American Cyanamid Co. v. Stephen

Decision Date08 November 1993
Docket NumberNo. 61A05-9205-CV-171,61A05-9205-CV-171
PartiesAMERICAN CYANAMID COMPANY, Appellant-Defendant, v. Dennis STEPHEN, Bruce Buchanan, Tom Fishero, David Brier and Rennick Farms, Inc., Appellees-Plaintiffs.
CourtIndiana Appellate Court

Roger E. Podesta, Anne E. Cohen, Debevoise & Plimpton, New York City, Ralph A. Cohen, Terri A. Czajka, Ice Miller Donadio & Ryan, Indianapolis, for appellant-defendant.

Irwin B. Levin, David J. Cutshaw, Cohen & Malad, P.C., Deborah J. Caruso, Dale & Eke, Indianapolis, Janet G. Abaray, Waite, Schneider, Bayless & Chesley Co., L.P.A., Cincinnati, for appellees-plaintiffs.

BARTEAU, Judge.

American Cyanamid Co. appeals from the trial court's order certifying some of plaintiffs' allegations against it as appropriate for class action litigation. We restate the issues raised by American Cyanamid as follows:

I. Whether the trial court erred in certifying for class action litigation plaintiffs' claims of fraud and constructive fraud; and

II. Whether the trial court erred in certifying for class action litigation plaintiffs' claim for punitive damages.

We affirm.

FACTS

American Cyanamid manufactures, markets and sells products, including herbicides, throughout the United States. Among the herbicides manufactured by Aware of the carry over problems created by Scepter, American Cyanamid established a settlement program in 1988 to compensate farmers for crop damage due to Scepter use. According to American Cyanamid, 86 percent of the 24,653 claims submitted to it were paid.

American Cyanamid and used for soybeans are Scepter, Squadron and Tri-Scept (collectively "Scepter"). Farmers commonly rotate their crops between soybean and corn annually. One of the concerns in using an herbicide on soybeans, therefore, is whether there will be any harmful "carry over" effects on the following year's corn crop.

On December 2, 1989, the named plaintiffs, Dennis Stephen, Bruce Buchanan, Tom Fishero, David Brier, and Rennick Farms, Inc., filed a "Class Action Complaint and Jury Demand" against American Cyanamid. The plaintiffs are Indiana farmers who grow "rotational crops" including soybeans and corn. They claim that the carry over from application of Scepter in either 1987 or 1988 damaged the following years' corn crop. The members of the class are all soybean farmers in Indiana, Illinois, Ohio, Michigan, Iowa and Missouri who purchased Scepter from American Cyanamid and applied it to soybean fields in 1987 and 1988 which were rotated to corn fields in 1988 and 1989. The complaint alleged nine theories of recovery: 1) breach of express warranty; 2) breach of implied warranty of merchantability; 3) breach of an implied warranty of fitness for a particular purpose; 4) negligence; 5) strict liability in tort; 6) fraud; 7) constructive fraud; 8) breach of implied covenants of good faith and fair dealing; and 9) reckless, willful and wanton misconduct. The plaintiffs seek damages for loss of corn crop yield and punitive damages. After a hearing to determine whether a class action could be maintained, the trial court entered the following relevant findings of fact and conclusions of law pursuant to American Cyanamid's motion for such:

1. The Court has jurisdiction over the parties and the subject matter of the lawsuit;

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5. During 1987 through 1990, defendant actively promoted the sale of Scepter through television and magazine advertising and other localized presentations by its sales representatives, and promoted and marketed Scepter as a herbicide which could be applied on soybean fields to control weeds.

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7. From 1987 through 1988, defendant represented that corn, as a rotational crop, could be planted 11 months after the application of Scepter;

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9. Plaintiffs claim that there are thousands of farmers in Indiana, Illinois, Ohio, Michigan, Iowa and Missouri who applied Scepter to soybean fields in 1987 and 1988, whose fields were subject to the carry-over of Scepter in the 1988 and 1989 corn growing seasons;

10. Plaintiffs claim that they and the other farmers they seek to represent suffered yield reductions in their corn crops as a result of Scepter being carried over in the ground, and that such reductions resulted in property damages and were due to the fault of defendant;

