Home Pest Termite Control, Inc. v. Dow Agrosciences, LLC

Full title: HOME PEST and TERMITE CONTROL, INC., a Nebraska corporation, Plaintiff vs…

Court: United States District Court, D. Nebraska

Date published: Feb 6, 2004

8:02CV406 (D. Neb. Feb. 6, 2004)

Opinion

8:02CV406

February 6, 2004

MEMORANDUM AND ORDER

JOSEPH BATAILLON, District Judge

I. Introduction

Before me is the motion, Filing No. 89, of defendant Dow Agrosciences, LLC (Dow) for summary judgment. Dow supports its motion with briefs, Filing Nos. 90 and 136, and indexes of evidence, Filing Nos. 92 and 137. The plaintiff, Home Pest and Termite Control, Inc. (Home), filed an opposing brief, Filing No. 101, and index of evidence, Filing No. 113.¹

1 Home's index of evidence actually stretches from Filing No. 113 through Filing No. 118 because Home filed its evidence as separate "supplements" rather than as attachments to the index of evidence. The same problem occurred with Home's index of evidence in support of its opposition to Dow's Daubert motion. See Filing Nos. 119-123.
The court strongly encourages litigants to examine the court's Civil Administrative Procedures for instruction on how to use the court's CM/ECF system. The Administrative Procedures can be found on the court's website, www.ned.uscourts.gov. For further assistance, parties may contact the Clerk's Office CM/ECF Help Desk, the number for which is also available on the website. In addition, the clerk's office regularly provides CM/ECF training at the courthouse.

Home filed suit after Dow terminated an agreement between the parties for the sale, installation, and service of termite elimination systems. Home's amended complaint alleges causes of action for violation of the Nebraska Franchise Practices Act, Neb. Rev. Stat. §§ 87-401 — 87-410; defamation; tortious interference with Home's business relations; restitution; breach of contract; and breach of warranty. See Filing No. 12. Dow raises numerous affirmative defenses and counterclaims for amounts owing and breach of contract. See Filing No. 76, Second Amended Answer and Counterclaim, at 4-9. Dow now seeks summary judgment on Home's defamation, tortious interference, breach of warranty, and franchise act claims. Having carefully reviewed the record and the parties' submissions, I find that Dow's motion for partial summary judgment should be granted in part and denied in part, as detailed below.

On a motion for summary judgment, the question before the court is whether the record, when viewed in the light most favorable to the nonmoving party, shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Mansker v. TMGLife Ins. Co., 54 F.3d 1322, 1326 (8th Cir. 1995). Where unresolved issues are primarily legal rather than factual, summary judgment is particularly appropriate. Id.

II. Facts

Dow manufactures the Sentricon Termite Colony Elimination System. Dow markets the Sentricon system through trained pest control operators such as Home. Under the agreement between Dow and Home, called the "Authorized Operator Agreement," Home installed and maintained the Sentricon system on customers' property, but Dow retained ownership of the system components.

On April 4, 2002, Dow terminated the agreement between itself and Home. In the letter terminating the agreement, Dow stated,

[A]s a result of Homep's [sic] failure to (a) service its Sentricon customers in accordance with Dow AgroScience's Recommendations as required by Section V.B.1 of the Agreement; and (b) pay invoices in a timely fashion as required by Section IV.A of the Agreement, Dow AgroSciences is terminating Home's status as an Authorized Operator, effective immediately, pursuant to Sections VII.D.1.a, b.i and v. [sic] of the Agreement.

Filing No. 92, Dow's Evid. Index, Ex. D, at 1 (emphasis in original). Dow also required Home, pursuant to Sections VII.D.2.e.1-11 of the agreement, to provide Dow with the names and addresses of all customers for whom Home had installed the Sentricon System. Dow told Home that Dow would send a letter to these customers "to advise them that Home will no longer be authorized to service the Sentricon System." Id. Dow demanded the return of all Sentricon components still in Home's possession and the payment of Home's account balance, $49,747.10. Id. at 1-2.

Dow then sent a letter to Home's Sentricon customers. The letter stated in part, "[D]ue to issues involving Home Termite and Pest [sic] Control's ("Home") performance, Dow AgroSciences has felt it necessary to terminate its authorization of Home as an authorized operator for the Sentricon System, effective immediately." Id., Ex. E, at 1 (emphasis in original). The letter went on to explain the customers' options for continued termite service. According to Dow, one of those options was to continue with Home.

