Summary of a Recent
Judicial Development in
Environmental Law

Court Reverses and Remands Decision Regarding Claims against
Pesticide Manufacturer, Distributor, and Applicator

Eric H. Foy
National AgLaw Center Research Associate

Summary of Decision

In FMC Corp. v. Helton, 202 S.W.3d 490 (Ark. 2005), the Supreme Court of Arkansas reversed and remanded the Phillips County Circuit Court's ruling, which had severed the claims of an insecticide distributor and an insecticide manufacturer against the insecticide applicator, directed a verdict against the farmers on their outrage claims, entered judgment on a jury verdict for the farmers, and awarded attorney fees to the farmers.

Background

In April 2001, the appellees' wheat fields were infested by a large concentration of armyworms, which can have devastating effects on crops. Id. at 494. A salesman for Agro Distribution, L.L.C. (Agro), distributor of chemical products, contacted one of the appellant's distributors to obtain a product recommendation and recommended rate of application to eliminate the armyworm problem. Id. Tyrus Teague, one of the appellant's distributors, recommended the use of Fury and provided the application rate. Id. Eventually, Fury was applied to the appellees' wheat fields and it stopped the armyworm infestations. Id.

A few days later, Doug Davidson, the manager of Agro's Holly Grove location, received a call from a pesticide application pilot, informing him that Fury had not yet been approved for use on wheat. Id. Agro notified the appellees and other farmers who had recently purchased Fury. Id. In May 2001, the Arkansas Plant Board launched an investigation into the use of Fury and quarantined all wheat that had been sprayed with the chemical. Id. Although initially prevented from harvesting their wheat, the appellees received approval to cut their crop, but they had to store the adulterated wheat until the quarantine concluded. Id. at 494-95. At some point, the appellees were told that either Agro or FMC Corporation Inc. (FMC), the manufacturer of Fury, would be responsible for the transportation and storage costs of the adulterated wheat. Id. at 495. While the quarantine remained in effect, the United States Department of Agriculture (USDA) determined that farmers who used Fury would not be eligible for loan deficiency payments. Id.

On June 21, 2001, the appellant finally made an offer to purchase the appellees' adulterated wheat if they signed a release of liability, but the appellees' refused to sign the agreement. Id. After a series of additional disputes regarding storage issues, the appellees' wheat was sold in December 2001, and the proceeds were deposited with the Phillips County court clerk. Id. The court entered an order in October 2002 directing that the proceeds be paid to the appellees. Id.

The appellees filed their original complaint on August 9, 2001, against numerous parties for damages they sustained as a result of the application of Fury to their wheat. Id. Two months later, the appellees filed a second amended complaint. Id. In its complaints, the appellees alleged: (1) fraud/misrepresentation on the part of FMC and Agro; (2) negligence on the part of FMC, Agro, Riddell Flying Service, and Gibbons Flying Service; (3) breach of express warranty by FMC and Agro; (4) breach of implied warranty of fitness for a particular purpose by FMC and Agro; (5) violation of the Arkansas Deceptive Trade Practices Act (ADTPA) by FMC and Agro; and (6) outrage by FMC, Agro, and Land O'Lakes, Inc. Id. at 495-96. The flying services successfully motioned the court to sever the appellees' claims against them from the claims against FMC and Agro. Id. at 496. The jury returned verdicts in favor of the appellees. Id. This appeal followed. Id.

Arguments

The appellants argued that: (1) the trial court abused its discretion by severing the cross-claims that the distributor and the manufacturer brought against the flying services; (2) the manufacturer's due process rights were violated by the admission of evidence of off-label use of insecticide in another state; (3) the representation that the insecticide could be used on the farmers' wheat was a matter of law, and thus not actionable; (4) the trial court abused its discretion by limiting the distributor's cross-examination of one the farmer's income tax losses; (5) the farmers did not have an outrage claim; (6) the farmers were not entitled to damages for mental anguish; and (7) the trial court abused its discretion by awarding the farmers all of their attorney fees.

Analysis and Holdings

The court first discussed severance, stating that its primary purpose is to "further convenience, avoid delay and prejudice, and serve the needs of justice." Id. at 496. In evaluating a pretrial motion to sever, the court's primary considerations are to conduct an efficient administration of justice and to avoid any prejudicial effects. Id. In the case at bar, the court held that it was error for the trial court to order severance for two reasons: first, severance failed to promote judicial economy; and second, granting severance in this case prejudiced FMC and Agro. Id. at 498.

Next, the court addressed appellants' argument that their due process rights were violated by the admission of evidence of off-label use of insecticide in another state. Id. at 498. From the record, the court could not determine whether evidence of similar instances in Mississippi and the arguments of counsel impacted the jury's award of punitive damages in this case. Id. at 499-500. Therefore, FMC's due process rights were violated by the introduction of the evidence regarding the use of Fury in Mississippi. Id. at 500. Additionally, the court stated that no evidence was offered showing that anyone ever made a representation that Fury could be used in a manner contrary to its label. Id. at 502. For this reason, the misrepresentation regarding the use of Fury on wheat was "clearly one of fact, not law." Id.

Next, the appellants argued that that it was error for the court to allow an award for mental anguish in the absence of an allegation of some type of physical injury. Id. To resolve this issue, the court had to determine whether the ADTPA permitted an award of damages for mental anguish. Id. On this issue, the court held that because the appellees did not allege that FMC or Agro violated the provisions of the ADTPA with the intent to cause mental distress or that they suffered a physical injury, the appellees could not recover damages for their mental-anguish claim under the ADTPA. Id. at 503. The court also held that the appellees could not recover for mental anguish under a claim of outrage because their emotional distress failed to be so severe that "no reasonable person could [have been] expected to endure it." Id. at 504.

Finally, the court addressed the issue of attorney fees. Id. at 505. The appellants' argued that the appellees were not entitled to any attorney fees, or in the alternative, that they should only have been awarded fees in proportion to their recovery under the ADTPA. Id. The court agreed. Because the only basis for the attorney fee award was the ADTPA claim, and because attorney fees are not recoverable for claims for fraud and negligence on which the appellees prevailed, the trial court's award of attorney fees was an abuse of discretion. Id. at 506-07.

The case was decided on February 3, 2005.