumption; deny that their labels are misleading, or that they are making drug claims for their raw milk and raw milk products.

4. Defendants also assert that many of the government's claims are moot, and that many of the acts alleged were done with the acquiescence and consent of government agencies.

5. Defendants allege that many of the acts or omissions alleged have stopped and/or been altered rendering injunctive relief moot.

6. Defendants allege many of the acts or omissions were performed with the consent, agreement and/or the direction of government entities with jurisdiction thereof, and such acts or omissions by these defendants are/were privileged and may not be enjoined.

7. Defendants allege that some of the acts, circumstances or omissions alleged, in particular, the context of websites of other entities, are beyond the authority or control of these Defendants, thus injunctive relief may not issue against them.

8. Defendants allege the allegations in this matter have been resolved in a related criminal action, rendering these allegations moot by the doctrines of settlement and compromise and/or res judicata.

9. Defendants allege Plaintiff, prior to the filing of this complaint, agreed to and/or acquiesced to the acts and omissions now complained of against these Defendants and, thus, said complaint is barred by the equitable doctrines of waiver and/or estoppel.

III. Orders Re Amendments To Pleadings

1. The parties do not anticipate amending the pleadings at this time.

IV. Factual Summary

A. Admitted Facts Which Are Deemed Proven Without Further Proceedings

1. Defendant, Organic Pastures Dairy Company LLC ("Organic Pastures"), is incorporated under the laws of the State of California, with its principal place of business located at 7221 South Jameson, Fresno, California.

2. Defendant Mark McAfee, an individual, is the co-founder and managing member of Organic Pastures. Mr. McAfee is the most responsible individual for the day-to-day operations of Organic Pastures. Specifically, he is responsible for, and has authority over, all of Organic Pastures' manufacturing and distribution operations. Mr. McAfee resides and conducts business in California, within the jurisdiction of this Court.

3. Defendants have been, and are now, engaged in milking cows and packaging, labeling, selling, and distributing, in interstate commerce, raw milk and raw milk products including, but not limited to, cream, butter, buttermilk and colostrum.

4. Defendants promote their products as "unpasteurized" or "raw," and FDA's independent analysis has confirmed that Defendants' products are raw.

Facts Related to Plaintiff's Food Charges

5. In September, 2007, numerous frozen samples of Organic Pastures' raw milk and raw milk products were distributed to customers. The labeling located on the exterior of the shipping container carrying these products read as follows:

"In compliance with FDA regulations and CFR 1240.61, [Organic Pastures] does not take orders or ship any raw State of California. All out of state product sales dairy products for 'human consumption' outside of the are labeled and intended for: 'Pet Food' consumption only. The quality and safety of this 'pet food' product is identical to what is offered to consumers in the California retail market." (hereafter, referred to as "Defendants' 'pet food' labeling").

6. Nowhere on the individual retail product is there a label indicating that the product is to be limited to pet consumption or identifying the product as pet food. The labels on the individual retail products bear statements such as "the best milk you'll ever taste," and state that Organic Pastures ...


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