A federal appeals court says a group of dairy consumers can proceed with parts of a lawsuit alleging that several national retailers and an organic dairy company falsely labeled the dairy's milk.

Aurora Organic Dairy, based in Boulder, Colo., is the nation's largest provider of store-brand organic milk.

Customers sued Aurora and retailers including Wal-Mart Stores Inc., Wild Oats Markets Inc., Target Corp. and Costco Wholesale Corp., claiming Aurora's milk was misleadingly labeled. The appeals court blocked their claims that Aurora is not an organic dairy because the certification remains in effect.

But ruling requires the trial court to hear claims that the milk isn't produced in the kinds of farms the labels describe.