Environmental Law Decisions

Minnesota Supreme Court Upholds $52 Million Class Action Judgment Against BASF Corporation

The Minnesota Supreme Court upheld a judgment against BASF Corporation, the subsidiary of German multi-national company BASF AG, maker of Poast and Poast Plus herbicide, ruling that the company must pay farmers nationwide $52 million as a result of a class action suit. The ruling moves farmers one step closer to receiving money for economic injuries inflicted between 1992 and 1996.

On December 6, 2001, a 12-member jury of the Norman County, Minnesota court awarded farmers $15 million in the case of Peterson v. BASF Corporation. Since BASF was sued under the New Jersey Consumer Fraud Act, the court then tripled the award to farmers. The trial court judge, Michael Kraker, raised the total amount BASF must pay America's farmers to $52 million with interest and costs. On March 11, 2003, the Minnesota Appeals Court agreed with Judge Kraker and affirmed the opinion in all respects.

The farmers are represented by Rob Shelquist of the Lockridge Grindal Nauen law firm and Doug Nill, all from Minneapolis. Rob Shelquist said: "Our clients and the class members have been watching this case from the day it was filed in 1997. Our hope is to move forward quickly to get money to the injured farmers."

About Peterson v. BASF Corporation

BASF originally registered a herbicide called Poast with the Environmental Protection Agency (EPA) in the 1980s to treat major and minor crops. At that time, Poast had little competition in the marketplace. As competition increased in the lucrative major crop market, BASF issued a "new" herbicide, which was virtually the twin of Poast, called Poast Plus. Though the EPA approved Poast Plus for the same major and minor crops as Poast, BASF marketed its "new" herbicide for use on just four major crops and sold it at a cheaper price.

Both herbicides contain the same active ingredient (sethoxydim developed by Nippon Soda) in different concentrations, but when mixed according to the packaging, the mixture resulted in the same amount of active ingredient per acre. BASF labeled the products differently, omitting certain EPA-approved crops from listings on the "new" label, so minor-crop farmers would have to pay more per acre for Poast, even though the EPA actually approved both herbicides as safe for the same crops.

In 1992, BASF began a marketing campaign based on false advertisement of Poast and Poast Plus and warning farmers of the dangers associated with using herbicides on crops not listed on the product labels (even though EPA had approved such uses as safe). Further, BASF perpetuated the deception by turning in their own dealers and farmers for prosecution if they were found using the herbicides on off-label crops.

The class action, led by eleven Midwest farmers, first came to the Red River Valley court in December of 1997. The Norman County verdict ranked as the 47th largest verdict nationwide in 2001 and one of the highest ever in Minnesota.

United States Supreme Court Issues Decision in Global Warming Case

The United States Supreme Court issued a landmark decision ruling that carbon dioxide and other greenhouse gases are "air pollutants" subject to regulation under the Clean Air Act. The case, Massachusetts, et. al. v. United States Environmental Protection Agency, was the Court's first opportunity to address the issue of global warming and its decision may prompt the development of comprehensive climate change legislation.

The case arises from EPA's denial of a petition for rulemaking asserting that the agency was required to regulate greenhouse gas emissions from new motor vehicles. EPA denied the petition, stating that it is not authorized to regulate greenhouse gas emissions under the Clean Air Act because the greenhouse gases are not "air pollutants." Moreover, even if it were authorized to regulate greenhouse gas emissions, EPA stated that it would decline to do so because of various "policy" considerations, including the substantial foreign policy concerns associated with the regulation of greenhouse gases.

Justice John Paul Stevens, writing for the 5-to-4 majority, rejected out of hand EPA's claim that it is not authorized to regulate greenhouse gases emissions. The Court noted that the Clean Air Act specifically authorizes regulation of all air pollutants which "may reasonably be anticipated to endanger public health or welfare and that the term "air pollutant" is defined broadly to embrace "all airborne compounds of whatever stripe. According to the Court, there is no doubt that EPA is authorized to regulate greenhouse gas emissions under the Act.

The majority also dismissed EPA's alternative basis for denying the petition - that it would decline to exercise its authority to regulate greenhouse gas emissions in light of various policy considerations. The Court noted that although EPA is free to decide whether sufficient information exists to make the endangerment finding it may not rely upon "laundry list" of policy concerns which "have nothing to do with whether greenhouse gas emissions contribute to climate change" to support its decision.

The Court referred the case back to EPA to determine whether greenhouse gas emissions may be anticipated to endanger public health or welfare. The Court emphasized, however, that "EPA can avoid taking further action only if it determines that greenhouse gases do not contribute to climate change or if it provides some reasonable explanation as to why it cannot or will not exercise its discretion to determine whether they do."

Given the sweeping language of the majority's opinion, EPA faces substantial obstacles if it chooses not exercise its authority to regulate greenhouse gas emissions. The most significant aspect of the Court's ruling, however, may be its potential to prompt Congress to enact comprehensive regulations specifically addressing global warming rather than allowing EPA to regulate greenhouse gas emissions under the framework of the Clean Air Act.

