Bader Farms, Inc. v. Monsanto Co., Case No. 1:16-CV-299 SNLJ

• Decision Date: 16 February 2017
• Docket Number: Case No. 1:16-CV-299 SNLJ
• Parties: BADER FARMS, INC. and BILL BADER Plaintiffs, v. MONSANTO CO., Defendant.
• Court: U.S. District Court — Eastern District of Missouri

BADER FARMS, INC. and BILL BADER Plaintiffs, v. MONSANTO CO., Defendant.

Case No. 1:16-CV-299 SNLJ

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MISSOURI SOUTHEASTERN DIVISION

February 16, 2017

MEMORANDUM AND ORDER

This case comes before the Court on plaintiffs' Motion to Remand (#30). Plaintiffs argue that this Court lacks subject matter jurisdiction because they bring only Missouri state law claims, none of which arise under federal law, and that their claims are not preempted by federal law. Defendant opposes this motion, arguing that this Court has original federal question jurisdiction under 28 U.S. C. § 1331 and that plaintiffs' claims are completely preempted under federal law. The issues are voluminously briefed and the case is ripe for disposition. For the following reasons, plaintiffs' motion is denied.

I. Factual Background

This case was originally filed in the 35^th Judicial Circuit Court for Dunklin County, Missouri. Defendant removed the case to this Court, alleging original federal question jurisdiction under 28 U.S. C. § 1331 and that plaintiffs' claims are completely preempted under federal law, specifically, under the Federal Plant Protection Act ("PPA"), 7 U.S.C. §§ 7701 et seq and regulations promulgated pursuant to the PPA.

As alleged in the petition, plaintiffs' peach orchards were damaged by the "drift" of an herbicide, dicamba, onto their property that was illegally applied by surrounding farmers on their own crops to prevent weed growth. Dicamba is a "highly volatile" herbicide that "is prone to drift" onto surrounding properties, damaging crops that are not genetically modified to withstand the herbicide. Although defendant did not manufacture, distribute, sell, or apply the dicamba sprayed by the surrounding farmers, plaintiffs contend that defendant is liable for the damage to plaintiffs' crops because defendant developed and sold to those farmers genetically engineered ("GE") soybean and cotton seeds without selling a corresponding less-harmful herbicide to curb weed growth on those GE seeds.¹ Without releasing a corresponding herbicide, plaintiffs maintain, it was foreseeable that the farmers who purchased the new GE seeds would resort to using dicamba to curb the weed growth on those seeds.

GE seeds are highly regulated via federal statutes and regulations. The Animal and Plant Health Inspection Service ("APHIS") is delegated the authority to regulate biotechnology by the U.S. Department of Agriculture. Among other things, APHIS regulates "plant pests" under the PPA. 7 U.S.C. § 7702(14); See also 7 C.F.R. § 340.1. Most GE seeds are created using agrobacterium, and all GE seeds made using agrobacterium are presumptively considered "plant pests" under the regulatory scheme. See 7 C.F.R. § 340.2. The Administrator of APHIS may be petitioned to deregulate GE seeds, but only after a strenuous investigation process and only based on sound science. 7 C.F.R. §340.6. Any person may petition the Administrator that an article should not beregulated by APHIS. 7 C.F.R. §340.6. The regulations regarding the petition are extensive and further define what is required to attain nonregulated status. See id. Importantly, a petition to deregulate an article currently regulated under APHIS must "include information known to the petitioner which would be unfavorable to a petition." 7 C.F.R. § 340.6(b).

Nonregulated status, or deregulated status, in effect, allows for the commercialization and sale of that product. The two seeds at issue in this case were formally deregulated by APHIS. However, the seeds were released to the public before the approval of a corresponding herbicide by the Environmental Protection Agency ("EPA"), the regulatory body charged with the regulation of pesticides and herbicides. Plaintiffs state that it is customary in the industry to release both the GE seed and a corresponding herbicide to curb weed growth as a "complete crop system." Ultimately, all of plaintiffs' claims are based on the conclusion that plaintiffs would not have been harmed if defendant released the "complete crop system" for these GE crops. Plaintiffs nine state-law claims are: (1) strict liability - defective design; (2) strict liability - failure to warn; (3) negligent design and marketing; (4) negligent failure to warn; (5) negligent training; (6) breach of implied warranty of merchantability; (7) fraudulent concealment; (8) unjust enrichment; and (9) punitive damages.

II. Standard of Removal

Removal statutes are strictly construed. In Re Business Men's Assur. Co. of America, 992 F.2d 181, 183 (8th Cir. 1993). Any doubts about the propriety of removal are to be resolved in favor of remand. Central Iowa Power Co-op. v. Indep.Transmission Sys. Operator, Inc., 561 F.3d 904, 912 (8th Cir. 2009). The party seeking removal has the burden to establish federal subject matter jurisdiction. Id. A civil action brought in state court may be removed to a proper district court if that district court has original jurisdiction over the lawsuit. 28 U.S.C. § 1441(a). District courts have "original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331.

To determine whether a claim arises under federal law, "[t]he general rule - known as the 'well-pleaded complaint rule' - is that a complaint must state on its face a federal cause of action in order for the action to be removable on the basis of federal-question jurisdiction." Griffioen v. Cedar Rapids & Iowa City Ry. Co., 785 F.3d 1182, 1188 (8th Cir. 2015). However, a case may arise under federal law under the "substantial federal question" doctrine when a "state-law claim necessarily raise[s] a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state responsibilities." Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 314 (2005). However, a defendant cannot "inject a federal question into an otherwise state-law claim and thereby transform the action into one arising under federal law." Central Iowa Power Co-op., 561 F.3d at 912 (internal citation omitted). "If even one claim in the complaint involves a substantial federal question, the entire matter may be removed." Pet Quarters, Inc. v. Depository Trust & Clearing Corp., 559 F.3d 772, 779 (8^th Cir. 2009) (citing Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 9 (2003)).

III. Substantial Federal Question

Although the parties spend much effort on whether federal preemption may apply to all counts, the motion to remand will be denied solely on this Court's determination that Count VII - fraudulent concealment - presents a substantial federal question. The fraudulent conduct alleged in the petition is that "Monsanto knew of [APHIS's and others'] ignorance of the truth and intentionally withheld the truth about its product and its risks," and that "Monsanto intended that [APHIS and others] should act in ignorance in carrying out their . . . oversight responsibilities . . . ." The "truth" was that there was a likelihood that farmers would illegally use the old dicamba herbicide with their new GE soybean and cotton seeds instead of waiting for a new "complete crop system" herbicide compatible with the new seeds, and that the old dicamba would tend to drift onto and destroy the crops of...