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In re Syngenta AG Mir 162 Corn Litigation

United States District Court, D. Kansas

April 5, 2017

IN RE SYNGENTA AG MIR 162 CORN LITIGATION This Document Relates To: The Nationwide and Kansas Classes Certified by the Court No. 14-md-2591-JWL


          John W. Lungstrum United States District Judge.

         In this multi-district litigation (MDL), plaintiffs assert various claims against defendants (collectively “Syngenta”) relating to Syngenta's commercialization of corn seed products known as Viptera and Duracade, containing a genetic trait known as MIR 162, without approval of MIR 162 corn by China, an export market. Plaintiffs, who did not use Syngenta's products, allege that Syngenta's commercialization of its products caused corn containing MIR 162 to be commingled throughout the corn supply in the United States; that China rejected imports of all corn from the United States because of the presence of MIR 162; that such rejection caused corn prices to drop in the United States; and that plaintiffs were harmed by that market effect. Plaintiffs assert claims under the federal Lanham Act and various state-law claims. By prior order, the Court certified a nationwide Lanham Act class and state-wide classes for claims under the law of Arkansas, Illinois, Iowa, Kansas, Missouri, Nebraska, Ohio, and South Dakota. See In re Syngenta AG MIR 162 Corn Litig., 2016 WL 5371856 (D. Kan. Sept. 26, 2016). The Court has first set for trial the claims of the Lanham Act class and the Kansas state class (which asserts only a claim of negligence), and the Court has entered a pretrial order to govern that trial. By prior order, the Court ruled that these summary judgment motions would cover only issues relevant to those claims.

         This matter presently come before the Court on Syngenta's motion for summary judgment on various claims (Doc. # 2860) and plaintiffs' motion for summary judgment on various defenses (Doc. # 2858). For the reasons set forth below, the Court grants in part and denies in part both motions. The Court grants Syngenta's motion with respect to all claims under the Lanham Act. The Court also grants Syngenta's motion with respect to any claim of negligence in which liability is based on any alleged misrepresentation, a voluntary undertaking, a failure to warn, or a duty to recall. The Court grants plaintiffs' motion with respect to Syngenta's defenses of intervening cause (as applied to Cargill and ADM and as applied to some acts of China), assumption of the risk, mitigation, business and economic justification, antitrust preemption, and comparative fault. The parties' motions are otherwise denied.[1]

         I. Summary Judgment Standards

         Summary judgment is appropriate if the moving party demonstrates that there is “no genuine dispute as to any material fact” and that it is “entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(a). In applying this standard, the court views the evidence and all reasonable inferences therefrom in the light most favorable to the nonmoving party. Burke v. Utah Transit Auth. & Local 382, 462 F.3d 1253, 1258 (10th Cir. 2006). An issue of fact is “genuine” if “the evidence allows a reasonable jury to resolve the issue either way.” Haynes v. Level 3 Communications, LLC, 456 F.3d 1215, 1219 (10th Cir. 2006). A fact is “material” when “it is essential to the proper disposition of the claim.” Id.

         The moving party bears the initial burden of demonstrating an absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Thom v. Bristol-Myers Squibb Co., 353 F.3d 848, 851 (10th Cir. 2003) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986)). In attempting to meet that standard, a movant that does not bear the ultimate burden of persuasion at trial need not negate the other party's claim; rather, the movant need simply point out to the court a lack of evidence for the other party on an essential element of that party's claim. Id. (citing Celotex, 477 U.S. at 325).

         If the movant carries this initial burden, the nonmovant may not simply rest upon the pleadings but must “bring forward specific facts showing a genuine issue for trial as to those dispositive matters for which he or she carries the burden of proof.” Garrison v. Gambro, Inc., 428 F.3d 933, 935 (10th Cir. 2005). To accomplish this, sufficient evidence pertinent to the material issue “must be identified by reference to an affidavit, a deposition transcript, or a specific exhibit incorporated therein.” Diaz v. Paul J. Kennedy Law Firm, 289 F.3d 671, 675 (10th Cir. 2002).