Several options are available to you. If you prefer to contract with Home for a different termite service (in other words, not Sentricon), we will respect that decision and will have our local representative retrieve the Sentricon Components [sic] from your property. (The Components are Dow AgroSciences' property and without Recruit™ II termite bait will provide no protection for your structure.) If, instead, you chose to have your Sentricon System monitored by a different pest control company that is authorized to service Sentricon, we will be happy to assist in that transition.

Id.

Home brought suit in state court, but Dow removed the case to this court pursuant to 28 U.S.C. § 1441 and 28 U.S.C. § 1332.

III. Discussion

A. Franchise Practices Act. Dow moves for summary judgment on Home's first cause of action, which alleges a violation of Nebraska's Franchise Practices Act. Dow contends that the agreement between Dow and Home is not a franchise, based on a section of the agreement entitled "Authority of the Authorized Operator." That section states, "This Agreement is not, nor is it to be construed as, a franchise agreement." Filing No. 92, Dow's Evid. Index, Ex. B, Authorized Operator Agreement at 2, ¶ III.

Despite this plain language, Home contends that the section must be construed against the drafter, Dow, and the agreement found a franchise. Home quotes at length from the Nebraska Franchise Practices Act, but does not explain how the agreement falls under the act when its express language takes it outside the operation of the act.

The act defines a franchise as

a written arrangement for a definite or indefinite period, in which a person grants to another person for a franchise fee a license to use a trade name, trademark, service mark, or related characteristics and in which there is a community of interest in the marketing of goods or services at wholesale or retail or by lease, agreement, or otherwise. . . .

Neb. Rev. Stat. § 87-402(1)(a). The act defines a "franchise fee" as "any payment made by the franchisee to the franchisor other than a payment for the purchase of goods or services, for a surety bond, for a surety deposit, or for security for payment of debts due." Neb. Rev. Stat. § 87-402(5). The parties' agreement obviously contemplates that Home and Dow would have a "community of interest in the marketing" of the Sentricon system, but the agreement nowhere required Home to pay a franchise fee in exchange for a license to use the Dow AgroSciences' name or mark. None of the fees mentioned in the agreement are for a surety bond or deposit or for security; rather, they are connected to the purchase of the Sentricon components. See Filing No. 92, Dow's Evid. Index, Ex. B, Authorized Operator Agreement at 2, 1 ¶ IV(A)-(B).

Home cites Regnev, Inc. v. Shasta Beverages, Inc., 337 N.W.2d 783 (Neb. 1983), for the proposition that the "lack of the term `franchise agreement' does not exclude this agreement from being subject to the Nebraska Franchise Practices Act." Filing No. 102, Home's Brief, at 9. But Regnev does not control this agreement, since the parties did include the term franchise — if only to expressly provide that the agreement was not a franchise.

I see no reason to construe the agreement in a manner contrary to its express terms. Consequently, because I find that the agreement is not a franchise, it is not subject to the Nebraska Franchise Practices Act. Dow's motion for partial summary judgment is therefore granted as Home's first cause of action.

B. Defamation. In its second cause of action, Home claims that the letter Dow sent to Home's Sentricon customers was defamatory. Home alleges that because it had "substantially complied" with the agreement, Dow's "publication . . . is false and untrue."² Filing No. 12, Amended Complaint at 5, ¶ 21. Home further alleges that Dow "made publications with malice and with specific intent to injure Plaintiffs [sic] business reputation and to appropriate said customers for Defendant's exclusive benefit." Id., ¶ 22. Home claims that because of the letter Dow sent to Home's customers, Home "has lost a [sic] customers and has lost revenues from such customers in an amount to be determined at trial, but in no event less than $750,000." Id. at 6, ¶ 23.

2 Home's defamation claim, Filing No. 12, Amended Complaint at 5-6, ¶¶ 20-24, does not state specifically what statement of Dow's it alleges to be defamatory, but the claim twice refers to paragraph 10 of the amended complaint; paragraph 10 is part of the general "Statement of the Case." Paragraph 10 alleges that Dow notified Home's Sentricon customers that Home's "franchise rights were terminated because of Plaintiff's poor or substandard service and/or contract performance." Id. at 3, ¶ 10.

