Indian Brand Farms v. Novartis Crop Prot., Inc.

• Decision Date: 27 August 2012
• Docket Number: Civil No. 99–2118 (NLH/JS).
• Citation: 890 F.Supp.2d 534
• Parties: INDIAN BRAND FARMS, et al., Plaintiffs, v. NOVARTIS CROP PROTECTION, INC., Defendant.
• Court: U.S. District Court — District of New Jersey

890 F.Supp.2d 534

INDIAN BRAND FARMS, et al., Plaintiffs,

v.NOVARTIS CROP PROTECTION, INC., Defendant.

Civil No. 99–2118 (NLH/JS).

United States District Court,

D. New Jersey.

Aug. 27, 2012.

Thomas Joseph Vesper, Esquire, Kathleen F. Beers, Esquire, Westmoreland, Vesper & Quattrone, PA, West Atlantic City, NJ, for Plaintiffs Joyce Cappuccio, individually and d/b/a William Cappuccio & Sons, Anthony Melora, individually and d/b/a Melora Farms, and Columbia Cranberry, Inc. through Gene Martinelli.

Michael D. Martin, Esquire, Martin & Martin, Lakeland, FL, for Plaintiffs Indian Brand Farms, Inc. and Columbia Fruit Farms, Inc.

Carl D. Poplar, Esquire, Carl D. Poplar, P.A., Cherry Hill, NJ, for Gregory Clark, individually and d/b/a Clark Farms, R & S Franeschini Farms, and Joseph Martinelli, individually and d/b/a Blu–Jay Farms.

Robert J. Machi, Esquire, Morgan Melhuish Abrutyn, Livingston, NJ, John P. Mandler, Esquire, Kristin R. Eads, Esquire, Faegre, Baker, Daniels LLP, Minneapolis, MN, for Defendant Novartis Crop Protection, Inc.

OPINION

HILLMAN, District Judge.

This matter comes before the Court by way of Defendant Novartis Crop Protection, Inc.'s (“Novartis”) motion [Doc. No. 286] for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c). Novartis seeks the dismissal of Counts IV and VII of Plaintiffs' fourth amended complaint alleging: (1) common law claims for negligent misrepresentation/fraud; and (2) statutory claims for violations of the New Jersey Consumer Fraud Act (“CFA”) (collectively referred to as Plaintiffs' “fraud-based claims”). Plaintiffs oppose Novartis's motion. The Court has considered the parties' submissions, and heard oral argument on the motion. For the reasons expressed below, Novartis' motion is granted.

I. JURISDICTION

In this action, the Court exercises jurisdiction over Plaintiffs' New Jersey state law claims pursuant to 28 U.S.C. § 1332 based on complete diversity of citizenship of the parties and an amount in controversy in excess of $75,000.

II. BACKGROUND

The detailed factual background of this case has been set forth in several prior opinions issued by the Honorable Joseph H. Rodriguez, U.S.D.J., and the Third Circuit Court of Appeals. Accordingly, the Court sets forth here only the general factual background relevant to the present motion. Plaintiffs in this action are blueberry farms and individual blueberry farmers located in Hammonton, New Jersey. Plaintiffs originally filed suit against Novartis, a pesticide company, on May 7, 1999 alleging damage to their blueberry plants and crops sustained after use of a new Novartis insecticide, known as Diazinon AG600 (“AG600”), during the spring and summer of 1997. For several years prior to the use of AG600 in 1997, Plaintiffs treated their blueberry plants with two other Novartis insecticides—Diazinon 50 WP (“50 WP”) and Diazinon AG500 (“AG500”).

In order to prevent damage to their blueberry plants from both insects and fungi, Plaintiffs had engaged for some time in the common and allegedly well-known practice of “tank-mixing,” a process by which an insecticide, either 50 WP or AG500, would be mixed with a fungicide, either Captan or Captec (“the fungicides”) and then applied to their blueberry plants. Plaintiffs had tank-mixed the fungicides with either 50 WP or AG500 for several years and did not experience any crop damage as a result of the application of this mixture.

Subsequently, Novartis introduced and marketed to Plaintiffs a new insecticide—AG600. Novartis distributed advertising materials which claimed that the new product, AG600, was safer and more effective than either 50 WP or AG500. In the spring of 1997, Plaintiffs purchased and began using AG600 to treat their blueberry plants. As Plaintiffs had done in the past with the previous Novartis insecticides—50 WP and AG500, Plaintiffs tank-mixed AG600 with the fungicides prior to application on their blueberry plants.

