Archive for FAQs – Page 2

Will this lawsuit concerning GMO corn bankrupt Syngenta?

The answer is “No.”

  • Syngenta is a major multi-national corporation with a market capitalization exceeding $32 billion.
  • Syngenta maintains extensive insurance, providing it with financial reimbursement rights for damages it pays to farmers in this litigation.
  • Syngenta has substantial cash-on-hand, and significant operating income, which it can use to pay a large, multi-billion dollar settlement in this case. Moreover, Syngenta’s parent corporation is liable for the actions complained of in this suit; additionally, its U.S. subsidiaries have significant assets here.
  • Syngenta will only pay those farmers who timely file suit against it; those who miss their state’s statute of limitations will not be included in a settlement of these claims, and will not cost Syngenta a single dollar.

The question has been asked, “will this lawsuit bankrupt Syngenta?” The answer is “No.”
First, Syngenta is a giant corporation with worldwide operations. Its market capitalization exceeds $32 billion. Syngenta’s sales exceed $14 billion per year, providing it with well over $1 billion a year in net operating capital, which can fund a major nationwide settlement in this case.

Second, Syngenta maintains substantial insurance to protect itself, and to assist the corporation to fund a major settlement of these cases. Syngenta self-insures or uses a combination of insurance and self- insurance for certain risks. In its 2013 Annual Report to its shareholders, Syngenta states, “Litigation is subject to many uncertainties, and the outcome of individual matters cannot be predicted with certainty. Syngenta maintains general liability insurance, including product liability insurance, covering claims on a worldwide basis with coverage limits and retention amounts which management believes to be adequate and appropriate in relation to Syngenta’s businesses and the risks to which it is subject.”
Third, Syngenta is a worldwide operation that generates huge amounts of cash that can be used to finance a settlement of these cases. Syngenta reported “cash and cash equivalents on December 31, 2013 and 2012 of $902 million and $1,599 million, respectively. Of total cash and cash equivalents of $902 million (2012: $1,599 million), $153 million (2012: $125 million) is required to meet insurance solvency requirements of the Group’s insurance subsidiaries.” Moreover, Syngenta’s parent corporation is liable for the actions complained of in this suit, and its U.S. subsidiaries have significant assets here. There is absolutely no business risk of Syngenta declaring bankruptcy, when its enormous assets in the United States would be sacrificed in an effort to achieve protection through a U.S. bankruptcy filing.
Fourth, the liabilities faced by Syngenta are not sufficiently large to cause it to even consider filing for bankruptcy protection. While Syngenta economically harmed every corn farmer in America with its conduct, it will not have to pay them all. Syngenta will only pay those farmers who timely file suit against it; those who miss their state’s statute of limitations will not be included in a settlement of these claims. While there are more than 440,000 corn farmers in America – farming more than 88 million acres of corn – we anticipate that only 25% of them will timely file lawsuits against Syngenta before their states’ applicable statute of limitations dictates that new lawsuits against Syngenta can no longer be filed. As such, Syngenta is likely to pay settlements only to those farmers who timely file suit against them, dramatically lowering the cost of settling these cases nationwide. In conclusion, there is no realistic risk of this litigation bankrupting Syngenta, a major multi-national corporate conglomerate.

Written by*:
Mikal C. Watts
WATTS GUERRA, LLP
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.

Is there any financial risk to the farmer who files suit against Syngenta for its actions causing the drop in corn prices?

  • We will pay all the costs for this litigation, and our farmers owe us nothing for expenses or fees if we are unsuccessful.
  • Our contingency fee arrangement calls for a 60-40 split in the event of a settlement, a standard fee in major litigation.
  • We will repay our expenses out of our 40%; the farmer is guaranteed 60% of the total recovery.
  • Syngenta’s website makes it clear that it will not file counterclaims against farmers suing Syngenta.

Is there any financial risk to the farmer who files suit against Syngenta? The answer is “No.”
First, all the costs for this litigation are to be borne by our law firm. Those costs are considerable. More than 2,500 lawsuits were filed in Minnesota state courts at a cost of $400 apiece, before we began “batch filing” them in groups of 80 or 90 plaintiffs per case. Our firm paid those filing fees. We will pay for the costs of doing discovery, and taking depositions. We will pay for the costs of hiring and paying experts that will be needed to prove this case against Syngenta. We will pay for the costs of taking depositions in this case, and for all costs in trying these cases. The farmer will pay for nothing. Should we be unsuccessful, no farmer will receive a bill from us asking for payment for our lost time, or our lost dollars in funding an unsuccessful litigation. We do not believe this will happen; if it does, you owe us nothing.