Under Nebraska law, the elements of defamation are:

(1) a false and defamatory statement concerning the plaintiff;

(2) an unprivileged publication to a third party;

(3) fault amounting to at least negligence on the part of the publisher; and

(4) either action ability of the statement irrespective of special harmor the existence of special harm caused by the publication.

Norris v. Hathaway, 561 N.W.2d 583, 585 (Neb.Ct.App. 1997) (citing 50 Am. Jur.2d Libel and Slander § 21 (1995) and Restatement (Second) of Torts § 558 (1977)). In its motion for summary judgment, Dow argues that the statement in the letter to Home's Sentricon customers is not defamatory; that publication of the statement was privileged; and that Home cannot prove special harm.

1. Defamatory Meaning. Language is defamatory if its "nature and obvious meaning . . . impute to a person the commission of a crime or subject the person to public ridicule, ignominy, or disgrace." Helmstadter v. North Amer. Biological, Inc., 559 N.W.2d 794 (Neb.Ct.App. 1997) (citing Young v. First United Bank, 516 N.W.2d 256 (Neb. 1994)). Determining whether a communication is defamatory is a threshold question of law. McCune v. Neitzel, 457 N.W.2d 803, 808 (Neb. 1990). Language may be defamatory per se, oron its face, or defamatory per quod, only on allegation and proof of the defamatory meaning of the words used and of special damages. Morris, 561 N.W.2d at 586.

In determining whether the communication is defamatory per se or per quod, the court construes language "in its ordinary and popular sense." Matheson v. Stork, 477 N.W.2d 156, 161 (Neb. 1991). The court also considers "the circumstances under which the publication of an allegedly defamatory communication was made, the character of the audience and its relationship to the subject of the publication, and the effect the publication may reasonably have had upon such audience." Id. "[W]ords complained of cannot be isolated and must be considered in the context of the entire recital or verbal exchange." McCune, 457 N.W.2d at 808.

"[W]ords are slanderous or libelous per se only if they falsely impute the commission of a crime involving moral turpitude, an infectious disease, or unfitness to perform the duties of an office or employment, or if they prejudice one in his or her profession or trade." Helmstadter, 559 N.W.2d at 800 (citing K Corp. v. Stewart, 526 N.W.2d 429 (Neb. 1995)). Statements that are defamatory per se are unambiguously defamatory and do not require proof of extraneous facts. Hennis v. O'Connor, 388 N.W.2d 470, 476 (Neb. 1986).

Despite the allegation in the amended complaint that Dow told Home's Sentricon customers that Home's "franchise rights were terminated because of [Home's] poor or substandard service and/or contract performance" — a statement that is potentially defamatory per se because arguably prejudicial to Home's business operation — the actual statement Dow made to Sentricon customers is not so clear-cut. Dow's letter to the customers stated, "[D]ue to issues involving Home Termite and Pest [sic] Control's ("Home") performance, Dow AgroSciences has felt it necessary to terminate its authorization of Home as an authorized operator for the Sentricon System, effective immediately." According to the Nebraska Supreme Court, to be defamatory per se, "language must be naturally and presumably understood in its defamatory meaning." K Corp., 526 N.W.2d at 435. "If innuendo or explanation is necessary to make a statement clear and understandable, then it is not perse actionable." Id. at 434.

With the addition of the clause about performance issues, Dow did more than merely state the end of business relationship between Dow and Home; it added potentially defamatory meanings. See, e.g., Tibbs v. Fisher, 303 N.W.2d 293 (Neb. 1981) ("The publication of a notice consisting solely of a statement of the cessation of a prior business or professional relationship between the parties is generally held not to be libelous or slanderous.'"). Taken in the context of the whole letter, however, the single statement is rather meaningless without an explanation of what Home's questioned performance was. The issues could relate to those Dow perceived in Home's performance under the contract, or to internal operational or financial performance problems in the Home organization, or to performance problems affecting past customer service. The remainder of the letter adds no further descriptive detail about the performance issues that led to the termination of the agreement between Dow and Home. Indeed, the letter clearly states that remaining with Home was one of the options each customer had — so long as the Sentricon components were removed from the customer's property — indicating Home was still in the business of providing termite elimination services.

