Adams v. United States

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT SEP 08 2011
MOLLY C. DWYER, CLERK
TIMM ADAMS, No. 10-35458 U .S. C O U R T OF APPE ALS
Plaintiff, D.C. No. 4:03-cv-00049-BLW
and
MEMORANDUM * **
CLINGER GROWER GROUP; FUNK
GROWER GROUP; HANSEN GROWER
GROUP; JENTZCH-KEARL GROWER
GROUP,
Plaintiffs - Appellees,
v.
UNITED STATES OF AMERICA,
Defendant,
and
E.I. DU PONT DE NEMOURS AND
COMPANY,
Defendant - Appellant.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
** Appeal No. 10-35611 is consolidated with 10-35592 and 10-35458
but we resolve 10-35611 in a separate opinion filed simultaneously with this
memorandum disposition.
TIMM ADAMS, No. 10-35592
Plaintiff, D.C. No. 4:03-cv-00049-BLW
and
CLINGER GROWER GROUP; FUNK
GROWER GROUP; HANSEN GROWER
GROUP; JENTZCH-KEARL GROWER
GROUP,
Plaintiffs - Appellants,
v.
UNITED STATES OF AMERICA,
Defendant,
and
E.I. DU PONT DE NEMOURS AND
COMPANY,
Defendant - Appellee.
Appeal from the United States District Court
for the District of Idaho
B. Lynn Winmill, Chief District Judge, Presiding
2
Argued and Submitted February 8, 2011
Seattle, Washington
Before: B. FLETCHER, PAEZ, and IKUTA, Circuit Judges.
Defendant-Appellant E.I. Du Pont De Nemours and Company (“DuPont”),
the manufacturer of the herbicide Oust, appeals from the district court’s judgment
and post-trial orders following a jury trial. We have jurisdiction pursuant to 28
U.S.C. §§ 1291, 1294(1). Because the facts of this case are well known by the
parties we do not repeat them here, except as necessary.
1. The district court found that Plaintiffs presented evidence that at most
showed DuPont’s nonfeasance, which cannot, as a matter of law, support an
assumed duty of care claim. It therefore granted DuPont’s Rule 50(b) motion as to
that claim. DuPont now asserts that it is entitled to a new trial1 as to all issues
because “stewardship principles impacted every aspect of the trial . . . and
ultimately infected the entirety of the jury’s verdict.”2
1
We review for abuse of discretion the denial of a Rule 59 motion for a new
trial. Jorgensen v. Cassiday, 320 F.3d 906, 918 (9th Cir. 2003).
2
DuPont also urges us to hold that a “corporate policy does not—and
cannot—give rise to a duty in tort.” The district court did not find that DuPont’s
corporate policy, alone, gave rise to a duty in tort. DuPont’s request for this
court’s guidance on the matter is therefore not squarely before us, and we decline
to address it.
3
DuPont has not, however, identified any case in which a new trial has been
granted in circumstances comparable to those here. We find no merit in DuPont’s
argument, particularly in light of the fact that it made strategic use of its corporate
stewardship policy—which was part of the assumed duty claim—during the trial.
DuPont must bear the risk of its own litigation strategy. Because DuPont has not
cited any relevant authority in support of its new trial argument, the district court
did not abuse its discretion when it denied DuPont’s motion for a new trial on this
ground.3
2. DuPont argues that the district court erred with respect to Plaintiffs’
defective product claims.
A. Rule 50(b) Motion 4
3
DuPont also argues that the district court erred when—after granting
DuPont’s Rule 50(b) motion as to Plaintiffs’ assumed duty of stewardship
claim—it allocated the jury’s stewardship damages to the other claims upon which
Plaintiffs prevailed. The doctrine of invited error precludes DuPont from
complaining to this court about a strategy that it crafted below but now finds
undesirable. See United States v. Reyes-Alvarado, 963 F.2d 1184, 1187 (9th Cir.
1992). Accordingly, we see no basis for disturbing the district court’s reallocation
of damages as requested by DuPont.
4
We review de novo the denial of a Rule 50(b) motion for judgment as a
matter of law. EEOC v. Go Daddy Software, Inc., 581 F.3d 951, 961 (9th Cir.
2009). Reversal is warranted where, construing “the evidence in the light most
favorable to the nonmoving party,” “the evidence permits only one reasonable
conclusion, and that conclusion is contrary to the jury’s verdict.” Id. (internal
quotation omitted).
4
DuPont argues that the district court should have granted its Rule 50(b)
motion on Plaintiffs’ defective product claim because manufacturers cannot be
held liable for manufacturing a product that does well what it is intended to do.