Second, if we are successful – as we were in the genetically-modified rice litigation that settled for $750 million – our deal with you is simple. Only you can approve a settlement of your lawsuit against Syngenta. If you agree to settle, for every ten dollars we recover, you will be guaranteed six dollars, and we will take four dollars to repay our expenses, and whatever remains from that four dollars will be divided between the attorneys working on your case in the percentages set forth in the contract that you sign. In sum, it’s a 60-40 deal – you keep 60%; we use the remaining 40% to repay the expenses, and to pay ourselves a fee for our successful resolution of your case.

Third, it is important to reiterate that the expenses are repaid out of our 40% share. This is unusual, but we felt it important to guarantee our clients 60% of their gross recovery. In the genetically-modified rice lawsuit settled for $750 million dollars, our firm and our partner firms spent over $4 million in costs. Here, we anticipate spending more than $10 million, since this case involves far more corn farmers than the number of rice farmers involved there. Because of the huge number of corn farmers to be involved in this case, we feel comfortable that our total expenses will be very low per farmer, and therefore, are absorbing those expenses from our 40% share.

Fourth, despute rumors of Syngenta considering counterclaims against parties filing suit against it, this will not happen. First, many states provide absolute protection against suit by Syngenta, since filing suit against it in the first place is exercising a constitutional right under the Seventh Amendment to the United States Constitution. Second, Syngenta has announced on its website as of March 24, 2015 that it will not file countersuits against parties that sue Syngenta. This is just and right, and Syngenta is to be commended for this statement.

In sum, there is no financial risk to the farmer who files suit against Syngenta. Instead, that farmer has an absolute right to pursue his or damages against Syngenta for its questionable conduct that cost American corn farmers billions of dollars.

Written by*:
Mikal C. Watts
WATTS GUERRA, LLP
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.

Did you have to grow Syngenta’s seeds in order to participate in this GMO corn lawsuit?

Answer: “No.”

  • Ninety-seven percent (97%) of the seed grown in the U.S. during crop years 2013 and 2014 was not seed sold by Syngenta
  • Nonetheless, farmers who were not customers of Syngenta saw the price they were paid for their corn drop significantly, and have a meritorious claim for that lost corn income
  • Grain elevators and corn exporters suffered damages from Syngenta’s conduct, regardless of whether they processed corn grown from Sygenta’s seeds
  • Corn exporters having no contractual relationship with Syngenta lost hundreds of millions of dollars, and can recover the same

Syngenta’s introduction in the United States of MIR 162 (Viptera Agrisure) in crop year 2013 and its subsequent introduction of Duracade Agrisure in crop year 2014 achieved over $1 billion in sales for the corporation, yet overall, only three percent (3%) of the corn seeds sold in 2013 and 2014 were these two non-approved genetically-modified seeds marketed by Syngenta. Thus, during the effected crop years in 2013 and 2014, ninety-seven percent (97%) of American corn farmers grew an approved seed marketed by an entity other than Syngenta. Nonetheless, every corn farmer in America saw lost corn income as a result of Syngenta’s actions.

Farmers who were not customers of Syngenta saw the price they were paid for their corn drop significantly, and have a meritorious claim for that lost corn income. As a result, more than ninety-seven percent (97%) of American corn farmers – in excess of 425,000 American corn farmers – who had nothing to do with Syngenta’s unapproved GMO corn trait – suffered billions of dollars in damages as a result of Syngenta’s actions. Nevertheless, the three percent (3%) of corn seed sales that involved MIR 162 or Duracade resulted in a meltdown of the U.S. corn export market, and billions of dollars in lost corn income to farmers having nothing to do with Syngenta.

