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Mortellite v. Novartis Crop Protection

August 21, 2006

GARY MORTELLITE; AND GEORGE MORTELLITE, INDIVIDUALLY AND D/B/A/ BUFFALO FARMS; MICHAEL DIMEO AND WILLIAM DIMEO, INDIVIDUALLY AND D/B/A INDIAN BRAND FARMS, INC.; ANTHONY DIMEO, JR. AND WILLIAM DIMEO, INDIVIDUALLY AND D/B/A COLUMBIA FRUIT FARMS, INC.; WILLIAM A. MORTELLITE, INDIVIDUALLY AND D/B/A WM. MORTELLITE FARMS; JOYCE CAPPUCCIO, INDIVIDUALLY AND D/B/A WM. CAPPUCCIO & SONS; JOSEPH D. BERENATO, INDIVIDUALLY AND D/B/A CHAPPINE FARMS; GENE J. MARTINELLI, INDIVIDUALLY AND D/B/A COLUMBIA CRANBERRY CO.; JOSEPH E. MARTINELLI, INDIVIDUALLY AND D/B/A BLU-JAY FARMS; LOUIS R. CONDO, INDIVIDUALLY AND D/B/A BIG BUCK FARMS; DAVID RIZZOTTE, INDIVIDUALLY AND D/B/A GLOSSY FRUIT FARMS, INC.; GREGORY A. CLARK, INDIVIDUALLY AND D/B/A CLARK FARMS; JEFFREY WHALEN, INDIVIDUALLY AND D/B/A WHALEN FARMS; HELEN BARTMER, INDIVIDUALLY AND D/B/A S.J. BLUEBERRIES; ANTHONY MELORA, INDIVIDUALLY AND D/B/A MELORA FARMS; BILL AUGUSTINE, INDIVIDUALLY AND D/B/A BILL AUGUSTINE FARMS; RUSSELL FRANCESCHINI AND SCOTT FRANCESCHINI, INDIVIDUALLY AND D/B/A R & S FRANCESCHINI FARMS; EVELYN FRANCHETTI, INDIVIDUALLY AND D/B/A FRANCHETTI FARMS, ANTHONY VACCARELLA, INDIVIDUALLY AND D/B/A VACCARELLA FARMS; FRANK JACOBS, INDIVIDUALLY AND D/B/A JACOBS FARM; JOHN A. DEMARCO, SR., INDIVIDUALLY AND D/B/A SUN VALLEY FARMS INC.; JOSEPH A. SILIGATO, INDIVIDUALLY AND D/B/A BLUEMOON BERRY FARMS; CARMEN MERLINO, JR., INDIVIDUALLY AND D/B/A OAKCREST FARMS; JOHN DOE(S), AS DISCOVERED,
v.
NOVARTIS CROP PROTECTION, INC., A FOREIGN CORPORATION JOSEPH D. BERENATO; LOUIS R. CONDO; DAVID RIZZOTTE; JEFFREY WHALEN; BILL AUGUSTINE; ANTHONY VACCARELLA; CARMEN MERLINO, JR.; MICHAEL DIMEO; WILLIAM DIMEO; ANTHONY DIMEO, JR.; WILLIAM DIMEO; JOYCE CAPPUCCIO; GENE J. MARTINELLI; JOSEPH E. MARTINELLI; GREGORY A. CLARK; ANTHONY MELORA; RUSSELL FRANCESCHINI AND SCOTT FRANCESCHINI, APPELLANTS.



On Appeal from the United States District Court for the District of New Jersey. (D.C. No. 99-cv-02118). District Judge: Honorable Joseph H. Rodriguez.

The opinion of the court was delivered by: Fuentes, Circuit Judge

PRECEDENTIAL

Argued January 13, 2006

Before: FUENTES, ROSENN,*fn1 and ROTH,*fn2 Circuit Judges.

OPINION OF THE COURT

Plaintiffs are New Jersey blueberry farmers who filed suit against a pesticide company for damages to their crops based on theories of products liability, negligence, consumer fraud, and breach of express warranty. In two separate orders, the District Court granted summary judgment in favor of defendant Novartis 1) based on releases that some of the plaintiffs had signed before filing suit, and 2) based on its holding that the remaining plaintiffs' claims were preempted by the Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA").

