The U.S. Court of Appeals for the 3rd Circuit (encompassing Delaware, Maryland, New Jersey, and the U.S. Virgin Islands) is one of the latest appellate courts to consider an appeal in the Roundup cancer cases. The primary issue in the appeal is a familiar one – whether the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) preempts a state law duty to warn. This argument has been raised many, many times in trial and appellate courts around the country. The overwhelming majority have found that FIFRA does not preempt state law duties to provide adequate warnings for pesticide products.

But in Schaffner v. Monsanto Corp., 113 F.4th 364 (3rd Cir. 2024), the 3rd Circuit bucked the trend and reached a different result, finding that one of EPA’s regulations relating to the requirements for amending a pesticide registration resulted in FIFRA preemption. The Court zeroed in on a regulation addressing amending a pesticide registration after it has been registered (“Application for amended registration,” 40 C.F.R. 152.44) which the court named the “Preapproval regulation.” In essence, once a pesticide has been registered, the pre-approval regulation prohibits any modification of the product’s label without submitting an application to amend the registration (subject to a few exceptions). Interestingly, the pre-approval regulation relied on by the Third Circuit does not specify the particular contents that should be on a pesticide label, although other regulations do exactly that (e.g., 40 C.F.R. 156.10 “Labeling requirements”).

The end result of the 3rd Circuit’s opinion seems to be that once a pesticide is registered, the product’s label cannot be changed unless the registrant decides on its own to amend the label and submits an application to EPA to amend. In a footnote the court raised an interesting issue on this point: “Monsanto has not claimed that it ever submitted an application for amended registration or sought EPA approval for a modified Roundup label that included the Cancer Warning. A plaintiff might conceivably argue that FIFRA required Monsanto to submit such an application and that a state-law claim for breach of the duty to warn could satisfy the parallel-requirements test because it is equivalent to that federal requirement.”

The Schaffer case was never actually litigated. Instead, the Parties entered into a settlement to dismiss all of the Plaintiffs’ claims except for failure to warn, and then stipulated to the entry of judgment against Monsanto on that claim, which Monsanto would immediately appeal. Thus, the Schaffer case reached the court of appeals through Bayer’s ability to buy its way into the appeals process, just as it did in the 11th Circuit case of Carson v. Monsanto Co., 92 F.4th 980 (11th Cir. 2024), although the 11th Circuit reached the opposite result.

Big Burger Sues Big Beef Over Big Prices

McDonald’s Corporation, one of the world’s favorite burger sellers, recently sued the U.S.’s largest beef packers and processors, including Cargill, JBS, Swift, and Tyson Foods, alleging a conspiracy among the big packers to fix prices and artificially inflate the price of finished beef products. According to the complaint, since at least 2015, the 4 big beef packers have controlled 85% of the domestic fed cattle market and sold 80% of the fresh and frozen beef supplied in the U.S. beef product market. Beginning in 2015, the big packers coordinated with one another by (among other things):

• reducing purchases of fed cattle ready for slaughter
• preventing cattle producers from shopping around for competitive bids through a collective boycott by the big packers
• reducing slaughter volumes at one another’s packing plants and operating plants well below capacity

The result of the collusion between the big packers was to constrain supplies of beef products to the marketplace, thereby elevating prices to consumers. Likewise, the agreement effectively reduced the price of cattle going into feedlots, thus reducing the prices the packers paid for its primary input and greatly increasing their profit margins. “From 2010, to 2014, the average farm-to-wholesale spread was about $34. But from 2015 to 2021, the average spread was about $82.78—a 143% increase.” During the period of the conspiracy, the big packers reaped record profits while cattle producers either operated at a loss or severely reduced margins.

Some of the more interesting allegations in the complaint involve allegations of an insider witness at one of Swift’s packing plants that confirms an agreement among the packers to reduce cattle purchases and slaughter volumes to keep margins high and above competitive levels. You can read the complaint (all 100 pages) here.​

Cape Law’s Bit ‘O Trivia

ANSWER TO LAST WEEK’S QUESTION: Congratulations to Friend of the Firm, Linda Smith, for the correct answer to last week’s question, Who were the candidates in the first general election U.S. presidential debate? Richard Nixon and John F. Kennedy. The Nixon-Kennedy debates of 1960 were the first general election presidential debates and were also the first to be televised. Nixon’s somewhat disheveled appearance made him appear weak and sickly on television and is widely considered to have contributed to his defeat.

THIS WEEK’S QUESTION:

McDonalds ubiquitous presence as a global fixture of fast food dining makes it one of the world’s largest purchasers of agricultural commodities and food products. The pop culture surrounding the restaurant chain has generated some fascinating stories – remember the scalding coffee lawsuit and its multi-million dollar damages award? While McDonalds is a really large purchaser of beef, hamburgers are not its top seller. What is the best-selling item at McDonalds?

Don’t be shy! Reply to us if you think you know the answer!

We will draw a name from the correct answers (within 5 days of posting) for a chance to win a fabulous prize. If you’re modest about your trivia savvy, we’ll promise to keep you anonymous. Every now and then we try to even out the winnings so everyone gets a chance.