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Syngenta

We represent hundreds of corn farmers and grain elevators for the losses they sustained as a result of Syngenta’s decision to prematurely commercialize a genetically modified corn seed sold under the trade name Agrisure Viptera. Despite warnings not to break from industry standard, Syngenta launched its new Viptera seed varieties without first obtaining major export market approval. After Viptera contaminated the U.S. corn supply, China, which had not approved Viptera for human or animal consumption, discovered the contamination beginning in November 2013 and began rejecting shipments of U.S. After rejecting several shipments through the winter of 2013-14, China finally imposed a complete ban on all U.S. corn, and later U.S. DDGs. Despite the falling corn prices that resulted, Syngenta has refused to provide any price support or agree to not do the same thing again. We represent farmers, elevators, and exporters seeking to recoup the losses they suffered as a result of this event.

The cases against Syngenta for the premature release of Viptera and Duracade, both of which contain the genetically-modified trait MIR162, which was not approved for import into China by the time it contaminated the entire US corn supply, is being litigated in two different jurisdictions. Paul McInnes is one of only 2 law firms in the country that has been appointed to the leadership of both cases.

It is not too late to be a part of this case. If you are a farmer, elevator, or exporter who sold corn after November 2013, you were affected by the drop in price on the CBOT because of the Chinese ban on U.S. corn—precipitated by Syngenta’s conduct. You can contact Ashlea Schwarz for more information, ashlea@paulmcinnes.com or 816-984-8105.

Case Update: Today, the Court dismissed Syngenta’s counter-claims against some of the biggest grain exporters in the US. After Cargill and ADM (among other exporters/elevators) sued Syngenta for the massive losses they suffered when China cancelled all of their contracts for corn and banned all future corn, Syngenta counter-sued and alleged that, if Syngenta had any responsibility for the losses to the US farmers, exporters, and elevators, then Cargill and ADM shared in the blame because they were the ones who actually shipped the unapproved corn to China. The Court disagreed and said that exporters do not have a duty to inspect the corn they buy from elevators and farmers to determine whether it includes unapproved traits before shipping to an export market. Additionally, the Court said that, even if the exporters knew there was Viptera in the corn, they did not have to breach their contracts with China by not shipping the corn. To require that, the court said it would have to require exporters to inspect, which it couldn’t do:

“The Court concludes that allowing liability for a breach of the duty asserted by Syngenta—a duty not to ship or sell to China corn that is known to include the Viptera trait—would impose, as a condition of shipment or sale, a requirement of inspection or description in accordance with a standard concerning a characteristic of the corn. As movants note, imposing such a duty would require either that the shipped or sold corn be tested for the presence of the Viptera trait or that the corn be effectively described as Viptera-free. The only alternative would be a complete ban on the sale of any corn to China because of the possibility of the presence of the Viptera trait, and such a ban imposed by state law would run afoul of Congress’s unmistakable intent to reserve to the federal government any such regulation on interstate or foreign commerce in grain based on characteristics of the grain.” Read the Court’s entire .

This is great news for farmers as well as the exporters. The Court has again confirmed that Syngenta has a responsibility to act reasonably in commercializing a new genetically-modified trait that is not approved in our major export markets. And the solution is not, as Syngenta would have liked, to just not export corn to our major markets. Instead, the Court has bolstered our position that Syngenta must bear the responsibility to not widely commercialize a product until it is approved by major export markets.

District of Kansas Litigation

In the United States District Court for the District of Kansas, Paul McInnes was appointed to the Plaintiffs’ Executive Committee with 13 other law firms. These firms jointly oversee the entire litigation—meaning we are responsible for all aspects of the case including conducting discovery, deposing witnesses, collecting and reviewing documents, writing and arguing motions, attending hearings, and conducting the trials. We are also responsible for communicating with opposing counsel, other plaintiffs’ counsel whose cases are now part of the MDL, and communicating directly with the court. Currently there are over 2,700 cases filed in this multi-district litigation. These cases were originally filed in federal courts across the country, and were consolidated in the District of Kansas.

In appointing Paul McInnes, the Court placed special emphasis on the fact that we represent hundreds of individual farmers and not just one or two farmers pursuing a class action. We have spent hundreds of hours in the fields talking to farmers, elevators, and exporters; learning, intimately, the dramatic effect the Chinese ban has had on the farm community.

Our purpose in this litigation is two-fold. First, to compensate the farmers, elevators, and exporters for the losses they sustained when the price of corn dropped on the CBOT. And second, to create a legal standard for when a seed manufacturer can reasonably commercialize a new genetically modified seed. Part of acting responsibly requires that biotechnology companies avoid introducing a new genetic trait into the market prematurely before it has been approved in all significant export markets. All in the industry, including Syngenta, recognize that premature commercialization can cause significant trade disruptions and enormous harm to industry participants. This rush-to-market approach must be stopped. Farmers, already dealing with significant variables in successfully planting and harvesting (like the weather), should not have to be bludgeoned with the unforeseen consequences of a corporate giant killing a key export market in order to maximize its own profits.

Recently, the District of Kansas Court selected approximately 48 cases to proceed to the discovery phase and trial. These cases will serve as “bellwethers,” which will give the plaintiffs and Syngenta insight into the strength of the case and also how the larger group of cases may be resolved in the future.

Importantly, the Court has required all farmers, elevators, and exporters who have filed a case to preserve certain documents relating to their farming operations. The Court’s Preservation Order can be reviewed HERE. If you are already one of our clients or if you have any interest in joining this litigation, we urge you to review the Court’s order and make sure you are saving all of the documents and information mentioned. This is important to the integrity of the process and also ensures that the records needed to determine your damages are kept.

