Montana Pole & Treating Plant v. IF Laucks and Co.

• Citation: 775 F. Supp. 1339
• Decision Date: 15 August 1991
• Docket Number: No. CV-86-147-BU-PGH.,CV-86-147-BU-PGH.
• Parties: MONTANA POLE & TREATING PLANT and Torger L. Oaas, Plaintiffs, v. I.F. LAUCKS AND COMPANY, Monsanto Chemical Company, Reichold Chemicals, Inc. and Dow Chemical Company, and Chapman Chemical Company, and Does 1 through 50, Defendants.
• Court: U.S. District Court — District of Montana

775 F. Supp. 1339

MONTANA POLE & TREATING PLANT and Torger L. Oaas, Plaintiffs, v. I.F. LAUCKS AND COMPANY, Monsanto Chemical Company, Reichold Chemicals, Inc. and Dow Chemical Company, and Chapman Chemical Company, and Does 1 through 50, Defendants.

No. CV-86-147-BU-PGH.

United States District Court, D. Montana, Butte Division.

August 15, 1991.

COPYRIGHT MATERIAL OMITTED

Torger S. Oaas, Jr., Lewistown, Mont., Bernard J. Allard, Popelka, Allard, McCowan & Jones, San Jose, Cal., for plaintiffs.

Dolphy O. Pohlman, Corette Smith Pohlman & Allen, Butte, Mont., Bruce A. Featherstone, Scott R. Bauer, Kirkland & Ellis, Denver, Colo., for Monsanto Chemical Co.

P. Keith Keller Keller, Reynolds, Drake, Sternhagen & Johnson, Helena, Mont., for Dow Chemical.

MEMORANDUM AND ORDER

HATFIELD, Chief Judge.

BACKGROUND

From 1946 through 1984, Montana Pole & Treating Plant ("Montana Pole") owned and operated a wood-treating facility in Butte, Montana. Montana Pole's wood-treating process utilized the preservative pentachlorophenol ("penta"), which was mixed with various petroleum products. The process generated waste penta, which Montana Pole disposed of in a manner that ultimately contaminated the real property on and near the treatment facility.

In June, 1985, the United States Environmental Protection Agency ("EPA") declared Montana Pole's facility a "Super-fund Site" and initiated an emergency cleanup operation. The EPA also notified Montana Pole of its responsibility, under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. §§ 9601-9675 (1987), for the cleanup costs.

On November 15, 1986, Montana Pole and its principal stockholder, Torger L. Oaas, instituted the above-entitled action¹ against the suppliers of the penta utilized in the treatment process,² seeking indemnity for the cleanup costs, as well as compensatory damages, under the following causes of action: negligence, breach of express and implied warranties, nuisance and strict products liability. Additionally, Torger Oaas seeks compensatory damages, in his individual capacity, for alleged "depression, anger, anxiety, outrage and embarrassment" as a result of the EPA's seizure of the treating site.

Following lengthy discovery, defendants moved for summary judgment, pursuant to Fed.R.Civ.P. 56, asserting, inter alia, (1) plaintiffs' "failure to warn" claims were preempted by federal law; and (2) plaintiffs' claims for property damage were barred by the applicable statute of limitations. Defendants also moved for summary judgment on plaintiffs' claims for indemnity, nuisance and breach of warranty, as well as Torger Oaas' individual claim.

The referenced motions were referred to the Magistrate Judge for the District of Montana, the Honorable Robert M. Holter, for findings and recommendations, pursuant to 28 U.S.C. § 636(b)(1)(B) and (C) and Rule 400-4 of the Rules of Procedure of the United States District Court for the District of Montana. The Magistrate Judge filed his report with the court, recommending summary judgment be entered in defendants' favor. The Magistrate Judge concluded (1) plaintiffs' claims for indemnity, nuisance and breach of warranty failed as a matter of law; (2) plaintiffs' property damage claims were time-barred; and (3) Torger Oaas' emotional injury claim lacked any legal or factual basis. The Magistrate Judge also recommended the court deny defendants' summary judgment motion asserting federal preemption of plaintiffs' "failure to warn" claims.

In accordance with 28 U.S.C. § 636(b), the parties were afforded the opportunity to file written objections to the Magistrate Judge's report. Plaintiffs filed objections, taking issue with the Magistrate Judge's conclusions regarding (1) the statute of limitations issue; and (2) the viability of Torger Oaas' individual claim. The defendants in turn challenge the Magistrate Judge's recommendation regarding the federal preemption issue. Having conducted a de novo review of the record, and considering the objections presented by the parties, the court is prepared to rule.

DISCUSSION

A. Preemption

In moving for summary judgment, defendants Reichhold Chemicals, Inc. and Dow Chemical Company assert the Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA"), 7 U.S.C. §§ 136 et seq., preempts state law tort recovery based on a failure to warn theory.³ Accordingly, defendants maintain plaintiffs' claims premised upon defendants' alleged breach of a purported duty to warn plaintiffs of the proper methods for disposing of penta waste fail as a matter of law. For the reasons discussed below, the court will DENY defendants' motion.

