Herbst v. Bush Boake Allen Inc et al
Filing
165
OPINION AND ORDER denying 95 Motion for Summary Judgment. See order text for details. Signed by Judge Mark W Bennett on 9/20/2018. (src)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
WESTERN DIVISION
MARLIN HERBST,
No. C 17-4008-MWB
Plaintiff,
vs.
GIVAUDAN FLAVORS
CORPORATION and EMORAL, INC.,
f/k/a Polarome International, Inc.,
OPINION AND ORDER
REGARDING DEFENDANT
GIVAUDAN’S MOTION FOR
SUMMARY JUDGMENT
Defendants.
___________________________
TABLE OF CONTENTS
I.
INTRODUCTION........................................................................... 1
II.
LEGAL ANALYSIS ........................................................................ 4
A.
Standards For Summary Judgment ............................................. 4
B.
Governing Law ...................................................................... 5
C.
Discussion ............................................................................ 8
III.
CONCLUSION ............................................................................ 13
I.
INTRODUCTION
In this case, plaintiff Marlin Herbst alleges that he suffers from bronchiolitis
obliterans (aka “popcorn lung”) and/or other lung or respiratory diseases or impairments
from working with butter flavorings containing diacetyl at the American Popcorn
Company (APC) plant in Sioux City, Iowa, between 1991 and August 1993. On January
27, 2017, Herbst brought products liability claims under strict liability and negligence
and a claim of breach of implied warranties against various “manufacturing defendants,”
which are companies that allegedly designed, manufactured, distributed, and/or sold
diacetyl-containing butter flavorings to APC, and against various “diacetyl defendants,”
which are companies that allegedly designed, manufactured, marketed, distributed,
and/or sold diacetyl that was used by APC. The remaining “manufacturing defendant”
is Givaudan Flavors Corporation, and the remaining “diacetyl defendant” is Emoral, Inc.
This case is now before me on Givaudan’s February 9, 2018, Motion For
Summary Judgment seeking summary judgment on all of Herbst’s claims on the ground
that, as a matter of undisputed fact and law, his claims, brought nearly 23 years after his
employment at APC ended, are barred by the applicable 15-year statute of repose, IOWA
CODE § 614.1.1
Moreover, Givaudan argues, Herbst cannot assert the statutory
exception for latent injury caused by “harmful materials,” in IOWA CODE § 614.1(2A)(b),
for the reasons I stated in Daughette v. Chr. Hansen, Inc., 960 F. Supp. 2d 849 (N.D.
Iowa 2012).
In his Resistance, filed March 26, 2018, however, Herbst does not rely on the
“harmful materials” exception. Instead, he relies on a different statutory exception, in
IOWA CODE § 614.1(2A)(a), which excepts claims from the statute of repose “if the
manufacturer, assembler, designer, supplier of specifications, seller, lessor, or distributor
of the product intentionally misrepresents facts about the product or fraudulently conceals
information about the product and that conduct was a substantial cause of the claimant’s
1
There are other motions pending in this case, consisting of motions to exclude
experts, Emoral’s Motion For Summary Judgment, inter alia, on statute of repose
grounds, and Givaudan’s second Motion For Summary Judgment As To All Claims,
asserting additional grounds. However, owing to extensions of time for briefing, these
motions are not yet ripe for disposition.
2
harm.” (Emphasis added). Herbst asserts that there are, at the very least, genuine issues
of material fact as to whether Givaudan fraudulently concealed information about the
safety of butter flavorings containing diacetyl that Givaudan sold to APC.2
In a Reply, filed April 11, 2018, Givaudan argues that Herbst’s reliance on the
“fraudulent concealment” exception fails, under the applicable “clear and convincing
evidence” standard, because (1) he has presented no evidence from which a fact-finder
could reasonably infer that Tastemaker, Givaudan’s predecessor, intentionally
misrepresented or fraudulently concealed any information about its butter flavorings, and
(2) he lacks any evidence that Tastemaker acted with any intent to deceive. Givaudan
also makes clear, in its Reply and in its response to Herbst’s Statement Of Additional
Material Facts, that it considers any evidence of alleged misrepresentations or
concealments after Herbst’s employment at APC ended in August of 1993 to be
irrelevant. Indeed, Givaudan argues, there was no published information about the
alleged association between butter flavorings containing diacetyl and lung disease prior
to 2001.
Both parties request oral arguments on Givaudan’s Motion For Summary
Judgment.
Contrary to the parties’ assertions, however, I find that their written
submissions are sufficient to resolve Givaudan’s Motion. Therefore, I deem Givaudan’s
Motion fully submitted.
