The ruling overturned a lower court decision that barred such suits on the grounds that they were superseded by federal law.
Congress wanted only state and federal prosecutors to police organic food violations in order to create a national standard for organic foods, a division of the 2nd District Court of Appeal decided in 2013.
The state Supreme Court said allowing lawsuits would further congressional goals of curtailing fraud and ensuring consumers can rely on organic labels.
"Accordingly, state lawsuits alleging intentional organic mislabeling promote, rather than hinder, Congress's purposes and objectives," Associate Justice Kathryn Werdegar wrote for the unanimous court.
At issue were allegations in a lawsuit by consumer Michelle Quesada that Herb Thyme Farms Inc. — one of the nation's largest herb producers — mixed organic and non-organic herbs then falsely labeled the product "organic."
A call to Cliff Neimeth, an attorney for Herb Thyme Farms, was not immediately returned.
The company said in court documents it had been authorized by the U.S. Department of Agriculture to use the organic label. Allowing individual lawsuits challenging that designation would open the door to a patchwork of standards for the term "organic" that would defeat the goal of a national organic foods marketplace, the company said.
"If a lone consumer can second-guess the USDA's certification, and a grower cannot rely on its federal authorization to use the term, the already high cost of production of such products will skyrocket, or more likely, there will be no organic products to enjoy," Mark Kemple, an attorney for Herb Thyme Farms, wrote in a 2014 brief to the California Supreme Court.
Raymond Boucher, an attorney for Quesada, said before the ruling a decision in his client's favor would help people ensure products are accurately and appropriately labeled.
"It will give private citizens an opportunity to bring corporations into court when necessary to help police this important and vital area," he said.
Quesada's lawsuit seeks to represent consumers who "fell victim to Herb Thyme's scheme to mislead consumers into paying premium prices for impostor products," her attorneys wrote in a court filing.