In the previous lawsuit involving GMO rice, how much did the rice farmers get paid?

  • In addition to amounts paid for cases tried to jury verdict, the remaining GMO Rice cases filed against Bayer Crop Science Co. settled for a total of $750,000,000
  • Plaintiffs were paid for their market losses, additional losses if they planted Cheniere/CL-131, and other losses such as storage costs and clean-up costs
  • Market losses paid were approximately $120/rice acre in 2006, $80/rice acre in 2007, $60/rice acre in 2008, $40/rice acre in 2009, and $10/rice acre in 2010
  • Approximately 11,000 rice farmers shared in the settlement, so the average recovery was approximately $68,100

During January and February, 2011, I negotiated a document with Bayer’s settlement counsel, John Galvin, which became the first of two settlement agreements with Bayer, resulting in the settlement of all the claims against Bayer for $750,000,000. Separately, Bayer had previously tried seven cases, and lost all seven of the cases. Consequently, Bayer paid seven litigants more than $125,000,000 to satisfy the seven trial court judgments against them arising from jury trials conducted.

Individual rice farmers were paid out of three different funds created by the two settlement agreements. The first fund satisfied market loss claims through the payment of more than $600,000,000. Market losses paid were approximately $120/rice acre in 2006, $80/rice acre in 2007, $60/rice acre in 2008, $40/rice acre in 2009, and $10/rice acre in 2010. The second fund, involved the payment of less than $100,000,000 for farmers who sustained damages as a result of growing Cheniere/CL-131. Finally, a $50,000,000 fund satisfied claims for other losses, particularly storage costs and clean-up costs.

To recover from the market losses fund created by the settlement, a claimant needed to enroll by attaching all FSA Forms 578 reflecting the Eligible Claimant’s interest in that rice crop. To recover from the Cheniere/CL-131 Fund, a claimant needed to submit a separate Cheniere/CL-131 Claims Form, containing reasonable documentation of Cheniere/CL-131 losses, as described in an attached exhibit. Finally, to recover from the third fund for Other Losses, a separate application for other losses was required, and a neutral third party known as a Claims Administrator divided up the $50,000,000.
Bayer paid for all administrative costs with respect to the settlement, including the fees of the Claims Administrator. Specific procedures were implemented to prevent fraud in the claims process, and Bayer negotiated for itself certain audit rights, to ensure that the claims being made were legitimate.
Claimants bore the responsibility to pay third-party liens, if any. Moreover, the funds recovered were subject to income taxes. Specifically, the agreement provided that “[t]he parties agree to characterize the monies comprised of Market Losses, the Cheniere/CL-131 Fund and Other Losses Fund for federal, state and local income tax purposes in such manner as is reasonably determined by Bayer, including without limitation as a “qualified settlement fund” within the meaning of Treasury Regulation Section 1.468B-1 or as a grantor trust pursuant to an election under Treasury Regulation Section 1.468B-1(k) or otherwise.”
In summary, the $750,000,000 settlement was divided amongst approximately 11,000 rice farmers. At its core, the funds primarily were divided by virtue of individual productivity, and specific other losses proven.

Written by*:
Mikal C. Watts
Four Dominion Drive, Bldg. Three, Suite 100
San Antonio, Texas 78257

* This information is provided to supply relevant information concerning the GMO corn lawsuit, and should not be received as legal advice. Legal advice is only given to persons or entities with whom Watts Guerra LLP has established an attorney-client relationship. If you have another lawyer in the GMO Corn lawsuit, you should consult with your own attorney, and rely upon his or her advice, rather than the information contained herein.

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