Opinion
01-CV-986 (JEL/JGL)
September 11, 2002
ORDER
This matter comes before the Court on defendant's motion for summary judgment. Oral arguments were heard on July 18, 2002. Defendant argues that plaintiff's claims are all preempted by the Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA"), 7 U.S.C. § 136a, et seq. Alternatively, defendant asserts plaintiff's claims are barred or limited pursuant to Minnesota's Economic Loss Doctrine or that the Uniform Commercial Code ("UCC") governs the transaction and plaintiff is therefore limited to recover only the purchase price of the herbicide alone.
I. Background
Plaintiff used defendant's herbicide, AIM®, on its seed corn crop. This caused significant damage, despite defendant's oral representations and labeling that the herbicide was safe for use on seed corn. Plaintiff makes claims of breach of express and implied warranties, negligent failure to warn, strict liability for failure to warn, negligent misrepresentation, false advertising, negligent testing, negligent labeling, and consumer fraud.
Plaintiff is a three-brother-owned company that produces seed corn and seed soybeans. One of the three brothers, Craig Dahlman, was responsible for selecting what pesticides or herbicides to use on plaintiff's crops. Mr. Dahlman reviewed AIM's label and spoke with David Eckhoff of Howe Company, who stated the product could be safely used on seed corn, which directly resulted in Mr. Dahlman's decision to purchase AIM for use on plaintiff's seed corn crop in 1999. The label stated that "Due to environmental conditions and with certain spray tank additives, some herbicidal symptoms may appear on the crop. However, the crop recovers quickly with no loss in yield." The label also stated that it was appropriate for use on seed corn. This label was approved and registered with the United States Environmental Protection Agency ("EPA"). This was the first year AIM was available for use by consumers, and contained a new chemistry not utilized before.
Plaintiff applied the herbicide according to the label, but the fields began to show signs of "leaf wrap" a few days later. Leaf wrap occurs when, due to herbicide desiccation, the leaf that is wrapped around the "whorl" of the plant is severely damaged or killed, resulting in the plant being unable to fully emerge. Plaintiff reported the problem to defendant, who dispatched its area sales representative to view the fields. In response, defendant offered to hire manual laborers to walk the fields and tear off the tightly wrapped leaves, but plaintiff refused that offer, concerned with the delicate condition of the plants, and desiring the plants not be disturbed at that time.
Many of the plants died or were delayed in development. Plaintiff claims yield loss and increased expenses as a result of the damage. Defendant now seek summary judgment pursuant to Rule 56(c) of the Federal Rules of Civil Procedure.
II. Analysis
A. Summary judgment
Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 246 (1986). As the Supreme Court noted, "one of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims and defenses." Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). On a motion for summary judgment, the court views all evidence in favor of the nonmoving party. Anderson, 477 U.S. at 250.
The party opposing summary judgment may not rest upon its pleadings, but must produce significant probative evidence demonstrating a genuine issue for trial. Id. at 248-49; see also Hartnagel v. Norman, 953 F.2d 394, 395-96 (8th Cir. 1992). If the opposing party fails to carry this burden, or fails to establish the existence of an essential element of its case on which that party will bear the burden of proof at trial, summary judgment should be granted. Celotex, 477 U.S. at 322; Mt. Pleasant v. Associated Elec. Coop., Inc., 838 F.2d 268 (8th Cir. 1988).
B. FIFRA Preemption
1. FIFRA Requirements
FIFRA contains a broad scheme for the regulation of pesticide, including herbicide, labeling and packaging. As part of its FIFRA-enforcing powers, the EPA requires manufacturers to submit draft label language to it, addressing a number of different topics, including ingredients, directions for use, and adverse effects of the product. 7 U.S.C. § 136a(c). Applicants for registration are responsible for submitting certain performance data and draft product labels. See 40 C.F.R. § 158.100 — 158.740. The EPA, however, does not generally attempt to independently verify the test data provided. Because AIM® is an herbicide, governed by the FIFRA, 7 U.S.C. § 136u, it must be registered with the EPA. 7 U.S.C. § 136a(a) (2002).
