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Bader Farms, Inc. v. Monsanto Co.

United States District Court, E.D. Missouri, Southeastern Division

April 10, 2017

BADER FARMS, INC. and BILL BADER Plaintiffs,
v.
MONSANTO CO., Defendant.

          MEMORANDUM AND ORDER

          STEPHEN N. LIMBAUGH, JR. UNITED STATES DISTRICT JUDGE.

         This case comes before the Court on defendant's motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) (#6). Plaintiffs oppose this motion on several grounds.

         I. Factual Background

         As alleged in plaintiffs' complaint, plaintiffs are engaged in a massive peach growing business and have a very successful orchard in Dunklin County, Missouri. Defendant is a global agrochemical and agricultural biotechnology corporation, well known for its development of genetically engineered (“GE”) seeds in addition to its development of herbicides. At issue in this case is the commercial release and sale of two of defendant's GE seeds, Roundup Ready 2 Xtend soybeans (“Xtend soybeans”) and Bollgard II XtendFlex cotton seeds (“Xtend cotton”). The seeds were subject to federal regulation by the Animal and Plant Health Inspection Service (“APHIS”), and following an investigation of their safety, they were deregulated, which allowed them to be sold. Xtend cotton seeds were first sold in 2015, and Xtend soybean seeds were first sold in 2016.

         The sales occurred, however, before the Environmental Protection Agency approved the seeds' corresponding weed-killing herbicide, XtendiMax, for commercial release. Plaintiffs allege that defendant violated standard industry practice and committed a number of tortious acts by releasing its new GE seeds without such an existing, approved herbicide on the market as a “complete crop system.” The foreseeable result of this negligent act, plaintiffs contend, was that third-party farmers were enticed to spray dicamba - a generic herbicide - onto their new GE seed crops to curb inevitable weed growth, ignoring product warning labels for the GE seeds as well as prohibitions under federal and state law. Further, because dicamba “drifts” onto surrounding properties, the spraying and drift of dicamba caused millions of dollars in damage to plaintiffs' peach orchards.

         The Xtend seeds are unusual because they are resistant to the herbicide dicamba, so that dicamba will not harm the Xtend seed crops. Dicamba has been manufactured and marketed since 1967 by several companies, but not Monsanto. Before 2015, dicamba was not often used by American farmers in-crop because it is a “highly volatile” herbicide that “is prone to drift” onto surrounding properties. Drift is a term used to denote the airborne movement of herbicide spray particles to non-target or neighboring sites, sometimes miles away. Also, dicamba is a selective herbicide, meaning that it is used to kill broadleaf weeds, as opposed to eradicating plants in the grass family. But dicamba is toxic to all broadleaf plants such as fruits, nuts, vegetables, and notably, cotton and soybeans that are not genetically engineered to withstand it.

         As this Court understands, dicamba historically has been used during the “burndown” period, meaning it was applied before the planting of seeds as a pre-season weed control option. When applied in the burndown period, dicamba's drift problem is not as pronounced as it is when applied “over the top” of crops, but in general, dicamba has not been used over the top of crops after crop emergence. With the development of dicamba-resistant seeds to produce crops, spraying dicamba over the top has become an option - albeit an unlawful one - for farmers to use as a weed-killing herbicide. Unfortunately, the volatility and drift problems of older formulations of dicamba are no less present, as is the case here.

         Apparently, defendant's new dicamba technology, XtendiMax, just recently approved, will not share the same drift problems as old dicamba. If applied correctly, XtendiMax will kill broadleaf weeds on the fields of dicamba-resistant crops and will not drift onto the property of neighboring landowners. Plaintiffs allege that defendant invested over a billion dollars into the development of XtendiMax because of the rise of “super weeds” that are resistant to Roundup, another Monsanto herbicide. Roundup, which contains glyphosate, is a non-selective herbicide, meaning it can kill most plants. Dicamba can be used in conjunction with Roundup, and together, these two herbicides will kill most weeds, increasing the yield of the farmer's crops. But plaintiffs allege that due to old dicamba's volatility and drifting, it can serve as a vehicle that transports Roundup miles away, possibly causing great damage to many types of plants.

         Plaintiffs acknowledge that at all relevant times of this lawsuit - 2015 and 2016 - it was a violation of state and federal law to use old dicamba on the seeds. Additionally, plaintiffs acknowledge that the use of dicamba on the seeds was “off-label” and expressly prohibited by product use labels on the bags containing the GE seeds. Finally, plaintiffs concede that the defendant did not manufacture, distribute, sell, or apply the dicamba sprayed by the third-party farmers on their crops that drifted onto plaintiff's property.

         Nonetheless, as noted, plaintiffs claim they were harmed by defendant's release of the Xtend seeds because it was foreseeable that third-party farmers who purchased the seeds would illegally spray older formulations of dicamba onto their own crops to kill weeds, and that dicamba drifted onto plaintiff's property, causing millions of dollars of damages. Plaintiffs proceed with nine state-law claims, including: (1) strict liability - defective design; (2) strict liability - failure to warn; (3) negligent design and marketing; (4) negligent failure to warn; (5) negligent training; (6) breach of implied warranty of merchantability; (7) fraudulent concealment; (8) unjust enrichment; and (9) punitive damages.

         II. Legal Standard

         The purpose of a Rule 12(b)(6) motion to dismiss for failure to state a claim is to test the sufficiency of a complaint so as to eliminate those actions “which are fatally flawed in their legal premises and deigned to fail, thereby sparing litigants the burden of unnecessary pretrial and trial activity.” Young v. City of St. Charles, 244 F.3d 623, 627 (8th Cir. 2001) (citing Neitzke v. Williams, 490 U.S. 319, 326-27 (1989)). “To survive a motion to dismiss, a claim must be facially plausible, meaning that the ‘factual content. . . allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'” Cole v. Homier Dist. Co., Inc., 599 F.3d 856, 861 (8th Cir. 2010) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). The Court must “accept the allegations contained in the complaint as true and draw all reasonable inferences in favor of the nonmoving party.” Id. (quoting Coons v. Mineta, 410 F.3d 1036, 1039 (8th Cir. 2005)).

         When reviewing a Rule 12(b)(6) motion, if documents outside the pleadings are presented and not excluded, the motion must be treated as a motion for summary judgment. Fed.R.Civ.Pro. 12(d). However, “Rule 12(b)(6) motions are not automatically converted into motions for summary judgment simply because one party submits additional matters in support of or [in] opposition to the motion.” Gorgo v. Best Buy Co., Inc., 760 F.3d 787, 791 (8th Cir.2014) (citation omitted). Documents that are necessarily embraced by the pleadings are not matters outside the pleadings for purposes of Rule 12(d). Id. “Documents necessarily embraced by the pleadings include documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading” and may be considered in a motion to dismiss. Ashanti v. City of Golden Valley, 666 F.3d 1148, 1151 (8th Cir. 2012). Further, “any error in a district court's failure to treat a motion for judgment on the pleadings as one for summary judgment ‘is harmless if the nonmoving party had an adequate opportunity to respond to the motion and material facts were neither disputed nor missing from the record.'” Surgical Synergies, Inc. v. Genesee Associates, Inc., 432 F.3d 870, 873 (8th Cir.2005) quoting Kerr v. Fed. Emergency Mgmt. Agency, 113 F.3d 884, 885 (8th Cir.1997) (internal citations omitted).

         III. Proximate Causation ...


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