Summary of a Recent
Judicial Development in
Environmental Law

FIFRA Does Not Create a Private Right of Action to Enable
a Registrant to Sue a Private Party

Eric H. Foy
National AgLaw Center Research Associate

Summary of Decision

In Sigma Coatings USA B.V. v. SigmaKalon B.V., Civ. No. 06-2850, 2006 WL 2548259 (E.D. La. Aug. 31, 2006), the United States District Court for the Eastern District of Louisiana granted the defendants' motion to dismiss for lack of subject matter jurisdiction and denied the plaintiff's motion to enjoin. The plaintiff and one of the defendants were aliens and could not assert diversity of citizenship federal subject matter jurisdiction. Additionally, the court held that the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) did not create a private right of action enabling a FIFRA registrant to sue a private party.

Background

The plaintiff, a corporation organized and incorporated in the Netherlands, made protective and decorative industrial coatings. Id. at *1. It located its principal place of business in Louisiana. Id. Defendant SigmaKalon USA (SK-USA), a limited liability corporation organized and incorporated in Delaware with its principal place of business in Texas, and defendant SigmaKalon B.V. (SK-BV), organized and incorporated in the Netherlands with its principal place of business in the Netherlands, were both members of SigmaKalon Corporate Group. Id. At one point, the plaintiff was also a member, but when SigmaKalon Corporate Group was purchased by Bain Capital, Bain decided not acquire the plaintiff corporation because of the plaintiff's exposure to potential liability. Id.

Thereafter, the plaintiff became a licensee of SK-BV in order for the plaintiff to continue selling products. Id. The plaintiff's business was going well until Hurricane Katrina hit and destroyed the plaintiff's manufacturing facilities in Louisiana. Id. The defendants forbade the plaintiff from farming out the manufacturing during its rebuilding phase; therefore, the plaintiff was forced to sell the company. Id. While the plaintiff sought potential buyers, defendant SK-BV was negotiating with the same manufacturers that the defendant forbade the plaintiff to use. Id. The plaintiff argued "that while plaintiff was in the midst of rebuilding from Hurricane Katrina, its former business partners were, via use of plaintiff's confidential information garnered as a result of their past business relationship, us[ing] plaintiff's misfortune from Katrina to establish their own business presence in the United States." Id. In response, the plaintiff filed suit. Id. at *2.

Arguments

The plaintiff filed suit against the defendants, alleging "interference with plaintiff's registration rights under [FIFRA]." Id.

The defendants motioned to dismiss for lack of subject matter jurisdiction. Id.

Analysis and Holdings

The court first addressed the defendants' assertion that it lacked subject matter jurisdiction to hear the instant case. Id. The defendants' claimed that complete diversity did not exist because both the plaintiff and defendant SK-BV were residents of the Netherlands. Id. The court agreed with the defendants. Id. at *5. Both the plaintiff and defendant SK-BV were aliens, and aliens cannot sue in diversity. Id. Therefore, the court did not have diversity of citizenship federal jurisdiction. Id.

The court then addressed whether it could exercise federal question jurisdiction. Id. at *6. Although the plaintiff attempted to rely on FIFRA to create federal question jurisdiction, the court said that the plaintiff's reliance was misplaced because FIFRA did not create a private right of action enabling a registrant to sue another private party. Id. Therefore, the court also did not have jurisdiction pursuant to FIFRA. Id. Ultimately, the court granted the defendants' motion to dismiss because it lacked federal subject matter jurisdiction. Id. at *8.

The case was decided on August 31, 2006.