Case Law Update: FIFRA Preemption, CERCLA Allocation and FTCA

Christina Galdos Bernstein

Brown v. Chas. H. Lilly Co., 985 P. 2d 846, 161 Or. App. 402 (1999).

Plaintiffs sought damages for personal injuries suffered as a result of exposure to Defendant’s herbicide fertilizer. Plaintiff applied the product to his lawn in accordance with the product’s instructions and warnings. However, some of the product soaked through his boots and came into contact with his skin. Contact with the product caused second degree burns which ultimately required amputation of his left foot. Plaintiff’s causes of action included negligence and strict liability based on Defendant’s failure to warn of the unreasonably dangerous nature of the product when used as directed. Defendant moved for summary judgment on the grounds that Plaintiff’s claims were preempted by the Federal Insecticide, Fungicide and Rodenticide Act ("FIFRA"). Defendant argued that because its warnings complied with federal law and because FIFRA preempted states from adding to federal requirements their motion for summary judgment should be granted. The trial court granted defendant’s motion.

Plaintiffs filed an amended complaint alleging strict liability, negligent testing and manufacturing and breach of warranty. Defendant again moved for summary judgment. The trial court granted Defendant’s second motion for summary judgment on the grounds that Plaintiff’s claims were preempted by federal law.

On appeal, Defendant argued that a clear majority of the federal courts addressing the issue have concluded that FIFRA has a preemptive effect with respect to common law tort claims concerning FIFRA regulated products. Plaintiffs responded that in light of Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996), the validity of the cases Defendant relies upon is doubtful.

The issue for the Court of Appeals of Oregon was to determine the scope of FIFRA’s express preemption provision, 7 U.S.C. § 136v(b). That section provides: "Such state shall not impose or continue in effect any requirements for labeling or packaging in addition to or different from those required under this subchapter." The court held that Plaintiffs’ claims were not preempted by FIFRA. In reaching this conclusion, the court looked to the extent a common law remedy would interfere with the purposes of the federal law. The court found that the broader purpose of FIFRA was to protect public health, not to shield manufacturers from tort liability. The general obligations that flow from liability for failure to warn and breach of warranty pose no threats to regulatory requirements imposed by federal law. Accordingly, the court reversed the trial court and remanded the case. This decision stands alone among recent appellate opinions, in denying preemption under FIFRA.

Boeing v. Cascade, – F.3d –, (9^th Cir. Case No. 9635246 Decided March 24, 2000).

This case involves a contribution action under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"). Both the Boeing Company and the Cascade Corporation contaminated an aquifer in Oregon. The contamination overlapped. Monitoring wells on Boeing’s property indicated that the contaminated ground water was flowing from Cascade’s property onto Boeing’s. However, both companies used toxic solvents, VOC’s, in their manufacturing operations. Both companies went to great expense to investigate and to clean up the contamination. The issue before the court was how their respective expenses should be allocated under CERCLA.

Boeing sued Cascade for contribution to offset Boeing’s higher expenses in the cleanup. The case was tried to the court. Boeing prevailed, but not received everything it sought. Both sides appealed. The district court determined that the fairest way to allocate the costs between Boeing and Cascade would be to examine the relative quantities of toxic chemicals each company put into the ground. The district court found that Cascade was responsible for 70% of the cleanup costs and Boeing for the remaining 30%. The district court further determined that future cleanup costs would also be allocated under the 70:30 ratio.

On appeal, Cascade first argued that it should not have been held liable for a share of Boeing’s costs because Boeing would have incurred them even if Cascade had not contaminated Boeing’s soil because the EPA ordered Boeing to investigate its own contamination. In other words, Cascade argued that because it was not the "but for" cause forcing Boeing to incur responses costs, that it was not liable under CERCLA for Boeing’s costs. The court held that the special case where either polluter’s conduct would have caused the same amount of response costs and the conduct was of substantially equal blameworthiness, the CERCLA causation requirement treats both polluters as having "caused" the response costs. Once a party is liable, it is required to share the costs of response regardless of whether it was the sole cause of those costs.

