Case Nos. 20-3665, 20-3663
`
`UNITED STATES COURT OF APPEALS
`FOR THE EIGHTH CIRCUIT
`
`John S. Hahn,
`Special Master,
`
`
`
`Bader Farms, Inc.,
`Plaintiff-Appellee,
`
`
`
`Bill Bader,
`Plaintiff,
`
`
`
`v.
`
`Monsanto Company,
`Defendant-Appellant,
`
`BASF Corporation,
`Defendant-Appellant.
`
`
`
`
`
`OPENING BRIEF FOR DEFENDANT-APPELLANT
`MONSANTO COMPANY IN NO. 20-3665
`
`Appeal from the United States District Court
`For the Eastern District of Missouri, No. 16-cv-00299
`Honorable Stephen N. Limbaugh, Jr., United States District Judge
`
`A. Elizabeth Blackwell
`BRYAN CAVE LEIGHTON PAISNER LLP
`One Metropolitan Square
`211 N. Broadway, Ste. 3600
`St. Louis, MO 63102
`
`Christopher M. Hohn
`Sharon B. Rosenberg
`THOMPSON COBURN LLP
`One US Bank Plaza
`St. Louis, MO 63101
`
`
`
`
`
`Jonathan F. Cohn*
`Erika L. Maley
`Tyler J. Domino
`Adam Kleven
`SIDLEY AUSTIN LLP
`1501 K Street, NW
`Washington, DC 20005
`(202) 736-8000
`
`Attorneys for Monsanto Company
`* Counsel of Record
`
`Appellate Case: 20-3665 Page: 1 Date Filed: 03/15/2021 Entry ID: 5014776
`
`
`
`UNITED STATES COURT OF APPEALS
`FOR THE EIGHTH CIRCUIT
`
`John S. Hahn,
`Special Master,
`
`
`
`Bader Farms, Inc.,
`Plaintiff-Appellee,
`
`
`
`Bill Bader,
`Plaintiff,
`
`
`
`v.
`
`Monsanto Company,
`Defendant-Appellant,
`
`BASF Corporation,
`Defendant-Appellant.
`
`
`
`
`
`OPENING BRIEF FOR DEFENDANT-APPELLANT
`MONSANTO COMPANY IN NO. 20-3665
`
`Appeal from the United States District Court
`For the Eastern District of Missouri, No. 16-cv-00299
`Honorable Stephen N. Limbaugh, Jr., United States District Judge
`
`A. Elizabeth Blackwell
`BRYAN CAVE LEIGHTON PAISNER LLP
`One Metropolitan Square
`211 N. Broadway, Ste. 3600
`St. Louis, MO 63102
`
`Christopher M. Hohn
`Sharon B. Rosenberg
`THOMPSON COBURN LLP
`One US Bank Plaza
`St. Louis, MO 63101
`
`
`
`
`
`Jonathan F. Cohn*
`Erika L. Maley
`Tyler J. Domino
`Adam Kleven
`SIDLEY AUSTIN LLP
`1501 K Street, NW
`Washington, DC 20005
`(202) 736-8000
`
`Attorneys for Monsanto Company
`* Counsel of Record
`
`Appellate Case: 20-3665 Page: 1 Date Filed: 03/15/2021 Entry ID: 5014776
`
`
`
`
`
`SUMMARY OF THE CASE
`
`The court below erred in massively expanding Missouri’s doctrine of
`
`proximate causation, contrary to bedrock federalism principles.
`
`Disregarding Missouri law, the court held that Monsanto Company was
`
`liable for damage to fruit trees caused by herbicides Monsanto did not even
`
`manufacture or sell. The purported basis for liability is that third-party
`
`farmers sprayed the herbicides over crops grown from Monsanto’s seeds
`
`contrary to express warnings—and the herbicides then allegedly drifted
`
`onto Plaintiff Bader Farms, damaging peach trees.
`
`This erroneous ruling, which the district court itself recognized was
`
`“unique” and not “conventional,” led to a judgment against Defendants of
`
`$75 million, including $60 million in punitive damages. The compensatory
`
`damages award is contrary to longstanding Missouri precedent regarding
`
`damages for harm to fruit trees, and the punitive damages award is
`
`contrary to Missouri law and unconstitutionally excessive.
`
`Given the importance of these issues and the significant errors below,
`
`Monsanto requests 30 minutes of argument time.
