Dow Chemical Co. v. Ebling

Decision Date03 February 2000
Docket NumberNo. 22A05-9812-CV-625.,22A05-9812-CV-625.
Citation723 N.E.2d 881
PartiesThe DOW CHEMICAL COMPANY, Dowelanco n/k/a Dow Agrosciences LLC, Eli Lilly & Company Rofan Services, Inc. and Epco, Inc., Appellants-Defendants, Louisville Chemical Company, Inc., Appellant-Defendant, Affordable Pest Control, Inc., Appellant-Defendant, v. Todd EBLING and Cynthia Ebling, individually and Husband and Wife, and as Parents of Christina Ebling and Alex Ebling, Appellees-Plaintiffs.
CourtIndiana Appellate Court

Janet Barbre Norton, Dow AgroSciences, LLC, Stanley C. Fickle, Robert D. MacGill, Dean T. Barnhard, Joseph G. Eaton, William E. Padgett, Barnes & Thornburg, Indianapolis, Indiana, Attorneys for Appellant, The Dow Chemical Company, Dowelanco n/k/a Dow AgroSciences LLC, Eli Lilly & Company, Rofan Services, Inc., and Epco, Inc..

John W. Bilby, Henry S. Alford, Middleton & Reutlinger, Jeffersonville, Indiana, Attorneys for Appellant, Louisville Chemical Company, Inc.

Gene F. Zipperle, Jr., Crafton, Martin & Zipperle, PLLC, Louisville, Kentucky, Attorney for Appellant, Affordable Pest Control, Inc.

Roger L. Pardieck, Esq., Pardieck, Gill, Vargo & MacTavish, Seymour, Indiana, Janet O. Vargo, Esq., Pardieck, Gill, Vargo & MacTavish, Carmel, Indiana, Attorneys for Appellees.

OPINION

DARDEN, Judge

STATEMENT OF THE CASE

Todd and Cynthia Ebling, individually, as husband and wife, and as parents and natural guardians of Christina Ebling and Alex Ebling, (collectively, "the Eblings") filed various state tort claims against The Dow Chemical Company, DowElanco n/k/a Dow AgroSciences LLC, Eli Lilly & Company, Rofan Services, Inc. and Epco, Inc. (collectively, "DowElanco"), Louisville Chemical Company ("LCC"), Affordable Pest Control ("Affordable"), and others. The Eblings generally allege that Christina and Alex developed seizure disorders and other health conditions as a result of their exposure to pesticides— Dursban 2E and Dursban L.O., products manufactured by DowElanco and allegedly applied to the Eblings' apartment by Affordable; and Creal-O, a product formulated by LCC. In this consolidated appeal, DowElanco, LCC and Affordable appeal from the denial of their separate motions for summary judgment.1

We affirm in part and reverse in part and remand.

ISSUES

DowElanco, LLC, and Affordable raise numerous issues on appeal, which we consolidate and restate as follows:

I. Whether the Eblings' state law tort claims against DowElanco, LCC, and Affordable are preempted by the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).
II. Whether Affordable is entitled to summary judgment on the Eblings' strict liability and negligence claims brought under the Indiana Product Liability Act on the grounds that the pest control rendered by Affordable involved wholly or predominately the sale of a service rather than a product.
III. Whether a genuine issue of material fact exists as to whether Affordable breached a standard of care in applying Dursban in the Ebling apartment.
IV. Whether Affordable's application of Dursban constitutes an abnormally dangerous activity warranting the application of strict liability for the resulting harm to the Eblings.
V. Whether a genuine issue of material fact exists as to whether Affordable's conduct of applying Dursban in the Ebling apartment gives rise to punitive damages.
FACTS
DowElanco and Dursban Pesticides

DowElanco, now known as Dow AgroSciences LLC, began as a joint venture between defendant Rofan Services, Inc.2 and Epco, Inc.3 to develop, manufacture and market agricultural and specialty products. Before October of 1989, Dow developed, manufactured and marketed a group of insecticides under the trademark Dursban. Dursban L.O. and Dursban 2E are two of those insecticides. Dursban 2E and Dursban L.O. were registered with the Environmental Protection Agency (EPA) in 1982 and 1984, respectively. As a part of the registration process, Dow received from the EPA stamped and accepted labels for both insecticides, which were authorized by the EPA for use in and around residential structures, including apartments and apartment complexes. In 1989, the registrations of Dursban 2E and L.O. were transferred to DowElanco.

DowElanco does not sell Dursban 2E or L.O. to the general public. Instead, Dow-Elanco sells Dursban 2E and L.O. products with the EPA-approved labels affixed thereto to professional applicators, distributors and formulators who repackage the products. There is no evidence that Dow-Elanco gave any end-consumers EPA-approved labeling information regarding the dangers of its pesticides or directed any applicators, distributors or formulators to do so.

