No. 93-011

IN THE SUPREME COURT OF THE STATE OF MONTANA

1993

HAROLD and MARY HAGEN, d/b/a

HAGEN WESTERN FISHERIES,

Plaintiffs and Appellants,

v .

Dow CHEMICAL COMPANY and MADISON

COUNTY WEED MANAGEMENT DISTRICT,

a political subdivision of the

State of Montana,

Defendants and Respondents.

NO’/12 19%

APPEAL FROM: District Court of the Fifth Judicial District,

In and for the County of Madison,

The Honorable Frank M. Davis, Judge presiding.

COUNSEL OF RECORD:

For Appellants:

Gig A. Tollefsen, Berg, Lilly, Andriolo,

& Tollefsen, Bozeman, Montana

For Respondents:

Robert M. Carlson, Corette, Pohlman, Allen,

Black & Carlson, Butte, Montana (Dow Chemical):

James T. Harrison, Jr, and James C. Cumming,

Harrison, Loendorf & Poston, Helena,

Montana (Madison County Weed District)

Filed:

Submitted on Briefs: March 18, 1993

Decided: November 12, 1993
Justice Terry N. Trieweiler delivered the opinion of the Court.

Harold and Mary Hagen filed suit in the District Court for the

Fifth Judicial District in Madison County, to recover damages

sustained when over 8000 pounds of fish died subsequent to the

Madison County Weed Management District's application of a weed

poison adjacent to the ditch which supplied water to the Hagens'

fish farm. The Hagens appeal from the District Court's order

granting summary judgment in favor of the Weed District and Dow

Chemical Company. The District Court concluded that the Hagens

failed to submit sufficient evidence to establish that exposure to

the weed poison caused the death of the fish.

We reverse.

The following issues are presented:

1 . Did the court err when it granted summary judgment in

favor of the defendants on the basis that, as a matter of law,

there were no genuine issues of material fact regarding the cause

of plaintiffs' damages?

2 . Did the court err when it granted summary judgment in

favor of Dow Chemical on the claim for punitive damages on the

basis that there were no issues of material fact regarding actual

fraud or malice on the part of Dow?

On July 12 and July 20, 1989, the Madison County Weed

Management District sprayed a mixture of Tordon 22K, manufactured

by Dow Chemical, and 2,4-D adjacent to the ditch which was the

water supply of the Hagens' fish farm near Sheridan, Montana. On

the afternoon of July 21, 1989, a heavy rain washed some of this

2
weed poison into the ditch and ultimately into the tanks at the

Hagens' fish farm. Within hours of the rainstorm, more than 8000

pounds of rainbow trout had died. During the next few weeks, more

of the fish turned black, lost their mucous tissue, became blind,

and eventually died.

The Montana Department of Agriculture was requested to

investigate this unexplained fish kill. After performing autopsies

on some of the fish and analyzing soil and vegetation samples, the

Department concluded that the fish had been exposed to the weed

poison, and cited the Weed District for violating Montana's

pesticide application law. Although the Department did not find

conclusive evidence that the fish were killed due to toxicity from

2,4-D and picloram (the active ingredient of Tordon), it did not

rule out the possibility that mortality was caused by sublethal

levels of the weed poison acting in combination with other

stresses. The autopsies performed by the Department revealed no

signs of disease in the dead fish.

Harold Hagen investigated to determine whether such things as

improper tank maintenance, disease, or lack of oxygen had caused

the fish kill. He also conducted tests in which fish were exposed

to the same mixture of weed poison that had been applied by the

Weed District. He observed that the test fish exhibited similar

symptoms prior to death as did the trout at the fish farm, and

based on his evaluation of conditions at the fish farm, concluded

that the only probable cause of this incident was exposure to

lethal levels of the weed poison. He also hired an independent

3
aquatic testing laboratory, Keeton Fisheries Consultants, to

conduct further tests to evaluate the effect of the weed poison on

trout. Based on its observations of lethal levels of picloram over

different periods of exposure, Keeton Fisheries recommended that

Tordon not be used where it could contaminate fish culture

facilities.

On April 18, 1990, the Hagens filed suit in District Court to

recover damages, alleging that all of their fish stock (in excess

of 15,000 pounds) were either killed or rendered unsuitable for

commercial use. The Hagens claimed that the cause of the damage to

their fish was the herbicide mixture which washed into the water

source for their fish farm after a heavy rainstorm on July 21,

1989.

