First farmer lawsuit on deck against Syngenta
MINNEAPOLIS: The first of tens of thousands of US lawsuits is about to go to trial against Swiss agribusiness giant Syngenta over its decision to introduce a genetically engineered corn seed variety to the US market before China had approved it for imports.
The lawsuits allege that Syngenta’s move wrecked an increasingly important export market for US corn, and that the resulting price drops hurt all producers. Court filings show that Syngenta aggressively marketed the seeds even when it knew that Chinese approval was going to be a problem.
Plaintiffs’ experts estimate the economic damage to be about $5 billion, while Syngenta denies its actions caused any losses for farmers. The first test case goes to trial today in state court in Minneapolis. The second goes to trial in federal court in Kansas City, Kansas, on June 5. The two cases are meant to provide guidance for how the complex web of litigation in state and federal courts could be resolved. Here are a look at some of the issues:
The problem:
Syngenta decided to commercialize its Viptera brand of genetically modified corn seeds before China approved importing it. Syngenta invested over $100 million and 15 years in developing Viptera, which has a trait called MIR162 that protects against pests such as earworms, cutworms, armyworms and corn borers.
With US government approval, Syngenta began selling Viptera in the US for the 2011 growing season. But China didn’t approve it until December 2014.
Court papers show that Syngenta initially assured stakeholders that China would approve MIR162 in time for the 2011 crop. But the date kept slipping. Some exporters sent shipments containing the trait to China anyway. After two years of accepting them, China began rejecting them in late 2013.
One expert working for the plaintiffs estimated the damage to US farmers to be $5.77 billion; another pegged it at $4.68 billion. Most plaintiffs didn’t grow Viptera, but China excluded their grain, too, because elevators and shippers typically mix grain from large numbers of suppliers, making it difficult to source corn that was free of the trait. So they say all farmers were hurt by the resulting price drop.
The legal landscape
About 60,000 individual cases involving farmers from across the country, plus a classaction lawsuit on behalf of Minnesota farmers, are consolidated before Hennepin County District Judge Thomas Sipkins. Syngenta’s North American seed business is based in suburban Minneapolis.
The other big bloc, which includes cases from corn belt states other than Minnesota, has been consolidated before US District Judge John Lungstrum in Kansas City, Kansas. The lawyers themselves aren’t sure how many farmers are covered there, but it’s a lot.
The first two cases will serve as bellwether trials, which courts often use when there are large numbers of lawsuits concerning similar legal issue. This way the attorneys can see how juries react and determine whether to settle other cases or take them to trial. The trial that starts Monday in Minneapolis is for a lawsuit filed by Daniel Mesnick of Morse Bluff, Nebraska, who grew Viptera and claims about $150,000 in damages. It is expected to last up to three weeks. The second trial will take place in federal court in Kansas City and will be a classaction case involving Kansas farmers who claim about $200 million in damages.