2
Indeed, Herbst argues that the evidence he has identified satisfies both
“intentional misrepresentation” and “fraudulent concealment,” but that, in an effort to
avoid repetition, he intends all his references to fraudulent concealment to include
Givaudan’s intentional misrepresentations, as well.
3
II.
A.
LEGAL ANALYSIS
Standards For Summary Judgment
Summary judgment is only appropriate when “the pleadings, depositions, answers
to interrogatories, and admissions on file, together with affidavits, if any, show that there
is no genuine issue of material fact and that the moving party is entitled to a judgment as
a matter of law.” FED. R. CIV. P. 56(c) (emphasis added); see Woods v. DaimlerChrysler
Corp., 409 F.3d 984, 990 (8th Cir. 2005) (“Summary judgment is appropriate if viewing
the record in the light most favorable to the nonmoving party, there are no genuine issues
of material fact and the moving party is entitled to judgment as a matter of law.”); see
generally Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). Thus, “[t]he movant
‘bears the initial responsibility of informing the district court of the basis for its motion,’
and must identify ‘those portions of [the record] . . . which it believes demonstrate the
absence of a genuine issue of material fact.’” Torgerson v. City of Rochester, 643 F.3d
1031, 1042 (8th Cir. 2011) (en banc) (quoting Celotex, 477 U.S. at 323). In response,
“[t]he nonmovant ‘must do more than simply show that there is some metaphysical doubt
as to the material facts,’ and must come forward with ‘specific facts showing that there
is a genuine issue for trial.’” Id. (quoting Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586–87 (1986)).
When the parties have met their burdens, the district judge’s task is as follows:
“On a motion for summary judgment, ‘facts must be viewed
in the light most favorable to the nonmoving party only if
there is a genuine dispute as to those facts.’” Ricci v.
DeStefano, ––– U.S. ––––, 129 S. Ct. 2658, 2677, 174 L.
Ed. 2d 490 (2009) quoting Scott v. Harris, 550 U.S. 372,
380, 127 S. Ct. 1769, 167 L. Ed. 2d 686 (2007) (internal
quotations omitted). “Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences
from the facts are jury functions, not those of a judge.”
Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133,
4
150, 120 S. Ct. 2097, 147 L. Ed. 2d 105 (2000), quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.
Ct. 2505, 91 L. Ed. 2d 202 (1986). . . . . “‘Where the record
taken as a whole could not lead a rational trier of fact to find
for the nonmoving party, there is no genuine issue for trial.’”
Ricci, 129 S. Ct. at 2677, quoting Matsushita, 475 U.S. at
587, 106 S. Ct. 1348.
Torgerson, 643 F.3d at 1042-43.
Summary judgment is particularly appropriate,
however, when only questions of law are involved, rather than factual issues that may or
may not be subject to genuine dispute. See, e.g., Cremona v. R.S. Bacon Veneer Co.,
433 F.3d 617, 620 (8th Cir. 2006).
B.
Governing Law
“Only disputes over facts that might affect the outcome of the suit under the
governing law will properly preclude the entry of summary judgment.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Ryan v. Capital Contractors, Inc., 679
F.3d 772, 776 (8th Cir. 2012).
The “governing law,” here, is IOWA CODE
§ 614.1(2A)(a), the key language of which is quoted, above, and applicable decisions of
the Iowa courts concerning statutes of repose and exceptions to them based on fraudulent
concealment.
Section 614.1(2A) is a “statute of repose” rather than a “statute of limitations.”
TSB Holdings, L.L.C. v. Bd. of Adjustment for City of Iowa City, 913 N.W.2d 1, 12
(Iowa 2018); Estate of Ryan v. Heritage Trails Assocs., Inc., 745 N.W.2d 724, 728 (Iowa
2008). As the Iowa Supreme Court has explained,
We distinguished a statute of repose from a statute of
limitations in Bob McKiness Excavating & Grading, Inc. v.
Morton Buildings, Inc., 507 N.W.2d 405, 408–09 (Iowa
1993). We stated,
5
A statute of limitations bars, after a certain period of
time, the right to prosecute an accrued cause of action.
By contrast, a statute of repose “terminates any right
of action after a specified time has elapsed, regardless
of whether or not there has as yet been an injury.”
A statute of repose period begins to run from
the occurrence of some event other than the
event of an injury that gives rise to a cause of
action and, therefore, bars a cause of action
before the injury occurs.
Under a statute of repose, therefore, the mere passage
of time can prevent a legal right from ever arising.
