Summary of a Recent
Judicial Development in
Environmental Law

FIFRA Preempts Some Claims Stemming from Written Representations
but Not from Oral Submissions

Eric H. Foy
National AgLaw Center Research Associate

Summary of Decision

In Mortellite v. Novartis Crop Protection, Inc., 460 F.3d 483 (3rd Cir. 2006), the United States Third Circuit Court of Appeals affirmed in part and vacated and remanded in part the district court's decision, which had granted Defendant's motion for summary judgment. The district court held that Plaintiffs' claims that the insecticide manufactured by Defendant damaged their blueberry plants were preempted by the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). The instant court held that only Plaintiffs' negligent misrepresentation, fraud, and statutory claims based on written misrepresentations were preempted, and only to extent the claims relied on misrepresentations that qualified as labeling under FIFRA.

Background

Plaintiffs, New Jersey blueberry farmers, regularly sprayed their blueberry plants with two insecticides manufactured by Defendant. Id. at 486. Prior to administering the insecticides, Plaintiffs would tank mix them with fungicides. Id. The mixture did not cause any noticeable damages to their blueberry plants. Id. Thereafter, Defendant produced and marketed a new insecticide called Diazinon AG 600. Id. Defendant claimed its new insecticide was "safer and more effective" than the previous ones that Plaintiffs had been using. Id. at 486-87. In the spring of 1997, Plaintiffs began using the new insecticide. Id. at 487. To their dismay, Plaintiffs noticed "blotches, depressions, and spots on the [blueberry] plants," as well as plant death. Id. The new insecticide contained an additional surfactant not included in the previously manufactured insecticides. Id. Plaintiffs' claimed that Defendant "failed to reveal the addition of the surfactant to [Defendant's] field personnel and failed to include this information in any of its marketing materials." Id. In late 1997 and early 1998, Defendant entered into settlement agreements with and paid damages to several blueberry farmers. Id. Two farmers would not settle and did not receive payment for damages. Id. During the next growing season, Plaintiffs again observed damages to their blueberry plants. Id. When Plaintiffs notified Defendant of the new damages, Defendant "informed them that it would not compensate [Plaintiffs] for any damages to their 1998 crop because the releases signed by the settling farmers precluded any future claims." Id. In response, Plaintiffs brought suit. Id. The district court dismissed many of Plaintiffs' claims based on releases contained in the settlement agreements, and held that the remaining claims were preempted by FIFRA. Id. at 487-88. Plaintiffs filed the instant appeal.

Arguments

Defendant argued that Plaintiffs' strict products liability, negligence, breach of express warranty, negligent misrepresentation, fraud, and breach of the New Jersey Consumer Fraud Act claims were preempted by FIFRA.

Plaintiffs asserted that the district court erred in holding that their claims were preempted by FIFRA.

Analysis and Holdings

In determining that Plaintiffs' strict products liability, negligence, breach of express warranty, negligent misrepresentation, fraud, and breach of the New Jersey Consumer Fraud Act claims were preempted by FIFRA, the district court relied on the inducement test. Id. at 488. The inducement test stands for the proposition that "claims are preempted by FIFRA 'if a judgment against [the defendant] would induce [the defendant] to alter its product label.'" Id. (quoting Mortellite v. Novartis Crop Prot., Inc., 278 F. Supp. 2d 390, 398 (D.N.J. 2003)). However, after the district court rendered its decision, the United States Supreme Court, in Bates. v. Dow Agrosciences LLC, 544 U.S. 431 (2005), overruled the inducement test "as a means of determining preemption by FIFRA." Id. at 489. In Bates, the Supreme Court held that "an 'event, such as a jury verdict, that might induce a pesticide manufacturer to change its label' should not be viewed as imposing a new labeling requirement in conflict with FIFRA." Id. (quoting Bates, 544 U.S. 431, 432 (2005)). Rather, the Court replaced the inducement test with the following two-part examination: (1) does "the statute or common law rule create a requirement for labeling or packaging"; and (2) is "the labeling or packaging requirement . . . in addition to or different from those required under FIFRA." Id.

Applying the Bates test to the instant case, the court first addressed Plaintiffs' strict liability, negligent testing, and breach of express warranty claims. Id. at 489-90. Because these claims did "not require [Defendant] to label or package the products in any particular manner," the court held that they were not preempted by FIFRA. Id. at 490. Continuing, the court stated, "such common law claims plainly do not impose labeling requirements, and therefore cannot conflict with FIFRA." Id.

The court then applied Bates to Plaintiffs' claims for negligent misrepresentation, fraud, and breach of the New Jersey Consumer Fraud Act. Id. Because FIFRA's labeling and packaging requirements only apply to "labels and other written, printed, or graphic matter," the court held that "claims for negligent misrepresentation, fraud, and breach of a statutory consumer fraud act were not preempted to the extent that they were based on oral representations made by Defendant." Id. However, the court "conclude[d] that Plaintiffs' claims of negligent misrepresentation, fraud, and statutory consumer fraud [were] preempted to the extent [they] rel[ied] on written misrepresentations that qualify[ied] as 'labels' or 'labeling' as defined by FIFRA" because the claims "indirectly challenge[d] the label." Id. at 491.

Plaintiffs' failure to warn claim was not fully briefed to the court's satisfaction, so it remanded the issue to the district court for further proceedings. Id.

The case was decided on August 21, 2006.