Kuiper v. American Cyanamid Co.

• Decision Date: 05 December 1997
• Docket Number: Nos. 96-1647,97-1657,s. 96-1647
• Citation: 131 F.3d 656
• Parties: , 28 Envtl. L. Rep. 20,314, Prod.Liab.Rep. (CCH) P 15,122 Charles H. KUIPER, Sr., Mae E. Kuiper, and Charles A. Kuiper, Jr., d/b/a Charles H. Kuiper & Son Farms, Plaintiffs-Appellants, v. AMERICAN CYANAMID COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 656

131 F.3d 656

46 ERC 1166, 28 Envtl. L. Rep. 20,314,

Prod.Liab.Rep. (CCH) P 15,122

Charles H. KUIPER, Sr., Mae E. Kuiper, and Charles A.

Kuiper, Jr., d/b/a Charles H. Kuiper & Son Farms, Plaintiffs-Appellants, v. AMERICAN CYANAMID COMPANY, Defendant-Appellee.

Nos. 96-1647, 97-1657.

United States Court of Appeals,

Seventh Circuit.

Argued Sept. 4, 1997.

Decided Dec. 5, 1997.

Robert H. Bichler (argued), JoAnne Breese-Jaeck, Hostak, Henzl & Bichler, Racine, WI, for Plaintiffs-Appellants.

Lawrence S. Ebner (argued), McKenna & Cuneo, Washington, DC, Winthrop A. Rockwell, John P. Mandler, Faegre & Benson, Minneapolis, MN, Kenneth B. Ness, John M. Filachek, Terschan, Steinle & Ness, Milwaukee, WI, for Defendant-Appellee.

Before CUDAHY, FLAUM, and DIANE P. WOOD, Circuit Judges.

FLAUM, Circuit Judge.

This appeal requires us to decide whether the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), 7 U.S.C. §§ 136-136y, preempts state law claims alleging that a pesticide manufacturer was negligent and made false representations in marketing and promoting its product. The district court entered summary judgment for the defendant manufacturer, holding that FIFRA preempted the plaintiffs' claims and, in the alternative, that the state statute of limitations barred plaintiffs' statutory claim. We affirm.

I. Background

In the mid-1980s, American Cyanamid Corporation manufactured and marketed an herbicide named "SCEPTER." Pursuant to FIFRA, American Cyanamid registered SCEPTER with the Environmental Protection Agency (EPA), and EPA approved the SCEPTER label submitted by American Cyanamid. ¹ The label contained a section on "Rotational Crop Restrictions" that told farmers how soon they could plant various crops on fields that had been treated with SCEPTER. Of particular significance for this case, the label stated that corn could be planted eleven months after the last application of SCEPTER. ²

Charles H. Kuiper, Sr., Mae Kuiper, and Charles A. Kuiper, Jr., are farmers in Racine, Wisconsin. In 1987 and 1988, the Kuipers used SCEPTER to control weeds in their soybean fields. The Kuipers bought the herbicide from Donald Spangenberg, an independent dealer in agricultural supplies. Spangenberg told the Kuipers that SCEPTER was safe for follow corn. ³

The Kuipers applied SCEPTER to their soybean fields in 1987 and planted corn on those same fields following the soybean harvest. Although they had waited eleven months after the last application of SCEPTER to plant their follow corn, as directed by the label, the 1988 corn crop did not do well. At the Kuipers' request, Donald Spangenberg came to inspect the fields, and the Kuipers also discussed the problem with an American Cyanamid representative.

In 1988, the Kuipers again applied SCEPTER to their soybean fields, and again their follow corn (the 1989 corn crop) grew poorly. The Kuipers complained to American Cyanamid for the second time, and the company admitted that it had received complaints from other farmers about damage to follow corn caused by SCEPTER. In December 1989, the Kuipers submitted a damage claim to American Cyanamid asserting their belief that SCEPTER had stunted their 1988 corn crop. In 1990, the Kuipers and American Cyanamid negotiated a settlement agreement. Although the parties discussed both the 1988 and 1989 crops, the final settlement compensated the Kuipers only for damages to the 1989 crop. The Kuipers continued to press American Cyanamid to pay damages for the 1988 crop until American Cyanamid, in a letter dated April 10, 1990, expressly denied them any further compensation.

The Kuipers finally filed suit against American Cyanamid in Wisconsin state court on April 30, 1993. Their complaint included a common-law negligence claim, a statutory fraudulent representation claim, and a request for punitive damages. American Cyanamid removed the case to the district court on diversity grounds, and the court entered summary judgment in favor of the defendant. The district court held that FIFRA preempts the Kuipers' claims and, in the alternative, that the three-year limitations period for statutory fraudulent representation claims had expired.

