Summary of a Recent
Judicial
Development in
Environmental Law
FIFRA Does Not Pre-empt State Labeling Laws that are
Consistent with Congressional Intent
Eric H. FoyNational AgLaw Center Research Associate
Summary of Decision
In Peterson v. BASF Corp., 711 N.W.2d 470 (Minn. 2006), the Supreme Court of Minnesota affirmed the decision of the Minnesota Court of Appeals, which had reversed the trial court's granting of summary judgment in favor of herbicide manufacturer accused of violating the New Jersey Consumer Fraud Act (NJCFA). After the court of appeals remanded the case to the trial court, the jury held that the herbicide manufacturer violated the NJCFA and awarded the farmers $52,058,931.51. The farmers alleged that the manufacturer's marketing of its herbicide misled and deceived them by dissuading them from buying a cheaper herbicide by the same manufacturer, which contained the same concentration of the same active ingredient per acre, stating that it could not be used on certain crops. The instant court held that the farmers' claims were not preempted by Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA); the herbicide's labeling information was admissible; and the manufacturer was not entitled to a new trial.
Background
A nationwide class of farmers alleged that BASF Corporation (BASF), which develops, produces, and markets herbicides, violated the NJCFA by deceptively advertising and marketing two BASF herbicides, Poast and Poast Plus. Id. at 473. Evidence at trial indicated that the two herbicides contained the same concentration of active ingredient per acre and were registered with the EPA, according to the requirements of FIFRA, for use on the same crops. Id. The evidence also indicated that in order to maximize profits, BASF failed to register Poast Plus with state regulators for minor crop usage or indicate on its label that it was suitable for the same. Id. at 473-44. BASF's internal documents indicated that this strategy was designed to mislead farmers and prevent them from learning details about the lower-priced Poast Plus. Id. at 474.
Originally, the trial court granted summary judgment in favor of BASF. Id. However, the Minnesota Court of Appeals reversed, finding that there was a question of fact as to whether BASF had violated the NJCFA, and the instant court denied BASF's petition for review. Id. On remand, the jury entered judgment in favor of the farmers. Id. After the Minnesota Court of Appeals and the instant court affirmed the jury verdict, BASF successfully petitioned the United States Supreme Court for writ of certiorari. Id. The Supreme Court granted certiorari, vacated the jury verdict, and remanded the case to the instant court for reconsideration in light of the Supreme Court's holding in Bates v. Dow Agrosciences LLC., 544 U.S. 431 (2005). Id.
Arguments
On appeal, BASF raised two main arguments pursuant to Bates: (1) under Bates, the farmers' consumer fraud claims were preempted by FIFRA; and (2) in the alternative, if the claims were not found to be preempted as a matter of law, Bates mandated a new trial due to erroneous evidentiary rulings and jury instructions. Id. at 475.
Analysis and Holdings
The touchstone of preemption is Congressional intent; therefore, the court began its analysis with a brief summary of FIFRA. Id. One of the key points in the court's analysis is that FIFRA does not "establish an exclusively federal regime of pesticide regulation; it expressly reserves some regulatory authority to the states." Id. In Bates, the United States Supreme Court set forth two conditions for a particular state law to be pre-empted: (1) the state law must be a labeling or packaging requirement, and (2) the statute law must impose a labeling or packaging requirement in addition to or different from those required under FIFRA. Id. at 476. The Court was clear that FIFRA does not pre-empt any state laws that are fully consistent with federal requirements. Id. at 478.
In the case at bar, the court originally held, and reasserted in the instant case, that the farmers' claims based on fraud, deception, and unconscionable conduct in violation of the NJCFA were based on BASF's marketing and advertising actions and not on the content of the product labels. Id. at 479. The instant case did not involve deceptive labeling; it involved deceptive non-labeling. Id. at 484. For this reason, the court held that the farmers' claims were not pre-empted by FIFRA. Id.
Additionally, the court ruled against BASF on its assertion that the trial court erred by not granting a new trial. Id. at 482. Because BASF failed to cite either evidentiary rulings or jury instructions in its petition for review to the instant court, it had procedurally waived those arguments. Id.
The case was decided on March 30, 2006.