Pursuant to § 7-22-2111, MCA, the Hagens alleged that the Weed

District acted with gross negligence when it applied the weed

poison in an area that was a "no spray" zone and allowed it to

enter the Hagens' water supply. The Hagens sued Dow Chemical

Corporation for negligence in representing that the weed poison was

not dangerous to fish and could be applied in the manner that it

was applied by the Weed District. They also sued Dow under a

theory of product liability for failure to warn, and for punitive

damages pursuant to § 27-1-221, MCA, based upon the allegation that

it willfully disregarded the high probability of substantial injury

to fish and human populations.

Both defendants moved for summary judgment, and the Hagens

followed with a motion for summary judgment against the Weed

4
District. After a hearing on October 13, 1992, the court issued

its order and memorandum in which it granted the defendants'

motions for summary judgment on the ground that the evidence

presented was not sufficient to allow a jury to find that the weed

poison caused the damage to the fish. It also granted summary

judgment in favor of Dow on the claim for punitive damages on the

ground that the Hagens failed to submit proof of actual fraud or

malice by Dow. From this order, the Haqens appeal.

STANDARD OF REVIEW

Summary judgment is an extreme remedy which should not be

granted when there is any genuine issue of material fact: the

procedure should never be substituted for trial if a material

factual controversy exists. Rule 56(c), M.R.Civ.P.; Cereck v.

Albertson@s, fizz. (1981), 195 Mont. 409, 637 P.2d 509; Reaves v. Reinbold

(1980) r 189 Mont. 284, 615 P.2d 896.

The party seeking summary judgment has the burden of

demonstrating a complete absence of any genuine factual issues.

DlAgostinov. &~~llson (1990), 240 Mont. 435, 442, 784 P.2d 919, 924.

In light of the pleadings and the evidence before the court, there

must be no material issue of fact remaining which would entitle the

nonmoving party to recover. Marriage of Hoyt (1985), 215 Mont. 449,

454, 698 P.2d 418, 421. The party opposing summary judgment must

present material and substantial evidence, rather than merely

conclusory or speculative statements, to raise a genuine issue of

5
material fact. B.M. byBergerv. State (1985), 215 Mont. 175, 179, 698

P.2d 399, 401.

This Court reviews an order for summary judgment by utilizing

the same criteria used by a district court initially under Rule 56,

M.R.Civ.P. Minnie% CityofRoundup (Mont. 1993), 849 P.2d 212, 214,

50 St. Rep. 342, 343. Furthermore, on review, all reasonable

inferences that might be drawn from the offered evidence should be

drawn in favor of the party opposing summary judgment. Cereck , 6 3 7

P.2d at 511.

I .

Did the court err when it granted summary judgment in favor of

the defendants on the basis that there were no genuine issues of

material fact regarding the cause of plaintiffs' damages?

It is well established that issues of negligence are generally

not susceptible to summary judgment and are better determined at

trial. Brohmanv.State (1988), 230 Mont. 198, 749 P.2d 67. However,

this Court has made clear that summary judgment is proper if a

plaintiff fails to submit evidence which would establish an element

material to his negligence action. U.S. Fide& & Guaranv Co. v. Camp

(1992) I 253 Mont. 64, 831 P.2d 586; Dvorakv.MatadorSetvice,Im. (1986),

223 Mont. 98, 727 P.2d 1306.

In this instance, the District Court determined that the

Hagens failed to establish liability for negligent conduct on the

part of either the Weed District or Dow Chemical because the Hagens

"failed to prove that the fish death was caused by any defect in

6
Dow's product or any actions or inactions of Dow or Madison

County." The court concluded that there was not sufficient

evidence in the record to raise an issue of fact on the question of

causation, and therefore, ruled that plaintiffs could not maintain

an action for strict liability or negligence.