`
`
`
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`
`i
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`
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`
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`CORPORATE DISCLOSURE STATEMENT
`
`
`
`Pursuant to Federal Rule of Appellate Procedure 26.1 and Eighth
`
`Circuit Local Rule 26.1A, Defendant-Appellant Monsanto Company
`
`(“Monsanto”), a non-governmental entity, states that Monsanto is wholly
`
`owned by BCS US Holding LLC and is an indirect subsidiary of Bayer AG.
`
`Bayer AG, a publicly held German stock company, has no parent company
`
`and no publicly-held company owns 10 percent or more of its stock.
`
`
`
`
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`
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`
`ii
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`
`
`TABLE OF CONTENTS
`
`
`
`SUMMARY OF THE CASE .........................................................................i
`
`CORPORATE DISCLOSURE STATEMENT ...............................................ii
`
`TABLE OF AUTHORITIES ........................................................................vi
`
`INTRODUCTION ...................................................................................... 1
`
`JURISDICTIONAL STATEMENT ............................................................... 5
`
`STATEMENT OF ISSUES ........................................................................... 6
`
`STATEMENT OF THE CASE ..................................................................... 7
`
`I.
`
`II.
`
`
`Factual Background........................................................................... 7
`
`Procedural History .......................................................................... 12
`
`A. The Complaint ....................................................................... 12
`
`B.
`
`
`Pre-Trial Rulings .................................................................... 14
`
`Rulings on the Pleadings .................................................. 14
`
`1.
`
`2.
`
`The Trial................................................................................. 18
`
`Summary Judgment Rulings ............................................. 16
`
`C.
`
`
`1.
`
`2.
`
`3.
`
`4.
`
`Causation Evidence.......................................................... 19
`
`Compensatory Damages Evidence ...................................... 20
`
`Jury Instructions ............................................................. 21
`
`Punitive Damages ........................................................... 22
`
`
`
`iii
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`
`
`
`
`
`D. Post-Trial Rulings................................................................... 23
`
`SUMMARY OF ARGUMENT................................................................... 26
`
`STANDARDS OF REVIEW ...................................................................... 28
`
`ARGUMENT............................................................................................ 29
`
`I.
`
`THE DISTRICT COURT ERRED IN HOLDING THAT
`MONSANTO PROXIMATELY CAUSED HARM TO BADER.......... 29
`
`
`
`II.
`
`
`
`
`
`A. Under Missouri Law, Monsanto Is Not Liable For Illegal
`Misuse Of Dicamba By Third Parties ...................................... 30
`
`
`
`1.
`
`
`2.
`
`Third-Party Illegal Misuse of Dicamba Broke the Chain Of
`Causation ....................................................................... 30
`
`At a Minimum, the District Court Erred in Refusing to Give
`an Intervening-and-Superseding Cause Instruction ............. 37
`
`
`B. Under Missouri Law, Monsanto Cannot Be Held Liable For
`Damages Caused By Products It Did Not Manufacture Or
`Sell ......................................................................................... 39
`
`
`
`1.
`
`
`2.
`
`The Court Erred in Holding That Monsanto was Liable for
`Damages Caused by Other Companies’ Products ................. 39
`
`The Court Erred in Holding that Monsanto was Liable for
`Manufacturing a “Component” of a “Dicamba-Tolerant
`System.”......................................................................... 43
`
`
`THE DISTRICT COURT IMPERMISSIBLY EXPANDED STATE
`LAW TO PERMIT SPECULATIVE FUTURE LOST-PROFIT
`DAMAGES ..................................................................................... 46
`
`iv
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`
`
`
`
`A. Missouri Has Long Prohibited Recovery Of Lost-Profit
`Damages For Fruit Trees As Overly Speculative ..................... 46
`
`
`B.
`
`Even If Future Lost Profits for Crop Damage Were
`Cognizable Under Missouri Law, Bader’s Damages Model
`Was Impermissibly Speculative .............................................. 50
`
`
`III. THE PUNITIVE DAMAGES AWARD IS UNWARRANTED
`UNDER MISSOURI LAW AND UNCONSTITUTIONALLY
`EXCESSIVE ..................................................................................... 53
`
`
`
`A. Punitive Damages Are Unwarranted Under Missouri Law..... 53
`
`B.
`
`The Punitive Damages Award Is Unconstitutionally
`Excessive ................................................................................ 59
`
`
`
`1.
`
`
`2.
