ADM, Bungee, Cargill, Louis Dreyfus, Syngenta see some claims end in ongoing lawsuit

Similar claims brought against Syngenta have been partially dismissed and partly upheld, after a ruling Wednesday by US District Court Judge John Lungstrum.

The ruling applied to a series of state-law claims and eight class actions brought by the Phipps Group of lawyers, referred to as the Phipps cases, according to court documents. They addressed the sale and handling of genetically engineered corn strains that had not been approved for some export markets.

Motions to dismiss the class actions were filed by Syngenta, Gavilon Grain, ADM, Bunge, Cargill and LDC, Lungstrum said in the order. Syngenta also had asked for a judgement on specific state-law claims.

“The ABCD [ADM, Bunge, Cargill, LDC] defendants’ motion to dismiss is granted, and the Phipps plaintiffs’ claims against those defendants are hereby dismissed,” ​the judge said. “Gavilon Grain’s motion is granted, and the Phipps plaintiffs’ claims against that defendant are dismissed, although those plaintiffs may cure their deficient pleading with respect to their partnership claims against Gavilon Grain by amending their complaints on or before September 6.”​

Syngenta’s request to dismiss the claims was granted in part, but not completely, said Lungstrum. Claims brought by the Phipps group that were preempted by the Grain Standards Act (GSA) were dismissed as were certain failure-to-warn items, but claims brought by Crone, et al that were covered by a Pennsylvania law were upheld.

“Syngenta’s motion for judgment on the pleadings based on preemption is granted in part and denied in part,”​ he said.

The GSA covers grain characteristics and entities that can set standards regarding them.

A spokesperson for Syngenta said that the ruling narrows the case against the company. "For example, the ruling confirms that federal law bars 'any claim against Syngenta based on a duty to make sure that Viptera corn is segregated from other corn.' The court also agreed with Syngenta that 'there is no basis for Syngenta's liability based in false representations or omissions of fact in communications with plaintiffs' and, therefore, rejected plaintiffs’ claim for negligent misrepresentation,"​ he added.

The lawsuit is continuing, but the ruling marks "an important step forward," in ensuring access to approved agricultural technologies, he said.

ADM and LDC said they did not have a comment on the judge's order.

Case details​

In 2014, ADM, Cargill and Rail Transfer along with multiple producer and non-producers filed claims, including of negligence, against the Swiss company for selling strains of genetically-engineered (GE) corn in the US market, according to court documents. Although the corn had been approved for use in the US, it had not been approved for import to China.

The move reportedly led to millions in losses after China started to refuse imports that included the GE corn strain.

The Phipps cases, which are not part of the master class action complaints, brought negligence claims against Syngenta, Gavilon Grain and ADM, Cargill, Bunge and LDC, according to court documents.

Syngenta had previously brought third-party claims against ADM and Cargill alleging that those companies were negligent in how they handled the corn, which led to commingling of the non-approved biotech corn with other varieties due for export. The claims were dismissed​ in a ruling in April after they were found to be preempted by the GSA.  

Ruling specifics​

The court’s previous ruling regarding the GSA preempting some claims brought against ADM and Cargill also applies to many of the complaints brought by the Phipps plaintiffs, said Lungstrum.

The plaintiffs argued that there were errors in the court’s previous ruling in the matter, he said. But, the interpretation presented was not persuasive.

Phipps plaintiffs also said that their claims concerned companies’ conduct with distiller dried grains with solubles (DDGS), which are not covered by GSA, he said. But, they were made with the GE corn and duties would have involved inspection of the corn, which is preempted by the act.

“Plaintiffs have not offered any explanation as to how these defendants could comply with the alleged duties concerning DDGS without the inspection or description of the corn used to produce the DDGS,” ​said Lungstrum. The claims were dismissed, he added.

Three specific allegations were not preempted, he said. However, they were found to be “not legally sufficient.”​

Specific claims brought against Gavilon Grain for being a partner of Syngenta also were dismissed as the plaintiff group failed to bring plausible claims against the grain company based on that partnership, he said.

“It is possible, however, that these pleading deficiencies could be cured,”​ he said in court documents. “Accordingly, if they are able to plead facts to support a plausible claim against Gavilon Grain based on a partnership with Syngenta, the Phipps plaintiffs are granted leave to amend their complaints in these eight cases, on or before September 6, 2016, to state such a claim.”​

The court also decided that certain claims against Syngenta were preempted if they referred to the need for inspection or description regarding the presence of the GE corn, he said.  

“On the other hand, the seed sold by Syngenta did not become a grain subject to the GSA until after it grew into corn,” ​said Lungstrum. “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.”​

Claims made by the Phipps plaintiffs regarding Syngenta’s alleged lack of warning for its products also are preempted, he said. But claims made regarding the use of the Pennsylvanian economic loss doctrine remain.