Defendant argues that plaintiff's claims are all preempted by FIFRA. Plaintiff claims this is not so. Under the Supremacy Clause of the United States Constitution, the laws of the United States are the supreme law of the land. See U.S. Const. art. VI, cl. 2. Congressional intent determines whether a federal statute preempts state law. See Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996). In any area of traditionally state regulated police powers, a presumption against preemption exists. See Cipollone v. Liggett Group, Inc., 505 U.S. 504, 517 (1992).
FIFRA restricts state-based demands on labeling that "impose or continue in effect any requirements for labeling or packaging in addition to or different from those required under this subchapter." 7 U.S.C. § 136v(b). The term "requirements" includes state common law actions, as well as state laws and regulations. Grenier v. Vermont Log Buildings, 96 F.3d 559, 563 (1st Cir. 1996); MacDonald v. Monsanto Co., 27 F.3d 1021, 1025 (5th Cir. 1994). FIFRA otherwise expressly reserves power to states to "regulate the sale or use of any federally registered pesticide or device in the State, but only if and to the extent the regulation does not permit any sale or use prohibited by this subchapter." 7 U.S.C. § 136v. Thus, the language of FIFRA attempts to strike a balance between state and federal control. See Wisconsin Pub. Intervenor v. Mortier, 501 U.S. 597, 613 (1991) (holding that FIFRA does not preempt the entire field of pesticide regulation and leaves ample room for state regulation).
2. FIFRA Preemption
At issue in this particular case is the extent to which 7 U.S.C. § 136v(b) preempts plaintiff's state law causes of action. Defendant argues that all of plaintiff's claims are premised on alleged deficiencies, errors, or inadequacies of the AIM label, and thus are preempted. Plaintiffs contend their claims fall outside the range of state-law causes of action that are preempted by FIFRA.
The majority of courts have found that FIFRA expressly preempts state law failure to warn claims, express warranty, implied warranties, and others that are premised on the adequacy of the label. See, e.g., Netland v. Hess Clark, 284 F.3d 895 (8th Cir. 2002) (holding that FIFRA preempts state law claims based on failure to warn or inadequate labeling and breach of express warranty); National Bank of Commerce v. Dow, 165 F.3d 602 (8th Cir. 1999) (holding in dicta that FIFRA preempts express warranty claims and failure to warn claims, at least to the extent that the claims would impose requirements "different from" or "in addition to" those imposed by FIFRA); Welchert v. American Cyanamid, 59 F.3d 69 (8th Cir. 1995) (holding FIFRA preempts express warranty claims referring to rotational crop restrictions); Worm v. American Cyanamid, 5 F.3d 744, 747 (4th Cir. 1993) (holding FIFRA preempts claims for negligent labeling for a plaintiff farmer's damaged corn crop due to failure to warn on crop rotation hazards); Jeffers v. Wal-Mart Stores, 84 F. Supp.2d 775 (S.D.W.V. 2000) (finding negligence, strict liability and express warranty based on labeling claims are all preempted); Etcheverry v. Tri-Ag Service, 93 Cal.Rptr.2d 36 (2000) (holding state law claims based on failure to warn, when it concerns the pesticide's label, are preempted by FIFRA); Ackerman v. American Cyanamid, 586 N.W.2d 208 (Iowa 1998) (holding breach of implied warranty was preempted). But see American Cyanamid Company v. Geye, 2002 WL 1448843 (Tex. June 6, 2002) (holding farmer's state law claims are not preempted because the EPA does not collect data regarding efficacy and target area phytotoxicity); Lucas v. Bio-Lab, Inc., 108 F.2d 518 (E.D. Va. 2000) (finding plaintiff's defective packaging claim premised on state law is not preempted by FIFRA). Thus, it would appear that plaintiff's claims for negligent labeling, breach of express warranty, and breach of implied warranty are all preempted.
Plaintiff conceded at oral argument that its implied warranty claim was no longer a claim. Thus, the Court considers it withdrawn.
