Bader Farms, Inc. v. Monsanto Co.

• Decision Date: 13 April 2018
• Docket Number: Case No. 1:16-CV-299-SNLJ
• Parties: BADER FARMS, INC. and BILL BADER Plaintiffs, v. MONSANTO CO. and BASF CORP., Defendants.
• Court: U.S. District Court — Eastern District of Missouri

BADER FARMS, INC. and BILL BADER Plaintiffs, v. MONSANTO CO. and BASF CORP., Defendants.

Case No. 1:16-CV-299-SNLJ

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MISSOURI SOUTHEASTERN DIVISION

April 13, 2018

Member case re 1:18MD2820 SNLJ

MEMORANDUM AND ORDER

Plaintiffs bring this action against Monsanto Company (a company that sells crop seed and herbicide) and BASF Corporation (a company that sells herbicide), alleging both defendants committed a number of torts related to their dicamba-based herbicides. Plaintiffs claim both defendants conspired to create an "ecological disaster," where Monsanto released its dicamba-tolerant seed in 2015 and 2016 with no corresponding dicamba herbicide. As a result, farmers illegally sprayed an old formulation of dicamba herbicide that was unapproved for in-crop, over-the-top, use and was "volatile," or prone to drift. This damaged neighboring crops, which forced neighboring farmers to plant Monsanto's dicamba-tolerant seed defensively, and that increased demand for both defendants' new dicamba herbicide during the 2017 growing season.

This matter is before the Court on BASF's motion to dismiss (#109). Plaintiffs' fraudulent concealment count will be dismissed entirely because plaintiffs failed to plead reliance. Plaintiffs' negligence-based counts that seek to hold BASF liable for 2015 and 2016 damage also are dismissed for two reasons. First, BASF did not have a dicamba herbicide approved for in-crop, over-the-top, use on the market until late 2016. So it did not independently cause any 2015 or 2016 damage. Second, it cannot be held liable for its co-conspirator Monsanto's negligent acts under an acts-of-a-co-conspirator theory. Thus, BASF may be held liable for the 2015 and 2016 damage only if plaintiffs eventually show (1) Monsanto and BASF entered into a conspiracy and (2) the 2015 and 2016 damage flowed naturally from that conspiracy. Finally, plaintiffs may assert all claims (except fraudulent concealment) against BASF for any damage allegedly caused by its new dicamba herbicide in 2017.

I. Factual and Procedural Background

Monsanto develops, manufactures, and sells crop seed—especially cotton and soybean seed—that are genetically engineered to tolerate certain herbicides. The herbicides are designed to kill unwanted weeds that hurt crop yield, and farmers use different crop "systems" for that purpose. They plant seed that are genetically engineered to tolerate a herbicide, then they spray that herbicide during the growing season (this is called "over-the-top" or "in-crop" spraying). In theory, the herbicide will kill unwanted weeds without harming the crops.

In 2015, Monsanto released its dicamba-tolerant cotton seed. A year later, it released its dicamba-tolerant soybean seed. During both 2015 and 2016, Monsanto's dicamba-tolerant seed were on the market without a corresponding dicamba herbicide that could be sprayed in-crop, or over the top, of the dicamba-tolerant crops. BASF did sell "old" dicamba-based herbicides during this time, but those herbicides were notapproved for in-crop, over-the-top, use (and thus could not legally be sprayed over the top), presumably because they were volatile and prone to drift. Instead, these old dicamba products generally were used during the "burndown" period, where farmers try to kill unwanted weeds before the planting season. Finally, in late 2016, the Environmental Protection Agency ("EPA") approved Monsanto's new dicamba herbicide ("XtendiMax") and BASF's new dicamba herbicide ("Engenia")—herbicides that were developed and marketed as less volatile and less prone to drift than old dicamba—making them available for the 2017 growing season. These new dicamba herbicides, plaintiffs allege, are no better than old dicamba because they too are volatile and prone to drift.

Plaintiffs own and operate a massive peach growing business in southeast Missouri. They filed this suit back in 2016, naming Monsanto as the only defendant. Plaintiffs claimed neighboring farmers planted Monsanto's dicamba-tolerant cotton and soybean seed in 2015 and 2016. With no corresponding dicamba herbicide on the market, these neighboring farmers illegally sprayed the old dicamba that was on the market but unapproved for over-the-top spraying. The old dicamba allegedly drifted off the target fields and damaged plaintiffs' peach trees. Plaintiffs claimed Monsanto is liable in several respects by releasing its seed without a corresponding herbicide because it was foreseeable that farmers would illegally spray old dicamba.

Monsanto moved to dismiss (#6), arguing it could not be held responsible for the damage because it did not manufacture, distribute, sell, or apply the old dicamba that allegedly damaged plaintiffs' peach trees. In ruling on Monsanto's motion to dismiss, this Court noted

even if Monsanto was negligent in its release of the [genetically engineered] seeds without a corresponding herbicide, it appears that its conduct was simply too attenuated to establish proximate cause. Instead, plaintiffs' injuries stem directly from an intervening and superseding cause—the unforeseeable independent acts by the third-party farmers who unlawfully sprayed dicamba on their crops.

