240 F. Supp. 2d 1012 | D. Minnesota | 2002
DAHLMAN FARMS, INC., Plaintiff
v.
FMC CORPORATION, Defendant.
United States District Court, D. Minnesota.
*1014 Michael M. Fluegel, Esq., Fluegel, Helseth, McLaughlin, Anderson & Brutlag, appeared for Plaintiff Dahlman Farms, Inc.
Michael E. McWilliams, Esq., Butler, Snow, O'Mara, Stevens & Cannada, PLLC, appeared for Defendant FMC Corporation.
ORDER
LANCASTER, District Judge.
This action arises from Dahlman Farms, Inc.'s (Dahlman) use of AIM herbicide (AIM) on its seed corn crop in 1999, which allegedly caused severe damage to the crop and resulted in a loss of yield. Dahlman sued the manufacturer of AIM, FMC Corporation (FMC), asserting several claims under Minnesota state law. The matter comes before the Court on FMC's Motion for Summary Judgment. For the reasons given below, the Court grants FMC's motion.
I. SUBJECT MATTER JURISDICTION
The Court has jurisdiction over this action pursuant to 28 U.S.C. §§ 1332(a)(1), 1441(a) (2000).
II. BACKGROUND
Dahlman is a Minnesota corporation engaged in the business of producing seed corn and seed soybean. In 1999, Craig Dahlman, one of three brothers who owned and worked for Dahlman, decided to purchase AIM from the Howe Company, a local dealer, for use on Dahlman's seed corn crop. AIM was a relatively new product that had been registered for distribution and sale by the EPA in the fall of 1998. Craig Dahlman's decision to purchase AIM was based primarily on statements found on the AIM label, which had been approved by the United States Environmental Protection Agency (EPA). Specifically, the label stated that AIM "is designed to be mixed with water and applied to corn (field, seed, popcorn, and silage) for selective postemergence control of broadleaf weeds." It stated further: "Due to environmental conditions and certain spray tank additives, some herbicidal symptoms may appear on the crop. However, *1015 the crop recovers quickly with no loss in yield." In addition to reviewing the product label, Craig Dahlman spoke with a salesperson from the Howe Company and Dahlman's crop consultant, both of whom told him that AIM was safe for use on seed corn.
Dahlman applied AIM to its seed corn crop according to the instructions on the label in June 1999. Within days, portions of the crop were affected by a condition known as "leaf wrap" or "buggy whipping." This condition severely damages or kills leaves wrapped around the outside of a plant, thereby preventing the plant from fully emerging. Dahlman reported the problem to FMC. FMC responded by sending an area sales representative, a district sales manager, and an area technical representative to view Dahlman's fields. FMC offered to hire manual laborers to walk through the fields and tear the tightly wrapped, dessicated leaves off of the plants. Dahlman refused the offer because it was concerned about the delicate condition of the plants. Some of Dahlman's seed corn plants died; others were severely damaged or experienced delayed development.
Dahlman commenced this action against FMC in Minnesota state court in May 2001, and FMC removed it to this Court on the basis of diversity of citizenship between the parties. Dahlman filed a sevencount Amended Complaint in February 2002, stating causes of action under Minnesota law for negligent testing, negligent labeling, strict liability, breach of express warranty, breach of implied warranty, false advertising in violation of Minn.Stat. § 325F.67 (2000), and consumer fraud in violation of Minn.Stat. § 325F.69 (2000). FMC now moves for summary judgment, arguing that Dahlman's claims are preempted by the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. §§ 136-136y (2000) (FIFRA), or, in the alternative, barred by the Minnesota economic loss doctrine, Minn.Stat. § 604.10 (2000). FMC also argues that, to the extent Dahlman's claims are not preempted or barred, a limitation of remedies provision found on the AIM label limits Dahlman's recovery to the amount it paid to purchase the AIM.
III. DISCUSSION
Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R.Civ.P. 56(c). The moving party "always bears the initial responsibility of informing the district court of the basis for its motion," and must identify "those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). If the moving party satisfies its burden, Rule 56(e) requires the nonmoving party to respond by submitting evidentiary materials that designate "specific facts showing that there is a genuine issue for trial." Celotex, 477 U.S. at 324, 106 S. Ct. 2548; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986).
FMC argues that Dahlman's claims are preempted by the FIFRA because they are premised on the inadequacy of the EPA-approved AIM label, which stated that AIM could be used on seed corn and that such use would not result in a loss of yield.
