The United States Supreme Court last week clarified the preemptive scope of the Federal Insecticide, Fungicide and Rodenticide Act ("FIFRA") as applied to common law claims arising from alleged pesticide damage. Bates v. Dow AgroSciences LLC, No. 03-388 (Stevens, J.). In a 7-2 majority, and after waiting years to consider this controversial issue, the Court rejected the test previously adopted by most federal Circuits and State Supreme Courts. The Court's decision limits dramatically the prior extent of FIFRA's preemptive reach.
Under FIFRA, 7 U.S.C. § 136 et seq., prior to distributing a pesticide in commerce, a manufacturer must register the pesticide with the United States Environmental Protection Agency (USEPA) by submitting scientific data regarding efficacy and health and environmental impacts, as well as proposed product labeling. FIFRA allows states to regulate the sale and use of federally registered pesticides. States cannot, however, impose "any requirements for labeling or packaging in addition to or different from those required under [FIFRA]." 7 U.S.C. § 136v(b).
This provision has previously been held to preempt state common law claims for defective design, defective manufacturing, negligence, negligent testing, breach of warranty, and misrepresentation where success of those claims required a determination that the FIFRA-approved label for a pesticide product was somehow inadequate. Although jurisdictions varied, the legal test adopted by most courts considered whether a manufacturer would change the product label or reformulate the product in response to a lawsuit. If the manufacturer would change the label, the claim was deemed to impose a different labeling "requirement" and held to be preempted. If instead the manufacturer would reformulate or alter the product, the claim would typically be allowed to proceed. In this manner, most courts looked beyond the claim itself to determine if a claim was merely a "disguised" challenge to the product label, and if so, the claim was preempted.
Background Facts of Bates
In Bates, twenty-nine Texas peanut farmers complained that Dow's herbicide, Strongarm, caused severe damage to their peanut crops, claiming that Strongarm's label recommended its use when Dow knew or should have known that it would stunt peanut growth in areas with soils of a certain pH level. Dow brought a lawsuit for declaratory relief seeking immunity from damage claims on the grounds that FIFRA preempted the farmers' ability to bring product defect, negligence, breach of warranty, fraud and failure to warn claims against Dow. The farmers counterclaimed. Both the District Court and the Fifth Circuit held that FIFRA expressly preempted the state law claims because a judgment against Dow would result in it altering its product label (by, for example, instructing the peanut farmers on more detailed limitations on use), and that the farmers' claims were therefore barred.
The Supreme Court's Ruling
In Bates, the Court held that the proper inquiry calls for an examination of the elements of the cause of action at issue, not speculation as to whether a manufacturer would alter the product or its label. The Court found it to be "perfectly clear" that the rules underlying causes of action for defective design, defective manufacture, negligent testing and breach of express warranty did not require manufacturers to label or package their products in any particular way. Because such claims did not qualify as "requirements" for labeling and packaging, the Court held that those claims were not preempted.
The Court further held that although common law claims premised upon text in the pesticide label -- such as fraud or failure to warn claims -- are subject to FIFRA, those claims are not necessarily preempted. FIFRA prohibits only state law labeling requirements that are "in addition to or different from" FIFRA's labeling requirements. Thus, so long as a common law claim imposes labeling requirements "consistent with" or "equivalent to" to FIFRA, they may survive preemption challenges. The Court concluded by remanding the farmers' fraud and negligent failure to warn claims so that lower courts could determine if they were consistent with FIFRA's misbranding standards.
The Bates decision will likely have a dramatic effect on pesticide manufacturers' and distributors' ability to utilize FIFRA preemption as a defense. Because a preemption analysis must now focus on the elements of common law causes of action, rather than the ultimate impact on a product's label, many plaintiffs may be able to plead around a preemption defense.
Because FIFRA's preemption clause is specifically limited to state "requirements" "in addition to or different from" federal standards, the reasoning of Bates may not impact federal preemption in other settings. At the very least, however, Bates reaffirms a state's right to provide for traditional damages for violations of common law duties where those duties parallel, but do not add to, federal requirements. The decision also signals the degree to which the Supreme Court will require careful scrutiny to determine whether state laws add to federal duties.