Saturday, July 23, 2022

Dicamba Spray-Drift Issues and the Bader Farms Litigation

Overview

Dicamba is a broad-spectrum herbicide that was first registered in 1967.  But, over the past several years, spray-drift issues associated with Dicamba have been happening.  Around 2016, Dicamba's use came under significant scrutiny due to its tendency to vaporize from treated fields and spread to neighboring crops.  Incidents in which dicamba affected neighboring fields led to complaints from farmers and fines in some states. A lower volatility formulation, M1768, was approved by the EPA in November 2016.  Dicamba formulations, including those registered in the late 2010s, can be especially prone to volatility, temperature inversions and drift.

Much of the problem has been with the use of XtendiMax with VaporGrip (Monsanto (now Bayer)) and Engenia (BASF) herbicides for use with Xtend soybeans and cotton as Dicamba usage increased in an attempt to control weeds in fields planted with crops that are engineered to withstand it.  Monsanto began offering crops resistant to Dicamba before a reformulated and drift resistant herbicide had gained Environmental Protection Agency (EPA) approval.  The drift issues became bad enough that some states (e.g., Missouri and Arkansas) banned Dicamba because of drift-related damage issues.  The U.S. Environmental Protection Agency imposed restrictions on the use of dicamba in November 2018.

What factors help determine the proper application of Dicamba?  If drift occurs and damages crops in an adjacent field, how should the problem be addressed?  Can the matter be settled privately by the parties involved?  If not, what legal standard applies in resolving the matter – negligence or strict liability?  Will punitive damages be awarded?  If so, will a large jury verdict awarding punitive damages be upheld?

Issues associated with Dicamba drift – that’s the focus of today’s post.

Uniqueness of Dicamba

In many instances, spray drift is a straightforward matter.  The typical scenario involves either applying chemicals in conditions that are unfavorable (such as high wind), or a misapplication (such as not following recommended application instructions).  But, Dicamba is a unique product with its own unique application protocol. 

Consider the following observations: 

  • Dicamba is a very volatile chemical and is rarely sprayed in the summer months. This is because when the temperature reaches approximately 90 degrees Fahrenheit, dicamba will vaporize such that it can be carried by wind for several miles.  This can occur even days after application.
  • The typical causes of spray drift are application when winds are too strong or a misapplication of the chemical.
  • For the newer Dicamba soybeans, chemical manufacturers reformulated the active ingredient to minimize the chance that it would move off-target due to it volatility.
  • Studies have concluded that the new formulations are safe when applied properly, but if a user mixes-in unapproved chemicals, additives or fertilizer, the safe formulations revert to the base dicamba formulation with the attendant higher likelihood of off-target drift.
  • Soybeans have an inherit low tolerance to dicamba. As low as 1/20,000 of an application rate can cause a reaction.  A 1/1000 of rate can cause yield loss.
  • The majority of damaged crops are may not actually result in yield loss. That’s particularly the case if drift damage occurs before flowering.  However, if the drift damage occurs post-flowering the likelihood of yield loss increases. 

Damage Claims – Building a Case

Negligence.  For a person to be deemed legally negligent, certain elements must exist. These elements can be thought of as links in a chain. Each element must be present before a finding of negligence can be obtained.  The first element is that of a legal duty giving rise to a standard of care.  To be liable for a negligent tort, the defendant's conduct must have fallen below that of a “reasonable and prudent person” under the circumstances.  A reasonable and prudent person is what a jury has in mind when they measure an individual's conduct in retrospect - after the fact, when the case is in court. The conduct of a particular tortfeasor (the one causing the tort) who is not held out as a professional is compared with the mythical standard of conduct of the reasonable and prudent person in terms of judgment, knowledge, perception, experience, skill, physical, mental and emotional characteristics as well as age and sanity. For those held out as having the knowledge, skill, experience or education of a professional, the standard of care reflects those factors. For example, the standard applicable to a farmer applying chemicals to crops is what a reasonably prudent farmer would have done under the circumstances, not what a reasonably prudent person would do.

If a legal duty exists, it is necessary to determine whether the defendant's conduct fell short of the conduct of a “reasonable and prudent person (or professional) under the circumstances.”  This is called a breach, and is the second element of a negligent tort case.

Once a legal duty and breach of that duty are shown to exist, a causal connection (the third element) must be established between the defendant's act and (the fourth element) the plaintiff's injuries (whether to person or property).  In other words, the resulting harm to the plaintiff must have been a reasonably foreseeable result of the defendant's conduct at the time the conduct occurred. Reasonable foreseeability is the essence of causality (also known as proximate cause).

For a plaintiff to prevail in a negligence-type tort case, the plaintiff bears the burden of proof to all four elements by a preponderance of the evidence (just over 50 percent).