The Idaho supreme court has “‘h[e]ld that a plaintiff need not prove a specific
defect to carry his burden of proof.’” Stanley v. Lennox Indus., Inc., 102 P.3d
1104, 1107 (Idaho 2004) (quoting Farmer v. Int’l Harvester Co., 553 P.2d 1306,
1311 (Idaho 1976)). “‘A prima facie case may be proved by direct or
circumstantial evidence of a malfunction of the product and the absence of
evidence of abnormal use and the absence of evidence of reasonable secondary
causes which would eliminate liability of the defendant.’” Id. A defective
condition is “dangerous to an extent beyond that which would be contemplated by
the ordinary consumer . . . .” Farmer, 553 P.2d at 1311 (internal quotation
omitted).
Here, Plaintiffs presented ample evidence from which a jury could infer that
Oust was “dangerous to an extent beyond that which would be contemplated by”
the government, much less an “ordinary consumer.” Id. For example, Plaintiffs
presented evidence that Oust is susceptible to erosion and unusually long-
lasting—both of which the jury could have construed as circumstantial evidence
that Oust is unreasonably dangerous. Moreover, the government’s use of Oust in
5
accordance with its label and with DuPont’s active advice and participation, was
not abnormal use. Finally, Plaintiffs presented extensive evidence ruling out
possible secondary causes for their crop damage. DuPont, therefore, has not met
its burden to show that the “evidence permits only one reasonable conclusion.” Go
Daddy, 581 F.3d at 961. The district court properly denied DuPont’s Rule 50(b)
motion as to Plaintiffs’ defective product claim.
B. Superseding Cause Instruction 5
DuPont argues that the district court erred in failing to instruct the jury on
the doctrine of superseding cause and that it is therefore entitled to a new trial. A
superseding cause is “an act of a third person or other force which by its
intervention prevents the actor from being liable for harm to another . . . .” Mico
Mobile Sales & Leasing, Inc v. Skyline Corp., 546 P.2d 54, 57–58 (Idaho 1975)
(internal quotation omitted). DuPont argues that the jury should have been
instructed that it could find that the government’s negligence was a superseding
cause of Plaintiffs’ damages which completely cut off DuPont’s liability.
Arguably, the common law superseding cause doctrine, discussed in Mico in
1975, was subsumed in 1980 by § 6-1405 of the Idaho Products Liability Reform
5
We review the formulation of jury instructions for abuse of discretion and
de novo with respect to misstatements of law. Dang v. Cross, 422 F.3d 800, 804
(9th Cir. 2005).
6
Act (“IPLRA”). See Corbridge v. Clark Equipment Co., 730 P.2d 1005 (Idaho
1986). Section 6-1405, “Conduct affecting comparative responsibility,” includes a
misuse defense, and DuPont did not request a misuse instruction.6 But even if the
IPLRA did not eliminate the superseding cause doctrine, see Exxon Co., U.S.A. v.
Sofec, Inc., 517 U.S. 830, 837–38 (1996); Orthman v. Idaho Power Co., 895 P.2d
561, 564 (Idaho 1995), any instructional error was harmless in light of the evidence
that Oust was, unbeknownst to the government, unreasonably dangerous. The
district court did not err in failing to give a superseding cause jury instruction.
3. DuPont argues that the district court made numerous errors with respect to
Plaintiffs’ failure to warn claims.
A. FIFRA Preemption
DuPont argues that the district court should have granted its Rule 50(b)
Motion as to Plaintiffs’ failure to warn claim because it is preempted by the
Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”). FIFRA requires
that pesticides not be misbranded. 7 U.S.C. § 136(q)(1)(A), (F). FIFRA explicitly
does not preempt all state regulation of pesticides. 7 U.S.C. § 136v(a), (b).
6
Even assuming that the district court should have construed DuPont’s
superseding cause request as a misuse defense request, any error was harmless.
The core of both doctrines is a question of proximate causation, which the district
court instructed the jury it must find in order to conclude that DuPont was liable
for Plaintiffs’ defective product claim.
7
We employ a two-part test to determine whether FIFRA preempts a
particular state law claim. See Bates v. Dow Agrosciences, LLC., 544 U.S. 431,
444 (2005). First, the state law “must be a requirement ‘for labeling or
packaging’; rules governing the design of a product, for example, are not pre-
empted.” Id. (quoting 7 U.S.C. § 136v(b)). “Second,” the state law “must impose
a labeling or packaging requirement that is ‘in addition to or different from those
required under this subchapter.’” Id. (quoting 7 U.S.C. § 136v(b)).
