Multiple class action complaints were filed in 2019 after non-profit animal welfare group Animal Recovery Mission released harrowing videos from an undercover investigation of Fair Oaks Farms in northwest Indiana - owned by fairlife founders Sue and Mike McCloskey – showing animals being mistreated, which prompted fairlife to suspend deliveries from the farm and step up audits at all of its milk suppliers.
Some retailers also removed fairlife milk from shelves at the time, although it doesn’t appear to have had any lasting impact on the billion-dollar-brand, which is now fully-owned by Coca-Cola.
The litigants in the class action lawsuits – which were consolidated in late 2019 – were not suing Coca-Cola and fairlife for animal cruelty, but for false advertising, in that they paid a premium for products based on reliance on packaging claims that fairlife provided 'extraordinary care' for its dairy cows, "but that these claims were false and they consequently suffered economic loss."
Some legal experts said at the time that plaintiffs might have a hard time proving that the milk they purchased came from an abused animal as fairlife had multiple suppliers and the abuse incidents could have been isolated.
However, the plaintiffs argued that this wasn’t the point. Fairlife, they said, charged a premium “for the express promises that dairy cows which produce their milk products were treated humanely, but did not have systematic measures in place to ensure those promises were truthful.”
Asked about this, Ryan Kaiser, managing partner at law firm Kaiser IP (which does not represent any of the parties) said: "We won’t get a chance to see how that argument would have faired since the parties are entering into a negotiated settlement.
"The plaintiffs' memo in support of the settlement is unlikely to be opposed in a meaningful way (at least not as to the “typicality” position) since the parties and counsel are looking to get the settlement approved. For all intents and purposes, at this point the fight is over."
As to the size of the settlement, he added: "While I’m not privy to any ‘behind the scenes’ information in this case, I’m sure the settlement is reflective of the information that came out during discovery and the potential liability to the defendants if the case proceeded to trial."
$21m settlement fund
In an April 27 preliminary approval order giving the provisional thumbs up to a proposed settlement agreed by both parties on April 14, US district judge Robert M. Dow, Jr. said the defendants (Coca-Cola, fairlife, Select Milk Producers, Fair Oaks Farms, and Mike and Sue McCloskey) had agreed to establish a $21m fund to settle the action owing to the cost and uncertainty of protracted litigation, although they did not admit any liability.
According to court filings, class members (anyone in the US who purchased fairlife products for personal use on or before April 27) are entitled to up to $20 with no valid proof of purchase, and up to $80 with valid proof of purchase (while the handful of named plaintiffs might receive $3,500 each), although claims will be “subject to a pro rata increase—upward or downward—depending upon the number filed.”
Coca-Cola and fairlife have also agreed to work with two unnamed nonprofits to “implement significant injunctive relief” that would “create a monitoring and compliance program, aimed at ensuring their cows receive humane treatment.”
'We stopped sourcing milk from Fair Oak Farms'
In an email to FoodNavigator-USA, a fairlife spokesperson said: “We stopped sourcing milk from Fair Oak Farms immediately following the 2019 incident and we have not sourced milk from them since.”
The spokesperson added: “Animal welfare is and will always be a top priority for fairlife. In partnership with our supplying farms, we have significantly strengthened our animal care programs and processes since 2019 – including improving oversight with camera monitoring, a third-party animal welfare advisory board and increasing the number of unannounced audits at our supplying farms.
“In 2021, 100% of our full-time supplying farms passed critical care standards. Our team continues to work to advance animal care within our supply chain and the industry.”
'Camera monitoring that monitors all human-animal interaction'
According to its latest stewardship report, fairlife invested more than $8m in 2021 to help its supplying farms implement animal welfare standards “and to explore new methods and technologies to improve animal care.”
Fairlife is also working with supplying farms to “install camera monitoring that monitors all human-animal interaction,” said the brand, which is also “piloting artificial intelligence camera monitoring.
“All of our full-time supplying dairy partners are audited by Validus, an independent third-party animal welfare certification firm, and are certified in animal welfare, worker care, and environmental practices.”
Plaintiffs in another high-profile class action lawsuit also filed in 2019 over animal welfare claims (taking issue with references to 'happy cows' on Ben & Jerry's packaging) were less successful, with brand owner Unilever persuading the court to toss the case in 2020 (and famously observing that it never said all of the cows supplying its milk were happy).
A lawsuit filed at around the same time also accused dairy brand Tillamook of presenting a deceptively bucolic image of a brand sourcing milk from cows grazing on local small farms, when most of its milk came from industrial scale factory farms.
*The fairlife case is 1:19-cv-03924, US district court northern district of Illinois, eastern division.
Founded by Indiana dairy farmers Mike and Sue McCloskey in 2012 as a joint venture between The Coca-Cola Company and Select Milk Producers (a co-op of 99 family-owned farms started by the McCloskeys in 1994), Fairlife was fully acquired by Coca-Cola in 2020.
Based in Chicago, Fairlife operates processing and bottling plants in Coopersville, Michigan; Dexter, New Mexico; Peterborough, Ontario; and Phoenix, Arizona.
Its flagship product is ultra-filtered milk with 50% more protein and 50% less sugar than regular milk. The milk is filtered to concentrate the naturally occurring protein in a process that removes most of the lactose (milk sugar). The remaining lactose is broken down into simple sugars by adding lactase enzyme, so the milk still contains some sweetness.
Other products in the Fairlife stable include ice cream and Core Power protein shakes.
According to a press release issued February 11, 2022, Fairlife "has surpassed $1bn in annual retail sales."