Therefore, construed in its ordinary and popular sense, the natural and obvious meaning of the statement "due to issues involving Home Termite and Pest Control's ("Home") performance," is not defamatory per se. I find that the statement is defamatory per quod and that as a result, Home must prove defamatory meaning and special damages. But because factual questions can be said to exist with regard to the defamatory meaning of the statement, especially with regard to its truth, Dow's motion for summary judgment on this first ground is denied.

2. Privilege. As its second ground for summary judgment, Dow argues that regardless of whether the statement is defamatory per quod, the statement was privileged. A communication is privileged if

made in good faith, without actual malice, with reasonable or probable grounds for believing [it] to be true, on a subject matter in which the author of the communication has an interest, or in respect to which the author has a duty, public, personal, or private, either legal, judicial, political, moral, or social, made to a person having a corresponding duty. A communication between those sharing a common interest is conditionally privileged.

Helmstadter, 559 N.W.2d at 801 (citing Turner v. Welliver, 411 N.W.2d 298 (Neb. 1987)). Home does not address the merits of Dow's privilege argument, merely claiming instead that Dow failed to raise privilege as an affirmative defense to the defamation claim. See id.; McCune, 457 N.W.2d at 810 (citing White v. Chicago, Burlington, Quincy R.R., 417 F.2d 941 (8th Cir. 1969)).

Dow's answer states, "[A]ny communication made by Dow AgroSciences to any of the Plaintiffs customers . . . are [sic] not defamatory and were [sic] true, proper and justified, and not made with the intent to defame, disparage or harm the Plaintiff." Filing No. 76, Second Amended Answer and Counterclaim at 5, ¶ 52. Although the word "privilege" does not appear as an affirmative defense, Dow contends that its omission is irrelevant. Under the terms of the agreement, Dow notes that it retained the right to contact Home's Sentricon customers if the parties terminated the agreement. Thus, Dow says its letter to Home's Sentricon customers was "proper and justified" — in a word, "privileged." Home's defamation claim thus can only challenge the content of the letter, not "the fact of communication." Filing No. 136, Dow's Reply Brief at 3.

The evidence shows that Home's owner knew that Home could be terminated as a Sentricon authorized operator and, in fact, communicated that information to its Sentricon customers in the service contract it required them to sign.³ Filing No. 92, Dow's Evid. Index, Ex. C., A. George Dep., 98:15-100:9 (A. George Dep.); Filing No. 137, Dow's Supp. Evid. Index, Ex. A, Home's Subterranean Termite Bait Agreement at 2. Home's owner also knew that Dow owned the Sentricon components Home installed on customer's property. A. George Dep., 101:2-103:14. The agreement between the parties provided that upon termination, Home had to supply Dow or its third-party designate with the names and addresses of all Sentricon customers so that Dow could "communicate to the customer on behalf of Dow AgroSciences concerning the termination of the Authorized Operator's ability to provide or service the Sentricon System and alternatives available to the customer." Filing No. 92, Dow's Evid. Index, Ex. B, Authorized Agreement at 8, ¶ VII.D.2.e.ii.

3 According to George's deposition testimony, the contract provision was intended "[t]o protect the company in the event that we lost authorization." A George Dep., 98:21-22. If Home lost its Sentricon authorization, George said, "We can put other bait stations out. These customers are ours and not Dow's." Id., 98:25-99:1. The provision in the service contract stated that if Home's Sentricon authorization were terminated, Home "reserves the right to either terminate this [termite bait] plan, replace Sentricon with another termite baiting system or substitute another type of termite control product for Sentricon." Filing No. 137, Dow's Supp. Evid. Index, Ex. A, Home's Subterranean Termite Bait Agreement at 2, "Termination of Sentricon Authorized Operator License."

"A communication is privileged if made bona fide by one who has an interest in the subject matter to one who also has an interest in it or stands in such relation that it is a reasonable duty, or is proper, for the writer to give the information." Molt v. Lindsay Mfg. Co., 532 N.W.2d 11, 17 (Neb. 1995) (citing White v. Ardan, Inc., 430 N.W.2d 27, 32-33 (Neb. 1988)). Given Home's knowledge that its authorized operator status could be terminated and the agreement's unambiguous language about Dow's right to contact Home's Sentricon customers about such a termination, Dow's letter to Home's customers at issue here meets all the requirements for a conditionally privileged communication. The letter was sent in accordance with the terms of the contract, without apparent malice, see Young v. First United Bank, 516 N.W. at 259 ("Malice has been defined as hate, spite, or ill will."), and notified the customers about the termination and their options for continuing service. Dow and the customers had common interest in these two subjects, thus rendering the letter conditionally privileged.

