Bruce v. ICI Americas, Inc.

• Citation: 933 F. Supp. 781
• Decision Date: 15 May 1996
• Docket Number: Civil No. 1-94-CV-10042.
• Court: U.S. District Court — Southern District of West Virginia
• Parties: David E. BRUCE, Trustee of the Keith E. Bruce Revocable Trust; David E. Bruce, Trustee of the Mary Kay Bruce Revocable Trust; David E. Bruce, Husband and Wife, Plaintiffs, v. ICI AMERICAS, INC., n/k/a Zeneca Inc., A Delaware Corporation, Defendant.

933 F. Supp. 781

David E. BRUCE, Trustee of the Keith E. Bruce Revocable Trust; David E. Bruce, Trustee of the Mary Kay Bruce Revocable Trust; David E. Bruce, Husband and Wife, Plaintiffs, v. ICI AMERICAS, INC., n/k/a Zeneca Inc., A Delaware Corporation, Defendant.

Civil No. 1-94-CV-10042.

United States District Court, S.D. Iowa, Western Division.

May 15, 1996.

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John Billings Boeye, Stamets Law Office, Red Oak, Iowa, for Plaintiffs.

K.J. Walker, Des Moines, Iowa, John P. Mandler, Faegre & Benson Professional, Limited Liability Partnership, Minneapolis, MN, for Zeneca, Inc.

ORDER

LONGSTAFF, District Judge.

The Court has before it Defendant ICI Americas Inc., n/k/a Zeneca Inc.'s ("Zeneca") Motion for Summary Judgment filed December 18, 1995, regarding the allegations contained in Plaintiffs' Petition.¹ Plaintiffs resisted this motion on April 2, 1996 and Defendant filed a reply brief on April 11, 1996.

I. BACKGROUND

Unless otherwise indicated, the following facts are either not in dispute or are viewed in the light most favorable to the plaintiffs. Plaintiffs are in the business of farming. Their farming operation is a large agricultural business² formerly operated by Keith Bruce and his son David Bruce and currently operated by David and Peggy Bruce. During the years 1990, 1991, and 1992, Plaintiffs' farming operation generated gross income of $2.1 million, $1.4 million, and $1.3 million respectively.

In connection with their farming operation, between 1982 and 1992, Plaintiffs purchased and used 32 different agricultural chemical products from 14 different manufacturers, including at least 29 separate purchases of five different Zeneca products. In addition, Plaintiffs have purchased Zeneca products in every year since 1983. These purchases have included Dyfonate, the product at issue in this case, in 1985, 1986, 1987, and 1990. The labels for each of these products included a disclaimer of warranty and limitation of liability. Moreover, all of the Zeneca and Stauffer³ products purchased and used by Plaintiffs during this time period contained a label with a similar disclaimer of warranty and limitation of liability as the one on the Dyfonate label at issue.

Plaintiff David Bruce has had a commercial pesticide application license since 1976 and has personally applied agricultural chemicals in every year since 1976. In order to maintain his license, David Bruce must take a class and pass a certification test every three years.

David Bruce stated that he believed it is important to read agricultural chemical labels prior to applying the product. He also understood that it is a violation of federal law to apply a product in a manner inconsistent with the product's label. It is his practice to read every agricultural product label before applying the product.⁴ David Bruce was also aware that agricultural chemical dealers had copies of labels of the products they sold and that he could review such labels prior to purchasing agricultural chemicals.

In 1992, Plaintiffs purchased Dyfonate II 20-G ("Dyfonate"), a Zeneca product, from two companies: J & N Fertilizer Company, Inc., Malvern Iowa and Benes Service Co., Valparaiso, Nebraska. Zeneca offers various rebates, promotional gifts, contests and calibration of equipment through dealers such as J & N and Benes.

The Dyfonate product which Plaintiffs purchased in 1992 contained a label on the bottom portion of the fifty pound bag that sets forth the following disclaimer of warranties and limitation of liabilities:

IMPORTANT: Read the entire Directions for Use and Warranty before using this product.

CONDITIONS OF SALE AND LIMITED WARRANTY:

The Directions for Use of this product are believed to be reliable and should be followed carefully. However, it is impossible to eliminate all risks associated with the use of this product. Crop injury, ineffectiveness or other unintended consequences may result because of such factors as timing and method of application, weather and crop conditions, mixture with other chemicals not specifically recommended or other influencing factors in the use of this product, all of which are beyond the control of the seller. All such risks shall be assumed by Buyer and User, and Buyer and User agree to hold Seller harmless for any claims relating to such factors.

