WASHINGTON, Aug. 24, 2016 - A federal judge has limited the scope of litigation seeking to hold Syngenta responsible for damages caused by China’s rejection of genetically engineered corn in 2013.
U.S. District Judge John Lungstrum last week ruled that the federal Grain Standards Act (GSA) pre-empts state-law claims of negligence brought by eight farms in an already crowded class-action being overseen by the judge in Kansas City, Kansas.
But he also left the door open for those plaintiffs, and thousands more whose lawsuits await adjudication by Lungstrum, to argue other theories of negligence. In general, the growers, who did not use the GE corn at issue – Agrisure Viptera and Agrisure Duracade – contend that Syngenta pushed ahead with commercialization of the traits before China approved them for import.
China halted U.S. corn shipments in late 2013 after detecting MIR 162, the genetically engineered trait in Viptera seed, in U.S. corn shipments. Although it approved imports of MIR 162 corn a year later, the National Grain and Feed Association estimated that the trade disruption cost U.S. growers as much as $2.9 billion.
In addition to targeting Syngenta, the eight lawsuits brought by Phipps Anderson Deacon in San Antonio also alleged that Archer Daniels Midland, Bunge North America, Cargill, Louis Dreyfus Co., and Gavilon Grain were negligent in their handling of the GE corn. The judge dismissed the claims against those companies, as well, but gave the plaintiffs a chance to amend their complaint against Gavilon Grain.
Lungstrum said that given his ruling in April, when he dismissed similar state-law negligence claims brought by Syngenta against grain handlers Archer Daniels Midland and Cargill, he had no choice but to rule for the seed company. He said the GSA’s goal of promoting foreign commerce and setting standards for ensuring the quality of the grain preempted any state claims.
The latest ruling does not affect the progress of 2,700 other consolidated cases being overseen by Lungstrum, who is scheduled to hear arguments next month on whether to certify as a class all corn growers who did not use Viptera but who suffered economic losses because of its use.
Syngenta said Lungstrum’s Aug. 17 ruling “significantly narrows the case” against it. For instance, the judge said the GSA bars “any claim against Syngenta based on a duty to make sure that Viptera corn is segregated from other corn” and he agreed with Syngenta that “there is no basis for Syngenta's liability based on false representations or omissions of fact in communications with plaintiffs.” Syngenta noted, however, that “the litigation will continue to proceed.”
Martin Phipps, representing the growers whose cases were largely dismissed, said in a statement, “While we respect Judge Lungstrum’s opinion, we disagree and intend to appeal the court’s decision at the appropriate time.” Since the GSA went into effect in 1916, “no court has ever found that (it) preempts farmers’ rights to sue for violations of their state laws in this type of case. If this opinion is allowed to stand, it could eliminate the ability of farmers to recover damages for misconduct of biotechnology, seed and grain trade companies.”
The approximately 2,700 individual growers in the case now before Lungstrum still have plenty of legal ammunition as the litigation proceeds. For example, Lungstrum said they “might argue that, even if contamination was not practically inevitable as alleged, Syngenta was nonetheless negligent in failing to take certain actions (for instance, with respect to avoiding cross-pollination) that would have prevented plaintiffs’ injuries.”
Syngenta also could have limited its sales geographically or sold Viptera seed to farmers who agreed not to sell their crop outside of the state where it is grown.
In ruling last September against Syngenta’s motion to dismiss the claims against it, Lungstrum found that the “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.”
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