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12. The alleged class herein are [sic] all soybean farmers in Indiana, Illinois, Ohio, Michigan, Iowa and Missouri who purchased Scepter from defendant and applied it to soybean fields in 1987 and 1988, which fields were then rotated into corn in 1988 and 1989;

13. Counsel for plaintiffs are experienced in the prosecution of class action litigation and there is no reason to believe that counsel for plaintiffs would not promote a class action vigorously if a class were certified as prayed;

14. Plaintiffs have the burden of proof as to class certification, and plaintiffs have failed in said burden of proof 15. The principle question of fact herein is whether there are questions of fact or law which are common to the members of the alleged class and which predominate over any questions affecting only individual members of the class;

16. Plaintiffs have failed to prove this question of fact;

17. With the exception of the claim of fraud and constructive fraud, the claims and theories of recovery of the plaintiffs are all extremely plaintiff sensitive factual claims, that is the individual claims and the facts supporting the same predominate over any questions of law and fact common to the alleged members of the class;

18. As stated, Scepter is a chemical herbicide which is applied to the soil, and is mixed with the soil, water and seed to control certain weeds, and often the application would be made by custom applicators rather than the individual farmer;

19. The method of application of Scepter, the method of planting the seed, the type of soil, the weather conditions at the time of planting and the general climate, among other factors, are all variables which would of necessity be dissimilar to each member of the alleged class and these factors would of necessity affect the alleged damage of each member of the class, and would require extensive and individualized proof;

20. Moreover, as stated, plaintiffs claim several and different theories of recovery against defendant, and not all of said theories would be applicable to each member of the alleged class, but would vary among the members of the class;

21. There are also numerous potential defenses to the plaintiffs' claims, all would vary with each individual plaintiff, each dependent upon the assumption of risk, causation, privity, disclaimer, notice, misuse of product, and scope and denial of duty;

22. In short plaintiffs herein have proven that the only common question of law and fact relating to each of them is the purchase of Scepter and its application on their soybean fields, and the numerous and variable other questions of law and fact raised herein are so numerous and individualized as to the members of the class that they clearly predominate in this litigation;

23. The questions of law or fact common to the members of the alleged class do not predominate over any questions affecting the individual members of the class as to all claims except in paragraphs VI [fraud] and VII [constructive fraud] herein;

24. A class action herein is not superior to other available methods for the fair and efficient adjudication of the litigation herein;

25. Moreover, some members of the alleged class herein live in Illinois, Ohio, Michigan, Iowa and Missouri, and plaintiffs have failed in their burden of proof to show that it is desirable to concentrate the litigation of those claims in Indiana;

26. Trial Rule 23(C)(4) provides that "an action may be brought or maintained as a class action with respect to particular issues", and the issues raised by plaintiffs on Counts VI and VII do raise issues that the Court finds can be raised and best litigated as class issues in this case, until further Order of Court which issues are:

a) The content of all statements issued by defendant which were directed to the class at large;

b) The truth or falsity of the statements made and issued by defendant to the class at large;

c) Whether defendant had knowledge of the falsity of any alleged misrepresentations and whether the statements and representations made by defendant were made intentionally or recklessly;

d) Whether defendant was an expert and had superior judgment and skill in the manufacturing and marketing of herbicides.

27. As to the issues raised and found in Finding 26, the questions of law and fact common to the alleged class would predominate over any questions affecting 28. Count IX is a claim for punitive damages, and in addition to those issues found in Finding 26, there are issues relating to punitive damages which can be raised and best litigated as class issues per TR 23(C)(4), to wit:

individual members of the class, and it would be in the interest of justice to maintain this cause as a class action as to those issues;

a. Whether defendant's conduct in marketing and selling Scepter to the class was fraudulent or reckless;

b. Whether punitive damages should be awarded against defendant;

c. The amount of punitive damages which should be awarded against defendant;

29. As to the issues raised in Finding 28, the questions of law and fact common to the alleged class would predominate over any questions affecting individual members of the class, and it would be in the interest of justice to maintain this cause as a class action as to those issues;

30. The maintenance of a partial class action as to the issues set forth in Findings 26 and 28, would be manageable, and the plaintiffs would fairly and adequately protect the interests of the class as to such issues, and a class action as to those issues would be a fair and efficient method of adjudicating said issues in controversy.

CONCLUSIONS OF LAW

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