A Case Law Update

Christina Galdos Bernstein

FIFRA Preemption

Sun Valley Packing v. Consep, Inc., 94 Cal App. 4th 315, 114 Cal. Rptr. 2d 237 (December 10, 2001, Case No. F034621), California Court of Appeals, Fifth Appellate District.

The Fifth Appellate District of the California Court of Appeals upheld a trial court's ruling that a claim premised on an express oral guarantee given by a pesticides sales representative that was contrary to the label's instructions is not pre-empted by the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). FIFRA preempts any state law claim that effectively requires a manufacturer to include different or additional information on a federally approved label.

A licensed pest control advisor of Consep, Inc. spoke with the owners of Sun Valley Packing and offered them a new pesticide product on several different occasions. Before finally agreeing to try the new product, one of the owners of Sun Valley Packing wanted a guarantee that the product would protect the orchards against oriental fruit moth and peach twig borer damage. The licensed pest control advisor gave Sun Valley Packing an oral guarantee that the crop would remain free from pests with the new product. The new product did not perform as promised. Sun Valley Packing suffered a substantial crop loss and additional expenses for using much harsher pesticides to get the pest problems under control.

The Court of Appeals focused on whether FIFRA preempts state law claims against the manufacturer of a pest control product for breach of an express warranty and negligence. The pest control manufacturer argued that the licensed pest control advisor's promises were limited to the efficacy of the product and thus were consistent with the product's label. The Court ruled that claims that are not label-based are not preempted by FIFRA. When a manufacturer voluntarily warrants the product's fitness for a particular purpose, other courts have permitted plaintiffs to maintain state law claims. The critical question in determining whether the cause of action is preempted by FIFRA is whether the warranty actually addressed matters outside the scope of the EPA-approved label. Because the licensed pest control representative made a voluntary promise to induce Sun Valley Packing into purchasing the product, Sun Valley Packing's claims for negligence and breach of express warranty were not preempted by FIFRA.

Arnold v. Dow Chemical Company, 91 Cal. App. 4th 698, 110 Cal. Rptr. 2d 722 (2nd Dist. Ct. of App. 2001).

The Second District of the California Court of Appeals held that the FIFRA preempts a strict product's liability claim to the extent that it alleged a failure to warn, but not to the extent that it alleged defective design. The Court also held that FIFRA did not preempt warranty claims. FIFRA preempts any state law claim that effectively requires a manufacturer to include different or additional information on a federally approved label.

The Arnold family alleged injuries from exposure to the pesticides Dursban, Mr. Scott's Do-It-Yourself Pest Control, Dragnet and Baygon. The Arnolds' landlord hired a pest control company to eliminate ant infestations in and around their home using Dursban and Baygon on two occasions in January and July 1997. Mr. Arnold also purchased and used the Mr. Scott's Do-It -Yourself Pest Control product in his home in December 1997. The Arnolds alleged that the products were defectively designed because they failed to perform safely as an ordinary user would expect when used in their intended or reasonably foreseeable manner. The Arnolds also alleged that said products were warranted to be fit for a particular purpose when they were placed in the stream of commerce and that the manufacturers breached that warranty. The Arnolds alleged various health problems as a result of using these pesticides. The manufacturers argued that FIFRA preempted the Arnolds' claims.

The trial court granted defendants' motion for summary judgment, holding Arnolds' claims preempted by FIFRA. The Court of Appeals reversed, holding that FIFRA would only preempt a failure to warn claim, not a "design defect" theory. The Court of Appeals also found that the consumer expectations' test could be used to find a design defect. The Court of Appeals allowed the claims for breach of applied warranty of fitness for a particular purpose to stand because it did not create a labeling requirement different from or in addition to those mandated by FIFRA.

Environmental Justice

The case law on environmental justice has turned against plaintiffs.

Alexander v. Sandoval, 532 U.S. 275, 121 S.Ct. 1511 (2001).