`
`The Three Constitutional Guideposts All Demonstrate that
`the $60-Million Award is Excessive ................................... 59
`
`The District Court Placed an Impermissible Emphasis on
`Monsanto’s Net Worth ..................................................... 66
`
`
`CONCLUSION…………………………………………………………………. 67
`
`
`
`
`
`v
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`
`
`
`Table of Authorities
`
`
`
` Page(s)
`
`CASES
`
`Adam v. Chi., Burlington & Quincy Ry.,
`122 S.W. 1136 (Mo. Ct. App. 1909)........................................................ 46
`
`Akers v. City of Oak Grove,
`246 S.W.3d 916 (Mo. 2008).................................................................... 49
`
`Alack v. Vic Tanny Int’l of Mo., Inc.,
`923 S.W.2d 330 (Mo. 1996).................................................................... 56
`
`Alcorn v. Union Pac. R.R.,
`50 S.W.3d 226 (Mo. 2001), overruled on other grounds by
`Badahman v. Catering St. Louis, 395 S.W.3d 29 (Mo. 2013) ................passim
`
`Arnold v. Ingersoll-Rand Co.,
`834 S.W.2d 192 (Mo. 1992).................................................................... 36
`
`Ashley Cty. v. Pfizer, Inc.,
`552 F.3d 659 (8th Cir. 2009) ............................................................passim
`
`Atkinson v. Corson,
`289 S.W.3d 269 (Mo. Ct. App. 2009)...................................................... 49
`
`Barnes v. Kerr Corp.,
`418 F.3d 583 (6th Cir. 2005) .................................................................. 43
`
`Beaty v. Nw. Elec. Power Co-op., Inc.,
`312 S.W.2d 369 (Mo. Ct. App. 1958)...................................................... 47
`
`Bhagvandoss v. Beiersdorf, Inc.,
`723 S.W.2d 392 (Mo. 1987).................................................................... 58
`
`BMW of N. Am., Inc. v. Gore,
`517 U.S. 559 (1996) .................................................................... 61, 63, 65
`
`
`
`vi
`
`Appellate Case: 20-3665 Page: 7 Date Filed: 03/15/2021 Entry ID: 5014776
`
`
`
`
`
`Boerner v. Brown & Williamson Tobacco Co.,
`394 F.3d 594 (8th Cir. 2005) ............................................................. 63, 64
`
`Boggs v. Mo.-Kan.-Tex. Ry.,
`80 S.W.2d 141 (Mo. 1934) ..................................................................... 46
`
`Brough v. Ort Tool & Die Corp.,
`149 S.W.3d 493 (Mo. Ct. App. 2004)...................................................... 42
`
`Burke v. Deere & Co.,
`6 F.3d 497 (8th Cir. 1993) ...................................................................... 58
`
`Butcher v. St. Louis-S.F. Ry.,
`39 S.W.2d 1066 (Mo. Ct. App. 1931).......................................... 4, 6, 27, 46
`
`City of Chi. v. Beretta U.S.A. Corp.,
`821 N.E.2d 1099 (Ill. 2004) .................................................................... 35
`
`City of St. Louis v. Benjamin Moore & Co.,
`226 S.W.3d 110 (Mo. 2007).................................................. 3, 6, 27, 40, 41
`
`Clark v. Chrysler Corp.,
`436 F.3d 594 (6th Cir. 2006) .................................................................... 6
`
`Clark v. Sears, Roebuck & Co.,
`731 S.W.2d 469 (Mo. Ct. App. 1987)...................................................... 38
`
`In re Dicamba Herbicides Litig.,
`359 F. Supp. 3d 711 (E.D. Mo. 2019)................................................. 17, 65
`
`In re Dicamba Herbicides Litig.,
`No. 1:18-md-2820 (E.D. Mo.) ................................................................ 61
`
`In re Dicamba Herbicides Litig.,
`No. 16-cv-299, 2018 WL 2117633 (E.D. Mo. May 8, 2018) .................. 1, 35
`
`Doty v. Quincy, Omaha & Kan. City R.R.,
`116 S.W. 1126 (Mo. Ct. App. 1909).................................................... 6, 48