Typical drift case.  In a straightforward drift case, the four elements are typically satisfied – the defendant misapplied the chemical or did so in high winds (breach of duty to apply chemicals in a reasonable manner in accordance with industry standards/requirements) resulting in damages to another party’s crops.  In addition, the plaintiff is able to pin-down where the drift came from by weather reports for the day of application combined with talking with neighbors to determine the source of the drift (causation).  In many of these situations, a solution is worked out privately between the parties.  In other situations, the disaffected farmer could file a complaint with the state and the state would begin an investigation which could result in a damage award or litigation.

Generally, what are contributing factors to ag chemical drift?  For starters, the liquid spray solution of all herbicides can physically drift off-target.   This often occurs due to misapplication including such things as applying when wind speed exceeds the recommended velocity, improper spray pressure, and not setting the nozzle height at the proper level above the canopy of the intended plant target.  Clearly, not shielding sprayers and aerial application can result in an increased chance of off-site drift.  Also, the possibility of drift to an unintended field can be influenced by droplet size if the appropriate nozzle is not utilized. 

Dicamba drift cases.  As noted above, dicamba is a different product that is more volatile than other crop chemicals.  That volatility and the increased likelihood of drift over a broader geographic area makes it more difficult for a plaintiff to determine the source of the drift.  Thus, the causation element of the plaintiff’s tort claim is more difficult to establish.  In addition, soybeans are inherently sensitive to extremely low dicamba concentrations, thus elevating the potential for damages. 

Dicamba manufacturers have protocols in place to aid in the safe application of the products.  Thus, in quantifiable damage cases, it is likely that an application protocol was not followed.  But, establishing that breach to the satisfaction of a jury could be steep uphill climb for a plaintiff.  That’s particularly the case with dicamba given its heightened volatility.  Damages could be caused by physical drift, temperature, volatility or temperature inversions.  Is a particular cause tied to the defendant’s breach of a duty owed to the plaintiff? 

Clear patterns of injury indicate physical drift which could make the causation element easier to satisfy.  Wind speed at time of application, sprayer speed, sprayer boom height above the plant canopy and nozzle height are also factors that are within the applicator’s control.  Failure to meet common industry standards or manufacturer guidance on any of those points could point toward the breach of a duty and could also weigh on the causation element of a tort claim.

Relatedly, another factor with dicamba, as noted above, is whether it was applied on a hot day.  The chemistry of dicamba has a “vapor curve” that rises with the temperature.  While I have not seen that vapor curve, it would be interesting to see whether that curve has a discernibly steeper slope at a particular temperature.  If so, that would indicate the point at which dicamba becomes very volatile and should not be applied.  To the extent any particular defendant can establish would be able to establish application beyond that temperature, the duty and breach elements of the plaintiff’s tort claim would be easier to satisfy.

Strict liability.  Most pesticide drift cases not involving aerially-applied chemicals are handled under the negligence standard.  However, a strict liability approach is sometimes utilized for aerially applied chemicals.  See, e.g., Langan v. Valicopters, Inc., 567 P.2d 218 (Wash. 1977); but see Mangrum v. Pique, et al., 359 Ark. 373, 198 S.W.3d 496 (2006)(the aerial application of chemicals commonly used in farming communities that are available for sale to the general public is not an ultrahazardous activity triggering application of strict liability).  In such a situation, liability results from damages to others as a result of the chemicals.  It makes no difference whether the applicator followed all applicable rules for applying the chemicals and did so without negligence.  The strict liability rule is harsh, and is normally reserved for ultra-hazardous activities.

The Bader Farms Litigation

The lawsuit – claims and motions.  In Bader Farms, Inc. v. Monsanto Co., et al., No. MDL No. 1:18md2820-SNLJ, 2019 U.S. Dist. LEXIS 114302 (E.D. Mo. July 10, 2019), the plaintiff is Missouri’s largest peach farming operation and is located in the southeast part of the state.  claimed that his peach orchard was destroyed after the defendants (Monsanto and BASF) allegedly conspired to develop and market Dicamba-tolerant seeds and Dicamba-based herbicides. The suit alleged that the two companies collaborated on Xtend (herbicide resistant cotton seed) that was intended for use with a less volatile form of Dicamba with less drift potential.  But, as of 2015 neither Monsanto nor BASF had produced the new, less volatile, form of Dicamba.  That fact led the plaintiff to claim that the defendants released the Dicamba-tolerant seed with no corresponding Dicamba herbicide that could be safely applied.  As a result, the plaintiff claimed, farmers illegally sprayed an old formulation of Dicamba that was unapproved for in-crop, over-the-top, use and was highly volatile and prone to drift.    The plaintiff claimed its annual peach crop revenue exceeded $2 million before the drift damage, and an expert at trial asserted that the drift caused the plaintiff to lose over $20 million in profits.  While many cases had previously been filed on the dicamba drift issue, the plaintiff did not join the other litigation because it focused on damages to soybean crops.  The plaintiff’s suit also involved claims for failure to warn; negligent training; violation of the Missouri Crop Protection Act (MCPA); civil conspiracy; and joint liability for punitive damages. 