The principal issue on appeal is whether Plaintiffs' claims are preempted by FIFRA. We conclude that, under Bates v. Dow Agrosciences LLP, 544 U.S. 431 (2005), decided after the District Court's rulings in this case, Plaintiffs' claims for defective design, defective manufacture, negligent testing, negligent misrepresentation, and fraud are not preempted because those claims do not impose labeling requirements in addition to or different from those required by FIFRA. Accordingly, we vacate the District Court's judgment as to those claims and remand for further proceedings. We also remand for the District Court to consider whether, under Bates, FIFRA preempts Plaintiffs' failure-to-warn claim.

Plaintiffs also appeal the District Court's granting of summary judgment against the claims of seven farmers who signed releases with Novartis. For the reasons that follow, we affirm the District Court's dismissal of those claims.

I. Factual and Procedural Background

For several years, Plaintiffs (the "farmers") treated the blueberry plants on their farms with two insecticides manufactured by defendant Novartis Crop Protection, Inc. ("Novartis"): Diazinon 50 WP ("50 WP") and Diazinon AG 500 ("AG 500"). Before applying the insecticide to the plants, the farmers engaged in the practice of "tank mixing," whereby they would mix these insecticides with the fungicides Captan or Captec (the "fungicides"). The farmers allege that tank mixing is a common and well-known practice among virtually all farmers that dates back to the introduction of pesticides. For several years, the farmers safely mixed the fungicides with Diazinon 50 WP or Diazinon AG 500 and experienced no crop damage.

This changed, however, when Novartis produced and marketed to the farmers a new insecticide known as Diazinon AG 600 ("AG 600"). The company distributed advertising literature claiming that its new product was safer and more effective than AG 500 or 50 WP. The farmers began buying and using AG 600 in the Spring of 1997, mixing the new product with the fungicides as they had done with previous Novartis insecticides. Unbeknownst to the farmers, however, AG 600 contained an additional ingredient known as a "surfactant," which was not found in 50 WP or AG 500.*fn3 The farmers allege that the surfactant, when mixed with the fungicides, caused systematic injury to their blueberry plants, such as blotches, depressions, and spots on the plants, as well as plant death. The farmers also allege that Novartis failed to reveal the addition of the surfactant to Novartis field personnel and failed to include this information in any of its marketing materials.

In response to the damages to their 1997 blueberry crop, the farmers hired Dr. William Sciarappa ("Sciarappa"), a plant pathologist, to investigate the farmers' crop damage. Novartis sent its representative, Dr. Neil Lapp ("Lapp"), also a plant pathologist. Almost all contact between the farmers and Novartis between August 1997 and December 1997 was conducted by Lapp on behalf of Novartis and Sciarappa on behalf of the farmers. Sciarappa's investigations concluded that AG 600 can cause plant damage when mixed with the fungicides.

Novartis decided to explore "goodwill" settlement agreements with the farmers to compensate them for the damage to their crops. Betweem November 1997 and January 1998, Novartis entered into settlement agreements with thirteen of the fifteen farmers (the "settling farmers").*fn4 As part of each settlement, the settling farmer signed a release indicating that he or she received the settlement proceeds in full satisfaction and extinguishment of all claims and causes of action against [Novartis] . . . arising out of any damage or loss, present or future, to crops, plants, animals, fish or land, direct or indirect, known or unknown, allegedly sustained by the [settling plaintiff] as a result of the use of [AG 600].

The releases also provided that "[i]t is agreed that this is a business decision in compromise of a disputed claim and that the making of this payment is not an admission of liability on the part of [Novartis]."

The following year, the farmers noticed continuing damage to their blueberry crop, including continued inhibition of plant growth, from their use of AG 600 in 1997. When the farmers contacted Novartis, Novartis informed them that it would not compensate the farmers for any damages to their 1998 crop because the releases signed by the settling farmers precluded any future claims.

The farmers commenced this action seeking damages based on claims of strict products liability, negligence, negligent misrepresentation, fraud, breach of express warranty, and breach of the New Jersey Consumer Fraud Act. The thirteen farmers who signed settlement agreements bring additional claims of ...


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