`
`Drabik v. Stanley-Bostitch, Inc.,
`997 F.2d 496 (8th Cir. 1993) ............................................................. 53, 58
`
`
`
`vii
`
`Appellate Case: 20-3665 Page: 8 Date Filed: 03/15/2021 Entry ID: 5014776
`
`
`
`
`
`Eden Elec., Ltd. v. Amana Co.,
`370 F.3d 824 (8th Cir. 2004) .................................................................. 64
`
`Emmons v. Bridgestone Americas Tire Operations, LLC,
`No. 1:10CV41, 2012 WL 6200411 (E.D. Mo. Dec. 12, 2012) ................ 41, 43
`
`EnerJex Res., Inc. v. Haughey,
`453 S.W.3d 830 (Mo. Ct. App. 2014)...................................................... 50
`
`Exxon Shipping Co. v. Baker,
`554 U.S. 471 (2008) ............................................................................... 31
`
`Finocchio v. Mahler,
`37 S.W.3d 300 (Mo. Ct. App. 2000) .................................................passim
`
`First Nat’l Bank v. Goodnight,
`721 S.W.2d 122 (Mo. Ct. App. 1986)...................................................... 34
`
`Fondren v. Redwine,
`905 S.W.2d 156 (Mo. Ct. App. 1995)...................................................... 65
`
`Ford v. GACS, Inc.,
`265 F.3d 670 (8th Cir. 2001) ............................................................passim
`
`Fowler v. Robinson,
`465 S.W.2d 5 (Mo. Ct. App. 1971) ......................................................... 38
`
`Gaines-Tabb v. ICI Explosives USA, Inc.,
`995 F. Supp. 1304 (W.D. Okla. 1996), aff’d, 160 F.3d 613 (10th
`Cir. 1998) ............................................................................................. 35
`
`Gathright v. Pendegraft,
`433 S.W.2d 299 (Mo. 1968).................................................................... 38
`
`Gesellschaft Fur Geratebau v. GFG Am. Gas Detection, Ltd.,
`967 S.W.2d 144 (Mo. Ct. App. 1998)...................................................... 51
`
`Grabinski v. Blue Springs Ford Sales, Inc.,
`203 F.3d 1024 (8th Cir. 2000)................................................................. 61
`
`
`
`viii
`
`Appellate Case: 20-3665 Page: 9 Date Filed: 03/15/2021 Entry ID: 5014776
`
`
`
`
`
`Hale v. Firestone Tire & Rubber Co.,
`756 F.2d 1322 (8th Cir. 1985)................................................................. 39
`
`Hallmark Cards, Inc. v. Monitor Clipper Partners, LLC,
`758 F.3d 1051 (8th Cir. 2014)................................................................. 64
`
`Harris v. Hillvale Holdings LLC,
`No. 4:15–cv–1854, 2016 WL 3194364 (E.D. Mo. June 6, 2016) ................. 35
`
`Erkson ex rel. Hickman v. Sears, Roebuck & Co.,
`841 S.W.2d 207 (Mo. Ct. App. 1992)...................................................... 36
`
`Hill v. Gen. Motors Corp.,
`637 S.W.2d 382 (Mo. Ct. App. 1982)...................................................... 40
`
`In re Hoel,
`617 B.R. 636 (W.D. Bankr. Wis. 2020) .................................................... 47
`
`Hoover’s Dairy, Inc. v. Mid-Am. Dairymen, Inc.,
`700 S.W.2d 426 (Mo. 1985).................................................................... 53
`
`Hrzenak v. White-Westinghouse Appliance Co.,
`682 F.2d 714 (8th Cir. 1982) .................................................................. 38
`
`Hughs v. Union Pac. R.R.,
`No. 5:15-06079-CV-RK, 2017 WL 1380482 (W.D. Mo. Apr. 14,
`2017) .................................................................................................... 57
`
`JCB, Inc. v. Union Planters Bank, NA,
`539 F.3d 862 (8th Cir. 2008) .................................................................. 61
`
`Keller Farms, Inc. v. McGarity Flying Serv., LLC,
`944 F.3d 975 (8th Cir. 2019) ....................................................... 28, 46, 49