Likewise, grain elevators intending to resell corn to exporters, and those exporters intending to transport such corn to foreign markets, likewise lost hundreds of millions of dollars when the price of corn plummeted through no fault of their own. Those grain elevators and corn exporters have righteously filed lawsuits against Syngenta, seeking to recover the enormous losses their shareholders have suffered as a result of Syngenta’s risky behavior. Iconic United States agricultural conglomerates such as Cargill and Archer Daniels Midland filed the first and third lawsuits filed in the country against Syngenta. For example, in its lawsuit against Syngenta, corn exporter Archer Daniels Midland specifically alleged that its “lawsuit arises from improper actions by Syngenta that have adversely affected the export market for corn grown in the United States and caused damages to ADM in particular.” ADM further specifically alleged that “[t]he results [of Syngenta’s actions] have been predictable and entirely foreseeable. Syngenta’s GMO corn has become intermixed with the rest of the U.S. corn supply. That, in turn, has resulted in China, which has never granted regulatory approval to Syngenta’s GMO corn but is one of the largest export markets for corn, rejecting the vast majority of U.S. corn shipments because of the intermixed presence of Syngenta’s GMO corn. These rejections have resulted in very substantial losses to U.S. exporters who have had their shipments to China turned away, including tens of millions of dollars in damages to ADM.”

In conclusion, Syngenta’s conduct has harmed a wide array of persons and entities having nothing to do with growing its GMO corn. Both those who did grow it, and those who did not grow it, were seriously harmed by Syngenta’s GMO corn strain; all of them are now seeking to recover their damages from Syngenta, and rightfully so.

Written by*:
Mikal C. Watts
WATTS GUERRA, LLP
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.

Why isn’t it China, rather than Syngenta, that is responsible for the drop in U.S. corn prices?

  • As a sovereign nation, China may legally prevent import on to its shores of exported genetically-modified corn like MIR 162, with no legal repercussions.
  • Syngenta promised the U.S. Government it would Prevent Unapproved MIR 162 from Arriving on Chinese shores, and thereby Disrupt U.S. Corn Export Acceptance by China.
  • As predicted by the National Grain and Feed Association in 2011, China’s zero-tolerance policy concerning previously-unapproved genetically-modified corn was known to Syngenta; its rejection was foreseeable to Syngenta.
  • Even with China’s refusal to approve MIR 162, it was Syngenta’s failure to keep it segregated from other approved seeds that resulted in China’s eventual ban on U.S. corn shipments, and the consequent loss of billions of dollars in corn income by American farmers.

As a sovereign nation, China may legally prevent import of genetically-modified corn like MIR 162, with no legal repercussions. Syngenta points to no basis for a court’s ability to adjudicate its desired defense that China acted in violation of its own laws. To do so would be contrary to the act-of-state doctrine, which “requires that . . . the acts of foreign sovereigns taken within their own jurisdictions shall be deemed valid.” W.S. Kirkpatrick & Co. v. Envt’l Tectonics Corp., Int’l, 493 U.S. 400, 409 (1990) (emphasis added); see also Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 401 (1964) (“The act of state doctrine in its traditional formulation precludes the courts of this country from inquiring into the validity of the public acts a recognized foreign sovereign power committed within its own territory.”).

Syngenta, in seeking non-regulated status from the United States Department of Agriculture in 2010, and consequently, the permission from our government to sell a GMO seed not approved elsewhere, made promises that it would prevent its unapproved MIR 162 from arriving on Chinese shores, and thereby disrupting U.S. corn export acceptance by China. It failed to meet these promises. Specifically, Syngenta failed to timely implement stewardship agreements to ensure that farmers to whom it sold its previously-unapproved GMO MIR 162 seed would not commingle corn grown from such unapproved seed with corn approved elsewhere. Syngenta failed to meet its promises to the U.S. Government, and thereby caused billions of dollars in damages to U.S. corn farmers, grain elevators and corn exporters.

The National Grain and Feed Association (“NGFA”) twice predicted that Syngenta would risk imploding the U.S. corn export market if it prematurely commercialized this unapproved corn seed. In 2011, the NGFA predicted that Syngenta’s premature commercialization of MIR 162, or Viptera Agrisure, could cost the American corn farmer upwards of $2.9 billion during crop year 2013. In 2012, the NGFA likewise predicted that Syngenta’s premature commercialization of Duracde Agrisure could cause perhaps another $3.4 billion in damages during crop year 2014.

