Johnson v. Paynesville Farmers Union Coop. Oil Co.

• Citation: 817 N.W.2d 693
• Decision Date: 01 August 2012
• Docket Number: Nos. A10–1596,A10–2135.,s. A10–1596
• Parties: Oluf JOHNSON, et al., Respondents, v. PAYNESVILLE FARMERS UNION COOPERATIVE OIL COMPANY, Appellant.
• Court: Minnesota Supreme Court

817 N.W.2d 693

Oluf JOHNSON, et al., Respondents,
v.
PAYNESVILLE FARMERS UNION COOPERATIVE OIL COMPANY, Appellant.

Nos. A10–1596, A10–2135.

Supreme Court of Minnesota.

Aug. 1, 2012.

[817 N.W.2d 696]

Syllabus by the Court

1. Because Minnesota does not recognize claims for trespass by particulate matter, the district court did not err in dismissing respondents' trespass claim as a matter of law.

2. Under 7 C.F.R. § 205.202(b) (2012), a producer's intentional placement of pesticides onto fields from which crops are intended to be harvested and sold as organic is prohibited, but section 205.202(b) does not regulate the drift of pesticides onto those fields. The district court therefore did not err in dismissing respondents' nuisance and negligence per se claims based on section 205.202(b). But to the extent that respondents' nuisance and negligence per se claims are not grounded on section 205.202(b), the court erred when it dismissed those claims.

3. Because respondents' proposed amended nuisance and negligence per se claims that are not grounded on 7 C.F.R. § 205.202(b), are not futile, the district court abused its discretion in denying respondents' motion to amend their complaint to include those claims.

Arlo H. Vande Vegte, Arlo H. Vande Vegte, P.A., Plymouth, MN; and Harry Burns, Burns Law Office, Saint Cloud, MN, for respondents.

Kevin F. Gray, Matthew W. Moehrle, Rajkowski Hansmeier, Ltd., Saint Cloud, MN, for appellant.

Jonathan C. Miesen, Margaret E. Dalton, Stoel Rives LLP, Minneapolis, MN, for amici curiae Minnesota Grain and Feed Association, Cooperative Network, and Minnesota Statewide Cooperative Managers Association.

OPINION
GILDEA, Chief Justice.

This action involves alleged pesticide contamination of organic farm fields in central Minnesota. Appellant Paynesville Farmers Union Cooperative Oil Company (“Cooperative”) is a member owned farm products and services provider that, among other things, applies pesticides to farm fields. Respondents Oluf and Debra Johnson (“Johnsons”) are organic farmers. The Johnsons claim that while the Cooperative was spraying pesticide onto conventionally farmed fields adjacent to the Johnsons' fields, some pesticide drifted onto and contaminated the Johnsons' organic fields. The Johnsons sued the Cooperative on theories including trespass, nuisance, and negligence per se and sought damages and injunctive relief. The Johnsons claim that the pesticide drift caused them: (1) economic damages because they had to take the contaminated fields out of organic production for 3 years pursuant to 7 C.F.R. § 205.202(b) (2012), (2) economic damages because they had to destroy some crops, (3) inconvenience, and (4) adverse health effects. The district court granted summary judgment to the Cooperative and dismissed all of the Johnsons' claims. The court of appeals reversed. Because we conclude that the Johnsons' trespass claim and claims for damages based on 7 C.F.R. § 205.202(b), fail as a matter of law, we reverse the court of appeals' reinstatement of those claims. But because the district court failed to consider whether the Johnsons' non trespass claims that were not based on 7 C.F.R. § 205.202(b), could survive

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summary judgment, we affirm the court of appeals' reinstatement of those claims and remand for proceedings consistent with this opinion.

Before discussing the factual background of this case, it is helpful to briefly summarize the organic farming regulations at issue. American organic farming is regulated by the Organic Foods Production Act of 1990, 7 U.S.C. §§ 6501–6523 (2006) (“OFPA”), and the associated federal regulations in the National Organic Program, 7 C.F.R. § 205 (2012) (“NOP”). One of the purposes of the OFPA is “to establish national standards governing the marketing of certain agricultural products as organically produced products.” 7 U.S.C. § 6501(1). The states may adopt the federal standards or they may impose “more restrictive requirements governing” products sold as organic. 7 U.S.C. § 6507(b)(1). Minnesota has adopted the OFPA and the NOP as its state organic farming law. Minn.Stat. § 31.925 (2010) (adopting the OFPA and the NOP “as the organic food production law and rules in this state”).

