Guest Article: The Syngenta Lawsuits - Some Background, a Precedent, and an Update
I’ve had many inquiries over the past months from farmers, agribusinesses and their attorneys about lawsuits against Syngenta. The inquiries usually contain a sense of intrigue and curiosity, combined with skepticism—sort of, “Is this for real?” Here are the results of my investigation thus far.
“Duracade” and “Viptera” are Syngenta brands of genetically modified seed corn. In November 2013, China began rejecting Duracade and Viptera corn (along with every shipment of corn containing even a trace of it), and prices of corn began dropping. Since then, many lawsuits have been filed in both federal and state courts against Syngenta. The lawsuits ask that Syngenta be held liable because of the following:
- Syngenta used its self-declared “global leader” status to promote Duracade and Viptera seed corn as “highly-effective” tools for controlling corn pests, maximizing yields and producing increased-quality grain;
- Syngenta assured producers that Duracade and Viptera seed corn would be made available only after “all necessary regulatory approvals” are obtained; but Syngenta rushed Duracade and Viptera into the market without first obtaining regulatory approval from China; and
- China’s rejection of Duracade and Viptera corn caused a decline in corn prices that damaged producers and agribusinesses throughout the U.S.
All such Federal Court lawsuits are now consolidated into a single case: In re Syngenta AG MIR 162 Corn Litigation in the District of Kansas (the “In re Syngenta Case”).
The In re Syngenta Case is similar, but unrelated, to a group of Federal Court lawsuits over genetically modified rice that are consolidated into a single case: In re Genetically Modified Rice Litigation in the Eastern District of Missouri. The rice case involved a mistaken release of a long-grain rice strain genetically engineered to be herbicide resistant. The rice strain spread quickly and, by 2006, had contaminated approximately 30% of all long-grain rice production lands in the U.S. Accordingly, the European Union refused to import any U.S. long-grain rice, and the price of long-grain rice dropped dramatically. Producers filed numerous lawsuits against the rice strain developer. The cases settled for a payment of $750 million in damages after jury trials of several test cases (called “Bellweather Trials”) resulted in verdicts for plaintiffs.
Consolidated cases with many plaintiffs, like these corn and rice cases, are typically led by a Court-appointed leadership team of attorneys for plaintiffs. It shouldn’t be a surprise that the leadership team in the In re Syngenta Case includes some of the same attorneys who served on the leadership team in the In re Genetically Modified Rice case and who helped prosecute the Bellweather Trials.
The In re Syngenta Case is moving forward at a rapid pace for litigation, which probably seems like glacial pace to anyone but lawyers. Here are some developments and issues in the Case [my apologies for the legalese that follows]:
- Administrative Details and Class Descriptions. On December 22, 2014, a U.S. “Panel on Multidistrict Litgation” entered its “Transfer Order” centralizing all Federal Court lawsuits on Duracade/Viptera issues into the Federal Court in Kansas for coordinated proceedings. Since then, hundreds of Federal Court lawsuits from across the United States have been consolidated into the one In re Syngenta Case. Plaintiffs are asking that the In re Syngenta Case be certified as a class action, with classes described as, (i) “corn producers in the United States who did not purchase or plant” Duracade or Viptera seed corn, and (ii) non-producers who “prepared, stored, transported, loaded, exported, sold or purchased for resale, on a commercial basis,” U.S. commodity corn or distillers grain produced by others.
- Motion to Dismiss and Initial Discovery. It’s common during the earliest stages of a lawsuit for the defendant to file a motion to dismiss the case. On June 19, 2015, Syngenta filed its Motion to Dismiss the In re Syngenta Case. Attorneys for both sides are preparing and presenting written arguments on the Motion. A ruling on the Motion is expected around Labor Day. [I’ll hazard a prediction: In light of results in the In re Genetically Modified Rice case, it seems unlikely that the In re Syngenta Case will be dismissed.] Meanwhile, the parties are working on a preliminary discovery of documents so that depositions can begin once, and if, the Motion to Dismiss is resolved in plaintiffs’ favor.
- Class Action Determination. One of the critical determinations to be made by the Court in the In re Syngenta Case is whether to certify it as a class action. Here’s why that’s important: Generally speaking, (i) if a class action is certified, then the lawsuit will proceed on behalf of all members of the class, and individual members of the class need not file their own lawsuits, but (ii) if the Court rejects class certification, then individual claimants will be responsible for bringing their own lawsuits, if they wish to pursue their claims. That’s a huge distinction. Current expectations are that class certification issues will begin to be addressed in the latter part of 2015 after the Motion to Dismiss is resolved.
- Statutes of limitations. A concern for potential claimants is whether the passage of time will impair their rights to pursue claims against Syngenta. The United States Supreme Court case of American Pipe & Construction Co. v. Utah, 414 U.S. 538, 94 S.Ct. 756, 38 L.Ed.2d 713 (1974), provides that the filing of a class action lawsuit tolls statutes of limitations as to all members of the proposed class, until a ruling is made on class certification. This might protect members of proposed classes. But it won’t protect, for example, producers who purchased or planted Duracade or Viptera seed corn, because they aren’t members of a proposed class.
The In re Syngenta Case is in its earliest stages, is making progress, but has a long way to go. The next critical questions in the Case are these: How will the Court rule on Syngenta’s Motion to Dismiss? And when and how will class certification issues be addressed and resolved?
*The author, Donald L. Swanson, is a shareholder in the Koley Jessen P.C., L.L.O., law firm of Omaha, Nebraska. We wish to thank him for this submission.
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