Here, the district court’s jury instructions 30 and 33 stated the necessary
elements of Plaintiffs’ failure to warn claims. Neither of the failure to warn claims
satisfy Bates’ first condition for preemption: none of the elements is a
“requirement ‘for labeling or packaging.’” 544 U.S. at 444 (emphasis in original).
Indeed, the words “label” and “package” do not appear in Jury Instruction 30 or 33.
Plaintiffs’ failure to warn claims are broader than DuPont’s construction of them as
solely based on inadequate labeling. DuPont’s preemption argument is premised
on an inaccurate representation of Plaintiffs’ claims and is unavailing.
B. Failure to Warn Jury Instructions
1. The Instruction Properly Tracked FIFRA
DuPont alleges that, even if FIFRA does not preempt Plaintiffs’ failure to
warn claims, the district court’s Jury Instructions 30, 33, and 34 did not properly
8
track FIFRA requirements. To begin with, Instructions 30 and 33 were not
required to track FIFRA. Instruction 34 explained that Plaintiffs allege that
DuPont violated the Idaho Pesticide and Chemigation Act. Idaho Code § 22-3401et seq. The Idaho Pesticide and Chemigation Act claim does impose a labeling
requirement, so the jury instruction must be “equivalent to, and fully consistent
with, FIFRA’s misbranding provisions.” Bates, 544 U.S. at 447. The instruction
need not, however, be “phrased in the identical language as its corresponding
FIFRA requirement.” Id. at 454 (emphasis in original). Jury Instruction 34 is fully
consistent with FIFRA since it sufficiently tracks FIFRA’s own requirements. The
district court did not err in instructing the jury on Plaintiffs’ failure to warn claims.
2. Actual Knowledge and Sophisticated Purchaser Defenses
DuPont argues that the district court erred in not instructing the jury on the
failure to warn defenses of actual knowledge of danger and sophisticated
purchaser. In Puckett v. Oakfabco, Inc., 979 P.2d 1174 (Idaho 1999), the court
explained that “where the undisputed facts lead to only one reasonable conclusion
the court may rule as a matter of law. . . .[t]he question becomes whether the
danger involved is so obvious that it is unreasonable to impose on the manufacturer
a duty to warn.” Id. at 1182 (internal quotation omitted).
9
Here, there were endless disputed facts that did not lead to only one
reasonable conclusion that, as a matter of law, Oust’s danger was “so obvious” that
DuPont should have no duty to warn, or that the government had actual
knowledge. Under Puckett, if there are factual disputes as to these issues, the jury
comparatively apportions fault for the non-consumer plaintiff’s injuries between
the defendants. This apportionment is also required by Idaho Code § 6-1405(2)(b).
The district court instructed the jury on comparative allocation of fault for
Plaintiffs’ failure to warn claims, which is what Idaho law requires. The district
court did not abuse its discretion in not providing more.
DuPont also argues that the jury should have been instructed on the learned
intermediary and sophisticated purchaser doctrines. In Sliman v. Alum. Co. of Am.,
731 P.2d 1267, 1270–71 (Idaho 1986), the court explained that “in some
circumstances a supplier positioned on the commercial chain remote from the
ultimate consumer may fulfill its duty to warn by adequately warning an
intermediary.” The court provided two examples. First, a “doctor stands as a
learned intermediary between the manufacturer and the ultimate consumer.” Id. at
1271 (internal quotation omitted). Second, a “bulk supplier, one who sells a
product to another manufacturer or distributor who in turn packages and sells the
product to the public,” may also invoke the defense. Id. The facts of this case
10
present neither example noted by the Idaho supreme court in Sliman, nor a
situation so analogous that the district court can be said to have abused its
discretion by not extending the principle. Both of the Sliman examples involve
voluntary purchasers of a product, which the Plaintiffs were not.
And to the extent that Idaho recognizes that a manufacturer has no duty to
warn a sophisticated purchaser of any inherent dangers in its product, see Mico,
546 P.2d at 61; see also Bromley v. Garey, 979 P.2d 1165, 1171 (Idaho 1999)
(citing Restatement (Second) of Torts § 388 (1965)), any error was more probably
than not harmless. Head v. Glacier N.W. Inc., 413 F.3d 1053, 1063 (9th Cir.
2005). The jury heard substantial evidence to the effect that Oust was not just
inherently dangerous as an herbicide, but abnormally so.
7
C. Evidence of Subsequent Remedial Measures
The district court admitted into evidence the Environmental Protection
Agency’s (“EPA”) Re-Registration Eligibility Determination (“RED”) for Oust,
which summarizes Oust’s risks and describes remedial measures necessary for
Oust re-registration. DuPont argues that the RED is a subsequent remedial
measure that is inadmissible under Federal Rule of Evidence 407 (“Rule 407”).
