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Legal Proceedings
9 Months Ended
Sep. 30, 2015
Legal Proceedings

12. Legal Proceedings—During the reporting period, there have been no material developments in the legal proceedings that were reported in the Company’s Form 10-K for the period ended December 31, 2014, other than as discussed below:

A. DBCP Cases

On or about May 31, 2012, HendlerLaw, P.C., which represents plaintiffs in seven related matters that had been pending before the United States District Court for the Eastern District of Louisiana (the “Hendler – Louisiana Cases” referred to in the Company’s Form 10-K for the period ended December 31, 2011 as Aguilar et al., v. Dole Fruit Company, Inc., et al (U.S.D.C., E.D. of LA No. CV-01305-CJB-SS)), filed nine separate actions, eight with the United States District Court for the District of Delaware (the “Hendler – Delaware Cases” (USCD DE No. 1:12-CV-00696-RGA)) and one with the Superior Court of the State of Delaware (which, for purposes of this filing shall be referred to as Chaverri et al. v. Dole Food Company, Inc. et al., case no. N12C-06-017-JOH). Six of the eight Hendler – Delaware cases and Chaverri involve claims for personal injury allegedly arising from exposure to DBCP on behalf of 235 banana workers from Costa Rica, Ecuador and Panama. Dole subsequently brought a motion to dismiss these seven matters under the “first-to-file” theory of jurisdiction, specifically in light of the fact that they involved identical claims and claimants as those appearing in the Hendler – Louisiana cases. On August 21, 2012, the U.S. District Court in the Hendler – Delaware cases granted defendants’ motion to dismiss with prejudice six complaints (filed on behalf of 235 plaintiffs) finding that the same claimants and claims had been pending in the Hendler – Louisiana cases where they had been first filed.

In October 2012, the federal district court in Louisiana granted defendant’s motion for summary judgment and dismissed the Hendler – Louisiana Cases for plaintiffs’ failure to bring the action within the applicable statute of limitations. Plaintiffs appealed the dismissal of the Hendler – Louisiana cases and, on September 19, 2013, the Fifth Circuit Court of Appeal upheld the lower court’s decision, finding no reason to reverse the dismissal.

On October 16, 2013, Plaintiffs filed a notice of appeal in the Hendler – Delaware cases. Oral argument was heard before the Third Circuit Court of Appeal on June 24, 2014 in connection with that appeal, and, on August 11, 2015, the Third Circuit upheld the lower court’s dismissal of the Hendler – Delaware cases. However, plaintiffs petitioned for rehearing en banc, arguing that, despite the fact that the same plaintiffs had made the same claims before another court (namely, the Louisiana court in the Hendler – Louisiana cases), because the Louisiana court had not decided the case on the merits (but, rather, on the basis of the statute of limitations), the Delaware trial court lacked the power to dismiss the Hendler – Delaware cases with prejudice. On September 22, 2015, the Third Circuit vacated its previous ruling (to uphold the lower court dismissal) and set the appeal for rehearing en banc on February 17, 2016. Thus, the appeal of the dismissal of the Hendler – Delaware cases will be reheard by the Third Circuit. The Company believes the Hendler – Delaware cases have no merit and, further, that a loss is neither probable nor reasonably estimable; accordingly, it has not recorded a loss contingency.

B. Other Matters

Sanchez v. Agro Logistics. AMVAC was 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, marketed and sold by numerous companies, over the course of their employment as laborers from 1989 through 2012. After a fair amount of discovery, including plaintiffs’ deposition, it became clear that plaintiffs were unable to confirm that they had used or been exposed to any of the Company’s products. After negotiation, plaintiffs and AMVAC have agreed to settle this matter for a fraction of the cost of defense, which amount was immaterial to the accompanying condensed consolidated financial statements. The Company expects that the matter will be dismissed with prejudice within the next 90 days.

 

USEPA TSCA Matter. On or about May 13, 2015, Region 9 of the United States Environmental Protection Agency (USEPA) issued a notice of violation (“NOV”) of the Toxic Substances Control Act (“TSCA”) in which it alleged that the Company had failed to submit a Form U to the agency during the 2012 submission period for four chemical substances imported for commercial purposes at two of its facilities. The Company responded to the allegations by not only providing documentation but also filing the subject Form U, albeit after the deadline. After discussion with USEPA regarding mitigation measures, the parties agreed to a civil penalty in the amount of $82. The parties executed a consent decree and final order that was filed with USEPA on September 30, 2015 under which the Company has agreed to pay aforementioned civil penalty in resolution of the claims set forth in the NOV.