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Legal Proceedings
3 Months Ended
Mar. 31, 2016
Legal Proceedings

12. Legal Proceedings— During the reporting period, there have been no material developments in legal proceedings that were reported in the Company’s Form 10-K for the period ended December 31, 2015, except as described below.

Galvan v. AMVAC In an action entitled Graciela Galvan v. AMVAC Chemical Corp. filed on April 7, 2014 with the Superior Court for the State of California for the County of Orange (No. 00716103CXC) plaintiff, a former employee, alleges violations of wages and hours requirements under the California Labor Code. The Company has completed the deposition of plaintiff and participated in mediation on the matter. Of the several claims set forth in the original complaint, only two were stated in plaintiff’s motion for class certification; namely, that the Company’s incentive bonus plan and wellness payments should be found to be nondiscretionary and included in overtime calculations. The Company continues to believe that the remaining claims are without merit and intends to defend the matter vigorously. In February 2016, without addressing the merits of the remaining claims, the court granted plaintiff’s motion for class certification. From this, we expect that class discovery will ensue. The Company does not believe that a loss is probable or reasonably estimable and has not recorded a loss contingency for the matter.

Navarro v. AMVAC On May 28, 2015, former employee, Silvano Navarro delivered a written claim to the Company in which he alleged that he was damaged due to discrimination for disability and a host of other labor and employment charges. After meeting in both November 2015 and February 2016 to mediate the matter, the parties have agreed to settle the matter for cash in an amount that is not material to the Company’s financial statements. The Company expects that settlement documentation will be finalized and the matter dismissed with prejudice during the second quarter of 2016.

Schiemer Farms v. AMVAC On or about May 12, 2015, Farmers Supply Co-op, made a written claim against the Company for losses arising from the alleged failure of the Company’s soil fumigant, Vapam, to control weeds on an onion crop that was harvested in late 2014. The grower alleged a loss of yield in the amount of $1.2 million. After having investigated the matter fully and engaging in settlement discussions with claimant over the course of several months, the Company has agreed in principle to settle the matter by providing product to claimants over the next three planting seasons. The total value of the settlement is not material to the Company’s financial statements. The Company expects that settlement documentation, including a release of claims against the Company, will be finalized during the second quarter of 2016.

U.S. EPA RCRA/FIFRA Matter On or about March 24, 2015, Region 4 of the United States Environmental Protection Agency (“USEPA”) issued to registrant’s principal operating subsidiary, AMVAC, an Opportunity to Show Cause (“OSC”) why USEPA should not take formal action under Section 3008(a) of the Resource Conservation and Recovery Act (RCRA) for potential noncompliance arising from AMVAC’s importation, transportation and storage of used, depleted Lock‘N Load containers having residual amounts of its product Thimet. The scope of these discussions subsequently expanded to involve USEPA Region 5 and to include the importation of depleted Lock ‘N Load containers from Australia in October 2015 and full Lock ‘N Load containers from Canada in January 2016. On or about March 25, 2016, USEPA Region 5 issued a Stop Sale, Use or Removal Order (“SSURO”) ordering AMVAC to cease the distribution or sale of US Thimet 20G, Canadian Thimet 15G and Australian Thimet 200G on the grounds that the importation of both depleted and full containers of Thimet and the subsequent use of their contents was inconsistent with FIFRA. AMVAC disagrees with this position and believes that it lawfully imported Thimet from Canada and Australia for the purpose of either refilling, reprocessing or properly disposing of them. After hosting a plant inspection by Regions 4 and 5 and providing documentation to the agency, AMVAC requested and received relief from the SSURO with respect to Thimet to be formulated after April 4, 2016 and before August 2, 2016, as well as with respect to certain lots of material that were produced before this period and are currently in inventory. As a consequence of this relief, the Company believes that it will have adequate inventory to meet customers’ needs for the 2016 season. The Company has not yet received a final position from USEPA with regard to past acts, and, at this stage, it is too early to tell whether a loss arising from either the OSC or SSURO is probable or reasonably estimable. Accordingly, the Company has not recorded a loss contingency on this matter.