Written By Erika Hooker
On Tuesday, September 26, 2017, Syngenta agreed to settle one of the largest legal battles in the company’s 17-year history.
Background
Syngenta is a Swiss-based agribusiness, with customers across the globe. In 2010, Syngenta began selling “a strain of insect-resistant GMO corn called Agrisure Viptera” in the United States, as well Agrisure Duracade, another string of GMO corn.
In the United States, the process of commercialization for seeds with GMO traits requires several approvals from different federal agencies, where representations about the new GMO trait must be made. In its petition for deregulation, Syngenta stated that the two new GMO traits would not affect the U.S. corn export markets. It also stated in its petition that applications for approval with export market countries were underway and that Syngenta would educate its growers in order to keep the seed away from markets where it was not yet approved.
In 2010 and 2013, the traits were deregulated in the United States, and the varieties containing the genes were commercialized for the growing seasons. During the 2012 and 2013 growing seasons in the U.S., Syngenta sold even more Viptera than the first year and did not require growers to implement any practices to reduce cross-pollination and contamination. Through cross-pollination, the GMO traits in Viptera contaminated corn grown by farmers who had not purchased Syngenta’s seeds. Additionally, both Viptera and Duracade corn was commingled at grain elevators and storage facilities.
Syngenta originally applied for import approval from China in 2010, but it was not granted approval until December of 2014, three years after the commercialization of Viptera. Consequently, in November of 2013, China began rejecting all corn from the U.S. containing the GMO trait, saying it was contaminated. Due to cross pollination and contamination, banned corn included even that from farmers who had not purchased Syngenta seed.
Consequently, farmers sued Syngenta, stating through their lawyers that “Syngenta negligently commercialized the seeds before obtaining import approval from China, then a major buyer of U.S. corn.”
Discussion
This major settlement, approximated to pay out close to $1.5 billion, came amid a trial in Minnesota state court in which “around 22,000 farmers were seeking $400 million.” It was also on the heels of a $218 million-dollar award to farmers in Kansas from a federal jury trial, in addition to numerous other pending lawsuits where farmers were suing Syngenta.
The affected farmers claimed that the loss of the Chinese market caused corn prices to decrease significantly in the U.S., creating significant economic harm to them. Additionally, the farmers involved in the lawsuit argued that (a) Syngenta misrepresented how it would control Viptera from contaminating other crops, (b) Syngenta commercialized Viptera, knowing China would not approve the GMO traits until sometime after the trait had entered export markets, and (c) Syngenta actively misled both farmers and grain storage companies about the importance of the Chinese market and the imminence of its approval. The farmers also claimed that Syngenta knew China was a large and growing export market for U.S. corn.
Syngenta responded by pointing to biotechnology industry lists from the years 2007 and 2009 – the years just prior to the deregulation of the GMO traits – which did not list China as a key import country for corn. Additionally, Syngenta argued that two droughts in the years leading up to the release of Viptera had increased corn prices, while a good year the same time Viptera was released set off a surplus season, dropping prices.
Ultimately, a settlement was reached. According to Syngenta spokesman Paul Minehart, the $1.5 billion dollar sum is a settlement with more than 100,000 farmers, and resolves all U.S. farmers’ litigation.
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Sources Cited
Geoff Colvin, Inside China’s $43 Billion Bid for Food Security, Fortune Finance (April 21, 2017).
In re Syngenta Litig., No. 27-CV-15-3785, 2016 Minn. Dist. LEXIS 6 (Minn. Dist. Ct. April 7, 2016).
Jef Feeley and Margaret Cronin Fisk, Syngenta Agrees to Pay More than $1.4 Billion in Corn Accord, Bloomberg Markets (Sept. 26, 2017).
Todd Neeley, Syngenta’s Viptera Corn: Trial Dates Set in 7 of 22 Class-Action Lawsuits-DTN, Ag Fax (July 10, 2017).
Photo courtesy of Farm Journal.