Summary Judgment Narrows Issues for First Syngenta Trial
Last week, Judge John Lungstrum, the federal district judge assigned to the nationwide Syngenta litigation, ruled on the parties’ first motions for summary judgment.
These motions were restricted to cover only those claims scheduled for a
bellwether trial on June 5, 2017. The order means that the first trial
will be a bit simpler, as multiple claims and defenses were tossed out.
As happens with all mass litigation, the Syngenta MDL class action has been slowly working its way through the system. While actions were first filed in the fall of 2014, a nationwide class of corn producers was not certified until last year. Those who fell within the definition of the class
had until April 1, 2017, to opt out. If a producer who meets the
court’s definition of a class member did not affirmatively opt out, he
or she is automatically part of the class action. The court has
determined that multiple bellwether or test trials will be held to help
the parties gauge the strengths and weaknesses of the claims and
determine whether they should settle.
The first trial is set to include only 9 plaintiffs, all of them
Kansas producers. The first of the two claims that was to be tried in
the first trial was Count I of the nationwide class action, the count
alleging that Syngenta violated the Lanham Act. The plaintiffs
specifically alleged that Syngenta violated the Act by misleading
producers regarding the timing of China’s approval of the Viptera[i]
GMO trait. The entire case, of course, is grounded in the allegation
that Syngenta injured the plaintiffs by marketing this trait before it
was approved by China, ultimately causing China to reject all U.S. corn,
causing the U.S. corn market to crumble, and causing the plaintiffs to
receive less money for their corn.
The second claim to be tried in the first trial is Count XXII of the
class action complaint, the claim alleging negligence under Kansas law.
In other words, while the Lanham Act claim applied to all plaintiffs,
the negligence claim to be tried in the first trial applies only to
Kansas class members. The class complaint has multiple state-specific
allegations that apply only to producers from particular states. The
state law claims can be tried in federal court because they were
supplemental to the federal Lanham Act claims, and because some class
members are citizens of states different from those of the defendant.
The motions for summary judgment pending before Judge Lungstrum were
restricted to the two Counts scheduled for resolution at the June 5,
2017, trial. They also addressed multiple defenses Syngenta had asserted
in response to the claims.
In his April 5, 2017, order,
Judge Lungstrum ruled in Syngenta’s favor as to all Lanham Act claims.
The court also restricted the scope of the negligence claims the
plaintiffs could seek to prove. The ruling, however, favored the
plaintiffs with respect to a number of Syngenta’s defenses.
The plaintiffs alleged in the class complaint that Syngenta had
violated the Lanham Act by making "false or misleading representations
in commercial advertising or promotion." After discovery, the only
evidence the plaintiffs produced to support the claim for a violation of
15 U.S.C. § 1125(a)(1)(B) was a "Grower Letter" sent by a Syngenta
employee in late August of 2011 to a number of producers stating that
Syngenta expected Chinese import approval by March of 2012. In ruling in
favor of Syngenta on its motion seeking summary judgment, the court
agreed that the plaintiffs could not, as a matter of law, prove that
this letter caused any of the plaintiffs’ alleged injuries. To prevail
on a Lanham Act claim, a plaintiff must show that their injuries were
caused by a defendant’s alleged misrepresentations. Here, the plaintiffs
would have to be able to show that the farmers read and were influenced
by the Grower Letter and that the the impact of the letter was great
enough to cause the embargo that caused corn prices to drop. This, the
court ruled, could not be shown. Of the 100 producers deposed in the
class action, only one testified that he had even seen the Grower
Letter. Noone testified that he purchased Viptera because of the letter.
The plaintiffs were unable to submit any evidence to show that any of
the plaintiffs’ injuries would not have occurred had the Grower Letter
not been sent. Finally, the court noted that by the time the Grower
Letter was sent in August of 2011, Syngenta had been selling Viptera for
many months and planting for the 2011 season was complete. The court
ruled that Syngenta was thus entitled to summary judgment as to the
plaintiffs’ Lanham Act claims.
Count XXII of the master class complaint alleges that Syngenta was
negligent in violation of Kansas law. This count applies only to Kansas
producers and asserts a number of different negligence theories.
Specifically, the plaintiffs allege that Syngenta breached its duty to
the producers in the following ways:
- Prematurely commercializing Viptera on a widespread basis without reasonable or adequate safeguards
- Instituting a careless and ineffective “stewardship” program
- Failing to enforce or effectively monitor its stewardship program
- Selling Viptera to thousands of corn farmers with knowledge that
they lacked the mechanisms, experience, ability and/or competence to
effectively isolate or channel those products.