Facing dire warnings of up to $6.3 billion in damages caused to the American corn farmer, Syngenta chose to plow forward anyway. As such, it was not China’s predictable rejection of U.S. corn shipments including the unapproved MIR 162 strain that caused the drop in corn prices, it was Syngenta’s own conduct and its repeated refusal to be honest with the American corn farmer. Consequently, it is not the Chinese, rather it is Syngenta, that is responsible for the drop in U.S. corn prices, and the consequent billions in litigation claims brought in these lawsuits.

Written by*:
Mikal C. Watts
WATTS GUERRA, LLP
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.

Where are the GMO corn lawsuit cases against Syngenta being consolidated and litigated?

Kansas City (federal court cases)

Minnesota (state court cases)

  • The United States has state courts, primarily responsible for lawsuits filed between citizens of the same state, or lawsuits filed by out-of-state plaintiffs against an in-state Defendant. The United States also has federal courts, primarily responsible for lawsuits filed between citizens of different states, or involving federal questions.
  • Syngenta is based in Minnesota; therefore, any citizen in the United States may file suit against it in the state courts of Minnesota, unless the suit involves a federal question.
  • Syngenta has claimed federal question jurisdiction exists due to China’s role in rejecting MIR 162 corn. Specifically, Syngenta has alleged that Plaintiffs have invoked the federal common law of foreign relations, giving rise to federal court jurisdiction. Plaintiffs have sought remand of these cases back to the Minnesota state courts in which they were filed.
  • State court lawsuits are being consolidated in Minnesota state courts; federal court lawsuits are being handled by a multi-district litigation proceeding in Kansas City, Kansas.

Cases against Syngenta have been filed across the United States, in both state courts and federal courts. The United States has state courts, primarily responsible for lawsuits filed between citizens of the same states, or lawsuits filed by out-of-state plaintiffs against an in-state Defendant. Conversely, the United States also has federal courts, primarily responsible for lawsuits filed between citizens of different states, or those involving federal questions. Thousands of lawsuits have been filed by farmers, landlords, grain elevators and corn exporters, and those suits have been filed in both state courts and federal courts.

Lawsuits filed between citizens of the same states, or lawsuits filed by out-of-state plaintiffs against an in-state Defendant, have jurisdiction in the state courts of the United States. Specifically, because Syngenta’s U.S. entity is based in Minnesota, suits brought by any farmer or grain elevator in the United States against Syngenta may be brought in Minnesota state courts unless such suits involve federal questions.

By contrast, suits filed between citizens of different states in the state where the plaintiff resides, or suits involving federal questions, must be brought in federal court. Pursuant to 1960’s legislation passed by the United States Congress, all federal court cases involving common issues of law and fact may be consolidated by the Joint Panel on Multi-District Litigation, and transferred to a single federal court for pretrial coordination. In this case, all cases in federal court have been consolidated in MDL 2591, before Hon. John W. Lungstrum, United States District Court for the District of Kansas.

Several thousand lawsuits have been filed against Syngenta in the state courts of Minnesota. With respect to those claims filed by Minnesota farmers, such suits have been filed in the counties where such farmers reside, and where Syngenta may be found. With respect to those claims filed by farmers residing in other states, such suits have been filed in Hennepin County, Minnesota, near Minneapolis. Syngenta has removed such suits to federal court, alleging federal question jurisdiction exists by virtue of the federal common law of foreign relations. Syngenta has claimed that federal courts have jurisdiction over such cases because the foreseeability that Plaintiffs must demonstrate to win requires a court to evaluate whether or not China’s conduct in refusing to accept MIR 162 was illegal. Plaintiffs disagree, and respond that China’s conduct has nothing to do with the allegations they have made against Syngenta; rather, it was Syngenta’s own decisions in marketing MIR 162 that resulted in Plaintiffs’ damages.
If the cases end up in federal court, they will be consolidated and litigated before Judge Lungstrum in Kansas City, Kansas. By contrast, if Judge Lungstrum decides that the thousands of cases filed against Syngenta in Minnesota state courts do not involve a federal question, they will be remanded back to Minnesota state courts. It is then expected that such cases will be consolidated by the Chief Justice of the Minnesota Supreme Court for purposes of pretrial discovery and coordination, before such cases are separately tried in the counties in which they were filed.

Written by*:
Mikal C. Watts
WATTS GUERRA, LLP
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.