UPDATE: On February 14, 2020 the jury in Bader Farms, Inc. v. Monsanto Co., No. 1:16-cv-299 (E.D. Mo. 2020) ruled in favor of the plaintiff, Bader Farms, and awarded $15 million dollars in damages. The following day, February 15, the jury awarded an additional $250 million in punitive damages. To read more click here or here.

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By 2018, hundreds of plaintiffs had filed individual lawsuits in their home states against Monsanto Company (“Monsanto”) and BASF Corporation (“BASF”), alleging that the companies were responsible for crop damage caused by their dicamba-based herbicides, and that the companies had conspired to create a monopoly of the pesticide-resistant crops market. Lawsuits against the two companies were filed in Arkansas, Illinois, Iowa, Kansas, Missouri, Mississippi, Nebraska, South Dakota, and Tennessee.

Ultimately, those cases were consolidated into one lawsuit known as In re: Dicamba Herbicides Litigation, No. 1:18-md-02820 (E.D. Mo. 2019). Consolidation was supported by both plaintiffs and defendants because the various cases shared common questions of fact and consolidation would eliminate the possibility of inconsistent rulings from different courts. The United States District Court for the Eastern District of Missouri was selected as the court where the consolidated case would be heard because some of the earliest actions involving dicamba damage were initially filed in that court, including Bader Farms, Inc. v. Monsanto Co., No. 1:16-cv-299 (E.D. Mo. 2019), the first lawsuit to raise allegations against Monsanto for dicamba-related damage. Additionally, Monsanto is headquartered in St. Louis, Missouri which is located in the Eastern District of Missouri. The consolidated case is before Judge Stephen N. Limbaugh, Jr. who was selected for the case because he is also presiding over the trial in Bader Farms, Inc. v. Monsanto Co.

After consolidation, In re: Dicamba was divided into two main components, the claims alleging crop damage and the claims alleging antitrust violations. The crop damage claims have been raised in the Crop Damage Class Action Master Complaint (“Crop Damage Master Complaint”) and the antitrust claims have been raised in the Master Antitrust Action Complaint (“Master Antitrust Complaint”).  While the antitrust claims all accuse Monsanto and BASF of violating federal law, most of the claims for crop damage allege that Monsanto and BASF violated state law. However, the Crop Damage Master Complaint does contain one federal law claim. That claim has the potential to have a wider impact than the claims for violations of state law because it accuses the defendants of violating the law on a national level.

The plaintiffs in In re: Dicamba accused Monsanto and BASF of violating the federal Lanham Act in the Crop Damage Master Complaint. Both defendants moved to have the claims dismissed before trial. The court dismissed the Lanham Act claims brought against BASF, but concluded that the claims against Monsanto could move to the trial stage.

The Lanham Act is the federal statute that governs trademarks and unfair competition. The Crop Damage Master Complaint asserts claims under § 1125(a) of the Lanham Act which essentially prevents manufacturers from making statements or using commercial advertising to confuse or deceive consumers with respect to what their products do and how their products behave when used. The plaintiffs argue that Monsanto and BASF violated this portion of the Lanham Act multiple times while marketing Monsanto’s dicamba-resistant seeds and both defendants’ dicamba-based herbicides, XtendiMax and Engenia (collectively referred to as the “Xtend Crop System”).

According to the Crop Damage Master Complaint, the defendants made multiple statements when marketing the Xtend Crop System claiming that the system could be “safely employed utilizing over-the-top application of dicamba herbicides on dicamba-resistant crops and would not lead to volatilization and/or drift onto susceptible non-dicamba resistant plants and crops.” The plaintiffs allege that these statements violated the Lanham Act by misleading consumers of the Xtend Crop System into thinking that there was no risk, or a very low risk, of dicamba drift if the dicamba herbicides were applied according to the instructions. Because there was still risk of pesticide drift even if the defendants’ application instructions were followed, plaintiffs contend that it was a violation of the Lanham Act to market the Xtend Crop System as being safe when applied according to the instructions.

In asking the court to dismiss the Lanham Act claims, Monsanto and BASF made three arguments: (1) the plaintiffs could not bring Lanham Act claims against Monsanto or BASF because the plaintiffs were not in direct business competition with either company; (2) the harm alleged by the plaintiffs was too far removed from the defendants’ alleged marketing conduct; and (3) the court lacked personal jurisdiction over both Monsanto and BASF and therefore did not have authority to consider federal claims brought against either of them. Of the arguments for dismissal made by the defendants, the court found that only BASF’s claim that the court lacked person jurisdiction over it had merit. Based on that argument, the court dismissed the Lanham Act claims against BASF, but allowed the claims against Monsanto to continue.

In considering the defendants’ first argument, that the plaintiffs were not direct business competitors of either Monsanto or BASF, the court focused on a Supreme Court case which held that to bring a claim under the Lanham Act, a plaintiff was required to be “a commercial actor suffering commercial injuries,” not “a consumer who [was] hoodwinked into purchasing a disappointing product.” Given that requirement, the court refused to grant the defendants’ motion to dismiss the plaintiffs’ Lanham Act claim because although the plaintiffs were not in direct business competition with the defendants, they were commercial actors who had suffered commercial injuries by losing crop sales to dicamba damage.

The court turned next to the defendants’ second argument that the harm alleged by the plaintiffs was too far removed from the defendants’ marketing conduct. According to the defendants, the plaintiffs were “at best ‘indirect’ victims of the allegedly false advertising.” The defendants argued that because the plaintiffs had not bought or used the Xtend Crop System, then they were not the real victims of the alleged Lanham Act violations. The court did not agree with the defendants’ argument, concluding that the plaintiffs had clearly alleged a commercial injury because the defendants’ misrepresentations caused third parties to buy and use the dicamba that damaged the plaintiffs’ crops, resulting in loss of sales. Therefore, the court determined that the plaintiffs’ Lanham Act claims would not be dismissed on that ground.

Finally, the court considered whether it lacked personal jurisdiction over each defendant. In other words, the court considered whether it had the authority to rule on federal claims against either Monsanto or BASF. With respect to Monsanto, the court concluded that it did have general jurisdiction over the company because its headquarters were located in Missouri, the same state where the court is located. However, with respect to BASF, the court concluded that it did not have general jurisdiction over the company because it was not incorporated or headquartered in Missouri or in any other of the states that the plaintiffs originally brought their federal claims in. Therefore, the court dismissed the nationwide class action claims against BASF for violations of the Lanham Act.

When In re: Dicamba goes to trial, the plaintiffs will be permitted to litigate their Lanham Act claims against Monsanto. If the plaintiffs are ultimately successful on their Lanham Act claims, it would result in a finding that Monsanto had made deceptive statements about the volatility of its dicamba-based herbicide when marketing its products. However, if the plaintiffs lose on their Lanham Act claims at trial, that would mean that the company had made statements that were true or that it believed to be true while marketing the Xtend Crop System. It is possible that however the jury rules on this claim at trial, Monsanto will have to alter how it markets its dicamba-based herbicides.

 

To read the Crop Damage Master Complaint, click here.

To read the text of the Lanham Act, click here.

To read the court’s opinion on motions to dismiss in In re: Dicamba, click here.

To read the previous article in this series, click here.

For more National Agricultural Law Center resources on pesticides, click here.