However, plaintiff claims that the language at issue on the label — "the crop recovers quickly with no loss of yield" — is a voluntary warranty, not required by the EPA and FIFRA, and thus does not impose any additional "requirement" to the EPA-approved label. The flaw in plaintiff's argument, however, is that the label on AIM® is comprised solely of what the EPA has already determined complies with federal standards, and any adverse judgments in this case would still have the effect of imposing additional requirements to the label. See generally Andrus v. AgrEvo USA, 178 F.3d 395 (5th Cir. 1999) (holding plaintiff farmer's state law claims of breach of express and implied warranty for damage to plaintiff's rice crop were preempted because they were premised on a challenge to the specifications set forth in the label). This "imposes . . . [a] requirement for labeling in addition to or different from those required under [FIFRA]" and as such are barred.
Additionally, plaintiff claims that the EPA does not regulate the efficacy or phytotoxicity of pesticide in any meaningful way. See 40 C.F.R. § 158.640(b)(1) (stating that the agency has waived all requirements to submit efficacy data); § 158.540(b)(1) (waiving target area phytotoxicity data unless required for special review or certain public health situations). Plaintiff argues that if the Court were to determine that FIFRA preempts its claims, statements made regarding a product's efficacy or phytotoxicity would remain largely or entirely unregulated.
This echoes the EPA's recent position, as well. The EPA does not regularly collect data regarding pesticides efficacy or phytotoxicity, and has stated in at least one amicus curiae brief that it has waived the right to regulate in this area, and that courts should allow state law causes of actions to lie in order to provide some measure of regulation. See Etcheverry, 93 Cal.Rptr.2d 36 (2000) (amicus brief submitted arguing that the EPA has validly waived regulation in these areas and leaves tort liability and the marketplace as regulators); see also 40 C.F.R. § 158.640(b)(1) and § 158.540(b)(1) (waiving target area phytotoxicity data and efficacy data).
However, so far, these arguments have won little acceptance within the courts. See, e.g., Netland v. Hess Clark, 284 F.3d 895 (8th Cir. 2002) (declining to revisit the preemption issue because it may not overrule itself unless it does so en banc, despite plaintiff's request to do so, in light of the EPA's amicus curiae brief in Etcheverry); Etcheverry, 93 Cal.Rptr.2d 36 (2000). But see American Cyanamid Company v. Geye, 2002 WL 1448843 (Tex. June 6, 2002) (holding farmer's state law claims are not preempted because the EPA does not collect data regarding efficacy and target area phytotoxicity).
Additionally, second-guessing a regulatory agency's, such as the EPA's, execution of its duties, is not a proper function of this Court. See Taylor Ag Industries v. Pure-Gro, 54 F.3d 555 (9th Cir. 1995) (holding that the quality of performance of the EPA is irrelevant to preemption analysis). Finally, the EPA does have at least an opportunity to regulate phytotoxicity and efficacy through its adverse effects reporting rule, which requires pesticide manufacturers to report "toxic or adverse effect incident reports," specifically data concerning "alleged effect(s) involv[ing] damage to plants." 40 C.F.R. § 159.184(c)(5)(iv) (1999). But see Geye, at *6 (stating the EPA makes no review over target area phytotoxicity, but merely phytotoxicity, and without that review and approval process, there is not regulation and thus no preemption).
This Court, if viewing the issue with a fresh lens, would perhaps be inclined to find persuasive the EPA's position and the Geye court's holding. It is indeed troublesome to preempt state law causes of action in an almost entirely unregulated field. However, the Court is not writing on a clean slate, as this circuit has considered similar arguments in Netland. The plaintiff in Netland introduced the EPA's amicus brief and opinions from other state courts in its argument, but the Eighth Circuit stated:
The law is well established, however, that this court may not overrule one of its prior decisions unless it does so en banc. . . . Thus, unless modified or overruled by the court en banc, National Bank is the law of this circuit. Accordingly, Netland's failure to warn and breach of warranty claims are preempted by FIFRA.
Netland, 284 F.3d at 899.
Although plaintiff attempts to distinguish Netland because it involved personal injury, whereas plaintiff's claims involve damage to property, this Court finds that distinction to be too fine without further instruction from the Eighth Circuit. Netland is the law of this Circuit, and until the Eighth Circuit revisits the issue, this Court is obligated to find plaintiff's claims preempted.
