Opinion ID: 174950
Heading Depth: 2
Heading Rank: 2

Heading: Arkansas Lawsuit

Text: On May 31, 2007, more than 80 cotton farmers sued UCPA and four other herbicide manufacturers in the United States District Court for the Eastern District of Arkansas (Arkansas Lawsuit). The cotton farmers alleged that, in June and July 2006, neighboring rice farmers applied tens of thousands of pounds of the manufacturers' herbicides to control weeds in their rice fields. The farmers claimed the herbicides contained dichlorophenoxyacetic acid (2,4-D), a phytotoxin, or plant poison, that is extremely toxic to cotton plants. The cotton farmers alleged the 2,4-D drifted off-target and damaged fields in five Arkansas counties. On June 4, 2007, the cotton farmers served UCPA with their complaint, which asserted state law claims of strict products liability; deceptive trade practices; negligent design, testing, and warning; breach of implied warranty of fitness for a particular purpose; and implied warranty of merchantability. Invoking diversity jurisdiction under 28 U.S.C. § 1332, the cotton farmers sought compensatory and punitive damages, attorney fees, and costs from the herbicide manufacturers. On June 12, 2007, UCPA tendered the Arkansas Lawsuit to Scottsdale for defense and indemnification. On July 27, 2007, Scottsdale agreed to defend UCPA subject to a complete reservation of its rights under the Policy. Scottsdale reminded UCPA of the Policy's $500,000 deductible and declined to provide UCPA a first-dollar defense.