Dow Chemical and the Weed District assert that the court was

correct in reaching this conclusion because the Hagens offered no

admissible expert opinion testimony that the weed poison

definitively caused or contributed to the death of the fish. Dow

contends that expert testimony regarding causation is crucial and

since the Hagens' experts could only speculate on the issue of

causation, summary judgment was proper. Dow contends that the

Hagens failed to meet their burden of proof regarding causation

because their case was based only on circumstantial evidence. In

contrast, Dow offered the direct testimony of an expert who claimed

that the cause of death was not its product Tordon, but rather was

due to reduced oxygen availability caused by the obstruction of

water flow in the tanks at the fish farm.

The Weed District also contends that the Hagens failed to

establish a cause of action under 5 7-22-2111, MCA, because there

is no evidence in the record of a willful act on the part of the

Weed District which could constitute gross negligence. The Weed

District asserts that there is no proof that it sprayed in the area

of the ditch, in 1989 or previously, knowing it to be a "no spray"

zone. Nor is there any factual evidence that the Weed District was

ever put on notice of the Hagens' concern about spraying in the

7
vicinity of the fish farm, or of other incidents of fish kills that

the Hagens now claim occurred subsequent to the application of

herbicides in previous years.

It is clear from the District Court's summary judgment order

and memorandum that it based its decision solely on a determination

that there was no factual evidence upon which the jury could

determine that the weed poison caused the fish to die. Therefore,

the first issue before this Court is whether there is a complete

absence of any genuine factual dispute on the question of

causation. Even if the defendants have offered significant

evidence to contradict the evidence offered by the Hagens, or in

the case of the Weed District, offered evidence to dispute the

claim of gross negligence, at this juncture our inquiry is simply

whether the Haqens have produced sufficient evidence from which it

can be reasonably inferred that the weed poison, applied by the

Weed District and containing DOW'S product, caused the Hagens'

injuries.

After reviewing the record and considering the standard of

review outlined above, we conclude that the Hagens did raise

genuine issues of material fact regarding the cause of their

damages and that this case does not fall into the category that

allows the court to determine the absence of liability as a matter

of law. Therefore, we hold that summary judgment was not

appropriate in this instance.

This Court has adopted a flexible standard of proof on

causation which may be met by circumstantial, as Well as direct,

8
evidence. Brothersv. GeneralMotorsCotp. (1983), 202 Mont. 477, 658 P.2d

1108; Brownv.NotihAmericanMfg Co. (1978), 176 Mont. 98, 576 P.2d 711.

Although a plaintiff does not meet his burden of proof by merely

establishing that an incident occurred, it is well established that

in actions dealing with product liability, sufficient evidence to

make a prima facie case may consist of establishing the

circumstances of the incident, similar occurrences under similar

circumstances, and elimination of alternative causes. Brothers, 658

P.2d at 1110. Also, courts in other jurisdictions have long

accepted circumstantial evidence as an acknowledged basis for

establishing causation in chemical poisoning cases because of the

inherent difficulty in offering direct proof in these situations.

See, e.g.,Ham>onv. whitt (Wash. App. 1985), 698 P.2d 87; wing% ClarkrsAir

Service, Inc. (Idaho 1984), 683 P.2d 842; Thomas Helicopters, Inc. v. San Tan

Ranches (Idaho 1981), 633 P.2d 1145; Branco Eastern Co. v. Lefler (Colo.

1971), 482 P.2d 364; Chickasha Cotton Oil Co. v. Hancock (Okla. 1957), 306

P.2d 330.

The record in this case discloses that the Hagens offered

evidence that the Weed District applied a mixture of Tordon and

2,4-D to roadside weeds in the vicinity of the Hagens' fish farm on

two dates in July, one of which was the day before the fish died.

There was also evidence that the fish had been exposed to the weed

poison at the time of death. The investigation and testing by the

Department of Agriculture demonstrated movement of the herbicide

mixture from its point of application to the ditch, and ultimately

9
into the fish tanks, immediately after the rainstorm on July 21,

1989. And the evidence was undisputed that within hours of the

rainstorm which washed the herbicide into the fish tanks, over

8000 pounds of trout were dead or dying.

Autopsies performed on the fish by the Department revealed the

presence of 2,4-D in the dead fish. However, Dow contends that

since no picloram, the active ingredient in its product, was

detected in the dead fish, there is no material factual issue in

relation to the cause of action brought against Dow. Dow argues

that without proof that the fish were exposed to picloram, the

Hagens cannot establish liability on the part of Dow. There is

evidence in the record, however, that picloram does not

bioaccumulate in organic matter in the same fashion as 2,4-D.