Minnesota Litigation

The law has special rules for when you can file a case in state court or federal court. One of those laws says that you can sue a defendant in the defendant’s “home state”—which, most often, is where the corporation has its headquarters—and be in state court (instead of federal court). Here, Syngenta Seeds, Inc. is headquartered Minnetonka, Minnesota. Thousands of farmers chose to file their cases in Minnesota state court. Currently, there are over 50,000 individual farmers, elevators, and exporters who have sued Syngenta in Minnesota. Like the federal courts, the Minnesota state courts sent all of these cases to one judge in Hennepin County who will oversee the entire litigation. Also like the federal case, the Court appointed a leadership team, called the Plaintiffs’ Steering Committee (“PEC”) that is charged with litigating all of the cases. The Court appointed 10 firms, including Paul McInnes. Thus, like in Kansas, we are responsible for all aspects of the 50,000 cases as they proceed through trials. The Minnesota court has also selected 40 plaintiffs to go first through the discovery process and trial.

Although cases are filed in different jurisdictions, the two leadership teams are working in coordination. This creates efficiency and lessens the cost associated with each case because the plaintiffs in Kansas and Minnesota can share the discovery taken in each case (such as documents produced by Syngenta and depositions of Syngenta’s key witnesses).

The Facts Underlying the Case:

In 2010, Syngenta announced that it planned to commercialize a new hybrid corn seed under the trade name Agrisure® Viptera™. Although Viptera had been approved by the USDA, it was not approved by our major export markets, most notably China. At the time, it was clear that China was a large and rapidly growing market for U.S. corn. As a result, several national trade organizations, including the NGFA and NAEGA, sent a very public letter to Syngenta asking it not to commercialize Viptera until it was approved for export by major U.S. export markets, including China. This letter specifically warned Syngenta that it was risking the U.S. corn trade market—and thus U.S. corn prices.

“Putting the Chinese and other markets at risk with such aggressive commercialization of biotech-enhanced events is not in the best interest of U.S. agriculture or the U.S. economy.” Joint Statement by National Grain and Feed Association and North American Export Grain Association CLICK HERE to read the full statement.

“As spring planting season moves toward completion, it is important that we draw attention to compliance with US law prohibiting the intentional addition of treated seeds to commodities and continuing the US system-wide diligence that prevents treated seeds in commodity grain and oilseed shipments. Please join us again in an industry wide effort to communicate the need to maintain our past success, comply with U.S. law and prevent treated seeds from entering the commodity supply.” 2011 Treated Seed Prevention Letter sent by NAEGA to industry associates CLICK HERE to read the full letter.

Despite the warnings, Syngenta nevertheless proceeded to broadly commercialize Viptera.

Understanding the potential harm to corn prices, one of the top 3 grain elevators, Bunge, put up signs saying it was not going to purchase Viptera corn. In response, Syngenta sued Bunge in federal court, asking the court to order Bunge to purchase Viptera corn. Syngenta argued that Bunge could simply segregate Viptera corn t prevent it from contaminating corn that would be shipped overseas. The court denied Syngenta’s request and found that it was unreasonable to ask grain elevators to segregate Syngenta’s corn—and the cost would be astronomical.

http://www.bloomberg.com/news/2011-09-27/syngenta-loses-court-ruling-against-bunge-unit-over-modified-corn-lawsuit.html

As predicted, Viptera contaminated the U.S. corn supply. In November 2013, China, the second largest importer of U.S. corn, found Viptera in a shipment of corn during inspection. At the time, China had not approved Viptera and turned the ship around at the dock. During inspections in late 2013 and early 2014, China discovered that many shipments of U.S. corn were contaminated with the Viptera GMO trait.  In response, China has banned the import of all U.S. corn. Not surprisingly, corn prices have fallen and studies conducted by the NGFA and the NAEGA have found that Syngenta’s conduct has caused significant harm to corn farmers and the entire U.S. corn supply channel.

The trade organizations again sent letters to Syngenta asking it to pull Viptera from the market until it obtained China’s approval.

“NAEGA and NGFA are gravely concerned about the serious economic harm to exporters, grain handlers and, ultimately, agricultural producers – as well as the United States’ reputation to meet its customers’ needs – that has resulted from Syngenta’s current approach to stewardship of Viptera. Further, the same concerns now transcend to Syngenta’s intended product launch plans for Duracade, which risk repeating and extending the damage. Immediate action is required by Syngenta to halt such damage.” NGFA and NAEGA Joint Statement, http://www.ngfa.org/2014/01/24/ngfa-naega-issue-joint-statement-urging-syngenta-to-suspend-commercialization-of-agrisure-viptera-and-duracade-biotech-corn/

In November 2013, corn was selling at approximately $7.50 a bushel. By the beginning of 2015, it was around $3. While not all of that price drop was caused by Syngenta, we believe we can show that a portion of that price drop is attributable to Syngenta’s premature commercialization of Viptera. Some of the big exporters, including Cargill, ADM, and Trans Coastal, have filed lawsuits against Syngenta. Shortly after China imposed its ban on U.S. corn, trade groups estimated the total losses at around $3 billion and predicted (accurately) that the decline in corn prices would continue.

For more information or to speak with an attorney, please call our office at 816-984-8100 or email Ashlea Schwarz at ashlea@paulmcinnes.com.