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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