Cascade’s second argument related to the allocation of the costs. Cascade argued that the plumes of contaminated groundwater were largely separate. Therefore, the court should not have aggregated the remediation costs and divided the total. CERCLA provides that a court may allocate response costs using equitable factors it deems appropriate. The district court tried to use the "Gore factors," which included volume, but concluded that most of the factors failed to assist in this case. Both parties were generators of the contaminants, neither party’s contaminants were more toxic than the others, and neither party was more careless that the other in light of the practices characteristic of the times. Cascade argued that allocating responsibility simply by analyzing relative volumes of toxins is inappropriate. The Ninth Circuit recognized that this argument as a general proposition has persuasive force. However, the district court in this case was well within its discretion to use volume as the primary or exclusive basis for allocation because of the circumstances in this case. Boeing presented sufficient expert evidence from which a reasonable and rational approximation of each defendant’s individual contribution to the contamination could be made.

Cascade next argued that the district court did not have the authority to issue a declaratory judgment allocating future expenses. Furthermore, even if the court had the authority, the amounts awarded were too speculative to support the judgment. CERCLA is silent on whether declaratory judgments are authorized in contribution actions. CERCLA does not prohibit them. The Ninth Circuit held that the declaratory judgment was proper in this case and that such relief was consistent with the broader purposes of CERCLA.

Bethel v. United States, – F.3d –, (9th Circuit, Case No. 9835316, Decided April 6, 2000.)

The issue in this case was whether the Eleventh Amendment barred the United States from asserting a third party claim for equitable apportionment of tort liability against a state, when the plaintiff filed an original action in federal court against the United States under the Federal Tort Claims Act ("FTCA"). The Ninth Circuit held that the Eleventh Amendment immunity did not extend to third party claims brought by the United States in this circumstance.

In August 1992, the United States General Services Administration ("GSA") and the Alaska State Agency for Surplus Property ("ASASP") executed GSA standard form 123, under which the U.S. donated 375,000 gallons of diesel fuel to the State of Alaska. ASASP sold the fuel to the City of Bethel. The City agreed to remove the fuel from its storage location. On or about April 15, 1993, a leak in the pipe connecting the fuel storage tank to the pump was discovered.

On November 27, 1996, Plaintiff field an FTCA case in the federal district court against the United States seeking $52.5 million in damages caused by the leaking fuel. The district court granted the U.S. leave to file a third party complaint against the State of Alaska, the City of Bethel and the City’s contractors. The U.S. alleged that the contractors’ negligence caused the leak and, therefore, the U.S. was not liable for plaintiff’s injury. The third party claim that was at issue on appeal involved the claim against Alaska under Alaska Statute § 09.17.080 (1996). The State moved to dismiss that claim on the basis of Eleventh Amendment immunity.

The Ninth Circuit found that Eleventh Amendment immunity does not extend to actions brought by the U.S. in federal court. Alaska conceded this point. Instead, Alaska argued that the circumstances of this case require departure from the general rule based on the nuances of Alaska law.

Alaska Statute – 09.17.080 (1996) replaced the old system of modified joint and several liability with a system of pure several liability. This statute also eliminated the right of contribution between joint tortfeasors. Under this statute, the finder of fact must determine the total fault of all of the parties to each claim. The fault is then allocated to each potentially liable party. The court then enters a judgment against each liable party based on the basis of several liability in accordance with that party’s percentage of fault. The Alaska Supreme Court had interpreted this section to allow a named defendant to bring a third party into an action by asserting a claim for equitable apportionment of fault. Therefore, under equitable apportionment, the newly joined party’s duty is to the original plaintiff, not to the party who brought them into the case.

Alaska relied on this distinction as grounds that the U.S.’s claim for equitable apportionment was barred by the Eleventh Amendment. The Ninth Circuit did not find this argument persuasive. The court found that the primary purpose of the Alaska remedy was to reduce the potential damages that plaintiff might recover against a defendant. The Eleventh Amendment did not immunize Alaska against equitable apportionment.