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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