Monsanto moved to dismiss the claims for failure to warn; negligent training; violation of the MCPA; civil conspiracy; and joint liability for punitive damages.  BASF moved to dismiss those same counts except the claims for failure to warn. The trial court granted the motion to dismiss in part.  Monsanto argued that the failure to warn claims were preempted by the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), but the plaintiff claimed that no warning would have prevented the damage to the peaches. The trial court determined that the plaintiff had adequately plead the claim and denied the motion to dismiss this claim.  Both Monsanto and BASF moved to dismiss the negligent training claim, but the trial court refused to do so. However, the trial court did dismiss the MCPA claims.  The trial court noted that civil actions under the MCPA are limited to “field crops” which did not include peaches.   The trial court, however, did not dismiss the civil conspiracy claim based on concerted action by agreement, but did dismiss the aiding and abetting portion of the claim because that cause of action is not recognized under Missouri tort law.  The parties agreed to a separate jury determination of punitive damages for each defendant

Note:  The case went to trial in early 2020 and was one of more than 100 similar Dicamba lawsuits.  Bayer, which acquired Monsanto in 2018 for $63 billion, announced in June of 2020 that it would settle dicamba lawsuits for up to $400 million.

The jury trial.  At trial, the jury found that Monsanto had negligently designed or failed to warn for 2015 and 2016 and that both defendants had done so for 2017 to the time of trial.  The jury awarded the plaintiff $15 million in compensatory damages and $250 million in punitive damages against Monsanto for 2015 and 2016.  The jury also found that the defendants were acting in a joint venture and in a conspiracy.  The plaintiff submitted a proposed judgment that both defendants were responsible for the $250 million punitive damages award.  BASF objected, but the trial court found the defendants jointly liable for the full verdict considering the jury’s finding that the defendants were in a joint venture.  Bader Farms, Inc. v. Monsanto Co., et al., MDL No. 1:18-md-02820-SNJL, 2020 U.S. Dist. LEXIS 34340 (E.D. Mo. Feb. 28, 2020). 

BASF then moved for a judgment as a matter of law on punitive damages or motion for a new trial or remittitur (e.g., asking the court to reduce the damage award), and Monsanto moved for a judgment as a matter of law or a new trial.  The trial court, however, found both defendants jointly liable, although the court lowered the punitive damages to $60 million (from $250 million) after determining a lack of actual malice.  The trial court did uphold the $15 million compensatory damage award upon finding that the correct standard under Missouri law was applied to the farm’s damages.  Bader Farms, Inc. v. Monsanto Co, et al., MDL No. 1:18md2820-SNLJ, 2020 U.S. Dist. LEXIS 221420 (E.D. Mo. Nov. 25, 2020).  The defendants filed a notice of appeal on December 22, 2020.     

Appellate decision.  In Hahn v. Monsanto Corp., No. 20-3663, 2021 U.S. App. LEXIS 18621 (8th Cir. Jul. 7, 2022), the appellate court partially affirmed the trial court, partially reversed, and remanded the case.  The appellate court determined that the trial court incorrectly instructed the jury to assess punitive damages for Bayer (i.e., Monsanto) and BASF together, rather than separately, and that a new trial was needed to determine punitive damages for each company.  Indeed, the appellate court vacated the punitive damages award and remanded the case to the trial court with instructions to hold a new trial only on the issue of punitive damages. 

However, the appellate court did not disturb the trial court’s jury verdict of $15 million in compensatory damages.  On the compensatory damages issue, the appellate court held that the trial court properly refused to find intervening cause as a matter of law for the damage to the plaintiff’s peaches.  On that point, the appellate court determined that the spraying of Dicamba on a nearby farm did not interrupt the chain of events which meant that the question of proximate cause of the damage was proper for the jury to determine.  The appellate court also held that the was an adequate basis for the plaintiff’s lost profits because the award was not based on speculation.  The appellate court noted that the peach orchard had been productive for decades, and financial statements along with expert witness testimony calculated approximately $20.9 million in actual damages.  The appellate court also determined that the facts supported the jury’s determination that the defendants engaged in a conspiracy via unlawful means – knowingly enabling the widespread use of Dicamba during growing season to increase seed sales.

Conclusion

The Dicamba drift issue has been an important one in agriculture for a few years, particularly with respect to soybean and cotton crops.  But, as the Bader Farms litigation shows, Dicamba drift can also impact other crops.  While the new Dicamba formulations will not eliminate the problem of physical drift, proper application procedures can go a long way to minimizing it.  Likewise, drift issues can also be minimized by communication among farmers to help determine the planting location of particular crops, their relative sensitivities to Dicamba and the necessary setbacks.

https://lawprofessors.typepad.com/agriculturallaw/2022/07/dicamba-spray-drift-issues-and-the-bader-farms-litigation.html

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