Phillips v. G&H Seed Co.

• Decision Date: 07 March 2012
• Docket Number: No. 10–1405.,10–1405.
• Citation: 86 So.3d 773
• Court: Court of Appeal of Louisiana — District of US
• Parties: Patrick E. PHILLIPS, Jr., et al. v. G & H SEED CO., et al.

86 So.3d 773

Patrick E. PHILLIPS, Jr., et al.

v.G & H SEED CO., et al.

No. 10–1405.

Court of Appeal of Louisiana, Third Circuit.

March 7, 2012.

Elwood C. Stevens, Jr., Domengeaux Wright Roy & Edwards, LLC, André F. Toce, The Toce Firm, A.P.L.C., Lafayette, LA, Jerald Edward Knoll, Sr., The Knoll Law Firm, LLC, Marksville, LA, for Plaintiffs/Appellants, Patrick E. Phillips, et al.

Gary A. Bezet, Robert E. Dille, Carol L. Galloway, Allison N. Benoit, Kean, Miller, Hawthorne, D'Armond, McCowan & Jarman, L.L.P., Baton Rouge, LA, Terrence D. McCay, Kean, Miller, Hawthorne, D'Armond, McCowan & Jarman, L.L.P., Lake Charles, LA, for Defendants/Appellees, Bayer CropScience LP, Michael Redlich, G & H Seed Company, Inc., Crowley Grain Drier, Inc., Nolan J. Guillot, Inc., and Mamou Rice Drier and Warehouse, Inc.

Raymond P. Ward, Adams and Reese, L.L.P., New Orleans, LA, for Defendants/Appellees, Bayer CropScience LP and Michael Redlich.

Michael T. Pulaski, McCranie, Sistrunk, Anzelmo, Hardy, Maxwell & McDaniel, PC, Covington, LA, for Defendants/Appellees, Allianz Global Risks and U.S. Insurance Company.

Court composed of ULYSSES GENE THIBODEAUX, Chief Judge, SYLVIA R. COOKS, JOHN D. SAUNDERS, OSWALD A. DECUIR, JIMMIE C. PETERS, MARC T. AMY, ELIZABETH A. PICKETT, BILLY H. EZELL, J. DAVID PAINTER, SHANNON J. GREMILLION and PHYLLIS M. KEATY, Judges.

COOKS, Judge.

[3 Cir. 1]Plaintiffs, who consist of several dozen buyers and/or processors of crawfish, appeal the trial court's granting of the defendants' motions for summary judgment, which dismissed the remaining claims of the buyer/processor plaintiffs. In Phillips v. G & H Seed Co., 10–1405 (La.App. 3 Cir. 5/11/11), 66 So.3d 507 (hereafter referred to as Phillips II ), a panel of this Court reversed the summary judgment grants, and remanded the matter back to the trial court for trial on the merits. The panel in Phillips II reversed on the grounds that the trial court based its granting of the summary judgments solely on this Court's prior opinion in Phillips v. G & H Seed Co., 08–934 (La.App. 3 Cir. 4/8/09), 10 So.3d 339,writ denied,09–1504 (La.10/30/09), 21 So.3d 284 (hereafter referred to as Phillips I ). In Phillips I, a panel of this Court held the plaintiffs in that case (who were three specifically selected buyers and/or processors of crawfish) “failed to prove a proprietary interest in the crawfish crop destroyed by the use of ICON.... [and as such] the plaintiffs' cause must fail.” Phillips I, 10 So.3d at 344. In Phillips II, we held “a per se proprietary interest rule is not the law of Louisiana in a products liability case” and the jurisprudence of this state has consistently mandated “a case specific duty-risk analysis be undertaken to determine the scope and extent of the defendants duties in this case.” Phillips II, 66 So.3d at 516. Defendants, Bayer CropScience LP, its employee/salesman, Michael Redlich, and several companies who purchased the allegedly defective insecticide from Bayer CropScience, LP, applied for writs to the Louisiana Supreme Court. After considering the writ application, the supreme court “remanded to the Third Circuit Court of Appeal for en banc opinion after briefing and argument.” Phillips v. G & H Seed Co., 11–1861 (La.11/18/11), 75 So.3d 460.

[3 Cir. 2]After en banc consideration, a majority of the judges vote to adopt Phillips II as the controlling opinion from this Court, which we reissue this date:

Plaintiffs, who consist of several dozen buyers and/or processors of crawfish, appeal the trial court's granting of the defendants' motions for summary judgment, which dismissed the remaining claims of the buyer/processor plaintiffs. For the following reasons, we reverse the summary judgment grants, and remand the matter back to the trial court for trial on the merits.

FACTS AND PROCEDURAL HISTORY

This protracted and contentious litigation had its genesis in the late 1990's, when Bayer CropScience LP and its employee, Michael G. Redlich, marketed the insecticide ICON in Louisiana. Certain companies purchased ICON, applied it to rice seed, and sold the ICON-coated rice seed to rice farmers in Louisiana. Many of these rice farmers also raised crawfish in their rice ponds.

