I have previously posted on the class action lawsuit brought against Syngenta; see Are You Currently Suing Syngenta? Quick Overview of Current Agrisure Viptera® Class Action Litigation. Back in September, the court rejected Syngenta’s motion to dismiss the claims for failure to state a claim that relief could be granted. For more information on that, see Kristine A. Tidgren, Most of Syngenta Claims Survive Motion to Dismiss . . . What’s Next? (September 29, 2015).
In December, Syngenta filed a third-party complaint against Cargill and Archer Daniels Midland (ADM), seeking that Cargill and ADM be required to contribute and indemnify Syngenta in any possible judgment in the class action lawsuit. Syngenta argues that if the plaintiffs are successful, and Syngenta is ordered to pay damages, then Cargill and ADM should have to pay those damages.
Looking back to the judge’s ruling in September, the judge found that with the plaintiffs’ negligence claims, Syngenta owed a legal duty to the plaintiffs (the growers who did not use Syngenta’s seed, non-producers who handled grain, and milo growers). Let’s review what negligence is. Negligence is simply failure to exercise a duty of care under the circumstances. This means that you failed to act as a reasonable and prudent person would have in the same situation. Courts have found that negligence has four elements which need to be proven:
Party owed a duty of care to act reasonable under the circumstances to the injured party;
Party breached that duty of care;
Breach was the proximate cause of the injury; and
Actual damages occurred.
In looking at the current lawsuit, the plaintiffs argue that Syngenta breached this duty of care by marketing a product that was unapproved in particular international markets. By selling the product before its approval in key international market, Syngenta, according to the plaintiffs, did not act in a reasonable and prudent manner and is potentially liable for damages. Syngenta counters this argument saying that the company followed industry protocol which only required approval with major trading partners, and China (one of the countries at issue) was not a major trading partner for corn at the time.
This brings us back to Syngenta’s third-party complaint. Syngenta is arguing that the company is in the business of selling seeds, not growing corn for commercial sale or the collection, segregation, or exporting of corn. ADM and Cargill do all those activities. The complaint points out that ADM and Cargill both knew that China had not approved the seed but still accepted that corn at their elevators and commingled it with other grain likely to be exported.
Syngenta’s position is that both ADM and Cargill as grain handlers and exporters are in a better position to prevent corn unapproved in one market from commingling with approved corn. On the other hand, Syngenta as a seed seller can only make the Cargills and ADMs of the world aware that the seed is not approved in particular markets. Syngenta says it did just that by making ADM and Cargill aware of the markets the variety was not approved in. The grain handlers ADM and Cargill did nothing to segregate the unapproved from the approved corn.
Syngenta is laying the groundwork to show others are potentially liable for any possible damages in the class action lawsuit. ADM and Cargill have yet to file a response to Cargill’s complaint so we are not sure what defenses either party may bring up. Check back here for future developments in this case.
Currently, the case is selecting a bellwether pool, narrowing the large class action pool down to representative plaintiffs who cross the spectrum of potential issues in the class action. The idea behind the bellwether pool is to gain information on which defenses and claims will be successful and potentially promote a settlement. The pool selection is to be finalized by January 22, 2016. Once the pool is selected, the parties will move into the discovery stage to be completed by mid-2016.
As I have stated before, this case presents interesting issues. Can a company sell GMO seed approved in that market or does the company have to wait till all trading partners approve?. Any decision, in this case, will potentially have large ramifications with how and when new seed varieties are released on the market. This case will continue to be one to watch in 2016.