Under the OFPA and the NOP regulations, a producer cannot market its crops as “organic,” and receive the premium price paid for organic products, unless the producer is “certified” by an organic certifying agent. 7 U.S.C. § 6503(d) (stating that the OFPA is implemented by certifying agents authorized through the Secretary of Agriculture); 7 C.F.R. §§ 205.100, .102 (describing which products can carry the “organic” label). And in order to receive certification, a producer must comply with the NOP. 7 C.F.R. § 205.400. Among numerous other requirements, the NOP provides that land from which crops are intended to be sold as organic must “[h]ave had no prohibited substances ... applied to it for a period of 3 years immediately preceding harvest of the crop.” 7 C.F.R. § 205.202(b).¹

Once producers obtain certification to sell products as organic, the OFPA and NOP provide guidelines for certified organic farming operations to ensure continued compliance. See7 U.S.C. § 6511. Under these guidelines, if a prohibited substance is detected on a product sold or labeled as organic, the certifying agent must conduct an investigation to determine whether there has been a violation of the federal requirements. See7 U.S.C. § 6511(c)(1). If the investigation indicates that the residue detected on the organic product was “the result of intentional application of a prohibited substance” or the residue is “present at levels that are greater than” federal regulations prescribe, the product cannot be sold as organic. 7 U.S.C. § 6511(c)(2). Under the NOP regulations, crops may not be sold as organic if the crops are shown to have a prohibited substance on them at levels that are greater than 5 percent of the Environmental Protection Agency's tolerance level for that substance. 7 C.F.R. § 205.671

With this regulatory scheme in mind, we turn to the incidents that gave rise to this lawsuit.

In June 2007, the Johnsons filed a complaint with the Minnesota Department of Agriculture (“MDA”), alleging that the Cooperative had contaminated one of their transitional soybean fields ² through pesticide drift. The subsequent MDA investigation verified that on June 15, 2007, a date when winds were blowing toward the

[817 N.W.2d 698]

Johnsons' fields at 9 to 21 miles per hour, the Cooperative sprayed Status (diflufenzopyr and dicamba) and Roundup Original (glyphosate) onto a conventional farmer's field immediately adjacent to one of the Johnsons' transitional soybean fields. The MDA informed the Johnsons that there was no tolerance for diflufenzopyr in soybeans (organic, transitional, or conventional) and that, pending chemical testing, the MDA would “determine if there [would] be any harvest prohibitions” on the Johnsons' soybeans. After receiving the results of the chemical testing, the MDA informed the parties that test results revealed that the chemical dicamba was present, but below detection levels. The MDA also reported that the chemicals diflufenzopyr and glyphosate were not present. Because only one of the three chemicals was present based on its testing, the MDA concluded that “it can not be proven if the detections were from drift.” And even though the testing did not find diflufenzopyr, the MDA still required that the Johnsons plow down a small portion of the soybeans growing in the field because of “the presence of dicamba” and based on the “visual damage” observed to this crop. In response to this MDA directive, the Johnsons destroyed approximately 10 acres of their soybean crop.

The Johnsons also reported the alleged pesticide drift to their organic certifying agent, the Organic Crop Improvement Association (OCIA), as they were required to do under the NOP. See7 C.F.R. § 205.400(f)(1). In an August 27, 2007 letter, the OCIA stated that there may have been chemical drift onto a transitional soybean field and that chemical testing was being done. The Johnsons were also told that “[i]f the analysis indicate[d] contamination,” they would have to “take this land back to the beginning of 36–month transition.” Based on the OCIA's letter, and the dicamba found by the MDA, the Johnsons took the transitional soybean field back to the beginning of the 3–year transition process. In other words, the Johnsons did not market soybeans harvested from this field as organic for an additional 3 years.

On July 3, 2008, the Johnsons reported another incident of alleged contamination to the MDA. In this report, the Johnsons alleged that there was pesticide drift onto one of their transitional alfalfa fields after the Cooperative applied Roundup Power Max and Select Max (containing the chemicals glyphosate and clethodium) to a neighboring conventional farmer's field. The MDA investigator did not observe any plant injury, but chemical testing revealed a minimal amount of glyphosate in the Johnsons' transitional alfalfa. The Johnsons reported another incident of drift on August 1, 2008. The MDA “did not observe any plant injury to the alfalfa field or plants, grass and weeds,” but chemical testing revealed the presence, at minimal levels, of chloropyrifos, the active ingredient in another pesticide, Lorsban Advanced. The MDA concluded that drift from the Cooperative's spraying caused both of the positive test results. After receiving these test results, the Johnsons took the affected alfalfa field out of organic production for an additional 3 years. The Johnsons took this action because they believed that the presence of any amount of pesticide on their organic fields prohibited them from selling crops harvested from these fields as organic.

Based on the presence of pesticides in their fields, the Johnsons filed this lawsuit against the Cooperative, alleging trespass, nuisance, negligence per...