Ackerman v. American Cyanamid Co., 96-2034

Citation586 N.W.2d 208
Decision Date21 October 1998
Docket NumberNo. 96-2034,96-2034
Parties36 UCC Rep.Serv.2d 972, Prod.Liab.Rep. (CCH) P 15,393 Clifford ACKERMAN, Appellant, v. AMERICAN CYANAMID COMPANY, Appellee, and Allison-Kesley Ag Center, Inc., Defendant.
CourtUnited States State Supreme Court of Iowa

Mark A. Woollums and Jean Dickson Feeney of Betty, Neuman & McMahon, L.L.P., Davenport, for appellant.

Judith O'Donohoe of Elwood, O'Donohoe, O'Connor, & Stochl, Charles City, for appellee.

Considered en banc.

HARRIS, Justice.

This is the second appeal in this litigation arising from application of a herbicide to cropland. The sticking point is determining the extent to which federal legislation, the federal insecticide fungicide and rodenticide act (FIFRA) has preempted the area. The case comes to us on further review of a court of appeals decision that left plaintiffs with only one state court remedy. We agree the plaintiffs are left with only one remedy, but disagree as to which one. We conclude the plaintiffs are free to seek recovery in our courts on their claim of negligent design and testing. We therefore affirm in part, reverse in part, and remand for determination on the merits of the one remaining claim.

In the mid-1980s, defendant American Cyanamid Company manufactured and marketed a herbicide named Scepter. Pursuant to FIFRA, American Cyanamid registered Scepter with the environmental protection agency (EPA), and the EPA approved the Scepter label submitted by American Cyanamid. The label contained a section on "rotational crop restrictions" that told farmers how soon they could plant various crops on fields that had been treated with Scepter. Of particular significance for this case, the label stated that corn could be planted eleven months after the last application of Scepter.

In 1987 and 1988, Clifford Ackerman, a farmer, used Scepter to control weeds in his soybean fields. He bought the herbicide from Allison-Kesley Ag Center, an independent dealer in agricultural supplies. Allison-Kesley told Ackerman that Scepter was safe for follow corn. 1 Ackerman applied Scepter to his soybean field in 1987 and planted corn on the same fields the following spring. Although he had waited eleven months after the last application of Scepter to plant his follow corn, the 1988 corn crop did not do well. It was later learned that Scepter was causing carryover damage in some parts of the United States, apparently because conditions prevented the herbicide from degrading prior to the next crop. American Cyanamid agreed to pay Ackerman for the damage to his 1988 crop.

Ackerman applied Scepter again in 1988 and, when he again experienced difficulty with his 1989 crop, an American Cyanamid representative met with him regarding a settlement. Given the option of a preharvest or postharvest settlement, Ackerman signed a release for a preharvest settlement in the amount of $8627.92. After checking his crop though, Ackerman estimated the loss at $41,309.40 and attempted to take the postharvest settlement option of $31,900. The release however had already been forwarded for approval and American Cyanamid ultimately determined it would only pay the preharvest settlement amount.

Ackerman filed this petition against American Cyanamid seeking damages for the carryover damage to his 1989 crop. Ackerman, in addition to a number of counts no longer at issue, sought recovery on two theories: breach of implied warranty of merchantability and negligent design and testing. The petition attacked the settlement agreement head-on, charging it was the product of fraudulent misrepresentation and breach of contract. The district court granted American Cyanamid's motion for summary judgment on the claims no longer at issue, finding they were preempted by FIFRA. Following a bench trial, the district court dismissed the claims of breach of implied warranty and negligent design and testing, finding they were barred by the release signed by Ackerman.

Ackerman appealed. Our court of appeals affirmed in part and reversed in part. It determined the release was not a binding contract and reversed the dismissal of the breach-of-implied-warranty and negligent-design-and-testing claims. On remand the district court dismissed the two remaining claims, based on its belief it lacked subject matter jurisdiction because the claims were preempted by FIFRA.

Ackerman again appealed. Except for a theory based on oral representations we discuss later, the court of appeals dismissed the breach-of-implied-warranty claim. It also dismissed the negligent-design-and-testing claim. Both dismissals were grounded on the district court's holding that it, under the circumstances, lacked subject matter jurisdiction to entertain the claim. The court cited Schuver v. E.I. Du Pont de Nemours & Co., 546 N.W.2d 610 (Iowa 1996), and Clubine v. American Cyanamid Co., 534 N.W.2d 385 (Iowa 1995), for authority.

We granted further review on the application of both American Cyanamid and Ackerman. Our review of a district court's grant of a motion to dismiss is on error. Iowa R.App. P. 4; Henry v. Shober, 566 N.W.2d 190, 191 (Iowa 1997).

I. The federal preemption doctrine is grounded upon the supremacy clause of the federal constitution:

This Constitution, and the Laws of the United States which shall be made in Pursuance thereof ... shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.

