Dow Agrosciences LLC v. Bates

332 F.3d 323, 2 A.L.R. Fed. 2d 645, 51 U.C.C. Rep. Serv. 2d (West) 384, 56 ERC (BNA) 1652, 2003 U.S. App. LEXIS 12012, 2003 WL 21221722
CourtCourt of Appeals for the Fifth Circuit
DecidedJune 11, 2003
Docket02-10908
StatusPublished
Cited by46 cases

This text of 332 F.3d 323 (Dow Agrosciences LLC v. Bates) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dow Agrosciences LLC v. Bates, 332 F.3d 323, 2 A.L.R. Fed. 2d 645, 51 U.C.C. Rep. Serv. 2d (West) 384, 56 ERC (BNA) 1652, 2003 U.S. App. LEXIS 12012, 2003 WL 21221722 (5th Cir. 2003).

Opinion

FELDMAN, District Judge:

Dow Agrosciences LLC sought a declaratory judgment against 29 Texas peanut farmers whom were threatening to sue Dow for damages caused by a Dow-manufactured herbicide. Dow sought, among other things, a judicial declaration that the Federal Insecticide, Fungicide and Roden-ticide Act (FIFRA), 7 U.S.C. § 136 (West 2002), preempts the farmers’ state law claims. The district court denied the farmers’ motion to dismiss for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted, and granted Dow’s motion for summary judgment, holding that FIFRA preempts the farmers’ state law claims. We affirm.

I.

Strongarm is a herbicide produced and marketed by Dow to control the growth of weeds in peanuts. Strongarm is registered with the United States Environmental Protection Agency as required by FI-FRA.

In the spring of 2000, many peanut farmers from west and northwest Texas bought Strongarm from local retailers. Many of these farmers 'contend that Strongarm stunted the growth of peanut plants, caused yellowing, inhibited peanuts from lapping or properly developing foliage, delayed maturity, reduced total peanut production, and increased the expense of harvesting future peanut crops.

The farmers sent Dow demand letters, claiming that Dow retailers had misrepresented Strongarm. 1 The letters threatened to sue Dow for false advertising, breach of warranty, and fraudulent trade practices under the Texas Deceptive Trade Practices Act (DTPA). See Tex. Bus. & Com.Code Ann. § 17.505(a) (Vernon 2002).

Dow struck first, and sued for declaratory judgment against 29 of the farmers. Dow sought a declaration that: (1) FIFRA preempts the farmers’ state law claims; (2) the “Limitation of Remedies” paragraph on the Strongarm label limited the farmers’ remedies to the purchase price of the product; and (3) the ‘Warranty Disclaimer” paragraph on the label barred any other claims based on a warranty of representation. The farmers counter *326 claimed against Dow for negligence, breach of implied and express warranties, fraud, fraud in the inducement, defective design, estoppel, and waiver.

II.

A. Subject Matter Jurisdiction

The farmers first contend that federal diversity jurisdiction did not exist over Dow’s lawsuit because three of the farmers’ claims failed to meet the $75,000 amount-in-controversy requirement. 28 U.S.C. § 1332(a) (West 2002). The issue of subject matter jurisdiction is subject to plenary review by this Court. See Julian v. City of Houston, 314 F.3d 721, 725 (5th Cir.2002). As the party invoking diversity jurisdiction, Dow bears the burden of establishing the amount in controversy. See Hartford Ins. Group v. Lou-Con Inc., 293 F.3d 908, 910 (5th Cir.2002).

When the claim is one for declaratory relief, the amount in controversy is determined by “the value of the right to be protected or the extent of the injury to be prevented.” St. Paul Reinsurance Co., Ltd. v. Greenberg, 134 F.3d 1250, 1252-53 (5th Cir.1998). The amount claimed by the plaintiff controls “if the claim is apparently made in good faith.” Id. at 1253 (quoting St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288, 58 S.Ct. 586, 82 L.Ed. 845 (1938)).

Dow’s complaint for declaratory relief states that the value of each of the individual claims exceeds $75,000. But that bare allegation, by itself, does not invest a federal court with jurisdiction. See Asociacion Nacional de Pescadores v. Dow Quimica, 988 F.2d 559, 566 (5th Cir. 1993). We must therefore ascertain, based on “summary judgment type evidence,” whether the amount in controversy requirement has been met. St. Paul Reinsurance, 134 F.3d at 1253.

The farmers point to the claims of Burk Denman, Richard Cox, and Frenchie Lee Wheeler. Their demand letters claim the following damages: Denman, $37,992.50; Cox, $33,227.50; and Wheeler, $18,242.50. All three, moreover, sought an additional $10,000 in attorney’s fees. See Hartford Ins., 293 F.3d at 912 (including “attorneys’ fees, penalties, statutory damages and punitive damages” in the amount-in-controversy calculation).

The farmers’ original damage requests, on their face, do not satisfy the $75,000 requirement; the farmers’ actual claims, however, are substantially greater because the DTPA permits a plaintiff to recover the costs of litigation, pre and post-judgment interest, and treble damages. 2 See Tex. Bus. & Com.Code Ann. § 17.50(b)(1) (Vernon 2002) (providing for an “award not more than three times the amount of damages for mental anguish and economic damages”).

The three farmers’ original demand letters did not include claims for punitive damages. Not only were such damages available to them under the DTPA, but they later sought such damages in their counterclaims. We agree with the district court that “additional demands for attorneys’ fees and punitive damages exalts the total amount in controversy over $75,-000.” 3 Thus, federal diversity jurisdiction existed over Dow’s lawsuit.

*327 B. Abstention

Appellants next urge that the district court should have abstained from taking jurisdiction over Dow’s lawsuit. District courts have a broad, but not unfettered, measure of discretion in deciding whether to entertain an action for a declaratory judgment. See Travelers Ins. v. Louisiana Farm Bureau Federation, Inc., 996 F.2d 774, 778 (5th Cir.1993); Torch, Inc. v. LeBlanc, 947 F.2d 193, 194 (5th Cir.1991). Thus, a grant of declaratory relief is reviewed for abuse of discretion. See Magnolia Marine Transport v. Laplace Towing Corp., 964 F.2d 1571, 1581 (5th Cir.1992).

While acknowledging the district court’s broad discretion to exercise jurisdiction over declaratory judgment suits, this Circuit requires courts to consider various factors, on the record, before abstaining from a declaratory judgment action:

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332 F.3d 323, 2 A.L.R. Fed. 2d 645, 51 U.C.C. Rep. Serv. 2d (West) 384, 56 ERC (BNA) 1652, 2003 U.S. App. LEXIS 12012, 2003 WL 21221722, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dow-agrosciences-llc-v-bates-ca5-2003.