3. Conclusion. Because the letter Dow sent to Home's Sentricon customers was conditionally privileged as matter of law, Home cannot establish the elements of its defamation claim. Therefore, Dow is entitled to summary judgment on Home's defamation claim.⁴

4 Because I find the letter privileged, I do not analyze the issue of special harm, Dow's third ground for summary judgment. I note, however, that Home did not address the issue of special harm in the defamation section of its responsive brief. It did raise the issue of causation and damages in the tortious inference section of its brief, see Filing No. 102, Home's Responsive Brief at 7, but its figures there do not necessarily transfer automatically to the defamation analysis. Had I been required to analyze the special harm issue, therefore, Home risked an adverse decision because it failed to meet its burden of going beyond the pleadings and presenting specific facts showing a genuine issue of material fact. See Fed.R.Civ.P. 56 (c); Huff v. Swartz, 606 N.W.2d 461, 469 (Neb. 2000).

C. Tortious Interference. In its third cause of action, Home alleges that a "substantial number" of its customers "decided not to do business with Plaintiff in the future" as a result of Dow's termination of the agreement and its subsequent letter to Home's Sentricon customers. Filing No. 12, Amended Complaint, ¶ 27. Home further alleges that despite its "substantial compliance" with the agreement, Dow's "interference and disruption of Plaintiffs [sic] business relationships with its customers is unjust and unreasonable." Id., ¶ 28. Dow seeks summary judgment on Home's claim for tortious interference on the ground that its alleged interference was no more than a termination of the agreement carried out pursuant to the terms of the agreement. Home counters that the agreement did not entitle Dow to contact Home's Sentricon customers because Dow had no privity with those customers.

Under Nebraska law, a claim for tortious interference requires a plaintiff to establish

(1) the existence of a valid business relationship or expectancy, (2) knowledge by the interferer of the relationship or expectancy, (3) an unjustified intentional act of interference on the part of the interferer, (4) proof that the interference caused the harm sustained, and (5) damage to the party whose relationship or expectancy was disrupted.

Wiekhorst Bros. Excavating Equip. Co. v. Ludewig, 529 N.W.2d 33, 39 (Neb. 1995) (citing Matheson v. Stork, 477 N.W.2d 156 (Neb. 1991)). The issue here is whether Dow engaged in "an intentional act which induces or causes a breach or termination of the relationship." Id. at 40 (citing Renner v. Wurdeman, 434 N.W.2d 536 (Neb. 1989); Miller Chem. Co. v. Tarns, 320 N.W.2d 759 (Neb. 1982)). The intentional act must be unjustified to make the interferer liable. Id.; Matheson, 477 N.W.2d at 160 ("[A]ny suggestion in Miller Chemical Co., Inc. v. Tarns, that an intentional but justified interference may subject the interfering party to liability is disapproved."). Therefore, an act authorized under a contract, such as termination of the agreement for cause with subsequent notice of the termination to third-party customers, is a justifiable act that cannot make the actor liable for tort damages. See DeLay First Nat'l Bank Trust Co. v. Jacobson Appliance Co., 243 N.W.2d 745, 752 (Neb. 1976) (finding lender's notice to debtor's suppliers that it would no longer provide the debtor with floor-plan financing "a proper contact").

Here, the agreement expressly states the grounds for either party to terminate for cause as well as the subsequent steps the parties must undertake to identify Home's Sentricon customers in the event of a termination for cause. The agreement provides that either party could terminate for cause without prior notice for, inter alia, a breach of the agreement's provisions or Home's failure to timely pay invoices or to maintain a satisfactory financial condition. Filing No. 92, Dow.'s Evid. Index, Ex. B, Authorized Operator Agreement at 8, ¶ VII.D.1.b. Upon Dow's termination of the agreement for cause, the agreement gave Home twenty-four hours to provide Dow with "the names and complete street addresses, indexed by previously reported contract number, of all locations" where Home had installed Sentricon components. Id., ¶ VII.D.2.e. Since Dow retained the right to retrieve from Home's customers all installed Sentricon components, see id., ¶ VII.D.2.a, it also was entitled to notify the customers before removing the components that Home could no longer market, install, or service the Sentricon system and to provide the customers with options forsecuring continued termite protection.