U.S. Const. art. VI, cl. 2. Preemption may be found where congress' intent to preempt the field is either expressly stated or implicit in congressional policies. Clubine, 534 N.W.2d at 386-87.

FIFRA is a comprehensive federal statute regulating pesticide use, sales, and labeling. Schuver, 546 N.W.2d at 612. The EPA is the administrative agency in charge of setting appropriate regulations. Wisconsin Pub. Intervenor v. Mortier, 501 U.S. 597, 601, 111 S.Ct. 2476, 2480, 115 L.Ed.2d 532, 540 (1991). Before a pesticide may be sold, it must be registered and its labeling approved by the EPA. Welchert v. American Cyanamid, Inc., 59 F.3d 69, 71 (8th Cir.1995). The review process requires an applicant to submit a proposed label to the EPA for approval. Id. This label must address numerous concerns, including the ingredients, directions for use, and adverse effects of the product. Id.; see also 40 C.F.R. §§ 152.50, 156.10 (1997). In addition to the written material on the actual container, the term "label" also includes written, printed, or graphic material accompanying the container, to which reference is made. Clubine, 534 N.W.2d at 387; see also Welchert, 59 F.3d at 71.

FIFRA specifically sets forth the authority the states shall have concerning the labeling of pesticides:

(a) In general

A state may regulate the sale or use of any federally registered pesticide or device in the state, but only if and to the extent the regulation does not permit any sale or use prohibited by this subchapter.

(b) Uniformity

Such state shall not impose or continue in effect any requirements for labeling or packaging in addition to or different from those required under this subchapter.

7 U.S.C. § 136v (1994). It is the preemptive effect of subsection (b) that is at issue in this case.

We discussed the preemptive effect of FIFRA on state law claims in Schuver, 546 N.W.2d at 613, and in Clubine, 534 N.W.2d at 387, in which we found that label-based common-law claims were preempted by FIFRA. In both cases we relied heavily on Cipollone v. Liggett Group, Inc., 505 U.S. 504, 508, 112 S.Ct. 2608, 2613, 120 L.Ed.2d 407, 417 (1992), which involved preemption under the public health cigarette smoking act of 1969. The Cipollone court held the preemption clause of the act barred all state law claims predicated on the labeling required under that act, an act which, although not identical, closely parallels the language of FIFRA. Cipollone, 505 U.S. at 523-24, 112 S.Ct. at 2621, 120 L.Ed.2d at 427. We noted that both failure to warn and labeling-based claims brought as common-law causes of action against manufacturers of pesticides are preempted by § 136v. 2 Schuver, 546 N.W.2d at 613; Clubine, 534 N.W.2d at 387. Other state appellate courts have also held that FIFRA preempts labeling-based common law causes of action. See, e.g., Kawamata Farms, Inc. v. United Agri Prods., 86 Hawai'i 214, 948 P.2d 1055, 1064 (1997); Hottinger v. Trugreen Corp., 665 N.E.2d 593, 598 (Ind.Ct.App.1996); Jenkins v. Amchem Prods., Inc., 256 Kan. 602, 886 P.2d 869, 876 (1994); Hochberg v. Zoecon Corp., 421 Mass. 456, 657 N.E.2d 1263, 1265 (1995); McAlpine v. Rhone-Poulenc Ag. Co., 285 Mont. 224, 947 P.2d 474, 477 (1997); Ackles v. Luttrell, 252 Neb. 273, 561 N.W.2d 573, 577 (1997); Quest Chem. Corp. v. Elam, 898 S.W.2d 819, 821 (Tex.1995); All-Pure Chem. Co. v. White, 127 Wash.2d 1, 896 P.2d 697, 699 (Wash.1995).

Ackerman contends the preemptive reach of Cipollone and its progeny has been eroded by the later opinion of Medtronic, Inc. v. Lohr, 518 U.S. 470, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996). Medtronic holds that certain state common-law claims are not preempted by the federal medical device amendments of 1976. Medtronic, 518 U.S. at 492-95, 116 S.Ct. at 2255-58, 135 L.Ed.2d at 720-21. At first blush Medtronic might seem to be a retreat from the preemptive analysis employed in Cipollone, and followed in Schuver and Clubine. But five cases decided after Medtronic show that it does not alter the law regarding preemption. Four cases expressly hold that Medtronic does not change the preemptive reach of FIFRA. See Hawkins v. Leslie's Poolmart, 965 F.Supp. 566, 571-72 (D.N.J.1997); Ackles, 561 N.W.2d at 579; Lewis v. American Cyanamid Co., 294 N.J.Super. 53, 682 A.2d 724, 730-31 (N.J.Super.Ct.App.Div.1996); Didier v. Drexel Chem. Co., 86 Wash.App. 795, 938 P.2d 364, 367 (Wash.Ct.App.1997). In the fifth case, Grenier v. Vermont Log Buildings,...

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