Seller warrants that this product conforms to the chemical description on the label and is reasonably fit for the purpose stated on the label, subject to the inherent risks referred to above, when used in accordance with directions under normal conditions of use. This warranty does not extend to the use of this product contrary to label instructions, or under abnormal conditions, or under conditions not reasonably foreseeable to or beyond the control of Seller and Buyer and User assume the risk of any such use. SELLER DISCLAIMS ALL OTHER WARRANTIES EXPRESSED OR IMPLIED INCLUDING ANY WARRANTY OF FITNESS OR MERCHANTABILITY.

When Buyer and User claims losses or damages resulting from the use or handling of this product (including claims based on contract, negligence, strict liability or other legal theories), Buyer or User must promptly notify in writing Seller of any claims to be eligible to receive either of the remedies set forth below. The EXCLUSIVE REMEDY OF BUYER OR USER and the LIMIT OF LIABILITY of seller will be, at the election of the Seller, refund of the purchase price for product bought, or replacement of amount of product used. SELLER SHALL NOT BE LIABLE FOR CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES RESULTING FROM THE USE OR HANDLING OF THIS PRODUCT AND SELLER'S SOLE LIABILITY AND BUYER'S AND USER'S EXCLUSIVE REMEDY SHALL BE LIMITED TO THE REFUND OF THE PURCHASE PRICE.

While Plaintiffs admit that they read the printed material that accompanied the pesticide which provided instructions for use and generally reviewed the bag for storage and disposal information, they deny that they actually read the disclaimer of warranties contained on the bag. (Bruce depo. 31:2-8; D. Ex. J).

Plaintiffs applied the Dyfonate to 1,253.5 acres of their 1992 corn crop in order to control rootworm. However, the Dyfonate failed to properly control corn rootworms in Plaintiffs' 1992 corn crop resulting in substantial damage to Plaintiffs' crops and lower yields.

II. SUMMARY JUDGMENT STANDARD

Summary judgment is properly granted when the record, viewed in the light most favorable to the nonmoving party, shows that there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Walsh v. United States, 31 F.3d 696, 698 (8th Cir.1994). The moving party must establish its right to judgment with such clarity that there is no room for controversy. Jewson v. Mayo Clinic, 691 F.2d 405, 408 (8th Cir.1982). "The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). An issue is "genuine," if the evidence is sufficient to persuade a reasonable jury to return a verdict for the nonmoving party. Id. at 248, 106 S.Ct. at 2510. "As to materiality, the substantive law will identify which facts are material.... Factual disputes that are irrelevant or unnecessary will not be counted." Id.

III. ANALYSIS

In support of its Motion for Summary Judgment, Zeneca argues that summary judgment is appropriate for several reasons. First, Zeneca asserts that all of the Plaintiffs' claims are based on allegedly inadequate pesticide labeling and as such are expressly preempted by the Federal Insecticide Fungicide and Rodenticide Act ("FIFRA"), 7 U.S.C. § 136 et seq. Second, Zeneca argues that Plaintiffs fail to state a claim under Iowa law because Plaintiffs may not recover economic losses pursuant to tort theories. In addition, Zeneca argues that Plaintiffs may not recover consequential economic loss against a non-privity seller pursuant to breach of warranty theories. Finally, Zeneca asserts that pursuant to Iowa Code §§ 554.2316 and 554.2719, it disclaimed all implied warranties and limited recovery upon a showing of breach of express warranty to the price of the product.

A. Preemption by FIFRA

"FIFRA creates a comprehensive scheme for the regulation of pesticide labeling and packaging." Welchert v. American Cyanamid, Inc., 59 F.3d 69, 71 (8th Cir.1995); see Wisconsin Pub. Intervenor v. Mortier, 501 U.S. 597, 601, 111 S.Ct. 2476, 2479-80, 115 L.Ed.2d 532 (1991). Section 24 of FIFRA provides in part:

(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(a), (b).

State actions based on the adequacy of warnings or instructions on the labels of EPA-registered pesticides are preempted. E.g., Welchert, 59 F.3d at 73; see Cipollone v. Liggett Group, 505 U.S. 504, 525, 112 S.Ct. 2608, 2622, 120 L.Ed.2d 407 (1992). "Labeling" is defined as "all labels and all other written, printed, or graphic matter (A) accompanying the pesticide or device at any time; or (B) to which reference is made on the label or in the literature accompanying the pesticide or device." 7 U.S.C. § 136(p)(2).

Zeneca asserts that all of the Plaintiffs' claims are label-based, and, as such, are preempted by FIFRA. Plaintiffs, on the other hand, contend that their claims are not based upon information or instructions contained in the label. Rather, Plaintiffs assert that their claims are based upon the fact that the...