A federal jury in Kansas has awarded close to $218 million in the first of eight certified state class action lawsuits, to farmers who sued Syngenta, a Swiss-based agribusiness giant. The verdict came following a three-week trial in Kansas City, Kansas, and involved four Kansas famers who represented over 7,000 farmers in the state. Another trial involving approximately 60,000 cases starts in August in Minnesota, according to USANews.
The issue was due to Syngenta’s introduction of a GMO (genetically modified organism) corn seed variety that caused serious economic harm to Kansas corn producers. The genetically modified strains of its corn seed, Agrisure Viptera and Agrisure Duracade were sold to the United States prior to China approving it for its imports.
China is a Major Corn Importer
China is a major importer of US corn, and in 2013 began refusing all shipments of U.S. corn subsequent to the discovery of a genetic trait found in Viptera (MIR162). At that time, the genetic trait was not approved in China. The corn growers in Kansas, as well as across the U.S., saw the price of corn plummet with the loss of the Chinese market. Losses to the U.S. corn farmers are estimated to be more than $5 billion.
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The Kansas class action lawsuit that began on June 5, took place in the U.S. District Court of the District of Kansas. It is the first of the eight class action suits certified in this multidistrict litigation (MDL). An MDL is a procedure which streamlines complex cases to be heard in one court by one judge. This allows for a faster outcome, lessens court costs, and is generally more efficient.
The recent award, if upheld on appeal, would be dispersed to the plaintiffs in the suit, but it remains unclear how much each farmer would ultimately get, since the payouts would probably be dependent on variables such as the number of bushels each sold during a given time frame.
The other certified state class action lawsuits involve Arkansas, Missouri, Illinois, Iowa, Nebraska, Ohio, and South Dakota corn farmers. A number of other state class action lawsuits in this matter are pending certification.
The Kansas trial and the upcoming Minnesota trial are to serve as bellwether trials and will provide guidance for how the complex web of litigation in state and federal courts may be resolved. This allows attorney to see how juries react and subsequently decide whether to settle other cases or take them to trial, reports the Des Moines Register.
Syngenta and GMO Seed Background
Syngenta began selling Viptera corn seed in the U.S. for the 2011 growing season, but it was not approved in China until December 2014. The lawsuits allege Syngenta’s action to market the seed variety before China’s clearing of it for imports, severely damaged an increasingly significant export market for U.S. corn. This caused years of depressed corn prices. Court documents show Syngenta aggressively marketed Viptera even when it knew Chinese approval was going to be an issue.
The majority of farmers suing did not grow Viptera, but China rejected millions of metric tons of their grain, as well. This is because elevators and shippers normally mix grain from large numbers of suppliers, making it problematic to identify or separate corn that was free of the trait. Due to this, the farmers say all farmers were hurt by the ensuing price drop, the Des Moines Register reports.
Syngenta stated it invested over $100 million and 15 years in developing Viptera, that has the trait called MIR163 that protects against pests such as earworms, cutworms, army worms, and corn borers.
Court filings show Syngenta told stakeholders that China would approve MIR162 in time for the 2011 crop, however the date kept shifting. Some exporters sent shipments that had the trait to China despite this knowledge. After two years of accepting the shipments of GMO seed, China began the rejection in late 2013.
Syngenta is closing in on its $43 billion acquisition of Syngenta. The Kansas trial came as ChemChina, a state-owned conglomerate also called China National Chemical Corp. Chinese companies are involved in a multibillion-dollar global buying action to acquire technology and brands, in an attempt to improve their competitive edge.
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