We review de novo a district court's decision to grant summary judgment, construing the evidence in the light most favorable to the Kuipers and drawing all reasonable inferences in their favor. Maier v. Lucent Technologies, Inc., 120 F.3d 730, 734 (7th Cir.1997).

II. Statute of Limitations

We start with the statute of limitations issue. We agree with the district court that the Kuipers filed their statutory claim for fraudulent representation after the three-year limitations period had expired. Wis. Stat. § 100.18(11)(b). The allegedly fraudulent representation in this case occurred in 1987, when the Kuipers first purchased SCEPTER after being told it was safe for follow corn. However, the Kuipers did not file suit until April 30, 1993. The Kuipers contend that during the limitations period they did not have knowledge of American Cyanamid's wrongdoing sufficient to support a claim for fraudulent representation. They assert that American Cyanamid knew that SCEPTER was damaging follow crops throughout Wisconsin, but the company concealed this fact by resisting the discovery process in a trial involving similar claims to those asserted by the Kuipers in this case. See Gorton v. American Cyanamid Co., 194 Wis.2d 203, 533 N.W.2d 746 (1995) (affirming American Cyanamid's liability to a Wisconsin farmer after SCEPTER damaged the farmer's follow corn), cert. denied, 516 U.S. 1067, 116 S.Ct. 753, 133 L.Ed.2d 701 (1996). Had American Cyanamid's guilty knowledge come to light earlier, the Kuipers argue, they would have been able to sue in a timely fashion. The Kuipers ask that we apply equitable principles to extend the limitations period in this case.

The record demonstrates, however, that the Kuipers had sufficient information to file suit within the limitations period, independent of any information discovered during the Gorton litigation. The Kuipers read the rotational crop restrictions on the label; they heard Donald Spangenberg's statement that SCEPTER is safe for follow corn; they observed damage suffered by their corn in two successive years following application of SCEPTER; and they even went so far as to approach American Cyanamid about SCEPTER's possible role in damaging their corn. The Kuipers suspected SCEPTER damage at least as early as December 1989, when they filed a claim with American Cyanamid for compensation for their 1988 crop. They also discussed the 1988 crop as part of their 1990 settlement negotiations, and they continued to press for reimbursement for the 1988 crop until they received American Cyanamid's letter, dated April 10, 1990, refusing their requests for compensation. In short, although the Kuipers may have been unaware at first that American Cyanamid knew SCEPTER could damage follow corn, the Kuipers had enough information to bring suit for fraudulent representation within the limitations period.

We also disagree with the Kuipers' contention that filing suit based on the information they had available to them within the limitations period would have violated Wisconsin's prohibition against frivolous suits. The standard under Wisconsin law is as follows:

[A claim is frivolous] if there is no set of facts which could satisfy the elements of the claim, or if the party or attorney knows or should know that the needed facts do not exist or cannot be developed. That is, if the attorney knows or should reasonably know that the facts necessary to meet the required elements of an allegation are not present and cannot be produced, then the attorney has no cause of action.

Stern v. Thompson & Coates, Ltd., 185 Wis.2d 220, 517 N.W.2d 658, 667 (1994) (citation omitted). Contrary to the Kuipers' suggestion, we do not interpret this standard to mean that plaintiffs must have in hand all the information necessary to prove their claims before they may file suit; such a reading would give no role to the discovery process in collecting evidence--such as the extent of a defendant's guilty knowledge--that is currently in the possession of the opposing party. As discussed, the Kuipers had ample cause to believe, within the limitations period, that a set of facts indicating fraudulent representation by American Cyanamid existed or could be developed. Accordingly, we affirm the district court's holding that the statute of limitations bars the Kuipers' statutory claim for fraudulent representation.

The Kuipers' remaining negligence claim and request for punitive damages allege that American Cyanamid "was negligent regarding SCEPTER in that, notwithstanding contrary representations by it, defendant ... knew or should have known that SCEPTER is likely to carry over to the following year's crops and adversely affect them," and furthermore, that American Cyanamid "acted in reckless disregard" of the Kuipers' rights. Plaintiff's Complaint at 3. These claims, which seem to overlap to some extent with the Kuipers' statutory fraudulent representation claim, are not subject to the three-year limitations period of § 100.18. Instead, they are subject to a six-year limitations period. Wis. Stat. § 893.52. Accordingly, we must determine whether these claims are preempted by FIFRA.

III. FIFRA Preemption

The Kuipers contend that their claims fall outside the range of state-law causes of action that are preempted by FIFRA. They argue that FIFRA preempts only state-law claims that directly challenge the product label; therefore, FIFRA does not preempt their complaint that American Cyanamid was negligent in making off-label misrepresentations regarding SCEPTER. Furthermore, if their claims are construed as direct challenges to the label, the Kuipers suggest that their claims would still survive preemption because the label would then have to be deemed misbranded. For the reasons given below, we reject...