The "FIFRA creates a comprehensive scheme for the regulation of pesticide labeling and packaging." Welchert v. Am. Cyanamid, Inc., 59 F.3d 69, 71 (8th Cir. 1995). Under the FIFRA, pesticides distributed *1016 or sold in the United States must be registered with the EPA. 7 U.S.C. § 136a(a); see Netland v. Hess & Clark, Inc., 284 F.3d 895, 898 (8th Cir.), cert. denied, ___ U.S. ___, 123 S. Ct. 415, 154 L. Ed. 2d 294 (2002); Welchert, 59 F.3d at 71. The FIFRA's definition of the term "pesticide" includes herbicides such as AIM. See 7 U.S.C. § 136(u); Welchert, 59 F.3d at 71 n. 1. A pesticide manufacturer applying for registration must supply the EPA with a statement containing certain information about the pesticide, including a copy of the pesticide label. 7 U.S.C. § 136a(c)(1)(C); see Netland, 284 F.3d at 898; Welchert, 59 F.3d at 71. Before registering a pesticide, the EPA must make a determination that the pesticide label complies with the FIFRA. 7 U.S.C. § 136a(c)(5)(B); see Netland, 284 F.3d at 898; Welchert, 59 F.3d at 71 n. 2.
Once a pesticide label is approved and the pesticide is registered, the "FIFRA expressly provides for a defense, arising from preemption, against certain state law claims." Nat'l Bank of Commerce of El Dorado, Ark. v. Dow Chem. Co., 165 F.3d 602, 608 (8th Cir.1999). The basis of the defense is the FIFRA's express preemption clause, which provides that a state "shall not impose or continue in effect any requirements for labeling or packaging in addition to or different from those required under [the FIFRA]." 7 U.S.C. § 136v(b). The term "requirement" includes obligations that take the form of common law rules. See Cipollone v. Liggett Group, Inc., 505 U.S. 504, 521, 112 S. Ct. 2608, 120 L. Ed. 2d 407 (1992); Nat'l Bank, 165 F.3d at 607. As explained by the Supreme Court in Cipollone: " `[Regulation can be as effectively exerted through an award of damages as through some form of preventive relief. The obligation to pay compensation can be, indeed is designed to be, a potent method of governing conduct and controlling policy.'" 505 U.S. at 521, 112 S. Ct. 2608 (citing San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 247, 79 S. Ct. 773, 3 L. Ed. 2d 775 (1959)).
The Eighth Circuit has consistently held that the FIFRA preempts claims for inadequate labeling or failure to warn. Netland, 284 F.3d at 898; Natl Bank, 165 F.3d at 608; Bice v. Leslie's Poolmart, Inc., 39 F.3d 887, 888 (8th Cir.1994). Moreover:
It is immaterial whether an inadequate labeling or failure to warn claim is brought under a negligence or products liability theory. If a state law claim is premised on inadequate labeling or a failure to warn, the impact of allowing the claim would be to impose an additional requirement for the label or packaging.
Netland, 284 F.3d at 898 (quoting Nat'l Bank, 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; Natl Bank, 165 F.3d at 608; Welchert, 59 F.3d at 73, and for breach of implied warranty, Nat'l Bank, 165 F.3d at 608.
Dahlman argues that the FIFRA's preemptive scope does not extend to claims based on the inadequacy of statements relating to pesticide efficacythat is, statements regarding whether the pesticide actually works and whether it will harm the target crop it is supposed to protectbecause such statements are not required under the FIFRA. Congress amended the FIFRA in 1978 to permit the EPA to "waive data requirements pertaining to efficacy" and to "register [a] pesticide without determining that the pesticide's composition is such as to warrant proposed claims of efficacy." 7 U.S.C. § 136a(c)(5). The EPA has exercised that authority by issuing a general waiver of the review of labeling claims relating to pesticide efficacy. See 40 C.F.R. *1017 § 158.640(b)(1) (2001). Dahlman asserts that if claims relating to pesticide efficacy are preempted by the FIFRA, then this area will be left largely, or entirely, unregulated.
Dahlman cites Cipollone and the Eighth Circuit's decision in Welchert in support of its position that the FIFRA preempts only claims based on label statements required by the EPA. In Cipollone, the Supreme Court interpreted the preemption provision in the Public Health Cigarette Smoking Act of 1969 (PHCSA), which provides: "No requirement or prohibition based on smoking and health shall be imposed under State law with respect to the advertising or promotion of any cigarettes the packages of which are labeled in conformity with the provisions of this Act." 15 U.S.C. § 1334(b) (2000). The Court held that the PHCSA does not preempt breach of express warranty claims based on alleged misstatements by manufacturers in cigarette advertisements. A plurality of the Court stated:
A manufacturer's liability for breach of an express warranty derives from, and is measured by, the terms of that warranty. Accordingly, the "requirement[s]" imposed by an express warranty claim are not "imposed under State law," but rather imposed by the warrantor.... In short, a common-law remedy for a contractual commitment voluntarily undertaken should not be regarded as a "requirement ... imposed under State law [.]"
