From pesticides to precedent: How courts may be rethinking regulatory evidence

Can following regulations provide a viable defense against lawsuits in the United States?  One judge, at least, seems to think so. 

On March 18, 2025, a federal judge in Illinois dismissed an eight-state class action complaint (Tepper v. The Quaker Oats Co., No. 1:24-cv-02055) (N.D. Ill. Mar. 18, 2025). 

The lawsuit alleged that Quaker’s claims that their oats are healthy ‘whole grains’ were misleading because although the oats in their products sold in the United States were whole grains, they also contained small amounts of chlormequat.

Chlormequat is a plant growth regulator and pesticide that has never been registered by the US Environmental Protection Agency (EPA) for use on locally grown food crops. However, the EPA permits imported oats to have chlormequat residues up to 40 parts per million (ppm). 

The use of chlormequat is allowed in the European Union and many other countries, and the EPA has issued a decision proposing to register chlormequat for use on some grains because it has “…no dietary, residential, or aggregate risks of concern.” 

Meanwhile, the non-profit US-based Environmental Working Group (EWG) and various scientific articles have stated that chlormequat, found in 80 percent of people it tested in the U.S, can cause reproductive and developmental harms in animals. The EWG also released a study showing higher-than-expected levels of chlormequat in oat-based products, with Quaker Old Fashioned Oats having the highest reading at 291 parts per billion (ppb).   

The class action lawsuit, therefore, alleged economic harm to those who purchased Quaker Oats because of chlormequat’s presence.  When assessing the motion to dismiss the case, the judge decided that the plaintiffs lacked standing to bring the case at all because they had not suffered an “…injury in fact, that is fairly traceable to the challenged conduct of the defendant, and that is likely to be redressed by a favorable judicial decision.”   

The decision explains that because the EPA had established a regulation that 40 ppm of chlormequat residue on imported oats was ‘safe,’ the natural extension of that determination is that 40 ppm of chlormequat residue on domestically produced oats would also be ‘safe.’ 

Given that the alleged contamination of the oat-based products was 0.7% of that limit, the opinion states that the alleged health risks were speculative rather than concrete.  The opinion cites a similar case involving the level of lead in lipstick, which was also well below levels cited by the US Food and Drug Administration (FDA) as dangerous. 

Although this case is not directly relevant to commercial general liability (CGL) insurance policies, the reasoning in the opinion could foretell a change in how courts view regulatory pronouncements in the context of allegations of corporate wrongdoing. 

Compare this result, for example, with the many decisions finding that plaintiffs alleging exposure to glyphosate from weedkiller products caused non-Hodgkin lymphoma can continue to press their cases in court. 

In the glyphosate litigation, some of the core facts are similar: the EPA has said glyphosate is not carcinogenic under its conditions of use, as has the European Union pesticide regulator. The scientific record is much larger, but still far from conclusive that glyphosate exposure causes non-Hodgkin lymphoma. The International Agency for Research on Cancer, on the other hand, has declared glyphosate as “…probably carcinogenic to humans.”   

In the end, and partly based on allegations that they improperly influenced the scientific literature, Monsanto has paid more than $10 billion in verdicts and settlements to resolve the litigation. 

So are we seeing a change in how courts view regulatory evidence in the United States? It’s too soon to tell, but insurers who keep a close eye on the scientific literature will be well-positioned to help their insureds present the best information in court.