An active ingredient in Dursban products is chlorpyrifos. In November of 1994, DowElanco voluntarily submitted to the EPA reports of allegations of adverse effects resulting from exposure to pesticide products containing chlorpyrifos as an active ingredient. The EPA subsequently brought a civil administrative action against DowElanco, alleging in part that DowElanco had violated FIFRA by not timely submitting to the EPA hundreds of incident reports concerning the alleged adverse effects of its pesticide products on humans or the environment. In the summer of 1995, DowElanco entered into a consent agreement with the EPA and paid a civil penalty of $876,000. Despite the imposition of this civil penalty, the EPA did not withdraw or alter DowElanco's registrations for Dursban L.O. and 2E.

LCC and Creal-O Pesticide

At all relevant times, LCC was a formulator of a ready-to-use pesticide known as Creal-O. As a formulator, LCC would mix mineral spirits with three active ingredients—diazinon, pyrethrins, and piperonyl butoxide. In 1974, as a part of the registration process for Creal-O, LCC was permitted by the EPA to adopt and incorporate the safety and toxicological data submitted by the manufacturers of Creal-O's active and inert ingredients. The EPA registered Creal-O and authorized its use in and around residential structures, including apartments and apartment complexes. LCC received from the EPA a stamped and accepted product label for Creal-O, which states as follows:

Avoid contact with skin, eyes or clothing. In case of spillage on skin, wash thoroughly with water and soap. Harmful if swallowed. Wash hands, arms, and face with soap and water after handling and before eating or smoking. Avoid inhalation of vapor or spray.

(R. 35).

Application of the Pesticides and the Eblings

In April of 1993, Prestwick Square Apartments entered into a pest control service agreement with Affordable, a professional applicator. Under the service agreement, Affordable was to provide regular pest control for roaches, ants, silverfish, mice and rats. In exchange, Prestwick Square paid Affordable for pest control treatments on a per apartment unit basis. The service agreement did not specify the type or brand of pesticide to be applied in the apartments.4 The term of the service agreement was for six months; afterwards, the agreement was to be automatically renewed month to month until canceled by written notice. Affordable sprayed Dursban5 in the apartment units in Prestwick Square on a preventive basis. In April of 1994, Prestwick Square canceled its service agreement with Affordable and began using its own maintenance personnel to apply Creal-O, a ready-to-use pesticide.

Shortly after the Eblings moved into their apartment unit at Prestwick Square in February of 1994, three-year-old Christina and five-month-old Alex began experiencing seizures and other health problems. In October of 1994, Alex had to be hospitalized for the uncontrollable seizures. Christina experienced uncontrollable seizure in December of 1994.

Affordable did not provide Prestwick Square or the Eblings with any of Dursban's EPA-approved warnings and labeling information. Further, although Louisville Chemical provided Prestwick Square with the EPA-approved labeling for Creal-O, the Eblings were not provided with this labeling before their exposure to that pesticide.

In late January of 1995, after the Eblings had moved out of their apartment in Prestwick Square, investigators for the Indiana State Chemist took swab samples from various areas of the apartment to determine the types and levels of pesticide residues. The lab report showed the presence of Chlorpyrifos from Dursban. The Eblings' clothing and toys tested in 1997 three years after the Eblings were allegedly last exposed to Dursban and Creal-O, still revealed the presence of Chlorpyrifos and Diazinon.

DISCUSSION AND DECISION
I. Preemption—Eblings v. DowElanco, LLC, and Affordable Preemption Doctrine

The preemption doctrine is grounded upon the Supremacy Clause of Article Six of the United States Constitution, which invalidates those state laws that interfere with, or are contrary to federal law. U.S. Const. Art. VI, CI. 2; Hillsborough County, Fla. v. Automated Medical Laboratories, Inc., 471 U.S. 707, 712, 105 S.Ct. 2371, 2374, 85 L.Ed.2d 714 (1985). The United States Supreme Court explained the different forms of preemption in its opinion in Louisiana Public Service Com'n v. F.C.C., 476 U.S. 355, 106 S.Ct. 1890, 90 L.Ed.2d 369 (1986):

The Supremacy Clause of Art. VI of the Constitution provides Congress with the power to pre-empt state law. Pre-emption occurs when Congress, in enacting a federal statute, expresses a clear intent to pre-empt state law, when there is outright or actual conflict between federal and state 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.

476 U.S. at 368-69,106 S.Ct. at 1898 (citations omitted). "The critical question in...

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