Bader Farms, Inc. v. Monsanto Co., No. 1:16-CV-299-SNLJ, 2017 WL 1315792, at *3 (E.D. Mo. Apr. 10, 2017), vacated, No. 1:16-CV-299-SNLJ, 2017 WL 2813393 (E.D. Mo. June 29, 2017). This Court also observed that even if "the third-party farmers' unlawful conduct was at all foreseeable because [old] dicamba was an available herbicide and the new [genetically engineered] seeds were dicamba-resistant, that foreseeability was wholly negated by the [genetically engineered] seeds' product warning labels [which explicitly told farmers not to apply dicamba herbicide in-crop], prominently highlighted on all bags of cotton and soybeans sold." Id. With that all in mind, this Court deferred a ruling on the motion, gave plaintiffs more time to respond to defenses based on the bag warnings, and treated the motion to dismiss as a motion for summary judgment. Id.

Next, plaintiffs moved to amend their complaint and asked the Court to vacate its order treating Monsanto's motion to dismiss as a motion for summary judgment. This Court granted both requests. Bader Farms, Inc. v. Monsanto Co., No. 1:16-CV-299-SNLJ, 2017 WL 2813393, at *1 (E.D. Mo. June 29, 2017). Explaining why it granted the requests, this Court noted

[a]lthough the Court maintains reservation about whether defendant's action or inaction proximately caused plaintiffs' injuries, the allegation that defendant's representatives instructed seed-purchasing farmers to illegally spray [old] dicamba on the defendant's seeds, if true, would seemingly negate the effectiveness of the product use labels attached to defendant's seeds in addition to altering the proximate causation analysis of this case.

Id. at *3.

In their amended complaint (#62), plaintiffs added a new count for civil conspiracy, alleging Monsanto conspired with farmers who bought dicamba-tolerant seed to corner the market such that other farmers would have no choice but to plant Monsanto's dicamba-tolerant seed. Monsanto did not file a new motion to dismiss and instead filed its answer (#64).

Then, plaintiffs asked for leave to file a second amended complaint (#68), and this Court again granted their request. Bader Farms, Inc. v. Monsanto Co., No. 1:16-CV-299-SNLJ, 2017 WL 4758886, at *1 (E.D. Mo. Oct. 20, 2017). As relevant here, plaintiffs (1) added BASF as a defendant, (2) amended their civil conspiracy count that now alleges Monsanto and BASF—not Monsanto and the farmers who bought dicamba-tolerant seed—conspired to create an "ecological disaster," and (3) added allegations that they have suffered damage in 2017, after Monsanto's and BASF's new dicamba herbicides were approved for in-crop use. There are now eight counts: (1) strict liability-design defect, (2) strict liability-failure to warn, (3) negligent design and marketing, (4) negligent failure to warn, (5) negligent training, (6) fraudulent concealment, (7) trespass, (8) civil conspiracy, and (9) punitive damages. After being added as a defendant, BASF moved to dismiss (#109) the claims against it.

Finally, two months ago, this case was made part of the multidistrict litigation ("MDL") In re Dicamba Herbicides Litigation, 1:18-MD-2820-SNLJ (E.D. Mo.) (#130). In the MDL's Initial Order, this Court explained it would consider motions that werefully briefed before the member case was transferred to the MDL. This is one of those motions.

This case is complex because it involves different time periods, products, and defendants. So, before wading into the merits of BASF's motion to dismiss, the Court will briefly explain its understanding of the allegations and theories of liability.

2015 and 2016 Damage. Here, the question seems to be did Monsanto commit any of the alleged torts by releasing its dicamba-tolerant seed before it released its corresponding dicamba herbicide. The heart of this question appears to be whether it was foreseeable that farmers would illegally spray old dicamba over the top of their dicamba-tolerant crops, despite the bag warnings on Monsanto's seed. Why else did they buy the dicamba-tolerant seed, or so the theory goes. At this point, BASF had no product in the mix. Its old dicamba was on the market in 2015 and 2016, but plaintiffs do not base any claims on BASF's old dicamba. In fact, plaintiffs explicitly define "dicamba-based products"—which are the subject of this lawsuit—as (1) Monsanto's dicamba-tolerant cotton and soybean seed, (2) Monsanto's new dicamba herbicides, and (3) BASF's new dicamba herbicide. (#77 at 99, ¶ 552.) It appears that BASF is involved at this point only as part of the alleged conspiracy with Monsanto.

2017 Damage. Here, there seem to be two questions. One, did Monsanto commit any of the alleged torts by releasing its new dicamba herbicides? Two, did BASF commit any of the...