Id. at 408 (citation omitted) (quoting Hanson v. Williams
County, 389 N.W.2d 319, 321 (N.D. 1986)). Stated
differently, “a statute of limitations affects only the remedy,
not the right, ... whereas a statute of repose affects the right
itself, extinguishing existing rights or preventing rights from
arising.” See Albrecht v. Gen. Motors Corp., 648 N.W.2d
87, 91 (Iowa 2002) (citation omitted).
TSB Holdings, L.L.C., 913 N.W.2d at 11. The Iowa Supreme Court reiterated its prior
holding that § 614.1(2A)(a) is a “statute of repose,” because “the limitations period
commenced from the date the aggrieved party first purchased the product or installed it
for use.” Id. at 12 (citing Albrecht, 648 N.W.2d at 92).
As to a “fraudulent concealment” exception to this statute of repose, the Iowa
Supreme Court has explained,
The common law doctrine of fraudulent concealment became
a part of Iowa jurisprudence over a century ago in District
Township of Boomer v. French, 40 Iowa 601, 603–04 (1875).
The doctrine developed to “prevent a party from benefiting
from ‘the protection of a limitations statute when by his own
fraud he has prevented the other party from seeking redress
within the period of limitations.’” Christy [v. Miulli], 692
6
N.W.2d [694,] 702 [(Iowa 2005)] (quoting Borderlon v. Peck,
661 S.W.2d 907, 909 (Tex.1983)). The doctrine is a form of
equitable estoppel that estops a party from raising a statute of
limitations defense in certain circumstances. Id. at 701. We
previously held that the “venerable” doctrine survived
codification of the statute of repose found in Iowa Code
section 614.1(9). Koppes v. Pearson, 384 N.W.2d 381, 387
(Iowa 1986), abrogated on other grounds by Christy, 692
N.W.2d at 701. Consequently, if proven, a party’s fraudulent
concealment allows a plaintiff to pursue a claim that would be
otherwise time barred under the statute of repose. See Koppes,
384 N.W.2d at 386.
Estate of Anderson ex rel. Herren v. Iowa Dermatology Clinic, PLC, 819 N.W.2d 408,
414 (Iowa 2012).
I note that the Iowa Supreme Court recognized a “fraudulent
concealment” exception to the statute of repose in IOWA CODE § 614.1(9), for medical
malpractice claims, even though that provision does not expressly state such an exception.
Section § 614.1(2A)(a), the provision at issue, here, does expressly state such an
exception. Thus, there can be no doubt that, “if proven, a party’s fraudulent concealment
allows a plaintiff to pursue a claim that would be otherwise time barred under”
§ 614.1(2A). Cf. id.
As the Iowa Supreme Court explained, further,
A party seeking shelter [from the statute of repose in
IOWA CODE § 614.1(9)] under the doctrine of fraudulent
concealment must plead and prove the following:
(1) The defendant has made a false representation or
has concealed material facts; (2) the plaintiff lacks
knowledge of the true facts; (3) the defendant intended
the plaintiff to act upon such representations; and
(4) the plaintiff did in fact rely upon such
representations to his prejudice.
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Christy, 692 N.W.2d at 702 (citation and internal quotation
marks omitted). The party alleging fraudulent concealment
must prove each of the elements by “a clear and convincing
preponderance of the evidence.” Id.
Ordinarily, the plaintiff must prove the defendant
engaged in affirmative conduct to conceal the plaintiff’s cause
of action. Id.; Koppes, 384 N.W.2d at 386. The affirmative
conduct of concealment must be independent of and
subsequent to the liability-producing conduct. Christy, 692
N.W.2d at 702.
Estate of Anderson, 819 N.W.2d at 414-15.
I agree with the parties that these elements of common-law fraudulent concealment
apply to proof of the “fraudulent concealment” exception expressly stated in IOWA CODE
§ 614.1(2A)(a), albeit tailored to the specific language of the statutory exception. Thus,
rather than fraudulent concealment of the plaintiff’s “cause of action,” cf. id., the
statutory language of the exception in § 614.1(2A)(a) requires fraudulent concealment of
“information about the product.” Also, the “fraudulent concealment” exception requires
that the defendant’s “fraudulent conduct . . . was a substantial cause of the claimant’s
harm.” IOWA CODE § 614.1(2A)(a); Baier v. Ford Motor Co., No. C04-2039, 2005 WL
928615, at *7 (N.D. Iowa April 21, 2005).
C.
