Summary of a Recent
Judicial Development in
Environmental Law

FIFRA Does Not Prevent States from Creating Civil Remedies
for Violating Federal Packaging and Labeling Standards

Eric H. Foy
National AgLaw Center Research Associate

Summary of Decision

In In re StarLink Corn Products Liability Litigation, 212 F. Supp. 2d 828 (N.D. Ill. 2002), the United States District Court for the Northern District of Illinois granted in part and denied in part Defendants' motion to dismiss. Plaintiff corn farmers brought this action against the creator and manufacturer of genetically modified corn claiming that Defendants' genetically modified corn contaminated the corn supply, depressed corn prices, and increased farming costs. Plaintiffs sought to recover on claims for negligence, strict liability failure-to-warn, nuisance, and conversion. The court held that: the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) preempted Plaintiffs' failure to warn claims challenging the GMO corn label; FIFRA did not preempt Plaintiffs' challenges to off-label representations; and Plaintiffs' allegations supported claims for crop contamination damages, negligence, and public and private nuisance, but not conversion.

Background

Defendant, Aventis CropScience USA Holdings, Inc. (Aventis), genetically engineered a corn seed to produce Cry9C and marketed the seed under the name StarLink. Id. at 833-34. When Aventis applied to register the seed with the Environmental Protection Agency (EPA), pursuant to the agency's responsibilities under FIFRA, the EPA issued only a limited use registration because "Cry9C had several attributes similar to known human allergens." Id. at 834. In other words, the EPA determined that StarLink corn was not fit for human consumption. Id. For this reason, separating StarLink corn from non-StarLink corn was important. Id. To ensure separation, the EPA mandated segregation methods "to prevent StarLink from commingling with other corn" during all stages of production, including a 660-foot buffer zone around StarLink crops to prevent cross-pollination. Id. From May 1998 to October 2000, StarLink was distributed throughout the United States. Id. In October 2000, many food manufacturers issued recalls of their corn products after numerous reports of Cry9C contamination in the human food supply. Id. at 835. Thereafter, Plaintiffs filed suit alleging that the contamination occurred because Defendants failed to comply with the EPA's requirements. Id.

Arguments

Plaintiffs alleged that "Aventis did not include the EPA-mandated label on some StarLink packages; did not notify, instruct and remind StarLink farmers of the restrictions on StarLink use, proper segregation methods and buffer zone requirements; and did not require StarLink farmers to sign the obligatory contracts." Id. Additionally, Plaintiffs alleged that prior to the 2000 growing season, Aventis "instructed its seed representatives that it was unnecessary for them to advise StarLink farmers to segregate their StarLink crop or create buffer zones because Aventis believed the EPA would amend the registration to permit StarLink use for human consumption." Id. Plaintiffs brought claims for negligence, strict liability failure-to-warn, conversion, public nuisance, and private nuisance.

Defendants argued that Plaintiffs' claims were preempted by FIFRA.

Analysis and Holdings

FIFRA prohibits enforcement of state laws that require additional packaging and labeling requirements, but does not prohibit state laws containing identical requirements. See id. at 836. For instance, FIFRA allows states to create civil remedies for violations of the federal standard, but it does not allow states to add to or take away from the federal requirements. Id. For this reason, the court held that FIFRA did not preempt Plaintiffs' negligence per se claims, and the court allowed Plaintiffs to proceed on their theory that Defendants "(1) violated duties imposed by the limited registration; (2) made representations to StarLink growers that contradicted the EPA-approved label; and (3) failed to inform parties handling StarLink corn downstream of the EPA-approved warnings." Id. at 838.

The Economic Loss Doctrine allows parties to recover for physical injuries or injuries to property; however, purely economic injuries are not compensable. Id. Defendants argued that Plaintiffs' damages were purely economic in nature and were therefore barred by the Economic Loss Doctrine. Id. at 842. However, the court held that to "the extent plaintiffs allege[d] that their crops were themselves contaminated, either by cross-pollination in the fields or by commingling later in the distribution chain, they ha[d] adequately stated a claim for harm to property." Id. at 842-43.

Defendants challenged three separate elements of Plaintiffs' negligence claim: duty, proximate cause, and damages. Id. at 843. Specifically, Defendants argued, "any effect StarLink may have had on corn markets [was] too far removed from defendants' conduct." Id. However, the court stated that Defendants misunderstood summary judgment standards and procedure. Id. When a motion for summary judgment is filed, the court "must not only accept plaintiffs' version, but also any set of facts consistent with it." Id. In short, the court held that "Aventis had a duty to ensure that StarLink did not enter the human food supply, and their failure to do so caused plaintiffs' corn to be contaminated." Id.

Plaintiffs argued " that [D]efendants' role in contaminating the corn supply amount[ed] to a conversion of their property." Id. at 844. The court disagreed because Plaintiffs' corn was not destroyed and they were not deprived of possession. Id. In fact, Plaintiffs' "only damages were a lower price, for which [P]laintiffs could be compensated without forcing a sale." Id. Additionally, the tort of conversion requires intent. See id. Plaintiffs did not allege that Defendants intended to cross-pollinate or physically mix StarLink corn with corn intended for human consumption. Id. For this reason, Plaintiffs' conversion claims were dismissed. Id.

Finally, the court addressed Plaintiffs' public and private nuisance claims. Id. at 844-45. Plaintiffs alleged that Defendants "created a private nuisance by distributing corn seeds with the Cry9C protein, knowing that they would cross-pollinate with neighboring corn crops." Id. In response, Defendants argued, "they [could not] be liable for any nuisance caused by StarLink because they were no longer in control of the seeds once they were sold to farmers." Id. at 845. The court held that "residue from a product drifting across property lines present[ed] a typical nuisance claim," and "[a]ll parties who substantially contribute to the nuisance are liable." Id. at 847. Additionally, Defendants' limited registration of StarLink put them in a position to control the nuisance. Id. For these reasons, the court held that Plaintiffs had stated a valid claim for private nuisance. Id.

In response to Plaintiffs' claim of public nuisance, Defendants argued that Plaintiffs could not establish special harm. Id. at 848. To state a private action for public nuisance, a party must suffer harm different in type than the harm suffered by the public in general. Id. Defendants argued "that because plaintiffs purport[ed] to represent a group so numerous as a nationwide class of corn farmers, their damages [could not] be considered special or unique." Id. However, the court held that "the special damages requirement [did] not limit the absolute number of parties affected so much as it restrict[ed] the types of harm that [were] compensable." Id. For this reason, the court held that Plaintiffs had stated a valid claim for public nuisance. Id.

The case was decided on July 11, 2002.