         Finally, the court notes that summary judgment is not a “disfavored procedural shortcut;” rather, it is an important procedure “designed to secure the just, speedy and inexpensive determination of every action.” Celotex, 477 U.S. at 327 (quoting Fed.R.Civ.P. 1).

         II. Lanham Act Claims

         Plaintiffs have asserted claims under the false advertising provision of the federal Lanham Act, which provides for liability of one who makes false or misleading representations in commercial advertising or promotion. See 15 U.S.C. § 1125(a)(1)(B). Plaintiffs' Lanham Act claims are now based solely on representations by Syngenta employee Chuck Lee in an August 17, 2011, letter to all Syngenta purchasers (the “Grower Letter”).[2] In particular, plaintiffs rely on the statement from the Grower Letter that Syngenta expected import approval from China for Viptera in late March 2012.[3]

         Syngenta argues as a matter of law that plaintiffs cannot prove causation as required for this claim. Although plaintiffs do not explicitly dispute that causation must be shown, they suggest that the Tenth Circuit has not expressly required causation in listing the elements of this claim. It is clear, however, that plaintiffs must prove that their injuries were caused by the alleged misrepresentations. The statute itself provides for a claim by a person “damaged by such act” of deception, see Id. (emphasis added), and the Supreme Court has held that a plaintiff asserting a claim under this statute must prove injury proximately caused by the misrepresentation, see Lexmark Int'l, Inc. v. Static Control Components, Inc., 134 S.Ct. 1377, 1395 (2014). See also University of Texas Southwestern Med. Ctr. v. Nassar, 133 S.Ct. 2517, 2524-25 (2013) (causation in fact is a standard requirement of any tort claim, including certain federal statutory claims). Moreover, the Tenth Circuit, in listing the required elements, has referred to false or misleading representations “that are . . . likely to cause confusion . . . and injure the plaintiff, ” and causation is thus required because the representation must injure the plaintiff. See Sally Beauty Co. v. Beautyco, Inc., 304 F.3d 964, 980 (10th Cir. 2002) (quoting Cottrell, Ltd. v. Biotrol Int'l, Inc., 191 F.3d 1248, 1252 (10th Cir. 1999)); cf. Hutchinson v. Pfeil, 211 F.3d 515, 522 (10th Cir. 2000) (presumption of causation arises only “when the defendant has explicitly compared its product to the plaintiff's or the plaintiff is an obvious competitor with respect to the misrepresented product”).

         Plaintiffs do not take issue with Syngenta's premise that, in order to prove causation in fact here, plaintiff must show both that farmers read and were influenced by the Grower Letter and that the impact of the letter was great enough to cause the embargo that allegedly caused the price drop in this country. In arguing that plaintiffs cannot produce such evidence, Syngenta notes that of the more than 100 farmers deposed in this MDL and the related Minnesota litigation, only one testified that he had seen the Grower Letter, and none testified that he purchased Viptera or Duracade because of that letter. Syngenta further notes that plaintiffs did not conduct any relevant survey of farmers. Nor have plaintiffs offered any expert opinion that sales attributable to the Grower Letter were such that plaintiffs' injuries would not have occurred otherwise. In their cursory response to this argument, plaintiffs cite only evidence that the Grower Letter was intended by Syngenta to provide assurance to potential purchasers of Viptera and that sales of the product did increase from 2011 to 2012. Plaintiffs have provided no evidence, however, that the increased sales may be traced to the Grower Letter (let alone to the particular statements in that document at issue here). Plaintiffs also argue, without citation to evidence, that the Grower Letter “prolonged and increased the risk of a trade disruption with China.” Plaintiffs have not provided any evidence, however, that their injuries would not have occurred but for increased sales traced to the letter.

