Appeal denied in Syngenta case

By Aerin Einstein-Curtis contact

- Last updated on GMT

Appeal denied in Syngenta case

Related tags: Syngenta, Law

Syngenta cannot appeal a ruling allowing Cargill, ADM and others to continue to sue the Swiss company alleging damages from the sale of the Swiss company’s Viptera seed into the US prior to Chinese trait authorization, said a Kansas federal judge.

US District Judge, John Lungstrum, is reported to have issued the ruling from the bench during a status conference.

Syngenta had asked the court certify a ruling from September that upheld some of the agribusiness and farmers' complaints against the Swiss company regarding the marketing of its Viptera seed, so that it could request an interlocutory appeal of the judge's findings in the Tenth Circuit.

“Syngenta respectfully believes that this order addressed several novel and controlling questions of law for which there are substantial grounds for difference of opinion and from which an immediate appeal may materially advance the termination of this litigation,” ​company lawyers said. “Syngenta will not seek any stay of discovery or other proceedings in this Court pending the proposed appeal and thus does not intend this motion for interlocutory appeal to delay ongoing proceedings before this Court.”

The Swiss firm had also argued that delaying an appeal until after the final ruling could waste money and time.

But Cargill and the other parties asked the court not to disturb the September ruling, which allows part of their litigation against Syngenta to go ahead. 

Lawsuits against Syngenta over Viptera release 

Several large agri-businesses including Cargill, Archer Daniels Midland (ADM) and Tran Coastal Supply, along with groups of US farmers, brought lawsuits against the Basel-based Syngenta in 2014 alleging its sale of a genetically modified corn seed led to millions in losses after China refused imports with the strain.

A class action lawsuit has also been brought against the company by farmers who have not grown the modified corn strain, group lawyers said. They are seeking damages for the harm done to the export market when China stopped accepting US corn.

The September order​ by Lungstrum dismissed some of the claims against Syngenta, but upheld others.

Those that were kept include claims about Syngenta’s duty as a company, proximate cause, economic losses and tortious interference with business expectancy.

“As alleged by plaintiffs (which allegations must be accepted at this stage), plaintiffs’ particular injuries were not only foreseeable, they were actually foreseen by Syngenta, with plaintiffs suffering the very harm expected to occur,” ​he said. “That foreseen harm applied to the industry generally, and thus plaintiffs’ injury is sufficiently connected to Syngenta’s conduct and is not wholly out of proportion to Syngenta’s culpability. Moreover, plaintiffs have alleged not only that Syngenta commercialized its products without taking sufficient steps to avoid the foreseen consequences, but that it also acted affirmatively to mislead the industry and to cover up its wrongdoing.”

Moving forward

The ongoing multi-litigation action against Syngenta is likely still several steps away from a jury trial, said Bryan Endres, associate professor of food and agricultural law at the University of Illinois at Urbana-Champaign. Parties still have to navigate the discovery phase and summary judgement. 

“The ruling that comes out of the motion for summary judgement is the one that lays out ‘have the plaintiffs found evidence of enough facts to go to trial," ​he told FeedNavigator. “Both sides know where they stand after this next round of motions.”

And, he said, many cases of this sort end outside of the courtroom.

Although the judge’s order did dismiss some parts of the case, the fact that it is continuing could be seen as a partial victory, Endres said. “To survive the motion to dismiss was a big hurdle to the plaintiffs,” ​he added.

Other, similar cases also tended to have a violation of US regulatory law, he said, which this case does not have. Instead arguments have focused on aspects of common law and unfair practices.

“It’s always been an open question on what is the legal impact if you have a product that is fully approved in the US and then causes some sort of a market loss because of co-mingling,” ​he said. “In this case there was full clearance, but a major export market hadn’t approved it – there was no underlying violation of US regulatory law.”

The case may have future implications for the biotech industry, he said, because it involves one of the industry’s best practices.

“The biotech industry came together and created an agreement on product stewardship several years ago, and it talked about the importance of receiving major export market approval before marketing because of market disruptions,” ​he said. “This was an industry best practice, but to have that translated into a duty of law is another step.”

Depending on the outcome of the case, it could mean that companies in the future need to be more cautious with the decisions they make regarding what they consider major export markets, he said. It may mean “holding back sales or putting in some sort of segregation program in the supply chain or post-harvest distribution chain, so there isn’t this sort of contamination and market loss.”

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