Therefore, the Hagens contend it can be inferred that since the

fish were exposed to certain levels of 2,4-D, they were likewise

exposed to the picloram that was in the herbicide mixture. Viewing

this evidence in the light most favorable to the Hagens, as the

party opposing summary judgment, it can be reasonably deduced that

the fish were exposed to DOW'S product.

Furthermore, there is evidence in the record that test fish

died when exposed to a similar herbicide mixture containing

picloram, and that these fish exhibited the same symptoms prior to

death as did the fish at the Hagens' fish farm. Evidence was also

presented that sublethal concentrations of these herbicides could

be toxic due to the synergistic effects of mixing these

ingredients, or the effect of these toxins in combination with

10
natural stresses that the fish populations were subjected to.

Although the parties' various experts dispute the validity or

applicability of some of this evidence, the credibility and weight

to be given to such evidence is a matter to be resolved by the

trier of fact, and is not a question of law. State v. Medina (199 0) ,

245 Mont. 25, 34, 798 P.2d 1032, 1038.

The record also reveals factual disputes about possible causes

of death other than exposure to toxic levels of the herbicide

mixture. The Hagens contend that other causes were eliminated,

while DOW'S experts assert that the cause of death was oxygen

deprivation resulting from reduced water flow in the tanks.

However, there was direct testimony from the caretaker who first

discovered the dead fish that there was no shortage of water in the

tanks at the time the fish died, and therefore, no lethal shortage

of oxygen. Because of such contradictory evidence, the exact cause

of death under the circumstances of this case constitutes a

material question of fact.

Considering this evidence in its entirety, despite the fact

that there is evidence to the contrary, one could reasonably find

that the fish died from exposure to the herbicide containing Dow's

product based on the following circumstances: the fish died shortly

after the weed poison was washed into the water tanks: traces of

weed poison were found in the fish: fish have died from exposure to

this weed poison under similar circumstances; and no alternative

cause of death has been proven. Under the tests outlined in

11
Brothers, 658 P.2d at 1110, and Brown, 576 P.2d at 716, we conclude

that the circumstantial evidence presented here is sufficient to

raise a material question of fact regarding causation.

Dow urges this Court to reject certain expert testimony

offered by the Hagens in which it is asserted that the fish were

exposed to lethal levels of the herbicide mixture and that this was

the cause in fact of the incident, on the basis that this evidence

constitutes inadmissible hearsay under the Montana Rules of

Evidence, or that the parties are not qualified to offer expert

opinions. Without ruling on the admissibility of the documents in

question, the transcript shows that the Hagens intended to offer

this evidence as direct testimony during the trial, and this

evidence was discussed during the summary judgment hearing.

However, even if we accept DOW'S contention that this evidence

should not have been considered by the District Court during the

summary judgment hearing, and therefore, that this Court should

disregard the substance of this disputed evidence, we have already

held that there is sufficient circumstantial evidence in the

record, as discussed above, to raise a material issue of fact

regarding the cause of the fish kill.

DOW insists that, under this Court's recent decisions in Nelson

v.MontanaPowerCompaizy (1993), 256 Mont. 409, 847 P.2d 284, and camp,

831 P.2d 586, summary judgment was proper because, based on the

record, the Hagens could not prove by a preponderance of the

evidence that their injury was caused by the defendants' actions.

12
Those cases are distinguishable from the situation here, however,

because in both Nelson and Camp the evidence consisted wholly of

unsupported conclusory or speculative statements. In this

instance, the plaintiffs' claim is corroborated by sufficient

factually based circumstantial evidence such that, when considered

as a whole, a genuine issue of material fact exists. Although the

District Court concluded that the Hagens would not be able to prove

by a preponderance of the evidence that the fish died from exposure

to the weed poison, we conclude that, based on the evidence in the

record, reasonable minds could differ in this regard. As long as

there is a material issue of fact in dispute, as exists under the

circumstances presented here, summary judgment is not appropriate.

II.

Did the court err when it granted summary judgment in favor of

Dow Chemical on the claim for punitive damages on the basis that

there were no issues of material fact regarding actual fraud or

malice on the part of Dow?