In determining whether a claim is preempted, a court should look behind the claims to determine if they are essentially a challenge to the label. "When a claim, however couched, boils down to an assertion that a pesticide's label failed to warn of the damage plaintiff allegedly suffered, the claim is preempted by FIFRA." Etcheverry, 93 Cal.Rptr.2d at 48. "The line between a claim for mislabeling [which is preempted] and a claim for a defective product [which is not preempted] may not always be clear . . . . The issue may nevertheless be resolved by looking to, as one factor, whether one could reasonably foresee that the manufacturer, in seeking to avoid liability for the error, would choose to alter the product of the label." Worm v. American Cyanamid, 5 F.3d 744, 747 (4th Cir. 1993); see also Netland, 284 F.3d at 900. Bearing these standards in mind, the Court will now turn to each of plaintiff's claims, as articulated in its amended complaint.
3. Application to Plaintiff's Claims
In Count II, plaintiff alleges defendant committed negligent labeling. This claim is nothing but a facial attack on the label's adequacy and is therefore preempted. In order to prevail on its failure to warn claim, plaintiff would have to prove that the label contained insufficient information and that different labels were warranted. Finding for plaintiff would therefore be tantamount to adding to the requirements that are required under FIFRA. See id., at 899 (holding that failure to warn claims are preempted by FIFRA).
In Count III, plaintiff alleges strict liability, which is based on the defendant "marketing and labeling and selling a product . . . which was defective due to . . . failure to adequately instruct . . . and failure to warn." Pl. Amended Complaint, p. 4. This claim is entirely premised on the adequacy of the label. Plaintiff has not produced any evidence of errors in the manufacture of AIM® other than the adequacy of the warning. It is therefore preempted. See National Bank, 165 F.3d at 608 (holding if the state law claim is premised on inadequate labeling or a failure to warn, which would result in additional or different labeling requirements, the claim is nonetheless preempted regardless of the guise under which the claim is presented).
Similarly, in Counts IV, Breach of Express Warranty, VI, False Advertising, and VII, Consumer Fraud, plaintiff alleges claims that are all premised on the insufficiency of the label. Although plaintiff points to other representations made by defendant's representatives and brochures, it identifies no language that differs substantially from the complained-of-language on the package's label. Had plaintiff alleged off-label statements that addressed matters outside the scope of the label, an action may have prevailed. However, plaintiff has alleged nothing of the sort. Consequently, these claims are preempted. See Papas v. Upjohn Co., 985 F.2d 516, 518 (11th Cir. 1993) (holding any claims that other informational materials or advertisements failed to warn plaintiff "necessarily challenge the adequacy of the warnings provided on the product's labeling or packaging").
Count V, breach of implied warranty, as indicated earlier, was withdrawn by counsel at oral argument. Even if it were not, it is yet another challenge to the implied warranty that AIM was fit for use in seed corn production. This claim is simply another condemnation of the label's language, and as such is preempted.
Finally, Count I, negligent testing, alleges defendant had a duty to adequately test AIM on seed corn and failed to do so. This claim actually questions the adequacy of the label. Although semantically different, Count I is nothing more than a reiteration of plaintiff's claim that the label inadequately warned about its use on seed corn. Plaintiff has submitted no evidence indicating that its claim that defendant failed to test adequately was based on anything other than the sufficiency of the labeling. Using the Worm test, the Court asks whether in seeking to avoid liability for any error in testing, would defendant choose to alter the label or the product. The Court concludes it would choose to alter the label. Thus, Count I is nothing more than an attack on the adequacy of warning, and it is accordingly preempted.
III. Conclusion
Because the Court finds all of plaintiff's claims barred as a result of FIFRA's preemption, it need not address defendant's other arguments concerning limitations based on the economic loss doctrine or the UCC. Accordingly, based on the files, records, proceedings herein, and for the reasons stated above, IT IS ORDERED THAT:
1. Defendant's motion for summary judgment is granted. [Docket #20].
2. Plaintiff's Complaint is dismissed with prejudice.
LET JUDGMENT BE ENTERED ACCORDINGLY