`
`Kelso v. C.B.K. Agronomics, Inc.,
`510 S.W.2d 709 (Mo. Ct. App. 1974).................................................. 6, 49
`
`Kingman v. Dillard’s, Inc.,
`643 F.3d 607 (8th Cir. 2011) .................................................................. 32
`
`
`
`ix
`
`Appellate Case: 20-3665 Page: 10 Date Filed: 03/15/2021 Entry ID: 5014776
`
`
`
`
`
`Lee ex rel. Lee v. Borders,
`764 F.3d 966 (8th Cir. 2014) .................................................................. 64
`
`Lewy v. Remington Arms Co.,
`836 F.2d 1104 (8th Cir. 1988)................................................................. 38
`
`Lindholm v. BMW of N. Am., LLC,
`862 F.3d 648 (8th Cir. 2017) .................................................................. 36
`
`Lompe v. Sunridge Partners, LLC,
`818 F.3d 1041 (10th Cir. 2016) ............................................................... 62
`
`Long v. Cottrell, Inc.,
`265 F.3d 663 (8th Cir. 2001) .................................................................. 43
`
`Lopez v. Three Rivers Elec. Coop., Inc.,
`26 S.W.3d 151 (Mo. 2000) ...............................................................passim
`
`M&I Marshall & Ilsley Bank v. Sunrise Farms Dev., LLC,
`737 F.3d 1198 (8th Cir. 2013)............................................................ 27, 28
`
`Mathias v. Accor Econ. Lodging, Inc.,
`347 F.3d 672 (7th Cir. 2003) .................................................................. 66
`
`May v. Nationstar Mortg., LLC,
`852 F.3d 806 (8th Cir. 2017) .................................................................. 59
`
`Menaugh v. Resler Optometry, Inc.,
`799 S.W.2d 71 (Mo. 1990), overruled on other grounds by
`Rodriguez v. Suzuki Motor Corp., 936 S.W.2d 104 (Mo. 1996) .................. 58
`
`Menz v. New Holland N. Am., Inc.,
`507 F.3d 1107 (8th Cir. 2007)............................................................ 36, 37
`
`State ex rel. Mo. Highway & Transp. Comm’n v. Dierker,
`961 S.W. 2d 58 (Mo. 1998) .................................................................... 34
`
`Moore v. Am. Family Mut. Ins. Co.,
`576 F.3d 781 (8th Cir. 2009) .................................................................. 64
`
`
`
`x
`
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`
`
`
`
`Mouser v. Caterpillar, Inc.,
`No. 98-cv-744, 2000 WL 35552637 (E.D. Mo. Oct. 6, 2000) ..................... 41
`
`Nassar v. Jackson,
`779 F.3d 547 (8th Cir. 2015) .................................................................. 28
`
`Ondrisek v. Hoffman,
`698 F.3d 1020 (8th Cir. 2012).............................................. 6, 28, 59, 63, 64
`
`Philip Morris USA v. Williams,
`549 U.S. 346 (2007) ............................................................................... 67
`
`Pree v. Brunswick Corp.,
`983 F.2d 863 (8th Cir. 1993) .................................................................. 57
`
`Racicky v. Farmland Indus, Inc.,
`328 F.3d 389 (8th Cir. 2003) .................................................................. 49
`
`Romeo v. Jones,
`144 S.W.3d 324 (Mo. Ct. App. 2004)...................................................... 53
`
`Ross v. Kan. City Power & Light Co.,
`293 F.3d 1041 (8th Cir. 2002)................................................................. 67
`
`Roth v. Black & Decker, U.S., Inc.,
`737 F.2d 779 (8th Cir. 1984) .................................................................. 53
`
`Scheibel v. Hillis,
`531 S.W.2d 285 (Mo. 1976).................................................................... 35
`
`Sperry v. Bauermeister, Inc.,
`804 F. Supp. 1134 (E.D. Mo. 1992), aff’d, 4 F.3d 596 (8th Cir.
