A troubling decision by a Louisiana appeals court may mean the middlemen who bring crawfish to consumers receive no compensation for lost income resulting from a biotech disaster that destroyed crawfish crops.

ICON, a pesticide manufactured by Bayer CropScience, was used by Louisiana rice farmers to control rice weevils that plague one of the state's largest cash crops. But it had the unfortunate side-effect of sterilizing crawfish, another major crop which are often farmed in the same fields as rice.

Bayer settled the claims of hundreds of crawfish farmers for $45 million and three crawfish buyer/processors won a jury award of $1.75 million in 2007 after a judge ruled that they came within the scope of Bayer's duty to avoid damaging the crawfish crop because of the “ease of association” between farmers and the middlemen further up the “supply chain.”

Following the victory of Patrick Phillips, Lisa Guidry, and James Bernard -– who served as  “bellwether” plaintiffs –- a group of crawfish buyers and processors filed a class-action lawsuit against Bayer in December.

But a 4-1 majority of the 3rd Circuit Court of Appeal has now muddied the waters by throwing out the jury award, finding in an April 8 opinion that Bayer's duty does not extend beyond the farmers who actually “own” the crawfish.

“[T]he plaintiffs in this case have failed to prove a proprietary interest in the crawfish crop destroyed by the use of ICON,” Judge Elizabeth A. Pickett wrote for the majority. “Therefore, the plaintiff’s cause must fail.”

She relied in part on PPG Industries v. Bean Dredging, 447 So.2d 1058 (1984), a case involving a damaged natural gas pipeline in which the Louisiana Supreme Court said,

It is highly unlikely that the moral, social and economic considerations underlying the imposition of a duty not to negligently injure property encompass the risk that a third party who has contracted with the owner of the injured property will thereby suffer an economic loss.

In a strong dissent, Judge John D. Saunders doubted that PPG Industries “absolutely and unequivocally requires that a plaintiff have a proprietary interest in the thing damaged in order to recover for damages done to that thing.”

The Supreme Court, he noted, used the phrase “'highly unlikely' rather than 'never'” and “the word 'negligently' rather than simply omitting any reference to the level of negligence displayed by the tortfeasor. In the present case, I think that the only conclusion a reasonable juror could reach was that Bayer had reckless disregard for the potential ramifications to this state’s crawfish industry, as a whole, when crawfish farmers used ICON.”

As evidence of Bayer's “callousness,” Saunders pointed to the testimony of ICON salesman Michael Redlich, who admitted he had “concerns” about the pesticide's effects on crawfish before it was sold to rice farmers.

The class-action suit –- Wiltz v. Bayer CropScience -- is now before a federal court in Lafayette, La. “I think the federal court will apply the ruling” of the 3rd Circuit, says an attorney involved with the case, noting that it was based on the Louisiana Supreme Court's precedent in PPG Industries.

Perhaps, though, the "moral, social and economic considerations" should ultimately favor the crawfish middlemen since under the reasoning of the 3rd Circuit majority, as Saunders puts it,

a tortfeasor may intentionally damage property necessary for a party to fulfill an obligation under a contract, yet only be responsible to that property’s owner for the actual damage done to the property.

Bayer pulled ICON, the brand name for fipronil, from the rice market in 2004. The class-action plaintiffs allege that as recently as 2006, tests still showed harmful levels of the pesticide in south Louisiana rice and crawfish fields.

By Matthew Heller
4/15/09