Cipollone, 505 U.S. at 525-26, 112 S. Ct. 2608. In Welchert, the Eighth Circuit, relying in part on Cipollone, held that the FIFRA preempts breach of express warranty claims to the extent that they challenge "language specifically required and approved by the EPA." 59 F.3d at 73 (emphasis added). In contrast, the court stated that claims for breach of an express warranty that is "voluntarily undertaken" are not preempted. Id. Dahlman also relies on an amicus curiae brief submitted to the California Supreme Court by the EPA in the case of Etcheverry v. Tri-Ag Service, Inc., 22 Cal. 4th 316, 93 Cal. Rptr. 2d 36, 993 P.2d 366 (2000), in which the EPA argued that the FIFRA does not preempt claims related to pesticide efficacy,[1] and the recent decision of the Texas Supreme Court in American Cyanamid Co. v. Geye, 79 S.W.3d 21 (Tex.2002),[2] which held that the FIFRA does not preempt common law claims arising from crop damage because the EPA does not regulate pesticide efficacy.
Dahlman's position that claims premised on the inadequacy of voluntary statements related to pesticide efficacy are not preempted is not supported by the language or purpose of the FIFRA's preemption clause. Again, section 136v(b) prohibits states from imposing or continuing in effect "any requirements for labeling or packaging in addition to or different from those required under [the FIFRA]." (Emphasis added.) As the italicized language demonstrates, the scope of the provision is not limited to state requirements that overlap federal requirements. The Texas Supreme Court in Geye adopted a different interpretation of section 136v(b), stating that "Congress has dictated that state actions regarding product labeling are preempted to the extent that the content of the product label is regulated." Geye, 79 *1018 S.W.3d at 22 (emphasis added); see also id. at 29 (stating "without EPA regulation, there can be no preemption"); id. (stating "the scope of FIFRA's preemption is dependent on what the EPA regulates"). The Court respectfully disagrees with Geye on this point. If the federal government's labeling requirements are limited to pesticide characteristics A, B, and C, and a state imposes a labeling requirement related to pesticide characteristic D, the conclusion that the state requirement is both "in addition to" and "different from" the federal requirements seems inescapable. Furthermore, allowing states to impose such requirements could result in 50 different sets of requirements, each one potentially conflicting with some or all of the others, thereby frustrating the FFRA's objective of establishing a uniform system of pesticide labeling requirements.
Dahlman's reading of section 136v(b) is also not supported by FIFRA preemption decisions from this circuit. With the exception of Welchert, the Eighth Circuit has never indicated that FIFRA preemption analysis depends on whether the allegedly inadequate statement was voluntarily undertaken or required by the EPA. The Eighth Circuit's subsequent decisions in National Bank and Netland raise serious questions about Welchert`s statement that the FIFRA does not preempt breach of express warranty claims based on voluntary statements. In National Bank, the plaintiffs brought negligence, products liability, and breach of express warranty claims against the manufacturers and distributors of several registered pesticides, alleging that the pesticides caused multiple birth defects. 165 F.3d at 605. The court held that the breach of express warranty claims were preempted by the FIFRA without finding it necessary to identify the alleged misstatements that served as the basis for the claims or to discuss whether those misstatements were voluntarily undertaken or required by the EPA. Nat'l Bank, 165 F.3d at 608. Instead, the court's discussion was limited to the following: "The [plaintiffs] advance several breach of warranty claims, but we have... held that common law claims for breach of express warranty are preempted by FIFRA. See Welchert, 59 F.3d at 73. Thus, the [plaintiffs'] express warranty claims fall within Welchert and are preempted." Nat'l Bank, 165 F.3d at 608.
