WASHINGTON, Oct. 26, 2016 - Syngenta is challenging a federal judge’s approval of a plaintiff class encompassing hundreds of thousands of farmers who claim the seed company’s commercialization of genetically modified seed prior to approval in China cost them dearly when the Asian giant rejected U.S. corn imports that contained minuscule amounts of the GM trait.

Last month, U.S. District Judge John W. Lungstrum in Kansas City, Kansas, certified as a class those farmers who did not plant corn containing the Agrisure Viptera or Agrisure Duracade traits, designed to control corn rootworm and other pests. The growers are seeking up to $7 billion in damages for losses they claim resulted from China’s decision to halt imports of all U.S. corn for about a year starting in November 2013.

In papers filed in the Tenth Circuit – legally speaking, a petition to appeal the class certification – Syngenta questioned Lungstrum’s reasoning, saying the judge failed to adequately analyze whether there was a sufficient connection between lower corn prices at the local level and the Chicago Board of Trade’s futures price.

In his Sept. 26 ruling, the judge found that a “reasonable juror could believe that local corn prices do reflect changes in the CBOT futures price,” as argued by plaintiffs’ experts. He also said “it would defy logic if the overall demand for corn, as reflected in the centralized exchange price for the commodity, did not bear on local prices. Indeed, Syngenta does not dispute the fundamental economic principle that decreased demand for a commodity results in lower prices.”

Syngenta’s experts, however, relied on their own analysis to show that “the relationship between CBOT prices and local prices varies widely by time and location – with price changes in some locations showing zero association with changes in CBOT prices,” the company said in its petition.

“Without evidence that separately tested the relationship between CBOT prices and local prices at different times and different places to establish uniform impact, there was no basis for class certification,” Syngenta argued.

The plaintiffs, who filed their response to Syngenta’s Oct. 19 petition two days later, quoted Lungstrum approvingly and cited testimony from grain companies.

Archer Daniels Midland and Cargill, for example, which “collectively represent 19 percent of all U.S. corn purchases,” both testified that CBOT prices are fully reflected in local prices, the plaintiffs said.

Syngenta also contended that the judge did not look closely enough at pricing information provided by growers. “Most producers did not retain contracts for the past three years, and the records they did retain failed to show when corn was priced,” the company said.

Lungstrum found that it would not be “particularly onerous” to determine whether corn was priced after the relevant date of Nov. 18, 2013. A producer would only need to establish a single sale after that date to show membership in the class, and if not, “corn purchasers are generally required to keep records of contracts,” he said in his order.

Syngenta said that amounted to a “blithe suggestion that the way to determine the date of

pricing for tens of thousands of producers would be to issue third-party subpoenas to

every purchaser of corn,” but the plaintiffs said Lungstrum “simply agreed that . . . class members who may no longer have paperwork concerning their crop sales can get those records from their buyers based on state record-keeping laws.”

Syngenta also argued that the “extraordinary number of suits remaining for individual resolution necessarily defeats a finding that a class action would be superior.” The company noted that “there are over 36,000 farmers” across the Midwest “who have pending suits that must be resolved individually.”

But the plaintiffs said there is “no support” in the law for the proposition that a federal judge “must deny certification for hundreds of thousands based on the existence of some individual suits.”

“If plaintiffs prevail at trial, Syngenta retains its right to appeal class certification,” the plaintiffs said. “Given the constellation of undisputed common issues, the virtual completion of discovery below, and the fact that trial will likely be completed before an interlocutory appeal, the impulse for immediate review lacks a pragmatic justification.” An interlocutory appeal is an appeal of a ruling by a trial court before all the claims in a case have been resolved.

Trial in the case is scheduled to start June 5, the plaintiffs said in their response.


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