IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

PACIFIC BOTANICALS, LLC, 

Plaintiff, 

v. 

SEGO'S HERB FARM, LLC; 

VICTOR OSZTROVICS D/B/A V.E. 

GARDENS; ROGER SEGO; and 

KATHLEEN SEGO, 

Defendants. 

MCSHANE, Judge: 

Civ. No. 1:15-cv-00407-CL 

OPINION and ORDER 

Magistrate Judge Mark D. Clarke filed a Findings and Recommendation (ECF No. 87) 

and the matter is now before this court. See 28 U.S.C. § 636(b)(l)(B), Fed. R. Civ. P. 72. 

After having reviewed the legal principles and the Defendants' Objections (ECF No. 93), I find 

no error and conclude it is correct. United States v. Bernhardt, 840 F.2d 1441, 1445 (9th Cir. 

1998). For the following reasons, Judge Clarke's Findings and Recommendation is adopted in 

' its entirety, and Defendants' Motion for Summary Judgment is granted in part and denied in part. 

1 - OPINION AND ORDER 
PROCEDURAL HISTORY 

On September 6, 2016, the Defendants, Sego's Herb Phann and Roger and Kathleen 

Sego, filed a Motion for Summary Judgment (ECF No. 70). On November 22, 2016, Judge 

Clarke heard oral arguments on the motions (ECF No. 86). On December 8, 2016, Judge Clarke 

filed a Findings and Recommendation (ECF No. 87), granting in part and denying in part the 

Defendants' Motion for Summary Judgment. On January 17, 2017, Defendants filed their 

Objections to Judge Clarke's Findings and Recommendation (ECF No. 93). On February 3, 

2017, Plaintiff filed its Response to the Defendants' Objections (ECF No. 95). 

In his Findings and Recommendation, Judge Clarke found that there were genuine issues 

of material fact as to all of Pac Bot's claims, except those against Kathleen Sego. Judge Clarke 

recommended that Plaintiffs Motion for Summary Judgment be granted with respect to claims 

against Kathleen Sego and denied for all other claims. (ECF No. 87). 

STANDARD OF REVIEW 

Summary judgment shall be granted when the record shows that there is no genuine 

dispute as to any material of fact and that the moving party is entitled to judgment as a matter of 

law. Fed. R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). The 

moving party has the initial burden of showing that no genuine issue of material fact exists. 

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Devereaux v. Abbey, 263 F.3d 1070, 1076 

(9th Cir. 2001) (en bane). The court cannot weigh the evidence or determine the truth but may 

only determine whether there is a genuine issue of fact. Playboy Enters., Inc. v. Welles, 279 F.3d 

796, 800 (9th Cir. 2002). An issue of fact is genuine "if the evidence is such that a reasonable 

jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248. 

2 - OPINION AND ORDER 
DISCUSSION 

Plaintiff, Pacific Botanicals (Pac Bot), brings claims for breach of express and implied 

warranty, breach of contract, and fraud against Defendants, Sego's Herb Farm, LLC, Victor 

Osztrovics D/B/ A V .E. Gardens, and Roger and Kathleen Sego. The claims arise out of a 

transaction between Pac Bot and Sego's Herb Farm for the purchase of ginseng that was later 

discovered to be tainted with DDE, a DDT derivative. 

In their Objections to the Findings and Recommendation, Sego's Herb Farm and Roger 

Sego (the Sego Defendants) argue that Pac Bot's claims are preempted by the Federal Food, 

Drug, and Cosmetic Act (FDCA). The Sego Defendants also argue in their objections: (1) there 

was no express warranty that the ginseng was pesticide free, (2) the Sego Defendants did not 

have a duty to disclose a pesticide test performed by a third party customer to Pac Bot, (3) Pac 

Bot did not have a right to rely on the Sego Defendants' representation that the ginseng was 

pesticide free, (4) Pac Bot's claims are barred because the ginseng was substantially changed in 

condition, and (5) there was no breach of the implied warranty of fitness for a particular purpose 

because the Sego Defendants had no reason to know the particular purpose for which Pac Bot 

intended to use the ginseng. 

The Sego Defendants' first argument, that Pac Bot's claims are preempted by the FDCA, 

fails for the same reason Judge Clarke found their Organic Foods Production Act (OFPA) 

argument failed. Pac Bot' s claims are premised on the argument that the ginseng contained 

pesticide contrary to the agreement between the parties. (ECF No. 87 at pp. 9-10). Pac Bot is not 

suing because the Sego Defendants violated the FDCA and, as a result, is not attempting to 

enforce the FDCA. Rather, Pac Bot is attempting to enforce a contractual agreement between it 

and the Sego Defendants. In its Response to the Sego Defendants' Objections (ECF No. 95 at pp. 

3 - OPINION AND ORDER 
3-4), Pac Bot summarizes the precedent allowing recovery for claims related to conduct that 

violates the FDCA which states that "state law claims such as negligence, breach of implied 

warranty, and fraudulent misrepresentation are viable, even to the extent they seek recovery for 

conduct that may also have violated the FDCA." In re Orthopedic Bone Screw Prod. Liab. Litig., 

193 F.3d 781, 791 (3rd Cir. 1999). 

The Sego Defendants' other arguments in their objection also fail because, as Judge 

Clarke noted, a determination on these issues cannot be made without weighing the parties' 

evidence, which is improper at the summary judgment stage, and a reasonable jury could return a 

verdict for Pac Bot on its claims against the Sego Defendants. 

CONCLUSION 

For these reasons, it is hereby ordered that Magistrate Judge Clarke's Findings and 

Recommendation (ECF No. 87) is ADOPTED IN ITS ENTIRETY. Defendants' Motion for 

Summary Judgement (ECF No. 70) is GRANTED in part and DENIED in part. 

IT IS SO ORDERED. 

DATED this :lf.p day of April, 2017. 

4 - OPINION AND ORDER 

\ _____ ._ ___ _ 

Michael J. McShane 

United States District Judge