Similarly, in Netland, a plaintiff who was allegedly injured by a registered pesticide brought claims against the pesticide manufacturer for strict liability, failure to warn, negligence, and "breach of warranty." 284 F.3d at 897-98. The court held that the breach of warranty claim was preempted, stating without qualification: "Common law claims for breach of express warranty ... are preempted by FIFRA." Netland, 284 F.3d at 898 (citing Nat'l Bank, 165 F.3d at 608; Welchert, 59 F.3d at 73). As in National Bank, the court in Netland did not address whether the plaintiffs claim was based on an alleged misstatement voluntarily undertaken or required by the EPA. Following National Bank and Netland, the Court concludes that breach of express warranty claims are preempted by the FIFRA if based on alleged misstatements made on an EPA-approved pesticide label, without regard to whether the alleged misstatement is one required by the EPA.[3]
*1019 Dahlman contends that National Bank and Netland can be distinguished from the present case on the ground that they both involved claims arising from personal injury, rather than property damage allegedly resulting from the pesticide's inefficacy. While it is true that both National Bank and Netland dealt with claims to recover damages for personal injury, nothing in either of the decisions indicates that they should be limited to cases of that type. Moreover, the Eighth Circuit recently rejected an invitation to narrow the scope of its prior FIFRA preemption decisions. The plaintiff in Netland asked the court to "revisit [its] prior decisions insofar as they hold that state law claims based on failure to warn are preempted by FIFRA." 284 F.3d at 899. The plaintiff maintained that a review of those decisions was necessary due to the Supreme Court's decision in Medtronic, Inc. v. Lohr, 518 U.S. 470, 116 S. Ct. 2240, 135 L. Ed. 2d 700 (1996), the amicus curiae brief filed by the EPA in Etcheverry, and "two recent state court decisions [from Montana and Oregon] finding failure to warn claims not preempted in light of these recent developments." Netland, 284 F.3d at 899. The court declined to conduct such a review, stating: "The law is well established ... that this court may not overrule one of its prior decisions unless it does so en banc. Thus, until modified or overruled by the court en banc, National Bank is the law of this circuit."[4]Netland, 284 F.3d at 899 (internal citations omitted).
In short, Dahlman's argument that the FIFRA does not preempt claims related to pesticide efficacy is not supported by the Eighth Circuit's decisions interpreting section 136v(b) or by section 136v(b) itself. Based on these considerations, the Court concludes that the FIFRA's preemption clause extends to claims for damages premised on the inadequacy of statements related to pesticide efficacy.
The Court turns now to an application of section 136v(b) to the claims asserted by Dahlman in this case. Count I of Dahlman's Amended Complaint states a claim for negligent testing, alleging that AIM should not be labeled for use on seed corn because FMC failed to adequately test it on seed corn. (Am.Compl.¶¶6-17.) In essence, this claim is an attack on the statement on the AIM label indicating that AIM is designed to be applied to seed corn. Thus, although couched in terms of negligent testing, Dahlman's first claim is premised on inadequate labeling, and it is therefore preempted by the FIFRA. See Netland, 284 F.3d at 898; Nat'l Bank, 165 F.3d at 608.
Count II states a claim for negligent labeling, alleging that FMC "breached its duty to accurately and clearly label AIM herbicide." (Am.Compl.¶ 20.) This claim falls squarely within the rule that claims for "inadequate labeling or failure to warn" are preempted by the FIFRA. See Netland, 284 F.3d at 898; Natl Bank, 165 F.3d at 608; Bice, 39 F.3d at 888.
In Count III, Dahlman alleges that FMC "is strictly liable in tort for marketing, labeling, and selling a product, AIM herbicide, which was defective due to [its] failure to adequately instruct the consumer regarding its use, and failure to warn of the foreseeable damages of its use when used according to the instructions." (Am. Compl.¶22.) The FIFRA does not preempt claims against manufacturers of registered pesticides that arise from defects in the manufacture or design of the pesticide. Netland, 284 F.3d at 900 (stating "defectively manufactured or designed products properly labeled under FIFRA remain subject to state regulation, in the *1020 form of common law or other claims"); Nat'l Bank, 165 F.3d at 609 (same). Dahlman's strict liability claim, however, is not premised on a defect related to the manufacture or design of AIM. Instead, the claim is that the AIM label was defective because it provided inadequate instructions and warnings. Because the claim is an attack on the AIM label, it is preempted by the FIFRA. See Netland, 284 F.3d at 898; Nat'l Bank, 165 F.3d at 608.
Count IV states claims for breach of express warranty based on two representations appearing on the AIM label: first, that the "crop recovers quickly [from herbicidal symptoms] with no loss in yield" (Am.Compl.¶ 24); second, that AIM can be used on seed corn (id. ¶ 1125). Claims for breach of express warranty that are based on a representation made on an EPA-approved pesticide label are preempted by the FIFRA. See Netland, 284 F.3d at 898; Nat'l Bank, 165 F.3d at 608.
