Syngenta Fires Back

Third-Party Complaint for Indemnification and/or Contribution

Last week, Syngenta filed a third-party complaint in the massive multi-district litigation (MDL) pending in Kansas. In its complaint, Syngenta fiercely denies its liability to plaintiffs in the pending actions, calling the litigation an “unprecedented attempt by Producer and Non-Producer Plaintiffs to assert that it was somehow a tort for Syngenta to sell a genetically modified corn seed called Viptera in the United States even though Syngenta had already received all required approvals from three U.S. federal regulatory agencies.”

Syngenta asserts, however, that if it is found to have been at fault, it was the exporters, grain elevators, and transporters of the grain who are really to blame. It was these third-party defendants, Syngenta alleges, who actively “commingled” the Viptera and Duracade corn with the rest of the corn supply. As such, Syngenta argues that any monetary damages should be “altogether the responsibility of” third-party defendants Cargill and ADM (as well as two transport companies Express Grain Terminal LLC and Rail Transfer Inc.). Specifically, Syngenta states:

If there is any judgment imposing liability based on the presence of Viptera in the corn supply and the alleged consequent loss of the Chinese market, any liability is placed where it should be: on the grain elevators, transporters, and exporters who indiscriminately commingled corn and corn grain as they purchased, stored, transported, resold, and exported corn, including by intentionally delivering commingled corn including a mixture of Viptera and non-Viptera corn (and corn by-products) into export channels.

Syngenta’s third-party complaint brings Cargill and ADM back to the Kansas-based litigation. In May, the court had remanded to state court negligence lawsuits filed by Cargill and ADM against Syngenta. The lawsuits had been consolidated into the MDL, but the court found that there was no federal jurisdiction for the claims. The complaints were filed in state court, did not involve diversity jurisdiction, and did not include any federal causes of action. The court disagreed with Syngenta that the doctrine of the federal common law of foreign relations created federal court jurisdiction.

In their state court actions against Syngenta, ADM and Cargill alleged that Syngenta was negligent in not following proper stewardship principles. Syngenta, the parties contended, was responsible for a devastated drop in corn prices they alleged was precipitated by China’s rejection of U.S. corn containing traces of the GM traits that China had not approved for import.

In its new filing, Syngenta says that any blame beyond that belonging to China falls on the exporters themselves. Syngenta argues that Cargill and ADM did not take reasonable steps to segregate or channel corn containing Viptera away from likely export channels. Syngenta also contends that the exporters violated Chinese law requiring “importers of a GM crop for production or as raw materials for processing to obtain the biosafety certificate for the GM crop before signing a contract for delivery to a Chinese purchaser.”

New Scheduling Order

The timing of the Syngenta filing was spurred by a recent scheduling order issued by the court. On October 21, the court filed its second detailed scheduling order. This order set a number of deadlines that will govern this behemoth litigation. Specifically, any comparative fault pleadings are to be filed by December 8, 2015. The scheduling order also details that the litigation will proceed with trials of “test cases,” or so-called “bellwether” cases. The purpose of these cases is to “produce a sufficient number of representative verdicts and settlements to enable the parties and the court to determine the nature and strength of the claims, whether they can be fairly developed and litigated on a group basis, and what range of values the cases may have if resolution is attempted on a group basis.”

The court order states that the initial bellwether discovery pool will include the following groups of plaintiffs:

• The 5 non-producer plaintiffs who have filed suit (4 of whom are named class representatives);
• The 2 milo plaintiffs named in the milo master complaint;
• A sampling of 6 producer-plaintiffs from 8 of the 22 states at issue, with each side selecting 4 states on an alternating basis, with plaintiffs selecting first, and further with each side selecting 3 plaintiffs per state on a similar alternating basis; and
• The named class representative(s) in each of the 8 selected states.

This means that fact depositions may begin with respect to the bellwether discovery pool. These depositions must be completed by May 2, 2016. The scheduling order states that the first bellwether trial will begin in June of 2017.

Other key dates noted in the scheduling order are as follows:

December 15, 2015        Amended pleadings must be filed.

March 15, 2016               All fact written discovery must be served.

June 15, 2016                 Plaintiffs must file their class certification motions, class-related expert reports and reliance materials.

August 17, 2016.            Syngenta’s reply brief on the class certification issue must be filed.

November 23, 2016        No further expert disclosures will be allowed.

December 1, 2016          Pretrial conference for bellwether pool of cases is held.

January 6, 2017              Dispositive and Daubert motions must be filed.

June 2017                        First bellwether trial should begin.

Conclusion

As discussed in prior articles, this massive litigation is unprecedented. It is unlikely the litigation will unfold as neatly as laid out in the most recent scheduling order. Nonetheless, the parties are knee-deep in  discovery, and Cargill and ADM are now busy responding to Syngenta’s latest filing. As always, we will keep you posted.