Essentially, Plaintiffs allege the ICON coated rice seed was introduced into the rice fields/crawfish ponds of South Louisiana in 1999. The active ingredient in ICON was fipronil, which is a chemical used to control arthropods and is used in a variety of compounds to control insects such as termites, fleas, mole crickets and the rice water weevil. According to the plaintiffs, the introduction of ICON killed and/or sterilized the crawfish, both wild and pond-raised. According to the plaintiffs, as a result of the contamination, Louisiana's annual farm-raised crawfish crop dropped from over 60 million pounds to approximately 10 million pounds.

Defendants argued the use of ICON is compatible with crawfish farming, provided the farmer allows for a suitable waiting period between planting the ICON-treated rice seed and introducing crawfish to the rice field. Defendants also argued the record breaking drought in Louisiana during the time in question was the reason for the decline in crawfish production.

[3 Cir. 3]In 1999, a class action lawsuit was filed on behalf of all crawfish farmers in Louisiana, Craig West, et al. v. G & H Seed Co., et al., No. 99–C–4984–A in the Twenty–Seventh Judicial District Court, Parish of St. Landry. That lawsuit was eventually settled.

Thereafter a class action suit was initiated on behalf of Patrick Phillips and Atchafalaya Processors, Inc, individually and on behalf of all others similarly situated. This class action suit was brought by crawfish buyers, processors and resellers. Named as Defendants were Bayer CropScience LP and Michael Redlich. Also named as Defendants were the companies who purchased the ICON, applied it to the rice seed, and sold it to the farmers: G & H Seed Co., Inc., Crowley Grain Drier, Inc., Delhi Seed Co., Inc., Terral Seed Co., Inc., Mamou Rice Drier & Warehouse, Inc.

Plaintiffs eventually abandoned their efforts to certify either a plaintiff or defendant class. Thereafter, through a series of supplemental and amending petitions, the matter proceeded as a cumulation of individual actions comprising the claims of approximately 72 individual crawfish buyers, resellers, and processors.

Bayer filed an exception of no cause of action, contending in order to maintain a delictual action against a manufacturer for property damage caused by a defective product, the claimants must have some proprietary interest in the damaged property. Bayer argued that since none of the plaintiffs in this litigation are crawfish farmers, and none of them had any ownership in the damaged crop, they could not demonstrate the required proprietary interest. Plaintiffs argued there were existing joint ventures between the crawfish farmers and buyers/processors during the time the crawfish crop was damaged. The trial court overruled the exception, rejecting the per se exclusionary/proprietary interest rule of [3 Cir. 4]Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303, 48 S.Ct. 134, 72 L.Ed. 290 (1927), in favor of the policy driven duty/risk analysis espoused in PPG Industries, Inc. v. Bean Dredging, 447 So.2d 1058 (La.1984). The trial court found in applying a duty-risk analysis, the law extended a remedy to the buyer/processor plaintiffs. Bayer applied for writs to this Court. Writs were denied.

Because of the enormity of trying all 72 actions at once, the trial court determined it would be best to try the actions of four plaintiffs, three to be chosen by the plaintiffs and one chosen by the defense. This number was eventually reduced to three plaintiffs: Patrick Phillips (d/b/a Phillips Seafood), James Bernard (d/b/a J. Bernard Seafood Processors, Inc.), and Lisa Guidry (d/b/a Guidry's Crawfish).

After a full trial on the merits, Plaintiffs filed a Motion for Directed Verdict on whether the Defendants' duty extended to these buyer/processor plaintiffs. Finding there was an “ease of association from farmer to wholesaler” such that farmers and processors are “inextricably interwoven and symbiotic in their relationships,” the trial court granted the Motion for Directed Verdict. The jury then returned a verdict in favor of each of the three plaintiffs, assigning 94% fault or causation to Bayer, 1% to Bayer salesman Michael Redlich, and 4% to the drought that occurred in South Louisiana. It awarded $900,000 to plaintiff Phillips, $750,000 in damages to plaintiff Bernard, and $100,000 to plaintiff Guidry.

Defendants timely filed a Motion for Judgment Notwithstanding the Verdict, New Trial, and Remittitur. The motions were denied and Defendants filed an appeal with this Court.

A five judge panel of this Court reversed the trial court's directed verdict on scope of duty and set aside the jury's verdict. Phillips v. G & H Seed Co., 08–934 (La.App. 3 Cir. 4/8/09), 10 So.3d 339 (hereafter referred to as Phillips I ). The [3 Cir. 5]majority reasoned that since “the plaintiffs in this case failed to prove a proprietary interest in the crawfish crop destroyed by the use of ICON.... the plaintiff's cause must fail.” Id. at 344. The majority did not undertake a duty-risk analysis or apply the PPG factors as done by the trial court. Instead it applied the per se exclusionary/proprietary interest rule of Robins Dry Dock. Plaintiffs also note the majority did not explain what would be “sufficient” to establish a proprietary interest under Louisiana law.

Judge Saunders dissented from the majority opinion, finding it contradicted the Louisiana Supreme Court's finding in 9 to 5 Fashions, Inc. v. Spurney, 538 So.2d 228, 234 (La.1989), that “the PPG case abrogat[ed] the rule that flatly prohibited recovery for intangible economic loss produced by negligent conduct.” Judge Saunders found “the only conclusion a reasonable juror could reach was that...