Federal preemption of state law is based on the supremacy clause of the United States Constitution, article VI, clause 2. Preemption can be either express or implied; it "is compelled whether Congress' command is explicitly stated in the statute's language or implicitly contained in its structure and purpose." Papas v. Upjohn Co., 926 F.2d 1019, 1021 (11th Cir.1991), quoting, Fidelity Federal Savings & Loan Ass'n v. De La Cuesta, 458 U.S. 141, 153, 102 S.Ct. 3014, 3022, 73 L.Ed.2d 664 (1982). Preemption can occur in a number of ways:

Preemption occurs when Congress, in enacting a federal statute, expresses a clear intent to preempt state law, when there is outright or actual conflict between state and federal law, where compliance with both federal and state law is in effect physically impossible, where there is implicit in federal law a barrier to state regulation, where Congress has legislated comprehensively, thus occupying an entire field of regulation and leaving no room for the States to supplement federal law, or where the state law stands as an obstacle to the accomplishment and execution of the full objectives of Congress.

Roberts v. Dow Chemical Co., 702 F.Supp. 195, 196 (N.D.Ill.1988), quoting, Louisiana Public Service Commission v. Federal Communications Commission, 476 U.S. 355, 106 S.Ct. 1890, 90 L.Ed.2d 369 (1986). There is, however, a presumption that "Congress did not intend to displace state law." Id., quoting, Maryland v. Louisiana, 451 U.S. 725, 746, 101 S.Ct. 2114, 2129, 68 L.Ed.2d 576 (1981). This presumption is heightened where the federal law would have the effect of barring a state from exercising its traditional police powers. Riden v. ICI Americas, Inc., 763 F.Supp. 1500, 1503 (W.D.Mo.1991).⁴

Preemption analysis is largely a matter of statutory construction. Roberts, supra, 702 F.Supp. at 196. The statute at issue, FIFRA, provides a comprehensive system for the registration and labeling of pesticides. Fisher v. Chevron Chemical Co., 716 F.Supp. 1283, 1286 (W.D.Mo.1989). Under FIFRA, the EPA is required to register a pesticide if it determines (1) the pesticide's labeling and other materials comply with FIFRA's requirements; and (2) the pesticide, when used properly, will perform its intended purpose without unreasonable adverse effects on the environment. Papas, supra, 926 F.2d at 1023, citing, 7 U.S.C. § 136a(c)(5). When a pesticide is registered, the manufacturer must submit the proposed label to the EPA for approval; any changes in the label must also be approved by the EPA. Fitzgerald v. Mallinckrodt, Inc., 681 F.Supp. 404, 406 (E.D.Mich.1987).

At the outset, this court joins the majority of federal courts in holding state common law remedies are not expressly preempted by FIFRA. Riden v. ICI Americas, Inc., supra, 763 F.Supp. at 1505 (citations omitted). The question before this court, therefore, is whether FIFRA and the labeling regulations promulgated thereunder impliedly preempt state common law tort claims based on labeling deficiencies. Although the issue has not been addressed by the court of appeals for this circuit, it has been the subject of two contradictory appellate decisions, Ferebee v. Chevron Chemical Co., 736 F.2d 1529 (D.C.Cir. 1984), cert. denied, 469 U.S. 1062, 105 S.Ct. 545, 83 L.Ed.2d 432 (1985); and Papas v. Upjohn Co., 926 F.2d 1019, 1021 (11th Cir. 1991).⁵

In Ferebee, the court upheld a jury verdict in favor of an agricultural worker who died from pulmonary fibrosis contracted from a long-term skin exposure to paraquat.⁶ The court found plaintiff's claims were not impliedly preempted by FIFRA because the manufacturer could comply with both the federal and state (common law) requirements. 736 F.2d at 1542. The court explained that a state court jury verdict would not automatically "require" a manufacturer to change its labels, but rather, would leave the manufacturer with the "choice of how to react" to the jury verdict. Kennan v. Dow Chemical Co., supra, 717 F.Supp. at 806 ("Chevron can continue to use the EPA-approved label and can at the same time pay damages to successful tort plaintiffs such as Mr. Ferebee; alternatively, Chevron can petition the EPA to allow the label to be made more comprehensive.")⁷

The Eleventh Circuit Court of Appeals, in Papas v. Upjohn Co., supra, concluded plaintiff's claims for personal injuries, based on theories of negligent labeling and failure to warn, were preempted by FIFRA. The court held "the federal government has occupied the entire field of labeling regulation, leaving no room for the states to supplement federal law, even by means of state common law tort actions." 926 F.2d at 1025. The court added that a jury determination that a pesticide's label was inadequate would (1) directly conflict with the EPA's prior affirmation of the label's adequacy; and (2) force the manufacturer to alter the label or risk further lawsuits. 926 F.2d at 1025-26.

A jury's imposition of damages in a state tort suit premised on labeling claims would disrupt the methods by which FIFRA protects man and the environment because it would inject irrelevant considerations into the EPA's evaluation of a pesticide and its labeling and would second guess the EPA's conclusions.

Papas v. Upjohn Co., supra, 926 F.2d at 1026.

After...