- Failing to adequately warn farmers as to the dangers of
contamination by the GMO trait and to warn then of the potential that
Viptera would lead to the loss of the Chinese market
- Distributing misleading information regarding the timing of China’s approval of Viptera.
Syngenta first asked the court to grant summary judgment in its
favor with respect to all negligence claims based upon an allegation of
misrepresentation. Syngenta argued that the plaintiffs had not properly
pleaded negligent misrepresentation and that they could not avoid higher
pleading standards imposed on such claims by asserting a claim of
ordinary negligence based upon alleged misrepresentation.
The court agreed, granting Syngenta summary judgment with respect to
any claims of negligence based in whole or in part on any alleged
The court also granted summary judgment in Syngenta’s favor with
respect to any theory of negligence based solely on a failure to warn.
The court ruled, however, that any failure to warn could be considered
part of the totality of Syngenta’s conduct that could establish a claim
The court next granted summary judgment for Syngenta with respect to
plaintiffs' claim that, as an alternative basis for proving a duty owed
by Syngenta, Syngenta owed a duty to them under the voluntary
undertaking doctrine. This doctrine states that, even in the absence of a
special relationship, the actor may still be liable to third persons
when he negligently performs an undertaking to render services to
another which he should recognize as necessary for the protection of
third persons. The court ruled that this doctrine could not apply in
this case because the plaintiffs are not seeking to recover damages for
physical harm. The court ruled that the voluntary undertaking doctrine
does not apply to claims seeking only economic injuries.
Likewise, the court entered summary judgment in favor of Syngenta by
ruling that Syngenta did not have a duty to recall seeds they had
already sold. The court denied summary judgment to Syngenta, however, as
to its claim that it did not have a duty to conduct a limited launch of
it GMO trait. The court found that a question of fact for the jury
exists as to that question.
Finally, the court denied Syngenta’s motion for summary judgment as
to punitive damages. The court disagreed that public policy or equitable
defenses should preclude punitive damages, as a matter of law, at this
stage of the litigation.
The court also granted summary judgment in the plaintiffs’ favor with
respect to a number of defenses asserted by Syngenta. First, the court
ruled that, as a matter of law, Syngenta could not show that the actions
of two exporters, Cargill and ADM, were superseding causes of the
plaintiffs’ damages. Syngenta could not show that other exporters would
not have shipped the corn to China had Cargill and ADM bowed out.
Consequently, the conduct of those exporters could not be a superseding
cause. Similarly, the court ruled in favor of the plaintiffs with
respect to Syngenta’s broad allegation that China’s actions in delaying
approval and later rejecting U.S. corn were superseding causes of the
plaintiffs’ harm. The alleged superseding acts of China related directly
to Syngenta's alleged negligence. The court, however, denied summary
judgment to the plaintiffs with respect to Syngenta’s allegation that
China actually rejected the corn for reasons other than the presence of
the GMO trait, such as for political reasons. A jury could find that
China's rejection was, in fact, unrelated to Syngenta’s actions, and
was, therefore, a superseding cause of the plaintiffs' harm. The court
held that a jury could also find that China’s rejection of Viptera was
not reasonably foreseeable to Syngenta.
The court also granted summary judgment to the plaintiffs with
respect to Syngenta’s affirmative defenses of assumption of the risk,
mitigation, antitrust preemption, and comparative fault.
What Does This Order Mean for the June 5 Trial?
The June 5, 2017, trial will focus solely on the plaintiffs’ claims
of negligence under Kansas law. Did Syngenta owe a duty to the
plaintiffs? Did Syngenta breach that duty by unreasonably marketing
Viptera prematurely or by failing to implement a reasonable stewardship
program? Did any breach of a duty owed by Syngenta to the plaintiffs
cause China to reject U.S. corn, thereby causing U.S. corn prices to
plummet, and the plaintiffs to receive less money for the corn they
grew? Any plaintiffs’ verdict would require the jury to find in favor of
the plaintiffs as to all of those questions. The court also leaves open
the door for Syngenta to prove that China wrongfully rejected shipments
of corn for reasons other than the presence of the Viptera trait. If
such proof is established, China’s actions would be a superseding cause
for the plaintiffs’ damages, and the plaintiffs would not prevail in
their action against Syngenta.
The June 5 trial is scheduled to last for 20 days. It will be a very important milestone in this massive litigation.
We’ll keep you posted!
View Original Story