Syngenta Dodges Most of GMO Corn MDL

The federal judge overseeing multidistrict litigation against biotechnology company Syngenta dismissed a raft of claims Wednesday by corn farmers who say the company foisted two GMO corn strains on U.S. farmers before the Chinese market was ready to accept them, laying waste to a major U.S. export market.

The dismissals, mostly based on preemption of state-law claims by the federal Grain Standards Act, came in eight class actions within the MDL, all of which were brought by one group of attorneys, anchored by Phipps Anderson Deacon LLP.

The plaintiffs in this group are farmers who never grew the Syngenta GMO seed strains Viptera and Duracade but say their livelihoods were harmed when the presence of these strains in U.S. exports all but shut down the Chinese market to U.S. corn. Hundreds of millions of bushels were turned away at Chinese ports in 2014 and 2015, plaintiffs say, causing an 85 percent drop in completed imports, because of contamination with small amounts of the Syngenta strains. Corn easily cross-pollinates, and Syngenta and its partners didn’t take steps to keep the two strains separate from other corn, the plaintiffs say.

U.S. District Judge John Lungstrum dismissed all claims against Archer Daniels Midland Co., Bunge North America Inc., Cargill Inc. and Louis Dreyfus Commodities LLC, processors and transporters that own 75 to 90 percent of the global grain trade, according to the plaintiffs, and most claims against Syngenta, agreeing generally that the federal Grain Standards Act of 1916 preempts them. He did, however, preserve Pennsylvania state law claims against Syngenta that have to do with economic loss.

Many of the claims would implicitly either “require the grain handlers and exporters to inspect corn for the presence of a genetic trait or to describe corn with respect to the presence of that trait, or require them to ensure that others do so.” Those are duties that the GSA explicitly preempts, he said.

However, “the seed sold by Syngenta did not become a grain subject to the GSA until after it grew into corn. Thus, any claims based on duties that do not require anyone to have acted with respect to corn, after it has been grown by the farmers, would not be preempted under the GSA. That distinction provides the basic dividing line between preempted claims and those claims that survive,” Judge Lungstrum said.

The judge also dismissed claims against Gavilon Grain but said the plaintiffs could amend their pleadings and try again with those claims. Gavilon is a commodities management and logistics company that connects market participants and provides storage, marketing and risk management. It is Syngenta’s partner in the launch and spread of Viptera and Duracade corn.

Kansan corn farmer Norman Sigrist, the lead plaintiff in one of the eight actions, said in his May 2016 amended complaint that, though he had never bought or grown Viptera or Duracade, they had badly harmed him.

“Syngenta marketed, distributed and sold its genetically modified corn with unapproved biotech traits in total disregard of the rights of farmers and the impact its actions would have on the U.S. corn market,” he said. “The loss of a large purchaser of U.S. corn like China as a result of Syngenta’s Viptera and Duracade contamination has had a sudden and calamitous impact on the U.S. corn market.

“Syngenta knew that unless strict stewardship and identity preservation measures were implemented at all levels — from the farm level through the marketing chain — Viptera would contaminate other U.S. corn crops,” Sigrist said. The company even promised the U.S. Department of Agriculture during a deregulation push that it would properly steward the corn to “divert this product away from export markets” where it hadn’t been approved, Sigrist said.

The GSA bars any state requirements to inspect or otherwise control grain, Syngenta told the court recently.

The farmers are represented by Martin Phipps and Barry Deacon of Phipps Anderson Deacon LLP and Clayton Clark and Scott Love of Clark Love Hutson.

Syngenta is represented by Thomas Schult and Ryan Hudson of Berkowitz Oliver Williams Shaw & Eisenbrandt LLP and Michael Jones, Edwin John U, Patrick Philbin, Ragan Naresh and Patrick Haney of Kirkland & Ellis LLP.

The case is In re: Syngenta AG MIR 162 Corn Litigation, case number 2:14-md-02591, in the U.S. District Court for the District of Kansas.

REPRINTED WITH PERMISSION FROM THE AUGUST 18, 2016 EDITION OF LAW360 © 2016 PORTFOLIO MEDIA INC. ALL RIGHTS RESERVED. FURTHER DUPLICATION WITHOUT PERMISSION IS PROHIBITED. WWW.LAW360.COM