The 8th U.S. Circuit Court of Appeals has ordered a new determination of punitive damages in a southeast Missouri peach farm’s suit claiming it was damaged by a drifting pesticide.
Bader Farms Inc. initially ordered BASF and Monsanto to pay $15 million in actual damages and $250 million in punitive damages. It was the largest plaintiffs’ win of 2020, as tracked by Missouri Lawyers Media.
After trial, a federal judge reduced the punitive damages to $60 million. But the 8th Circuit’s July 7 opinion said that under Missouri law a new jury must come up with a new figure and apportion the damages between the two defendants.
Otherwise, the court affirmed the verdict, including the original jury’s finding that a punitive award was warranted.
Bill Randles of Randles & Splittgerber in Kansas City, an attorney for plaintiff Bader Farms Inc., said he expected the new trial would be a relatively short and simple matter.
“This is as narrow a retrial as you can have,” he said.
Randles’ firm, along with attorneys from Davis George Mook in Kansas City, represented Bader Farms, which alleged in its suit that dicamba herbicide applied to crops on other neighboring farms had drifted onto its property, killing and damaging its peach trees.
The suit alleged that Monsanto marketed its dicamba-tolerant Xtend cotton and soybean seeds to farmers before the federal government had approved a lower-volatility dicamba herbicide that would not drift onto neighboring farms, leaving those farmers no option but to illegally spray dicamba to protect the crops. The farm also alleged BASF conspired with Monsanto to create a market for the components of a dicamba-based system.
The defendants, who have denied those claims, had urged the 8th Circuit to overturn the entire verdict. But the federal appeals court allowed the compensatory damages to stand.
“Bader’s theory of actual causation is that, but for seed that could withstand dicamba herbicide, neighboring farmers would not have sprayed volatile dicamba during growing season,” Judge Duane Benton wrote for the court, noting that there was no confusion about whose seeds were at fault because the Xtend seed was the only product of its kind on the market. Chief Judge Lavenski R. Smith and Judge Jane Kelly concurred.
While other farmers’ improper use of dicamba was an intervening cause of Bader Farms’ damages, the court said, Monsanto had relationships through its growers’ licenses that gave it some degree of control over their acts. And, Benton added, Xtend’s primary benefit to those farmers was its tolerance to dicamba.
“Consumers could not receive that benefit without misusing dicamba,” he wrote.
The court also said the evidence supported a punitive award, as the plaintiffs had shown that Monsanto had blocked testing for dicamba volatility to make sure bad results didn’t interfere with regulatory approval.
However, the court said the verdict assessed the punitive damages only against Monsanto. After trial, Judge Stephen N. Limbaugh Jr. not only reduced the award but also held that Monsanto and BASF would be jointly and severally liable for it.
Benton said that while the plaintiffs had proven the companies participated in a conspiracy that enabled widespread off-label use of dicamba to increase Xtend’s sales, that “does not change the rule” that the punitive award had to be assessed separately against the defendants.
The court declined to address the defendants’ arguments that even the reduced award was unconstitutionally excessive.
Chip Shilling, a spokesman for BASF, said in a statement that the company is pleased the appeals court “recognized that the punitive damages award focused on Monsanto’s conduct, and that BASF’s conduct must be considered separately from Monsanto’s in evaluating punitive damages.”
Bayer, which acquired Monsanto in 2018, didn’t immediately respond to a request for comment.
Jonathan F. Cohn of Sidley Austin in Washington, D.C., argued for Monsanto. Neal Katyal of Hogan & Lovells in Washington, D.C., the former U.S. solicitor general, argued for BASF.
The case is Bader Farms Inc. v. BASF Corporation, 20-3663.