Home has not yet shown how Dow's conduct in terminating the agreement and subsequently notifying Home's Sentricon customers violated the express terms of the contract. I therefore find that Dow's conduct was a justifiable intentional act that created no tort liability for interference with Home's business relationships. Consequently, Dow's motion for summary judgment on Home's third cause of action is granted.

D. Breach of Warranty. In its sixth cause of action, Home alleges that Dow's "termite elimination products" breached the representations and warranties found as "written statements on product packages, product labels, and marketing information."⁵ Filing No. 12, Amended Complaint at 11, ¶ 46. Home alleges that the breach consisted of a failure "in [the products'] essential purpose to eliminate termites and pests,"⁶ id. at 12, ¶ 47, even though Home continued to sell and install Sentricon products until Dow terminated the agreement. Dow asks for summary judgment on the breach of warranty claim on the ground it is preempted by the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. § 136 et seq. (FIFRA).

5 The amended complaint also states claims that breach of warranty occurred in "verbal assurances and representations during both the contract negotiations and the franchisor/franchisee relationship between the parties regarding the subject agreement," Filing No. 12, Amended Complaint at 11, ¶ 46, but deposition testimony of Home's owner indicates that Home's breach of warranty claim is primarily based on the label found on the "Recruit" bait used in the Sentricon system. See A. George Dep., 285:1-288:19.

6 The agreement contains the following warranty provision:

Warranty. Dow AgroSciences warrants that all Components conveyed to the Authorized Operator hereunder meet Dow AgroSciences' published specifications, conform to the description on the Components' labels or literature, and are reasonably fit for the uses or purposes stated on the labels when used in accordance with the directions for use set forth thereon and in Dow AgroSciences [sic] literature and Recommendations. Dow AgroSciences warrants that all such Components are conveyed on loan to the Authorized Operator free and clear of all liens and security interests of third parties. With the exception of the foregoing, unless expressly provided in this Agreement, Dow AgroSAciences MAKES AND EXTENDS NO WARRANTY OF MERCHANTABILITY OR FITNESS, OR ANY OTHER WARRANTY, EXPRESS OF IMPLIED.

Filing No. 92, Dow's Evid. Index, Ex. B, Authorized Operator Agreement at 3, ¶ IV.F (emphasis in original).

The FIFRA creates a comprehensive scheme for the regulation of pesticide labeling and packaging." Welchert v. American Cyanamid, Inc., 59 F.3d 69, 71 (8th Cir. 1995). The act requires that pesticides distributed or sold in the United States must be registered with the Environmental Protection Agency (EPA). 7 U.S.C. § 136a(a). A pesticide manufacturer applying for registration must supply the EPA with a statement including, inter alia, "a complete copy of the labeling of the pesticide, a statement of all claims to be made for it, and directions for its use." 7 U.S.C. § 136a(c)(1)(C). The EPA will register the pesticide only if it determines that

when considered with any restrictions imposed under subsection (d) of this section —

(A) its composition is such as to warrant the proposed claims for it;

(B) its labeling and other material required to be submitted comply with the requirements of this subchapter;

(C) it will perform its intended function without unreasonable adverse effects on the environment; and

(D) when used in accordance with widespread and commonly recognized practice it will not generally cause unreasonable adverse effects on the environment.

