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Legal Proceedings
3 Months Ended
Mar. 31, 2014
Legal Proceedings

12. Legal Proceedings—Summarized below are litigation matters in which there has been material activity or developments since the filing of the Company’s Form 10-K for the period ended December 31, 2013.

A. DBCP Cases

A number of suits have been filed against AMVAC, alleging injury from exposure to the agricultural chemical 1, 2-dibromo-3-chloropropane (“DBCP®”). DBCP was manufactured by several chemical companies, including Dow Chemical Company, Shell Oil Company and AMVAC, and was approved by the United States Environmental Protection Agency (“USEPA”) to control nematodes. DBCP was also applied on banana farms in Latin America. The USEPA suspended registrations of DBCP in October 1979, except for use on pineapples in Hawaii. The USEPA suspension was partially based on 1977 studies by other manufacturers that indicated a possible link between male fertility and exposure to DBCP among their factory production workers involved with producing the product. There are approximately 100 lawsuits, foreign and domestic, filed by former banana workers in which AMVAC has been named as a party. Fifteen of these suits have been filed in the United States (with prayers for unspecified damages) and the remainder have been filed in Nicaragua. All of these actions are in various stages and allege injury from exposure to DBCP, including claims for sterility. There have been no material developments in any of these matters since the filing of the Company’s Form 10-K for the period ended December 31, 2013 (which sets forth the procedural history of these matters in detail).

 

B. Other Matters

AMVAC has been named as one of 27 defendants in an action entitled Sanchez v. Agro Logistic Systems, Inc. et al which was filed on April 14, 2014 with the Superior Court for the State of California for the County of Los Angeles as case number BC542612. In this matter, two individuals seek unspecified damages from defendants for negligence, strict liability and other causes of action allegedly leading to physical injury (myelogenous leukemia) arising from exposure to dozens of registered products over the course of their employment as laborers from 1989 through 2012. AMVAC has not yet been served. We believe that the claims have no merit, and should we be served, we intend to defend the matter vigorously, and expect that we will enter into a joint defense arrangement with certain other defendants. At this stage in the proceedings, it is too early to determine whether a loss is probable and reasonably estimable, and the Company has not set up a reserve for this matter.

On April 7, 2014, an action entitled Graciela Galvan v. AMVAC Chemical Corp. (naming AMVAC as the sole defendant) was filed with the Superior Court for the State of California for the County of Orange as case number 00716103CXC. The matter was subsequently served on AMVAC’s registered agent on April 18, 2014. This action involves claims by plaintiff on behalf of herself (an inactive employee currently on leave) and other “similarly situated employees” for alleged violations of wages and hours requirements under the California Labor Code. The Company believes that the claims have no merit and intends to defend the matter vigorously. At this stage in the proceedings, it is too early to determine whether a loss is probable or reasonably estimable; accordingly, the Company has not set up a reserve for the matter.