Count V is a claim for breach of the implied warranties of merchantability and fitness for a particular purpose. (Am. Compl.¶26.) The Eighth Circuit held in National Bank that the FIFRA preempts implied warranty claims, stating that "[alllowing... implied warranty claims to survive FIFRA preemption would result in additional or different requirements for the pesticide label or package." 165 F.3d at 608; see also Andrus v. AgrEvo USA Co., 178 F.3d 395, 399-00 (5th Cir.1999) (holding FIFRA preempts claim for breach of implied warranty of fitness for particular purpose); Taylor, 54 F.3d at 563 (breach of implied warranties of merchantability and fitness for particular purpose); Lowe v. Sporicidin Int'l, 47 F.3d 124, 129 n. 4 (4th Cir.1995) (breach of implied warranty of merchantability); Papas v. Upjohn Co., 985 F.2d 516, 519-20 (11th Cir.1993) (breach of implied warranty of merchantability). Thus, Dahlman's breach of implied warranty claims are preempted.
In Count VI, Dahlman claims that the AIM label is "false and misleading" in violation of Minn.Stat. § 325F.67, which prohibits "untrue, deceptive, or misleading" advertising. (Am. Compl. ¶ 27.) This claim represents a direct attack on the EPA-approved AIM label, and it is therefore preempted by the FIFRA. See Netland, 284 F.3d at 898; Nat'l Bank, 165 F.3d at 608.
Finally, Count VII alleges that FMC committed consumer fraud in violation of Minn.Stat. § 325F.69, by representing that "AIM was appropriate for use on seed corn fields and that plant damage caused by AIM would result in no loss of yield." (Am.Compl.¶ 28.) The claim is based on two types of statements: those that appear on the AIM label, and those that appear in advertisements for AIM and other "off-label" representations. (Id.) To the extent that Dahlman seeks to challenge alleged misrepresentations on the AIM label, its claim is preempted under the Eighth Circuit precedents discussed above. See Netland, 284 F.3d at 898; Nat'l Bank, 165 F.3d at 608. Those decisions do not, however, address the preemptive effect of the FIFRA on claims based on alleged off-label misrepresentations. This issue has been considered by the Fourth, Fifth, Seventh, Ninth, and Eleventh Circuits. Although there are differences in approach among some of these circuits, all agree that claims based on offlabel statements are preempted when the off-label statements and the statements on the pesticide label are essentially the same. See Andrus, 178 F.3d at 400; Kuiper v. Am. Cyanamid Co., 131 F.3d 656, 662-63 (7th Cir.1997); Taylor, 54 F.3d at 561; Lowe, 47 F.3d at 129-30; Papas, 985 F.2d at 519. In the present case, the offlabel statements cited by Dahlman in support *1021 of its consumer fraud claim convey the idea that the use of AIM will not result in a loss of yield. (Am.Compl.¶28(a)-(f).) Because the AIM label also states that the use of AIM will not result in a loss of yield, the Court concludes that Dahlman's claim is preempted by the FIFRA.
In sum, all of Dahlman's claims for damages are preempted by the FIFRA because they are premised on the inadequacy of the EPA-approved AIM label. Because this conclusion disposes of the entire case, the Court will not address the parties' arguments regarding the Minnesota economic loss doctrine and the limitation of remedies provision on the AIM label.
IV. CONCLUSION
Based on the files, records, and proceedings herein, and for the reasons stated above, IT IS ORDERED THAT:
1. Defendant FMC's Motion for Summary Judgment [Doc. No. 20] is GRANTED.
LET JUDGMENT BE ENTERED ACORDINGLY.
UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA
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NOTES
[1] The EPA also argued that the FIFRA does not preempt any claims for damages or, in the alternative, that it does not preempt claims based on "off-label" statements. The California Supreme Court rejected all of the EPA's arguments. See Etcheverry, 93 Cal. Rptr. 2d 36, 993 P.2d at 374-78.
[2] Geye was decided after the briefs in this case were submitted but before the hearing on FMC's motion.
[3] The First and Ninth Circuits have also held that the FIFRA preempts breach of express warranty claims that are based on alleged misstatements on an EPA-approved pesticide label. See Grenier v. Vt. Log Bldgs., Inc., 96 F.3d 559, 564 (1st Cir.1996); Taylor AG Indus. v. Pure-Gro, 54 F.3d 555, 562-63 (9th Cir. 1995). Like the Eighth Circuit in National Bank and Netland, those circuits did not limit their holdings to claims based on statements required by the EPA.
[4] The Eighth Circuit denied the plaintiff's motions for a rehearing and a rehearing en banc.