`1993) .................................................................................................... 45
`
`State Farm Mut. Auto. Ins. Co. v. Campbell,
`538 U.S. 408 (2003) .........................................................................passim
`
`Steckman v. Quincy, Omaha & Kan. City R.R.,
`165 S.W. 1122 (Mo. Ct. App. 1914)........................................................ 48
`
`
`
`xi
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`
`
`
`
`Sutherland v. Elpower Corp.,
`923 F.2d 1285 (8th Cir. 1991)................................................................. 53
`
`In re Target Corp. Customer Data Sec. Breach Litig.,
`855 F.3d 913 (8th Cir. 2017) .................................................................. 30
`
`In re Temporomandibular Joint (TMJ) Implants Prods. Liab. Litig.,
`97 F.3d 1050 (8th Cir. 1996) .................................................................. 45
`
`Thoroughbred Ford, Inc. v. Ford Motor Co.,
`908 S.W.2d 719 (Mo. Ct. App. 1995)................................................. 50, 52
`
`Tipton v. Mill Creek Gravel, Inc.,
`373 F.3d 913 (8th Cir. 2004) ....................................................... 50, 51, 52
`
`Vann v. Town Topic, Inc.,
`780 S.W.2d 659 (Mo. Ct. App. 1989)...................................................... 30
`
`Wagner v. Bondex Int’l, Inc.,
`368 S.W.3d 340 (Mo. Ct. App. 2012)...................................................... 42
`
`Wandersee v. BP Prods. N. Am., Inc.,
`263 S.W.3d 623 (Mo. 2008).................................................................... 52
`
`Williams v. ConAgra Poultry Co.,
`378 F.3d 790 (8th Cir. 2004) ............................................................. 61, 63
`
`Zafft v. Eli Lilly & Co.,
`676 S.W.2d 241 (Mo. 1984).................................................................... 41
`
`Zazú Designs v. L’Oreal, S.A.,
`979 F.2d 499 (7th Cir. 1992) .................................................................. 66
`
`Statutes and Regulations
`
`7 U.S.C. § 136j(a)(2).......................................................................... 8, 30, 31
`
`28 U.S.C. § 1291 .......................................................................................... 5
`
`28 U.S.C. § 1294(1) ...................................................................................... 5
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`
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`28 U.S.C. § 1331 .......................................................................................... 5
`
`7 C.F.R. pt. 340 ........................................................................................... 9
`
`Mo. Rev. Stat. § 281.005 et seq. ................................................................... 58
`
`Mo. Rev. Stat. § 281.060 ............................................................................ 59
`
`Mo. Rev. Stat. § 281.105 ............................................................................ 59
`
`Mo. Rev. Stat. § 281.120 ............................................................................ 59
`
`Mo. Rev. Stat. § 537.340 ............................................................................ 65
`
`Mo. Rev. Stat. § 537.353 ............................................................................ 65
`
`Other Authorities
`
`Bader Farms, Inc., Welcome to Bader Peaches,
`https://www.baderpeaches.com/ (last visited Mar. 8, 2021) ............... 52
`
`Bader Farms, Inc., Where to Buy Bader Peaches,
`https://www.baderpeaches.com/where.php (last visited
`Mar. 8, 2021) .......................................................................................... 4
`
`Mo. Dep’t of Agric., Missouri Department of Agriculture Has
`Issued and Collected First Round of Fines Resulting From 2016
`Dicamba Investigations (Dec. 14, 2017),
`https://agriculture.mo.gov/news/newsitem/uuid/80faff7c
`-31ba-43cf-ad35-3b933b4c402b/missouri-department-of-
`agriculture-has-issued-and-collected-first-round-of-fines-
`resulting-from-2016-dicamba-investigations ........................................ 59
`
`U.S. Dep’t of Agric., USDA’s Biotechnology Deregulation Process (Feb. 21,
`2017), https://www.usda.gov/media/blog/2011/06/28/usdas-
`biotechnology-deregulation-process ............................................................... 9
`
`
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`
`
`INTRODUCTION
`
`As this Court held in rejecting an analogous attempt to rewrite state
`
`tort law, a “federal court construing state law” should be “very reluctant to
`
`open Pandora’s box” by engaging in unprecedented extensions of liability.
`
`Ashley Cty. v. Pfizer, Inc., 552 F.3d 659, 671 (8th Cir. 2009). Despite this
`
`admonition, the court below committed multiple remarkable errors,
`
`brushing aside or even ignoring state court precedent it did not like or
`
`considered too “aged.” Collectively, these errors led to a shocking
`
`judgment of $75 million—including $60 million in punitive damages—for
`
`purported harm to marginally profitable peach trees.
`
`First, the district court erred in massively expanding Missouri’s
`
`doctrine of proximate causation, in rulings the court itself recognized were
`
`“unique” and not “conventional.” In re Dicamba Herbicides Litig., No. 16-cv-
`
`299, 2018 WL 2117633, at *2-3 (E.D. Mo. May 8, 2018). According to
`
`Plaintiff Bader Farms (“Bader”), Monsanto is liable for damage caused by
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`third parties’ spraying of dicamba herbicides that Monsanto did not
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`manufacture or sell, because Monsanto manufactured seeds that were
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`tolerant to dicamba. Plaintiff’s novel theory is that it was “foreseeable that
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`third-party farmers who purchased the seeds would illegally spray older
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`Appellate Case: 20-3665 Page: 15 Date Filed: 03/15/2021 Entry ID: 5014776
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`formulations of dicamba onto their own crops to kill weeds,” and the
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`dicamba could then drift and damage crops on neighboring farms,
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`including Bader. A.56 (emphasis added).