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Lockridge Grindal Nauen Our People Government Relations- State and Federal Practice Areas Events Endorsements Media Community Summer Associate Program Contact Us Map & Directions Environmental/Real Estate Law EnviroLaw Updates EnviroLaw Events Decisions Publications	Environmental Law Decisions Minnesota Supreme Court Upholds $52 Million Class Action Judgment Against BASF Corporation The Minnesota Supreme Court upheld a judgment against BASF Corporation, the subsidiary of German multi-national company BASF AG, maker of Poast and Poast Plus herbicide, ruling that the company must pay farmers nationwide $52 million as a result of a class action suit. The ruling moves farmers one step closer to receiving money for economic injuries inflicted between 1992 and 1996. On December 6, 2001, a 12-member jury of the Norman County, Minnesota court awarded farmers $15 million in the case of Peterson v. BASF Corporation. Since BASF was sued under the New Jersey Consumer Fraud Act, the court then tripled the award to farmers. The trial court judge, Michael Kraker, raised the total amount BASF must pay America's farmers to $52 million with interest and costs. On March 11, 2003, the Minnesota Appeals Court agreed with Judge Kraker and affirmed the opinion in all respects. The farmers are represented by Rob Shelquist of the Lockridge Grindal Nauen law firm and Doug Nill, all from Minneapolis. Rob Shelquist said: "Our clients and the class members have been watching this case from the day it was filed in 1997. Our hope is to move forward quickly to get money to the injured farmers." About Peterson v. BASF Corporation BASF originally registered a herbicide called Poast with the Environmental Protection Agency (EPA) in the 1980s to treat major and minor crops. At that time, Poast had little competition in the marketplace. As competition increased in the lucrative major crop market, BASF issued a "new" herbicide, which was virtually the twin of Poast, called Poast Plus. Though the EPA approved Poast Plus for the same major and minor crops as Poast, BASF marketed its "new" herbicide for use on just four major crops and sold it at a cheaper price. Both herbicides contain the same active ingredient (sethoxydim developed by Nippon Soda) in different concentrations, but when mixed according to the packaging, the mixture resulted in the same amount of active ingredient per acre. BASF labeled the products differently, omitting certain EPA-approved crops from listings on the "new" label, so minor-crop farmers would have to pay more per acre for Poast, even though the EPA actually approved both herbicides as safe for the same crops. In 1992, BASF began a marketing campaign based on false advertisement of Poast and Poast Plus and warning farmers of the dangers associated with using herbicides on crops not listed on the product labels (even though EPA had approved such uses as safe). Further, BASF perpetuated the deception by turning in their own dealers and farmers for prosecution if they were found using the herbicides on off-label crops. The class action, led by eleven Midwest farmers, first came to the Red River Valley court in December of 1997. The Norman County verdict ranked as the 47th largest verdict nationwide in 2001 and one of the highest ever in Minnesota. United States Supreme Court Issues Decision in Global Warming Case The United States Supreme Court issued a landmark decision ruling that carbon dioxide and other greenhouse gases are "air pollutants" subject to regulation under the Clean Air Act. The case, Massachusetts, et. al. v. United States Environmental Protection Agency, was the Court's first opportunity to address the issue of global warming and its decision may prompt the development of comprehensive climate change legislation. The case arises from EPA's denial of a petition for rulemaking asserting that the agency was required to regulate greenhouse gas emissions from new motor vehicles. EPA denied the petition, stating that it is not authorized to regulate greenhouse gas emissions under the Clean Air Act because the greenhouse gases are not "air pollutants." Moreover, even if it were authorized to regulate greenhouse gas emissions, EPA stated that it would decline to do so because of various "policy" considerations, including the substantial foreign policy concerns associated with the regulation of greenhouse gases. Justice John Paul Stevens, writing for the 5-to-4 majority, rejected out of hand EPA's claim that it is not authorized to regulate greenhouse gases emissions. The Court noted that the Clean Air Act specifically authorizes regulation of all air pollutants which "may reasonably be anticipated to endanger public health or welfare and that the term "air pollutant" is defined broadly to embrace "all airborne compounds of whatever stripe. According to the Court, there is no doubt that EPA is authorized to regulate greenhouse gas emissions under the Act. The majority also dismissed EPA's alternative basis for denying the petition - that it would decline to exercise its authority to regulate greenhouse gas emissions in light of various policy considerations. The Court noted that although EPA is free to decide whether sufficient information exists to make the endangerment finding it may not rely upon "laundry list" of policy concerns which "have nothing to do with whether greenhouse gas emissions contribute to climate change" to support its decision. The Court referred the case back to EPA to determine whether greenhouse gas emissions may be anticipated to endanger public health or welfare. The Court emphasized, however, that "EPA can avoid taking further action only if it determines that greenhouse gases do not contribute to climate change or if it provides some reasonable explanation as to why it cannot or will not exercise its discretion to determine whether they do." Given the sweeping language of the majority's opinion, EPA faces substantial obstacles if it chooses not exercise its authority to regulate greenhouse gas emissions. The most significant aspect of the Court's ruling, however, may be its potential to prompt Congress to enact comprehensive regulations specifically addressing global warming rather than allowing EPA to regulate greenhouse gas emissions under the framework of the Clean Air Act.
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