         Plaintiffs have not addressed at all Syngenta's argument based on the fact that, by the time of the Grower Letter in August 2011, Syngenta had been selling Viptera for many months and planting for the 2011 season had been completed. Thus, under plaintiffs' own theory of liability here (under which contamination of the entire corn supply through cross-pollination and commingling was inevitable without additional safeguards), there was already more than enough corn containing MIR 162 in the system to cause the alleged trade disruption. Thus, there is no evidence that sales occurring after the Grower Letter affected the fact or duration of plaintiffs' economic injuries. That lack of evidence, along with the lack of evidence that the alleged misrepresentations caused any increase in sales, means that plaintiffs have failed to provide the necessary evidence of causation. Syngenta is therefore entitled to summary judgment on plaintiffs' Lanham Act claims.[4]

         III. Negligence Claims

         A. Liability Based on Alleged Misrepresentations

         Syngenta seeks summary judgment on plaintiffs' negligence claims to the extent they are based on alleged misrepresentations made in Syngenta's deregulation petition or in the course of Syngenta's suit against Bunge. Syngenta argues that such representations are protected by the Constitution's Petition Clause. Syngenta also seeks summary judgment more broadly on any claim based on an alleged misrepresentation, for the reason that plaintiffs have not pleaded or preserved a claim for negligent misrepresentation. In its order dismissing certain negligence claims as preempted, the Court ruled as follows:

[P]laintiffs argue that they have alleged various false and misleading representations by Syngenta and that such claims should not be preempted. The Court agrees with Syngenta, however, that plaintiff by these complaints have not asserted any claim for negligent misrepresentation. Thus, there is no basis for Syngenta's liability based on false representations or omissions of fact in communications with plaintiffs.

See In re Syngenta AG MIR 162 Corn Litig., 2016 WL 4382772, at *9 (D. Kan. Aug. 17, 2016) (footnote omitted).

         In response, plaintiffs insist that they are not asserting any negligent misrepresentation claims. Instead, they argue, the alleged misrepresentations are part of the totality of Syngenta's conduct regarding the commercialization of Viptera that was allegedly unreasonable. In that regard, they note various experts' opinions that the applicable standard of care includes transparency in communications.

         The Court rejects this argument by plaintiffs. The law sets forth certain requirements for liability based on negligence with respect to representations, and plaintiffs may not circumvent those requirements by basing an ordinary negligence claim on alleged misrepresentations. See Rodriguez v. ECRI Shared Servs., 984 F.Supp. 1363, 1368 (D. Kan. 1997) (plaintiff could not base negligence claim on statements to a third party; “to hold otherwise would allow plaintiff to circumvent the more stringent requirements of the torts of defamation, negligent misrepresentation, and tortious interference”). Plaintiffs cannot avoid that result by alleging that additional conduct was also negligent, as any liability would then improperly be based, at least in part, on alleged misrepresentations, without plaintiffs' having satisfied the requirements for the applicable tort. Thus, the Court rules that alleged misrepresentations cannot be part of the conduct the reasonableness of which the jury determines. Accordingly, Syngenta is awarded summary judgment on any claims of negligence based in whole or in part on any alleged misrepresentation, including any misrepresentation made in the deregulation petition or the Bunge suit.

         Plaintiffs also argue that Syngenta's alleged misrepresentations may have other evidentiary value, including with respect to the issue of punitive damages. Evidentiary issues are not before the Court in these motions, however, and the Court thus makes clear that by this order it does not rule on the admissibility of any particular evidence.

         B. Voluntary Undertaking

         Plaintiffs assert, as an alternative basis for a duty, that Syngenta owes a duty to them under the voluntary undertaking doctrine as recognized in McGee ex rel. McGee v. Chalfant, 248 Kan. 434 (1991). In McGee, the Kansas Supreme Court held 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, ” as set forth in Section 324A of the Restatement. See McGee, 248 Kan. at 438 (citing Restatement (Second) of Torts § 324A). Plaintiffs argue that Syngenta voluntarily undertook compliance with the BIO Policy concerning the commercialization of new GM products.