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`Early in the case, the district court itself cogently explained why this
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`attenuated theory fails as a matter of Missouri law: “[T]his is not a case in
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`which a plaintiff’s use or a third-party’s use of a defendant’s defective
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`product caused damage to plaintiff, because Monsanto did not
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`manufacture, sell or apply the dicamba.” A.59. Rather, “plaintiffs’ injuries
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`stem directly from an intervening and superseding cause—the
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`unforeseeable independent acts by the third-party farmers who unlawfully
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`sprayed dicamba on their crops,” in the face of a “prominently
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`highlighted” warning on the seed bags stating “DO NOT APPLY
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`DICAMBA HERBICIDE IN-CROP … IT IS A VIOLATION OF FEDERAL
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`AND STATE LAW.” A.59-60. Accordingly, Monsanto’s “conduct was
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`simply too attenuated to establish proximate cause.” A.59.
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`But the court later erroneously reversed course, concluding it was
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`“irrelevant” that “Monsanto did not manufacture, distribute, or sell the old
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`dicamba herbicide,” and that Bader never proved Monsanto’s own
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`herbicide caused its injury, because that was “not part of the causal link
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`2
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`Appellate Case: 20-3665 Page: 16 Date Filed: 03/15/2021 Entry ID: 5014776
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`under plaintiffs’ theory of the claim.” A.1044. The court held that the
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`“product” at issue was a “dicamba-tolerant system”—comprised of
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`Monsanto’s seed and any manufacturer’s dicamba herbicides—and that
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`Monsanto was liable for selling the seed “component” of this system
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`“without a safe, corresponding herbicide.” A.1034, 1044. The court further
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`held that third parties’ illegal misuse of dicamba would not break the chain
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`of causation if it was “foreseeable”—but then refused even to instruct the
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`jury on foreseeability. A.1054-56.
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`These rulings are contrary to Missouri precedents holding (1) that a
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`third party’s illegal misuse of a product generally constitutes a superseding
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`cause that breaks the chain of causation, Finocchio v. Mahler, 37 S.W.3d 300,
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`303 (Mo. Ct. App. 2000); see also Ashley Cty., 552 F.3d at 671 (Arkansas law),
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`and (2) that defendants cannot be liable for damages caused by products
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`they did not manufacture or sell, City of St. Louis v. Benjamin Moore & Co.,
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`226 S.W.3d 110, 115 (Mo. 2007) (per curiam). The court disregarded both
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`doctrines.
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`Second, the district court rewrote Missouri law on compensatory
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`damages. Longstanding Missouri precedents hold that lost profit damages
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`for fruit-bearing trees are overly speculative, and that the proper measure
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`3
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`Appellate Case: 20-3665 Page: 17 Date Filed: 03/15/2021 Entry ID: 5014776
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`of damages is instead the change in the land’s fair market value. See
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`Butcher v. St. Louis-S.F. Ry., 39 S.W.2d 1066, 1069 (Mo. Ct. App. 1931)
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`(collecting cases). The court below rejected these precedents as “aged,”
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`even though no Missouri court has overruled them or called them into
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`doubt. This ruling led to an award of $15 million in highly speculative
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`“lost profits”—even though Bader’s historical profits from the orchard
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`were only $54,000 per year and Bader is still in the peach business,
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`advertising that “customers can buy any amount they choose, from a
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`quarter peck to a semitruck load.”
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`https://www.baderpeaches.com/where.php.
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`Third, the district court disregarded Missouri precedent on punitive
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`damages. The Missouri Supreme Court has rejected punitive damages
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`where, as here, the defendant complied with government regulations and
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`the harm would not have occurred without the wrongful conduct of third
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`parties. Alcorn v. Union Pac. R.R., 50 S.W.3d 226, 248 (Mo. 2001), overruled
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`on other grounds by Badahman v. Catering St. Louis, 395 S.W.3d 29 (Mo. 2013).
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`But the district court failed even to cite this decision.
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`Compounding this error, the court below then misapplied this
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`Court’s punitive damages precedent and imposed an award that is
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`4
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`Appellate Case: 20-3665 Page: 18 Date Filed: 03/15/2021 Entry ID: 5014776
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`unconstitutionally excessive. The district court itself recognized the case
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`does not involve “malice,” only unintentional economic injury to Bader’s
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`fruit trees. A.708. Therefore, if Monsanto’s conduct even measured on the
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`reprehensibility scale at all, it would be on the lowest end of that scale. Yet,
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`the district court imposed a punitive award more than double the largest
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`award ever approved by this Court post-Gore.