7 U.S.C. § 136a(c)(5).

After the EPA has approved a pesticide label and registered the pesticide, the FIFRA prohibits a state from "impos[ing] or continu[ing] 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). Thus, the "FIFRA expressly provides fora defense, arising from preemption, against certain state law claims." Nat'l Bank of Comm. v. Dow Chem. Co., 165 F.3d 602, 608 (8th Cir. 1999). Preempted "state action includes legislative enactments and executive pronouncements (positive law) and also encompasses applicable common law claims recognized by state court." Id. at 608 (citing Cipollone v. Liggett Group, Inc., 505 U.S. 504, 521-22 (1992)). Under Eighth Circuit law, the preempted state common law claims include those premised on inadequate labeling or failure to warn, since "the impact of allowing the claim would be to impose an additional requirement for the label or packaging." Dahlman Farms, Inc. v. FMC Corp., 240 F. Supp.2d 1012, (D. Minn. 2002) (citing Netland v. Hess Clark, 284 F.3d 895, 898 (8th Cir.), cert. denied, 537 U.S. 949 (2002); and Nat'l Bank of Comm., 165 F.3d at 608). The Eighth Circuit has also held that the FIFRA preempts claims for breach of express warranty, Netland, 284 F.3d at 898; Nat'l Bank of Comm., 165 F.3d at 608; Welchert, 59 F.3d at 73, and for breach of implied warranty, Nat'l Bank of Comm., 165 F.3d at 608. The Nebraska Supreme Court has also held that the FIFRA preempts breach of express and implied warranty claims based on a herbicide label. See Pfeifer v. DuPontde Nemours Co., 606 N.W.2d 773, 776-77 (Neb. 2002) ("[M]anufacturers would be equally between a rock and a hard place if they were forced by the federal government to make statements regarding the use of the manufacturers' products, and the state then treated such statements as warranties and allowed juries to award damages based upon them.")

The Recruit component of the Sentricon system falls under the act's definition of a "pesticide": "any substance or mixture of substances for preventing, destroying, repelling, or mitigating any pest." 7 U.S.C. § 136(u). Dow's regulatory manager for hexaflurumon, the active ingredient in the Recruit II and Recruit AG termite bait, attested that the EPA has approved the specimen labels for both products. Filing No. 92, Dow's Evid. Index, Ex. H, S. Robertson Aff. at 2, ¶ 5. The label contains a warranty disclaimer which provides that

this product conforms to the chemical description on the label and is reasonably fit for the purposes stated on the label when used in strict accordance with the directions, subject to the inherent risks set forth below. Dow AgroSciences MAKES NO OTHER EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER EXPRESS OF IMPLIED WARRANTY.

Id., Att. A at 3; Att. B at 3 (emphasis in original).

Home offers no evidence to refute the conclusion that the FIFRA preempts its breach of warranty claim. In its responsive brief, it does not address the FIFRA label issue but argues only that Dow also made oral and written representations about "the efficacy of Sentricon, the Dow product, and how it worked and why it worked" throughout the "extensive training for its authorized operators and their employees." Home offers little evidence to explain how these representations amounted to breach of warranty, but just enough to suggest that factual issues exist. Accordingly, I find that Dow's motion for summary judgment on the breach of warranty claim is granted insofar as the claim is based on the Recruit labels, but denied in all other respects.

E. Damages. The agreement provides that it may be terminated for cause without notice or without cause on thirty days written notice. Filing No. 92, Dow's Evid. Index, Ex. B, Authorized Operator Agreement at 8, ¶ VII.D.1.a-b. Dow asks that if a jury should find that Dow did not have cause to terminate the agreement without notice, Home's damages be limited to those incurred in the thirty days following Dow's termination. Home seems to acknowledge that the thirty-day cut-off might be appropriate in the breach of contract claim, but ultimately asks the court to altogether deny the motion for the thirty-day cut-off.⁷

7 Home's brief states,

Although, [sic] Dow may attempt to limit HomePest's recovery on [the breach of contract] claim to damages associated with termination notice clause, and HomePest does not agree it should be allowed to do so, than [sic] that limitation would only be applicable to the Breach of Contract claim. There is no law or basis for limiting the recoverable damages on the other causes of action. Thus, Homepest would also respectfully request that Dow's request to limit damages to those incurred within thirty days after the unwarranted and improper termination be denied.

Filing No. 102, Home's Responsive Brief at 10. Home offers no authority to support its position.

Any limitation on damages would be inappropriate at this stage of the litigation, particularly since many factual issues exist on the remaining claims, including the breach of contract claim. If necessary, the court can instruct the jury on the proper measure of damages at trial. Accordingly, I decline to grant Dow's motion for summary judgment on damages.

IT IS THEREFORE ORDERED that the motion, Filing No. 89, of defendant Dow AgroSciences, LLC (Dow) for summary judgment is granted in part and denied in part as set forth in this memorandum and order.