Discussion
Contrary to Givaudan’s contentions, I conclude that Herbst has generated genuine
issues of material fact as to whether Tastemaker, Givaudan’s predecessor, and later
Givaudan, fraudulently concealed information about its butter flavorings containing
diacetyl, and that Tastemaker (or Givaudan) acted with intent to deceive. First, I do not
agree with Givaudan that any evidence of concealment or intent to deceive after the end
of Herbst’s employment at APC in August of 1993 is simply irrelevant.
8
Section 614.1(2A) states that, with exceptions not relevant, here, the statute of repose
begins to run from when “the product was first purchased, leased, bailed, or installed for
use or consumption,” which the parties appear to agree in the case of APC and Herbst,
as APC’s employee, occurred in about 1991 and certainly no later than August 1993.
That provision does not state any limitation on the time or period during which the
“fraudulent concealment” must have occurred, however. Logically, such “fraudulent
concealment” must have occurred during the 15-year period of repose after first purchase
when the statutory repose period would otherwise have been running, i.e., from some
point in 1991 until some point in 2006. Thus, even if Givaudan is correct that there was
no published information about the alleged association between butter flavorings
containing diacetyl and lung disease prior to 2001, concealment of that fact with intent to
deceive after 2001 would also be before the end of the statute of repose period otherwise
applicable in 2006 and would, thus, be relevant to an exception to the running of the
statute of repose prior to Herbst filing his claims. Such concealment, a rational trier of
fact could conclude, might include concealment of a determination after the end of
Herbst’s employment at APC that possible lung disease (possibly even bronchiolitis
obliterans) suffered by some employees at Tastemaker’s plant prior to 1993 may have
been linked to exposure to diacetyl. Torgerson, 643 F.3d at 1042-43 (stating the rational
trier of fact standard at summary judgment).
Furthermore, the 1985 Flavor or Fragrance Ingredient Data Sheet (FFIDS) for
diacetyl, Plaintiff’s Appendix, 56-60, and Givaudan’s conduct based on it do give rise to
reasonable inferences from which a rational trier of fact could conclude that Givaudan or
its predecessor concealed pertinent information from APC and, by extension, from
Herbst. Id. Givaudan is correct that the 1985 FFIDS, indicates that “Statements Relevant
to Making a Health Hazard Determination” consist of the following: “Irritation Data:
Liquid and vapor may be irritating to skin and eyes. Vapor is irritating to throat and
9
lungs.” Id. at 60. Givaudan is also correct that it provided similar information in its
material safety data sheets (MSDSs) from 1993 onward, that its butter flavorings “May
be irritating to skin and eyes,” and that “Inhalation is irritating to nose, throat, and
lungs,” although the warning in the MSDS is not plainly linked to exposure to either
liquid or vapor, as in the 1985 FFIDS. More importantly, the 1993 and later MSDSs do
not address all the human health effects data from “inhalation” listed in Section IV of the
1985 FFIDS, which stated “Harmful. Sore throat, coughing; may be absorbed. High
concentrations may cause irritation of respiratory tract; capable of producing systemic
toxicity.” Id. at 57 (internal citations omitted). Thus, the 1985 FFIDS, read as a whole,
suggests considerably more than “irritation” as the result of inhalation, including that
inhalation may be “harmful” and may produce “systemic toxicity,” to the “respiratory
tract,” including the throat and lungs. A rational trier of fact could discount the testimony
of Tastemaker’s regulatory department head that “systemic toxicity” was not a reference
to the lungs or respiratory system, but to a systemic toxic event, such as irritation or
sensitization, as a post hoc definition that is inconsistent with the context in which that
term is used in the 1985 FFIDS.
A rational trier of fact could also infer that Tastemaker was concealing its
requirement of procedures, including respirators, for handling diacetyl and products
containing diacetyl in its own plant, while indicating that only less rigorous procedures
were required for handling butter flavorings containing diacetyl at APC’s plant. A
rational trier of fact could reject Givaudan’s assertion that the procedures at the
Tastemaker plant did not require respirators to be used in the presence of finished butter
flavorings containing diacetyl, but only when an employee was using pure, liquid diacetyl
in the spray dry department, as contrary to the language of Tastemaker’s procedures.
Those procedures state, in part, “Whenever liquid Diacetyl or a product where liquid
Diacetyl is present is to be used, a respirator . . . must be worn,” and, “Whenever
10
material [i.e., without reference to whether in pure or liquid form or present in a product]
is in tank, lids must be closed [and] [i]f ventilation (mechanical) is not connected to tank
or is unavailable, a respirator must be used at all time while in the room.” Plaintiff’s
Appendix at 129 (emphasis added). This language could reasonably be understood to
apply to both pure or liquid diacetyl and products containing diacetyl, such as butter
flavorings. Also, while Tastemaker’s procedures warned, “Avoid heating or flame at all
times” when handling diacetyl, id., Tastemaker was aware that APC was heating the
butter flavorings in the course of producing butter flavored microwave popcorn and that
the microwave popcorn would also be heated when prepared by consumers.