7
We review evidentiary rulings for abuse of discretion. Sprint/United
Mgmt. Co. v. Mendelsohn, 552 U.S. 379, 384 (2008).
11
We have held that Rule 407 “only applies to a defendant’s voluntary
actions.” Pau v. Yosemite Park and Curry Co., 928 F.2d 880, 888 (9th Cir. 1991)
(emphasis in original). Because the EPA and the Bureau of Land
Management—the responsible government agency in this case—are separate
federal agencies, admitting the EPA’s RED into evidence against DuPont did not
run afoul of Rule 407’s purpose “of encouraging potential defendants to remedy
hazardous conditions without fear that their actions will be used as evidence
against them.” Id. Accordingly, the district court did not abuse its discretion under
Rule 407 in admitting the RED into evidence. Nor did the district court abuse its
discretion under Rule 403 in concluding that the RED’s danger of unfair prejudice
did not substantially outweigh its probative value.
4. DuPont argues that the district court’s damages award violates Idaho’s
economic loss rule.8 In Brian and Christie, Inc. v. Leishman Elec., Inc., 244 P.3d
166, 172 (Idaho 2010), the court explained that “[d]amages from harm to person or
property are not purely economic losses.” Rather than limiting the damages
available in a negligence action, the economic loss rule means that the “seller has
8
The district court concluded, and DuPont admits, that it has waived this
argument as to Bellwether Plaintiffs. DuPont’s economic loss rule argument
remains relevant, however, to the future damages trial for the non-Bellwether
Plaintiffs. We therefore address this argument on the merits.
12
no duty under the law of negligence to design, manufacture, or sell property that
will confirm to the buyer’s economic expectations.” Id. This rule does not bar
Plaintiffs’ claims for two reasons. First, Plaintiffs did not have a contractual
relationship with DuPont. Cf. Duffin v. Idaho Crop. Imp. Ass’n, 895 P.2d 1195,
1199–1200 (Idaho 1995). Thus, they had no “economic expectations,” and the
economic loss rule does not apply. Second, the damages DuPont challenges were
awarded to compensate Plaintiffs for injuries that Oust caused to their property,
and there is an exception to the economic loss rule: economic loss is recoverable in
tort as a loss parasitic to an injury to person or property. See Just’s, Inc. v.
Arrington Const. Co., 583 P.2d 997, 1004 n.1 (Idaho 1978). Accordingly, Idaho’s
economic loss rule does not bar Plaintiffs’ damages.
5. DuPont argues that Idaho law precludes the debt-based costs portion of
Plaintiffs’ damages award. The debt-based costs at issue reimburse Plaintiffs for
the money they “paid on their operating loans and lines of credit due to Oust crop
damage.” This money represents “increases in contract interest payments, i.e.,
additional interest payments pursuant to a contract between the bellwether
plaintiffs and their banks.” These contractual interest payments constitute
consequential damages insofar as they are designed to compensate Plaintiffs for
actual money damages.
13
The parties agree that this issue is controlled by Spreader Specialists, Inc. v.
Monroc, Inc., 752 P.2d 617 (Idaho Ct. App. 1987), overruled on other grounds by
Walton, Inc. v. Jensen, 979 P.2d 118 (Idaho Ct. App. 1999). Spreader “h[e]ld that
interest charges incurred on a loan obtained in good faith, as part of a reasonable
course of action to mitigate losses, may be recovered as an item of consequential
damages.” Id. at 624. The court explained that while “[m]ost cases dealing with . .
. the recoverability of interest, involve claims for interest allegedly due as
compensation for the detention of money during the time between injury and
compensation . . . But here . . . [the plaintiff] seeks to recover a sum actually
expended by it as a result of [the defendant’s] tortious conduct.” Id. at 623–24
(emphasis in original). The debt-based costs here are similar to the Spreader costs
insofar as they compensate Plaintiffs for “a sum actually expended by [them] as a
result of [DuPont’s] tortious conduct.” 752 P.2d at 624. Thus, Spreader’s analysis
reasonably extends to the present dispute and supports the award of debt-based
consequential damages.9
No. 10-35458: AFFIRMED.
9
Dupont argues that if this court accepts only some of its arguments
regarding Bellwether Plaintiffs’ claims, Idaho and federal law require a new trial
because the jury did not allocate fault and damages between the defendants on a
claim-by-claim basis. Because we do not agree with any of DuPont’s arguments,
we need not address this issue.
14
Plaintiffs’ motion to dismiss their cross-appeal, No. 10-35592, is
GRANTED. No. 10-35592: DISMISSED.
15