The U.S. Supreme Court ruled on April 27, 2005 that twenty-nine Texas peanut farmers could pursue certain state law damage claims against a pesticide manufacturer. Dennis Bates, et al. v. Dow AgroSciences LLC (No. 03-388). This decision modifies an interpretation of preemption authority of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) adopted by many lower federal and state courts. The Court vacated a 5th Circuit Court of Appeals judgment, overturning the Circuit Court's rulings on some claims, and remanding two claims for further preemption analysis. This 7:2 majority ruling affirmed the dominant role of FIFRA in regulating pesticides in the United States, and also significantly reduced the extent of federal preemption under FIFRA.

FIFRA and Preemption

FIFRA is the primary federal authority for regulating the manufacture, distribution, sale, and use of pesticides in the United States. The statute requires the U.S. Environmental Protection Agency (“EPA”) to register all pesticides before they are distributed or sold. (FIFRA §136a(a)). Limited State authority to regulate pesticides is preserved in section 136v(a), which authorizes a State to regulate the sale or use of federally registered pesticides in the State if that regulation does not include any sale or use prohibited by FIFRA. However, FIFRA also expressly prohibits in section 136v(b) any State “requirements for labeling or packaging in addition to or different from those required under [FIFRA].” This prohibition has provided the basis for defendants to argue successfully that FIFRA preempts any state “requirement” that directly or indirectly results in changes to a federally approved pesticide label. Most courts have interpreted this statutory language as authorizing broad preemption of state statutory or common law claims based on the adequacy of a federally approved pesticide label, or that may cause a manufacturer to alter an EPA-approved label. Thus, even claims that do not rely on label content, such as design or manufacturing defect claims without a failure to warn component, have not survived preemption summary judgment motions.

Pesticide manufacturers and other defendants began to use the FIFRA preemption argument to thwart state common law damage claims with great success only after the Supreme Court's 1992 ruling in Cipollone v. Liggett Group, Inc., in which the Court ruled that the phrase “requirement or prohibition” in the Public Health Cigarette Smoking Act of 1969 included state common law duties/tort claims. Defendants in FIFRA cases successfully adopted the Court's interpretation of “requirements” in Cipollone to support a likewise interpretation of the word in section 136v(b) of FIFRA. Until Cipollone, state tort suits against pesticide manufacturers were common before and after enactment of the 1947 FIFRA and its significant 1972 Amendments, but, as the Bates Court noted, preemption arguments either were not raised in those suits or were unsuccessful. In the Bates opinion, the Supreme Court acknowledged the 5th Circuit's decision was consistent with most other Circuit Courts that have addressed FIFRA preemption, but that other conflicting court decisions and inconsistent positions taken by EPA warranted resolution of the conflict.

Preemption and the Bates Case

The Texas peanut farmers had complained to Dow AgroServices (“Dow”) that its “Strongarm” herbicide had damaged their peanut crops and failed to control weeds. Dow representatives met with the farmers to resolve the problem, but those efforts failed. When the farmers notified Dow of their intent to file a lawsuit under a Texas deceptive trade and consumer protection statute, Dow filed a declaratory judgment action in federal District Court, asserting that such claims are preempted by FIFRA. The peanut farmers then filed counterclaims based on Texas statutory and common law, including breach of express warranty, fraud, strict liability (based on defective design and manufacture), negligent testing, and violation of the Texas Deceptive Trade Practices-Consumer Protection Act. The District Court granted Dow's summary judgment motion, dismissing one claim on state-law grounds and the remaining claims as expressly preempted by section 136v(b) of FIFRA. The Court of Appeals affirmed, based primarily on the assumption that plaintiffs' success on their claims would likely cause Dow to change the “Strongarm” label.

In Bates, the Court rejected the 5th Circuit's use of an “effects” or “inducement” test to determine what qualifies as a “requirement.” According to the 5th Circuit, state actions or legal duties that induce a pesticide manufacturer to change its pesticide label should be considered preempted “requirements” for labeling because they result in requirements that are “in addition to or different from” the federal requirements. The Court then addressed the FIFRA meaning of the word “requirements” and concluded that while the 5th Circuit properly ruled the word includes state statutes and regulations and common law duties, it did not properly assess what specific common law duties were preempted under section 136v(b). Accordingly, the Court held that section 136v(b) provides a narrow preemption of certain state “requirements” regarding pesticide labels and packaging. The preemption applies primarily to state rules (i.e., “requirements”) that compete directly with specific EPA regulations, such as competing letter size, word, or format requirements, and to common law duties (i.e., “requirements”) that address the adequacy of the label information in claims such as a failure to warn. Moreover, the Court stated that section 136v(b) preemption does not apply to state requirements “that are fully consistent with federal requirements” (i.e., “parallel” or “equivalent” requirements”), or to those common law causes of action that are not based on label or packaging content, such as negligent design or manufacture claims without a failure to warn component.

The Bates Court has significantly reduced the ability of pesticide manufacturers to achieve a “slam-dunk” dismissal of state common law damage claims. Lower courts now must scrutinize the nature of these claims more carefully to determine whether FIFRA preemption exists under section 136v(b). Although plaintiffs have greater opportunities now for artful complaint drafting to avoid preemption, defendants can still preempt certain claims related to product labeling and packaging under certain conditions. Future preemption battles are likely to focus on the issue of equivalency of State and FIFRA requirements relevant to label-based claims such as fraud and negligent failure to warn. Plaintiffs will argue that common law duties related to these claims are equivalent to FIFRA misbranding requirements that a pesticide label not contain “false and misleading statements” or “inadequate instructions or warnings.” Defendants are likely to rely on the Bates Court's admonition that equivalency must be genuine, and that a manufacturer should not be held liable under state labeling requirements unless the manufacturer is also liable under the FIFRA misbranding requirements.