The Hagens sought to recover punitive damages on the basis

that Dow was aware of its product's danger to fish cultures and

acted with a willful disregard of the rights of others by

representing that it could safely be applied in the manner that it

was applied by the Weed District. The District Court dismissed

this claim on the basis that the Hagens submitted no evidence of

actual fraud or actual malice on the part of Dow.

The Hagens contend that there was sufficient evidence to allow

a jury to find in their favor. They argue that Dow was aware of

13
research indicating that picloram was unsafe at levels of

.035 parts per million (ppm), and that Dow itself had a study that

indicated picloram was lethal at 1 ppm. The Hagens contend that

Dow acted with malice when it represented that the lethal

concentration was much higher than this, and when its agent advised

the Weed District that it could safely use the herbicide around

fish despite its knowledge to the contrary.

As already noted in the discussion on causation, the record in

this case is replete with contradictory evidence regarding the

toxicity of the herbicides which were sprayed in the vicinity of

the fish farm. There is evidence that one of DOW'S employees had

conducted tests to determine the effects of Tordon on fish, and

found that picloram was lethal at a concentration of 1 ppm. Other

tests conducted by Dow, however, indicate that picloram is not

lethal until it reaches concentrations of 15 ppm. The record also

contains evidence of testing by Dr. Dan Woodward, which was

forwarded to Dow, demonstrating that picloram was unsafe even at a

level of .035 ppm.

The Code of Federal Regulations requires a warning label

stating "This Pesticide is Toxic to Fish" if the pesticide contains

an active ingredient which is toxic to fish at a concentration of

1 ppm or less. 40 C.F.R. 5 156.10(h)(Z)(ii)(B) (1992). The Tordon

label does not have such a warning, and Dow contends that the

existing label adequately advises against use of the product where

it might contaminate water used for irrigation or domestic

purposes. However, the evidence shows that even though Dow had

14
knowledge of the Woodward study and its own testing which

demonstrated toxicity at this level, the only reports submitted to

the Environmental Protection Agency regarding the need for a

warning on Dow's label were the company's tests indicating toxicity

at 15 ppm.

The record also contains evidence that the Woodward study

established that there is a synergistic affect when picloram and

2,4-D are combined which results in a lower level of toxicity than

either of the chemicals alone. Nevertheless, the record

demonstrates that Dow represented to its users that the chemicals

could be mixed and safely applied, and if used according to the

label, it was not toxic to fish. However, as already noted, the

label does not warn about the potential dangers when used in close

proximity to fish populations.

Montana law provides that reasonable punitive damages may be

awarded when a defendant has been found guilty of actual fraud or

actual malice. Section 27-1-221, MCA. Actual malice occurs when

a defendant has knowledge of facts or intentionally disregards

facts that create a high probability of injury to the plaintiff and

then proceeds to act with indifference or disregard of the high

probability of injury. Section 27-l-221(2), MCA.

The Hagens were not required to prove during the summary

judgment proceedings that DOW'S actions constituted actual malice,

but rather that a genuine dispute exists with regard to this

allegation. After reviewing the record, we conclude that there was

evidence that Dow was aware that its product had characteristics

15
which created a high probability of damages to people like the

Hagens. A factual dispute exists regarding whether Dow represented

to EPA that a warning label was not required when it knew

otherwise, and whether Dow represented that it was safe to mix the

herbicides and apply the mixture in the vicinity of fish cultures,

when it knew otherwise. Therefore, we conclude that a genuine

factual dispute exists on the issue of punitive damages and summary

judgment should not have been granted.

Accordingly, the judgment of the District Court is reversed

and this matter is remanded for further proceedings consistent with

this opinion.

We concur:

16
November 12, 1993

CERTIFICATE OF SERVICE

I hereby certify that the following order was sent by United States mail, prepaid, to the following

named:

Gig A. Tollefsen

Berg, Lilly, Andriolo & Tollefsen

910 Technology Blvd., Ste. A

Bozeman, MT 59715

Robert M. Carlson

Corette, Pohlman, Allen, Black & Carlson

P.O. Box 509

Butte, MT 59703

James T. Harrison, Jr. and James C. Cumming

Harrison, Loendorf & Poston

2225 Eleventh Ave., Ste. 21

Helena, MT 59601

ED SMITH

SUPREME COURT

TANA