The U.S. Supreme Court issued a seminal decision barring the door for "environmental justice" cases arising out of Title VI of the Civil Rights Act. This case involved a suit by a Spanish-speaking citizen who sought to enforce a Department of Justice regulation with a private action to require non-English speaking accommodations for obtaining drivers' licenses. Environmental justice advocates immediately reacted with alarm to this decision, fearing it would foreclose cases based on environmental exposures to chemicals that have a "disparate impact" upon certain racial subgroups.

South Camden Citizens in Action v. New Jersey Department of Environmental Protection, __ F. 3d __, 2001 WL 1602144 (Case Nos. 01-2224 and 01-2296, 3rd Cir. December 17, 2001).

The U.S. Court of Appeals for the Third Circuit reversed a U.S. District Court injunction that barred the opening of an already built $50 million cement plant in Camden, New Jersey. The U.S. District Court found that New Jersey environmental officials did not consider the disparate impact of the plant on a minority neighborhood that already suffers from the effects of a sewage treatment plant, a trash-to-steam plant and numerous toxic waste sites.

A few days after the U.S. District Court's decision to issue the injunction, the United States Supreme Court handed down Alexander v. Sandoval, 532 U.S. 275, 121 S. Ct. 1511 (2001) (no private right of action under Title VI of the Civil Rights Act). Defendants in South Camden asked the U.S. District Court to reconsider its decision to issue the injunction in light of the Sandoval opinion. However, the District Court did not change its position in the motion for reconsideration.

On appeal, Plaintiffs argued that the statutory provisions of Title VI and the complementary regulations promulgated by the EPA still prohibit discriminatory impacts in administering programs, thereby creating an enforceable right through Section 1983 despite the precedent in the Alexander decision.

The Third Circuit disagreed and held that a federal regulation alone may not create an enforceable right through Section 1983 not already found in an enforcing statute. The court primarily relied upon the Sandoval decision. The court also rejected the argument that an enforceable right may be found in any valid administrative implementation of a statute that in itself creates some enforceable right. The court determined that: (1) Congress did not intend for Title VI to create a federal right to be free from disparate impact discrimination, and (2) while the EPA's regulations on the point may be valid, they do not create enforceable rights under Section 1983.

Superfund: Passive Migration

Carson Harbor Village, Ltd. v. Unocal Corp., 270 F. 3d 863 (9th Cir. 2001) (en banc).

The Ninth Circuit Court of Appeals held that gradual passive migration of contamination through soil that allegedly took place during former owners' ownership of property was not "disposal" under the CERCLA.

Owners of a mobile home park filed suit against former owners of the property under Section 107 of CERCLA to recover cleanup costs of tar and slag in a wetlands area of the property. The property also contained elevated levels of petroleum hydrocarbons and lead.

Under CERCLA, potentially responsible parties (PRPs) can be liable for cleanup costs. Persons who owned or operated the property at the time of disposal of any hazardous substance are PRPs. The District Court ruled that the past owners were not PRPs and that no "disposal" took place because no showing was made that hazardous substances were actively introduced into the environment. A three-judge panel of the Ninth Circuit reversed this decision, triggering review en banc.

The en banc court reversed the three-judge panel and held that "disposal" does not include passive soil migration of the type in this case, but that "disposal" may include other passive migration fitting within the plain meaning of the terms used to define "disposal." The court's opinion focused on the definition of "disposal" as set forth in the Resource Conservation and Recovery Act (42 U.S.C. § 6902 (3)), holding that some passive migration is not excluded. The court left open the possibility that landowner knowledge of "spilling," "leaking" or other terms in the definition of disposal might constitute passive migration that leads to PRP liability. The court stated that if all passive migration was excluded from the definition of disposal, there would be little incentive for landowners to examine their property and clean up any contamination if found. Therefore, it left open the possibility that given the right circumstances, "spilling" or "leaking" or other terms might encompass passive migration.