At the time of the initial application of AG600 in approximately May of 1997, Plaintiffs were unaware that AG600 contained an additional ingredient known as a surfactant ¹ which was not an ingredient in either 50 WP or AG500. According to Plaintiffs, that surfactant, when mixed with the fungicides, caused systematic injury to their blueberry plants including, but not limited to blotches, depressions, spots on the plants, and plant death. Plaintiffs contend that Novartis failed to disclose the addition of the surfactant in AG600 to the Novartis field personnel who met with Plaintiffs and that Novartis failed to include this information in any of its advertising or marketing materials promoting the use of AG600.

After several years of motion practice in this District and two separate appeals to the Third Circuit, Plaintiffs' remaining claims at this stage of the case include: ²

(1) a strict liability claim by all Plaintiffs under the New Jersey Products Liability Act based on theories of—

(a) design defect, and

(b) failure to warn of the harm to blueberry plants when AG600 was mixed with a fungicide;

(2) a claim for negligent misrepresentation/fraud by all Plaintiffs except Indian Brand Farms based on Plaintiffs' indirect reliance on Novartis's marketing brochure alleging that Novartis marketed AG600 as controlling insects without having an adverse effect on plants when Novartis knew or should have known that this statement was false;

(3) a claim alleging breach of the New Jersey Consumer Fraud Act by all Plaintiffs except Indian Brand Farms based on Plaintiffs' indirect reliance on the marketing brochure alleging that Novartis deceptively represented that AG600 was safe to use on blueberry plants;

(4) a claim for fraud in the inducement by the six Settling Plaintiffs; ³ and (5) a claim for breach of the covenant of good faith and fair dealing by the six Settling Plaintiffs.

III. DISCUSSION

Novartis filed an answer to Plaintiffs' fourth amended complaint on April 25, 2007. ( See Answer [Doc. No. 130].) Accordingly, Novartis now moves for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) and seeks the dismissal of Plaintiffs' common law misrepresentation and statutory consumer fraud claims as alleged in Counts IV and VII of the fourth amended complaint. (Mem. in Supp. of Novartis' Rule 12(c) Mot. for J. on the Pleadings as to Pls.' Fraud–Based Claims [Doc. No. 286–1] (hereinafter, “Novartis Mem.”) 1.) Rule 12(c) provides in pertinent part that “[a]fter the pleadings are closed ... a party may move for judgment on the pleadings.” Fed. R. Civ. P. 12(c). “A motion for judgment on the pleadings based on the defense that the plaintiff has failed to state a claim is analyzed under the same standards that apply to a Rule 12(b)(6) motion.” Revell v. Port Auth. of N.Y. & N.J., 598 F.3d 128, 134 (3d Cir.2010) (citing Turbe v. Gov't of the V.I., 938 F.2d 427, 428 (3d Cir.1991)).

In considering a motion to dismiss a complaint for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6), a court must accept all well-pleaded allegations in the complaint as true and view them in the light most favorable to the plaintiff. Evancho v. Fisher, 423 F.3d 347, 350 (3d Cir.2005). It is well settled that a pleading is sufficient if it contains “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2).

A district court, in weighing a motion to dismiss, asks “ ‘not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims[.]’ ” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 563 n. 8, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974)); see also Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1953, 173 L.Ed.2d 868 (2009) (“Our decision in Twombly expounded the pleading standard for ‘all civil actions[.]’ ”) (citation omitted). First, under the Twombly/Iqbal standard, a district court “must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210–11 (3d Cir.2009) (citing Iqbal, 129 S.Ct. at 1949).

Second, a district court “must then determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a ‘plausible claim for relief.’ ” Fowler, 578 F.3d at 211 (citing Iqbal, 129 S.Ct. at 1950). “[A] complaint must do more than allege the plaintiff's entitlement to relief.” Fowler, 578 F.3d at 211;see also Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir.2008) (“The Supreme Court's Twombly formulation of the pleading standard can be summed up thus: ‘stating ... a claim requires a complaint with enough factual matter (taken as true) to suggest’ the required element. This ‘does not impose a probability requirement at the pleading stage,’ but instead ‘simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of’ the necessary element.”) (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). “The defendant bears the burden of showing that no claim has been presented.” Hedges v. U.S., 404 F.3d 744, 750 (3d Cir.2005).

IV. ANALYSIS

According to Novartis, Plaintiffs' common law misrepresentation claim and statutoryclaim under the CFA must be dismissed because under New Jersey law, these two claims are subsumed by the New Jersey Products Liability Act (the “PLA”).⁴ Novartis argues that “Plaintiffs' core claim underlying each of these theories of liability is that Novartis' Diazinon AG600 product, when tank-mixed with [the fungicides], allegedly caused damage to Plaintiffs' blueberry crops[.]” (Novartis Mem. 2.) Thus, Novartis asserts that, consistent with state and federal case law interpreting the PLA, Plaintiffs' fraud-based claims must be dismissed because such claims are “subsumed by the NJPLA where the ‘core issue’ is harm allegedly caused by a defendant's...