S. Agric. Insecticides, Inc. v. Taylor
| Decision Date | 24 September 2021 |
| Docket Number | Case No. 6:20-cv-00922-AA |
| Citation | 563 F.Supp.3d 1127 |
| Parties | SOUTHERN AGRICULTURAL INSECTICIDES, INC., Plaintiff, v. Director Alexis TAYLOR, Oregon Department of Agriculture, et al., Defendants. |
| Court | U.S. District Court — District of Oregon |
Timothy J. Bernasek, Dunn Carney LLP, Portland, OR, Cristen Rose, Pro Hac Vice, James Peter Rathvon, Pro Hac Vice, Paley Rothman Goldstein Rosenberg Eig & Cooper Chtd., Bethesda, MD, for Plaintiff.
Jeanne Nicole DeFever, Oregon Department of Justice, Trial Division, Portland, OR, for Defendants.
In this action, plaintiff Southern Agricultural Insecticides, Inc., seeks a declaration that final orders of the Oregon Department of Agriculture ("ODA" or "Department"), which prohibit plaintiff from selling and distributing its pesticide product in Oregon and impose a civil penalty for plaintiff's violation of Oregon law, are preempted by the Federal Insecticide Fungicide and Rodenticide Act ("FIFRA"), 7 U.S.C. § 136 et seq. , a comprehensive regulatory scheme for the use, sale, and labeling of pesticides. Plaintiff also seeks an injunction prohibiting defendants, Alexis Taylor, ODA Director, and Toby Prims and Michael Babbitt, ODA officials who work in the Department's Pesticide Program, from enforcing the orders against plaintiff. Now before the Court are the parties' cross-motions for summary judgment. For the reasons that follow, plaintiff's Motion for Summary Judgment (doc. 20) is DENIED and defendants' Motion for Summary Judgment (doc. 22) is GRANTED.
The following facts are undisputed. Plaintiff sells insecticide products, including Triple Action Neem Oil ("TANO"), which plaintiff buys from the manufacturer, Certis. As a pesticide, TANO is regulated by the United States Environmental Protection Agency ("EPA") under FIFRA and by ODA under Oregon's Pesticide Control Act ("OPCA"), Oregon Revised Statutes ("ORS") Chapter 634. The ingredient list on TANO's label states that it is 70% Clarified Hydrophobic Extract of Neem Oil, which is the active ingredient, and 30% inert ingredients. Supp. Decl. of Toby Primbs, Ex. 5 at 2 (doc. 25-3); Decl. of John C. Diem (doc. 21) ¶ 5; id. Ex 1 at 3; Compl. ¶¶ 27–28, 30. During the relevant period, TANO's label included a logo from the Organic Materials Review Institute ("OMRI"), which stated "OMRI Listed for Organic Use." Compl. ¶ 33.
In February 2019, ODA issued an initial Stop Sale, Use, or Removal Order ("SSURO"), which alerted plaintiff that ODA's lab had tested some of plaintiff's TANO product "found in the Oregon marketplace, for [certain] pesticidal active ingredients." Diem Decl. (doc. 21) Ex. 3 at 1. The lab tests revealed trace amounts of three substances not listed as active ingredients on TANO's label: 0.15 ppm of malathion, 0.040 ppm of chlorpyrifos, and 0.24 ppm of permethrin.1 Id. ODA concluded that the sale and distribution of this TANO in Oregon violated provisions of the OPCA. ODA ordered plaintiff to "cease all sales, offers of sale, or other distribution of" TANO in Oregon. Id.
Ultimately, ODA issued a Second Amended SSURO, which narrowed the scope of its order, limiting it to the single TANO lot that ODA had tested. ODA also limited the grounds for the order to two reasons: (1) the TANO lot was "adulterated" because it included three pesticidal active ingredients not identified in the product's label and (2) the lot was "adulterated" and "misbranded" because its label stated that it was "OMRI Listed for Organic Use," when the three substances "are not permitted in organic production." Id. Ex. 5 at 2–3 (citing ORS 634.032 ; ORS 634.036 ). With the Second Amended SSURO, ODA issued a Notice of Violation and Imposition of Civil Penalty and Proposed/Final Order ("NOV"), which set forth formal findings of fact and conclusions of law, consistent with the Second Amended SSURO, and proposed a $814.00 penalty for the adulterated product violation and no civil penalty for the misbranded product violation. Id. Ex 6. Plaintiff made a timely request for a hearing, but later withdrew that request, and the Second Amended SSURO and NOV became final orders of ODA on April 14, 2020. Decl. of Toby Primbs (doc. 23) Ex. 1 at 1.
In June 2020, plaintiff filed this action, alleging that ODA's Second Amended SSURO and NOV ("Final Orders") violate the Supremacy Clause because they are preempted by FIFRA. Doc. 1. The parties filed cross-motions for summary judgment on plaintiff's claims. Docs. 20, 22. The Court held oral argument on the motions on March 3, 2021. Doc. 36.
Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, affidavits, and admissions on file, if any, show "that there is no genuine dispute as to any material fact and the [moving party] is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Substantive law on an issue determines the materiality of a fact. T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n , 809 F.2d 626, 630 (9th Cir. 1987). Whether the evidence is such that a reasonable jury could return a verdict for the nonmoving party determines the authenticity of the dispute. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
The moving party has the burden of establishing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the moving party shows the absence of a genuine issue of material fact, the nonmoving party must go beyond the pleadings and identify facts which show a genuine issue for trial. Id. at 324, 106 S.Ct. 2548.
Special rules of construction apply when evaluating a summary judgment motion: (1) all reasonable doubts as to the existence of genuine issues of material fact should be resolved against the moving party; and (2) all inferences to be drawn from the underlying facts must be viewed in the light most favorable to the nonmoving party. T.W. Elec. , 809 F.2d at 630-31.
In the Complaint, plaintiff alleged: (1) that the Final Orders are expressly preempted by FIFRA because they "impose a labeling requirement that is ‘in addition to or different from’ those required under" FIFRA, Compl. ¶¶ 46–53, and (2) that the Final Orders are impliedly preempted by FIFRA because "[i]t is impossible for [plaintiff] to comply with both EPA and ODA labeling requirements for TANO," id. ¶¶ 54–59. Now, plaintiff contends that it is entitled to summary judgment on both claims. Initially, defendants sought summary judgment on two grounds: (1) that plaintiff's claims were barred by claim preclusion and (2) that plaintiff cannot demonstrate that the Final Orders are preempted by FIFRA. In their reply, defendants withdrew their claim preclusion arguments. Accordingly, the only issues before the Court concern whether either party is entitled to a judgment as a matter of law on the merits of plaintiff's preemption claims.
Preemption arises under the Supremacy Clause of the United States Constitution. "It is a familiar and well-established principle that the Supremacy Clause, U.S. Const. art. VI, cl. 2, invalidates state laws that interfere with, or are contrary to, federal law." Hillsborough Cnty., Fla. v. Automated Med. Labs., Inc. , 471 U.S. 707, 712, 105 S.Ct. 2371, 85 L.Ed.2d 714 (1985). "Congress has the constitutional power to preempt state law, and may do so either expressly—through clear statutory language—or implicitly." Whistler Inv., Inc. v. Depository Trust & Clearing Corp. , 539 F.3d 1159, 1164 (9th Cir. 2008) (internal citation omitted). That said, the "preemption analysis begins with the presumption that Congress does not intend to supplant state law." Tillison v. Gregoire , 424 F.3d 1093, 1098 (9th Cir. 2005).
Where Congress has superseded state legislation by statute, a court's task is to "identify the domain expressly pre-empted." Dan's City Used Cars, Inc. v. Pelkey , 569 U.S. 251, 260, 133 S.Ct. 1769, 185 L.Ed.2d 909 (2013). FIFRA expressly preempts "any [state] requirements for labeling or packaging in addition to or different from those required in [FIFRA]." 7 U.S.C. § 136v(b). In other words, two conditions must be met for FIFRA to preempt a state requirement: "[f]irst it must be a requirement ‘for labeling or packaging ’ " and "[s]econd, it must impose a labeling or packaging requirement that is ‘in addition to or different from those required under [FIFRA].’ " Bates v. Dow Agrosciences LLC , 544 U.S. 431, 444, 125 S.Ct. 1788, 161 L.Ed.2d 687 (2005) (quoting § 136v(b) ; emphases in Bates ).
In Bates v. Dow Agrosciences LLC , the Supreme Court interpreted the term "requirements" in § 136v(b) to include "positive enactments, such as statutes and regulations," as well as "common-law duties." 544 U.S. at 443, 125 S.Ct. 1788. "Requirements" do not, however, include "any event, such as a jury verdict, that might ‘induce’ a manufacturer to change its label." Id. In other words, "[a] requirement is a rule of law that must be obeyed; an event ... that merely motivates an optional decision is not a requirement." Bates , 544 U.S. at 445, 125 S.Ct. 1788.
"The proper inquiry" in Bates , which concerned whether state law claims for product liability, breach of express warranty, fraud, and negligent failure-to-warn were expressly preempted by FIFRA, "call[ed] for an examination of the elements of the common-law dut[ies] at issue, ... not for speculation as to whether a jury verdict will prompt the manufacturer to take any particular action." Id. Similarly, here, the Court must examine the state laws applied in the Final Orders and not speculate on how plaintiff might choose to comply with the orders.
In the Final Orders, ODA relied on the OPCA's misbranding and adulteration provisions. As explained below, the Court concludes that the OPCA's misbranding provision is a requirement "for labeling or packaging" but its adulteration provision is not. Thus,...
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