The court refused to recognize a classic "circuit split" on this issue of passive migration. Rather, it termed the Courts' differences as a continuum. The Fourth Circuit has held past owners liable for disposal of hazardous wastes that leaked from underground storage tanks. Nurad v. William E. Hooper & Sons Co., 966 F.2d 837 (4th Cir. 1992). The Sixth Circuit determined that absent evidence of human activity involved in the movement of hazardous substances on the property, no "disposal" occurred. United States v. 150 Acres of Land, 204 F.3d 698 (6th Cir. 2000). The Third Circuit held that "leaking" or "spilling" may not require active human contact, even though neither word specifically addressed the gradual spreading. United States v. CDMG Realty, 96 F.3d 706 (3rd Cir. 1996). Attorneys making decisions regarding PRP status of a particular "innocent landowner" should review these cases carefully.

Medical Monitoring

In re: Marine Asbestos Cases, 265 F.3d 861 (9th Cir. 2001).

One hundred and seventy-four separate, but virtually identical, actions were filed in the district court by seamen who formerly worked aboard the S.S. Independence and the S.S. Constitution. Each plaintiff alleged asbestos exposure in the course of employment on board both vessels. None of the plaintiffs was diagnosed with an asbestos-related medical condition. The Ninth Circuit held that seamen were not entitled to a court-supervised medical monitoring program (i.e., a modest plan for a single baseline medical examination).

The court noted that the relief sought by these plaintiffs differed from the two other forms of relief that courts have awarded in toxic exposure cases where the plaintiffs do not have a medical condition linked to toxic exposure. The plaintiffs sought neither lump sum payments for their future medical monitoring costs (see Metro-North Commuter R.R. Co. v. Buckley, 521 U.S. 424, 439-440 (1997)), nor damages in the form of the economic value of the harm that they expect in the future, discounted by the probability that the harm will never occur (In re Paoli R.R. Yard PCB Litigation, 916 F.2d 829, 850 (3rd Cir. 1990)).

The court granted summary judgment for the defendants on all claims under the theory that the Jones Act does not permit recovery for future medical monitoring for plaintiffs who have not yet developed symptoms of disease, and that even if it did, these plaintiffs had failed to present sufficient evidence to raise a triable issue of fact as to causation and damages. The Ninth Circuit affirmed on the grounds that plaintiffs have not shown that they will benefit from a single baseline examination where no asbestos-related problems currently exist.

Admissibility of Regulatory Violations to Establish Due Care

Scott v. Matlack Inc., Colo. No. 99SC415, Jan. 14, 2002 (cited in 70 US Law Week 1443, Jan. 29, 2002).

The Colorado Supreme Court followed the emerging majority rule in allowing plaintiffs to introduce evidence of Occupational Health and Safety Act regulations to establish the standard of care in a particular case (but not to establish "negligence per se"). The case involved an independent contractor who fell from a tanker truck while loading hot asphalt. In establishing the negligence of the truck and facility owners for negligence, plaintiff submitted evidence of OSHA regulatory violations. The trial court allowed the plaintiff to present some evidence on these standards but refused to admit the standards into evidence and refused the jury's request for a copy of the regulatory standards that had been violated.

While the OSHA statute contains a prohibition on its use to "enlarge or diminish or affect" an employee's or employer's common law liability (29 U.S.C. §653(b)(4)), the Colorado Supreme Court held that this language did not express a clear intent on the part of Congress to have evidence of OSHA violations "absolutely barred from civil cases." (See fulltext at http://pub.bna.com/lw/99sc415.pdf). As a result, the Court reversed the appellate court's reversal, resulting in an affirmance of the trial court's decision to allow the OSHA standard to be "borrowed" as a standard of care for a party. This "borrowing" can only occur when the trial court finds that there is a duty - then the scope of that duty can be established by reference to all admissible evidence about safe practices, including OSHA standards.

Christina Galdos Bernstein is with the firm Maas, Miyamoto and Bernstein and can be reached at cbernstein@maaslitigation.com.