While a rational trier of fact might reject some of the evidence on which Herbst
relies to show concealment, a rational trier of fact would not be required to do so.
Moreover, a rational trier of fact would not be required to accept Givaudan’s
characterization of the evidence as correct and beyond dispute.
There is enough
evidence, as discussed, above, giving rise to inferences of concealment for Herbst’s claim
to satisfy the “concealment” element of the “fraudulent concealment” exception to the
statute of repose.
I am also unpersuaded by Givaudan’s contention that Herbst has not generated
genuine issues of material fact as to the “intent to deceive” element. Givaudan rejects
what it contends is Herbst’s argument that a showing of concealment is enough to show
intent to deceive and contends that argument is based on a misreading of Judge Jarvey’s
decision in Baier. Givaudan contends that Baier was a case in which evidence existed
from which jurors could infer intent to deceive, but that this is not such a case, because
there is no evidence of concealment, in the first place, and even if a jury could find failure
to provide information, there is no evidence that the failure was intentional or for the
purpose of deceiving APC.
11
In Baier, there was evidence that Ford had withheld one crash report that showed
the “drop-in” gas tank in a Mustang would rupture upon a rear-end collision, and,
instead, reported to the federal government that the Mustang had met the federal crash
test standard in a second test, but “did not mention or reference the modifications done
to the frame of the car” that had allowed it to pass that test. Baier, 2005 WL 928615, at
*1. Also, when the National Highway Traffic Safety Administration (NHTSA) conducted
an investigation into the safety of Ford’s “drop-in” gas tank line of vehicles, Ford did
not produce any of its internal reports regarding failed tests or the dangers of “drop-in”
gas tanks, so the NHTSA closed its investigation. Id. at *2. Judge Jarvey concluded this
evidence generated genuine issues of material fact as to concealment. Id. at *5.
As to “intent to deceive,” Judge Jarvey explained,
[T]he relevant inquiry is not whether the defendant intended
to deceive the plaintiffs with respect to a time bar, but whether
the defendant intended to deceive the plaintiffs with respect to
the product. The plaintiffs have produced sufficient evidence,
as detailed above, to create a genuine issue of material fact as
to whether Ford engaged in fraudulent conduct. This evidence
also creates a genuine issue of fact as to whether Ford
intended to deceive the plaintiffs, as potential purchasers and
then as users of the car, about the Ford Mustang.
Baier, 2005 WL 928615, at *7. Thus, Judge Jarvey did conclude that evidence of
concealment by Ford in that case also generated genuine issues of material fact on intent
to deceive.
As indicated, above, I disagree with Givaudan’s contention that there is no
evidence of concealment in this case, so that there is no evidence from which a rational
trier of fact could infer intent to deceive. Rather, I conclude that there is evidence of
concealment and that some of Herbst’s evidence of concealment, like Baier’s, also gives
rise to inferences of intent to deceive. For example, like Baier’s evidence of concealment,
12
Herbst’s evidence of concealment includes evidence of differences between what
Tastemaker was telling APC were adequate procedures to handle butter flavorings
containing diacetyl and the procedures that Tastemaker was requiring in its own plant for
handling diacetyl and products containing diacetyl. That difference not only suggests
concealment of known information, but intent to deceive APC into believing that butter
flavorings containing diacetyl were not dangerous, because less stringent handling
procedures were adequate. Cf. id. at *1-*2, *7 (identifying evidence of differences
between information known to Ford and what Ford disclosed and holding this evidence
of concealment also gave rise to an inference of intent to deceive). Similarly, other
evidence of differences between what Givaudan knew about the possible links between
diacetyl or products containing diacetyl and lung or respiratory diseases and what it
required for safe handling of diacetyl and products containing diacetyl, on the one hand,
and what Givaudan was telling customers about product safety and handling procedures,
on the other hand, during the period that the statute of repose would otherwise have been
running—after 1993, and even after 2001—also gives rise to inferences of intent to
deceive.
III.
CONCLUSION
Upon the foregoing, Givaudan’s February 9, 2018, Motion For Summary
Judgment (docket no. 95) is denied.
IT IS SO ORDERED.
DATED this 20th day of September, 2018.
______________________________________
MARK W. BENNETT
U.S. DISTRICT COURT JUDGE
NORTHERN DISTRICT OF IOWA
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