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`The judgment below should be reversed.
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`JURISDICTIONAL STATEMENT
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`The United States District Court for the Eastern District of Missouri
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`had jurisdiction to hear this action pursuant to 28 U.S.C. § 1331. See A.46.
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`After a jury trial, the court denied Monsanto’s motions for a new trial and
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`judgment as a matter of law and entered an amended final judgment on
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`November 25, 2020.
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`This Court has jurisdiction to hear this appeal pursuant to 28 U.S.C.
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`§§ 1291 and 1294(1), because a district court within this Circuit entered
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`final judgment, and Monsanto timely filed a notice of appeal on December
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`17, 2020.
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`5
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`STATEMENT OF ISSUES
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`1. Whether the district court erred in holding that Bader could
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`establish proximate causation and duty without proving that Monsanto
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`manufactured or sold the herbicides causing Bader’s alleged injury, and
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`despite the illegal misuse of the herbicides by third parties, contrary to
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`Monsanto’s express warnings. Ashley Cty., 552 F.3d at 671; Finocchio, 37
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`S.W.3d at 303; Benjamin Moore, 226 S.W.3d at 115.
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`2. Whether the district court erred in holding that speculative lost
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`profits are recoverable as compensatory damages for harm to fruit-bearing
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`trees, despite Missouri precedent to the contrary. Butcher, 39 S.W.2d at
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`1069 (collecting cases); Doty v. Quincy, Omaha & Kan. City R.R., 116 S.W.
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`1126, 1128 (Mo. Ct. App. 1909); Kelso v. C.B.K. Agronomics, Inc., 510 S.W.2d
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`709, 725-26 (Mo. Ct. App. 1974).
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`3. Whether the district court erred in entering a punitive damages
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`award that is contrary to the applicable standard under Missouri law and
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`that is unconstitutionally excessive. Alcorn, 50 S.W.3d at 248; Lopez v. Three
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`Rivers Elec. Coop., Inc., 26 S.W.3d 151, 160 (Mo. 2000); Ondrisek v. Hoffman,
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`698 F.3d 1020, 1028 (8th Cir. 2012); State Farm Mut. Auto. Ins. v. Campbell,
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`538 U.S. 408, 427 (2003).
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`6
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`Appellate Case: 20-3665 Page: 20 Date Filed: 03/15/2021 Entry ID: 5014776
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`4. As Federal Rule of Appellate Procedure 28(i) permits,
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`Monsanto adopts by reference BASF’s statement of issues 3, regarding the
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`joint venture and conspiracy rulings.
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`STATEMENT OF THE CASE
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`I.
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`Factual Background
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`This case involves popular crop seeds—Monsanto’s Bollgard II®
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`XtendFlex® cotton and Roundup Ready 2 Xtend® soybean seeds
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`(collectively, “Xtend seeds”). These “high-performing” seeds provide
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`significant benefits to American farmers and consumers. A.290; A.303-04.
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`First, the seeds have premium genetics and the “best germplasm”
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`available, leading to increased crop yields. A.290; see A.360-61 (Xtend
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`seeds “have outyielded anything that we have had so far … and compared
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`to our competitors”). Second, they have an “exceptional disease package,”
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`offering protection against diseases including “bacterial blight.” A.356-59.
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`Third, they are tolerant to multiple herbicides, including dicamba. A.199-
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`200; A.518; A.239-40.
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`Bader’s claims center on the seeds’ dicamba-tolerance trait. Dicamba
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`herbicides have been on the market since the 1960s, and are sold by
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`numerous different manufacturers. A.192. Dicamba is highly effective at
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`7
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`Appellate Case: 20-3665 Page: 21 Date Filed: 03/15/2021 Entry ID: 5014776
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`killing broadleaf weeds, including pigweed, and has long been used in a
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`variety of applications. A.202-03; A.206-07, 219; A.418-19; A.317-20; A.499-
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`500. However, dicamba herbicides can also be harmful to conventional
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`soybean, cotton, and certain other crops, A.220; A.580, and older
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`formulations of dicamba are volatile, prone to vapor drifting off target and
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`potentially damaging neighboring crops. A.207-08; A.530. It is thus illegal
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`to spray the older formulations over growing cotton and soybean crops
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`(though not illegal to spray those formulations before the growing season
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`begins or over certain o
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