Opinion ID: 3169658
Heading Depth: 2
Heading Rank: 2

Heading: Riceland’s Counterclaim

Text: We now turn to Riceland’s argument on the merits, in which it contends the district court erred in holding, as a matter of law, that Plaintiffs did not release their claims against Riceland. We review the district court’s dismissal under Rule 12(b)(6) de novo. O’Neil v. Simplicity, Inc., 574 F.3d 501, 503 (8th Cir. 2009). The parties do not dispute that Arkansas law governs the interpretation of the Settlement 3 Federalism cases may aid in determining when certification could improperly interfere with state court proceedings. See Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 717 (1996) (listing cases in which state interests counsel against federal court interference). -10- Agreement because a choice of law provision in the Settlement Agreement requires it be construed according to the laws of that state. Riceland first argues that the district court erred by requiring a strict causal nexus between Plaintiffs’ claims and LLRICE contamination even though the Release language did not require such a causal connection. Riceland contends that Arkansas law requires a broad interpretation of the Release, citing Hisaw v. State Farm Mut. Auto. Ins. Co., 122 S.W.3d 1, 6 (Ark. 2003) and State Farm Mut. Auto. Ins. Co. v. LaSage, 559 S.W.2d 702, 703 (Ark. 1978) for the proposition that the phrase “arising out of” should be interpreted very broadly. Riceland also points to the Arkansas Court of Appeals case McGarrah by McGarrah v. Sw. Glass Co., 852 S.W.2d 328, 331 (Ark. Ct. App. 1993) (en banc) and argues that the phrases “arising out of” necessitates “but for” causation. Thus, according to Riceland, because Plaintiffs’ claims ultimately would not exist “but for” the LLRICE contamination, the Release applies. However, the Arkansas Supreme Court explicitly rejected the use of broad, “but for” causation in interpreting the phrase “arising out of” in Hisaw. 122 S.W.3d at 6-7. The Court concluded that a “but for” analysis was not appropriate for determining the meaning of the phrase “arising out of” in the context of an automobile insurance policy, reasoning that: [a] distinguished treatise has challenged the workability of the “but for” principle and said: “The event without millions of causes is simply inconceivable, and the mere fact of causation, as distinguished from the nature and degree of the causal connection, can provide no clue of any kind to singling out those which are to be held legally responsible.” We agree. A but-for causation analysis would bring into play a multitude of causes and would be largely unworkable for interpreting the policy language at issue. Id. at 6 (citing W. Page Keeton, et. al., Prosser & Keeton on the Law of Torts, § 41 (5th ed. 1984)). -11- Because Arkansas law has only addressed the causation required for the relevant language in the insurance context, the district court determined that it must look to the contract as a whole. Under this approach, Riceland argues the Release is all-inclusive, pointing to A.G. Edwards & Sons, Inc. v. Myrick, 195 S.W.3d 388 (Ark. Ct. App. 2004). Riceland contends that the terms “any,” “all,” and “whatsoever” are “routinely described as ‘all inclusive.’” However, A. G. Edwards did not hold that the terms “any,” “all,” and “whatsoever,” are “all inclusive;” rather, it merely concluded that the specific phrase “any controversy” used in the contract at issue was “clear and unambiguous language.” 195 S.W.3d at 391-92. When we look to the plain language of the Release, it is clear that the language used was not intended to protect Riceland from litigation related to its refusal to contribute to the fund. See Douglas v. U.S. Tobacco Co., 670 F.2d 791, 795 (8th Cir. 1982) (noting that under Arkansas law, a release is construed “in accordance with the plain meaning of the language employed” (quoting Green v. Ferguson, 567 S.W.2d 89, 91 (Ark. 1978))). The plain language of the Release included a clause absolving the Bayer Released Parties from litigation-related claims: “This Release shall also release the Bayer Released Parties and their attorneys from any and all claims . . . related to the conduct of the Bayer Released Parties and/or their attorneys in the prosecution or defense of any claim being released hereby.” No such clause existed in the section of the Release addressing Riceland or the Additional Released Parties. As the district court recognized, “when reading this clause in tandem with the paragraph releasing both Bayer and Riceland, it becomes clear that the drafters did not consider claims ‘related to’ Bayer’s rice-litigation conduct to ‘arise’ out of the presence of Bayer’s rice in the U.S. market. Had that been the drafter’s intent, this clause would have been unnecessary.” The litigation-specific release language included in the section specific to the Bayer Released Parties would be superfluous if Riceland’s interpretation is applied. See Byme, Inc. v. Ivy, 241 S.W.3d 229, 236 (Ark. 2006) (“In seeking to harmonize different clauses of a contract, we should not give effect to one to the exclusion of another even though they seem conflicting or -12- contradictory, nor adopt an interpretation which neutralizes a provision if the various clauses can be reconciled” (quoting Sturgis v. Skokos, 977 S.W.2d 217, 223 (Ark. 1998))). The inclusion of the word “also” in the litigation-specific release indicates that the litigation-specific release for Bayer Released Parties is in addition to the general release language that applied to both Bayer and Riceland. While we agree that the Release language is broad, the subject matter of the Release is different from the subject matter of the present lawsuit, which is Riceland’s failure to contribute to the fund. The claims regarding genetically-modified rice were released by the Settlement Agreement and Release, but the Release does not govern the Plaintiffs’ unjust enrichment and quantum meruit claims against Riceland for its failure to contribute to the fund. We therefore affirm the district court’s dismissal of Riceland’s counterclaims.