ST. LOUIS -- A recent ruling by a Kansas federal judge cleared the way for farmers, grain handlers and exporters to proceed towards trial in their suits against Syngenta claiming that the company's sale of its Viptera and Duracade corn seed interrupted trade with China and harmed the market for U.S. corn.
Plantiffs in the lawsuits from Stoddard County are Kenneth Bell, Nathan Bell, Shawan Farms, LLC, Bell AGCO, NAKE LLC and SANA LLC, partners of Bottoms Farms Partnership in Stoddard County. Zachary Bell and Madeline Bell, Margaux Madenwald and Austin B. Madenwald are listed as partners of Triple BG Partnership in Stoddard County. They, along with JPPL, Inc., NEBCO, Inc. and Triple BG Partnership, plant approximately 1,500 acres in corn annually.
Federal U.S. District Judge John W. Lungstrum rejected Syngenta's two primary legal defenses in denying Syngenta's motion to dismiss in substantial part. Syngenta had argued for the entire case to be dismissed.
Syngenta has maintained that the company was transparent in marketing the genetically modified corn, which is resistant to pests like corn earworms. Syngenta spokesman Paul Minehart said the issues in the case "affect every American farmer's right to benefit from new technologies that help grow better crops," and that when approved products like Viptera are kept out of the market "for political and economic reasons, farmers -- and consumers -- lose."
Judge Lungstrum issued his 116-page ruling on Friday, Sept. 11, after reviewing hundreds of pages of written briefs and oral arguments presented by the plaintiff co-lead counsel team and Syngenta.
The co-lead plaintiff counsel, which includes Don Downing of Gray, Ritter & Graham; William Chaney of Gray Reed & McGraw; Scott Powell of Hare, Wynn, Newell & Newton; and Patrick Stueve of Stueve Siegel Hanson, allege, among other things, that Syngenta was negligent in the timing, scope and manner of commercializing Viptera and Duracade genetically modified corn in the United States knowing that China had not yet approved the corn.
China was a major importer of U.S. corn and stopped accepting virtually all U.S. corn shipments. As a result, prices for U.S. corn were depressed, economically damaging U.S. corn growers and others in the industry, according to the plaintiffs.
Judge Lungstrum rejected Syngenta's argument that the company had no duty to protect the farmers, exporters and others in the industry who had brought suit. In his ruling, the judge said "the law reasonably imposes a duty on a manufacturer to exercise reasonable care not to commercialize and sell its product in a way that creates a risk of widespread harm resulting from the intended use of the product by all of its customers."
Based on the allegations in the complaint, the Court made two other key observations: (1) "[t]his case .... involves a risk of harm to other participants in an inter-connected market, participants whom Syngenta has appeared to embrace as stakeholders, and thus who are especially vulnerable to the wrongful acts alleged by plaintiffs"; and (2) Syngenta had actually represented that it would take steps to protect the industry from the very harm which had occurred.
"This is a big win for the American corn farmer," said Gray, Ritter & Graham's Downing. "We believe the court's ruling thoroughly addresses and rejects the primary legal defenses asserted by Syngenta, namely, that it had no duty to avoid conduct that it knew was likely to harm corn farmers and others and that the economic loss doctrine barred those claims."
Publicly available estimates of economic damages in early 2014 ranged from $1 billion
to $2.9 billion, although Downing explained that actual damages may now be substantially higher given that U.S. corn exports to China have yet to recover. "We believe that the interruption of the corn trade with China that continues to this day has contributed to the lower prices received by corn farmers and others in the industry in recent years," said co-lead counsel Stueve.
Switzerland-based Syngenta is the world's largest crop chemicals company with annual revenue of about $15 billion. It has an agricultural seed division based in Minnetonka, Minn.
Co-lead counsel Downing, Powell and Chaney also led the team that obtained a $750 million settlement in 2011 on behalf of U.S. rice farmers who similarly suffered financially due to genetically modified rice seed. Both Chaney and Powell said they look forward to trying these cases against Syngenta.