Plaintiffs Seek Preliminary Approval of $1.51 Billion Syngenta Settlement
Yesterday, plaintiffs filed a motion asking for preliminary approval of a settlement reached with Syngenta. The proposed settlement, which would comprise $1.51 billion, is described by plaintiffs’ counsel in a court filing as a “record-breaking achievement in agricultural litigation, the largest-ever GMO settlement in the United States.”
If approved and consummated, the proposed settlement would dispose of nearly all claims that were or could have been filed against Syngenta stemming from its development, introduction, production, distribution, sale, marketing, and efforts to gain regulatory approval of Agrisure Viptera and/or Agrisure Duracade corn seed. The proposed settlement class, which includes more than 600,000 proposed members, includes producers and non-producers. If approved, the settlement class would exclude only 11 named exporters, including ADM and Cargill, as well as anyone who affirmatively opts out of the settlement class. If the settlement is approved, those who previously opted out of the MDL class or a state class must again opt out of the settlement class if they do not want the settlement to conclude their claims against Syngenta.
Proposed Settlement Class
The proposed settlement class is much broader than the class approved in the MDL and includes any person in the United States that from September 15, 2013 through the date of preliminary approval of the settlement (if granted), owned any interest in corn in the United States priced for sale, if they fall within one of the following four sub-classes:
Subclass 1: Any Producer in the United States that, during the Class Period owned any Interest in Corn in the United States priced for sale during the Class Period, excluding Producers that, at any time prior to the end of the Class Period, purchased Agrisure Viptera Corn Seed and/or Agrisure Duracade Corn Seed and produced Corn grown from Agrisure Viptera Corn Seed and/or Agrisure Duracade Corn Seed.
Subclass 2: Any Producer in the United States that during the Class Period owned any Interest in Corn in the United States priced for sale during the Class Period and that, at any time prior to the end of the Class Period, purchased Agrisure Viptera Corn Seed and/or Agrisure Duracade Corn Seed and produced Corn grown from Agrisure Viptera Corn Seed or Agrisure Duracade Corn Seed. (Proposes no more than $ 22.6 million for this sub-class.)
Subclass 3: Any Grain Handling Facility in the United States that during the Class Period owned any Interest in Corn in the United States priced for sale during the Class Period. (Proposes no more than $ 29.9 million for this sub-class.)
Subclass 4: Any Ethanol Production Facility in the United States that during the Class Period owned any Interest in Corn in the United States priced for sale during the Class Period. (Proposes no more than $ 19.5 million for this sub-class.)
Method of Allocation
The proposal states that all costs and expenses related to class notice, claims administration, notice administration, as well as attorney fees and expenses, would first be deducted from the $1.51 billion fund. A maximum of $72 million would be allocated to subclasses 2 through 4, as noted above. The remaining fund would be used to pay members of subclass 1, which includes the U.S. corn producers who did not plant the GMO seed. The amount paid to each corn producer would be based upon “compensable recovery quantity,” which is measured in number of bushels. The number of bushels assigned to each producer would be determined largely through government data authorized by the producer in the claims process to be disclosed for purposes of the settlement. The proposal allows three methods of proof to determine the final compensable recovery quantity:
Method One: Multiple Form FSA 578 acres * average county yield determined through USDA NASS data.
Method Two: If acreage not reported to USDA through Form FSA 578, RMA data can be used to establish number of acres.
Method Three: If USDA and RMA data is not available, producers will include the proof on a claim form. This would include crop share landlords whose interests are not reflected on Form FSA 578 or through RMA data.
The final compensable recovery quantities would be determined using the following weighted averages applied to each marketing year:
- 2013/14 – 26 percent
- 2014/15 – 33 percent
- 2015-16 – 20 percent
- 2016-17 – 11 percent
- 2017-18 – 10 percent
Each producer would apparently receive the proportion of the fund set aside for their subclass equal to their proportion of the compensable recovery quantity in the subclass.
The proposal would require notice to be mailed to class members 10 days after issuance of a preliminary approval order from the court. Proposed settlement class members would have to opt-out within 90 days after that mailing. A final opt-out list would be created 30 days after that deadline. Class members would have to file their claims within 150 days after the mailing of the notice.
The proposed settlement provides that none of the $1.51 billion could be returned to Syngenta. However, Syngenta would have a right to “walk away” from the settlement up to 30 days after receiving the final opt-out list. Fourteen days later, the plaintiffs could file their motion for final settlement approval. The fee and expense application deadline would be 60 days after the mailing of the notice.
What does this proposed settlement mean for the average corn farmer? It remains to be seen. Recovery would depend upon the amount of approved administrative costs and attorney fees, as well as the compensable recovery quantities included in each subclass.
Remember, this is just the settlement proposal. There are many more hurdles to be cleared before any payouts are made.
We will watch for a court order.
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