         The Court agrees with Syngenta, however, that Section 324A cannot apply here because plaintiffs have not sought to recover for physical harm in this case. The Restatement section provides for liability “for physical harm resulting from [the actor's] failure to exercise reasonable care to protect his undertaking, ” see Restatement (Second) of Torts § 324A, and the Kansas Supreme Court has specifically held that Section 324A “has application only in cases involving physical harm.” See Barber v. Williams, 244 Kan. 318, 324 (1989); see also Geiger-Schorr v. Todd, 21 Kan.App.2d 1, 8-9 (1995) (in rejecting application of the similar Section 323 to a claim for economic harm, noting that “Kansas courts have not applied § 323 to hold an actor liable for non-physical harm to persons or things”). Plaintiffs argue that courts in other jurisdictions have applied Section 324A to claims for economic harm, but Kansas courts have specifically limited the application of Section 324A to its explicit terms and thus to claims for physical harm, and this Court must abide by that law as set forth by the Kansas Supreme Court.

         Plaintiffs also argue that Syngenta's actions increased the risk of physical harm to farmers' property. The Restatement, however, provides only for liability for physical harm, and plaintiffs seek only to recover for economic injuries in this case. Accordingly, Syngenta is awarded summary judgment on any negligence claim based on this theory of duty.

         C. Failure to Warn

         This Court previously dismissed, on the basis of FIFRA preemption, “any claim based on an alleged failure to warn to the extent that such claim is based on a lack of warnings in materials accompanying the products.” See In re Syngenta AG MIR 162 Corn Litig., 131 F.Supp.3d 1177, 1208 (D. Kan. 2015). Syngenta now seeks summary judgment on any other failure-to-warn claim asserted by plaintiffs. Plaintiffs respond that they are not asserting a failure to warn as a separate basis for liability (as might be asserted in a product liability case). Thus, the Court awards Syngenta summary judgment on any claim based solely on a failure to warn.

         Plaintiffs argue that they may allege a failure to warn as part of the totality of conduct by Syngenta that was negligent. Syngenta responds that it is entitled to seek summary judgment with respect to part of plaintiffs' claim. The particular conduct making up the alleged negligence may not so easily be segregated, however, as the reasonableness of Syngenta's conduct must be judged based upon the totality of the circumstances, and the Court thus declines to prohibit plaintiffs' reliance on an alleged failure of Syngenta to warn or instruct farmers.[5] Similarly, as noted above, the Court by this order makes no ruling concerning the admissibility of particular evidence at trial.

         D. Duracade

         Syngenta seeks summary judgment to the extent that plaintiffs' claims are based on the commercialization by Syngenta of the Duracade product, which, like Viptera, contained the MIR 162 trait. Plaintiffs argue that they are alleging not that they suffered a separate injury from the release of Duracade, but rather that the release prolonged the period of harm, and that Syngenta therefore should not be permitted to seek summary judgment on this basis. The Court rejects this argument, however, as Syngenta is certainly entitled to seek summary judgment with respect to a portion of the damages period extending beyond the time of Viptera's approval in China in 2014.

         Syngenta argues that plaintiffs lack the required evidence that Duracade had any impact on corn prices. Syngenta acknowledges that plaintiffs' experts did offer such an opinion, but it argues that those experts improperly relied only on speculative evidence. The Court rejects this argument. Both experts relied on testimony by a Cargill employee that Cargill “could be” going through the same situation with Duracade that it had experienced with Viptera. Syngenta paints that testimony as speculative. The employee testified, however, that Cargill did not export corn to China after Viptera had been approved there because Duracade had been released and had not been approved. That testimony is not impermissibly speculative, and plaintiffs' experts were entitled to rely on that evidence in opining that the release of Duracade did have a causative effect. Thus, plaintiffs have offered evidence on this issue, and the Court cannot conclude that no reasonable jury could award damages based on Syngenta's actions concerning Duracade. The Court therefore denies Syngenta's motion as it relates to this issue.

         E. Liability Based on a Duty to Conduct a Limited Launch

         Syngenta seeks summary judgment on plaintiffs' negligence claims to the extent that such claims are based on a duty to conduct only a limited launch of Syngenta's products. Syngenta argues as a matter of law that plaintiffs cannot show the requisite causation under such a theory.

         As a preliminary matter, the Court rejects plaintiffs' argument that Syngenta may not seek summary judgment on this portion of plaintiffs' negligence claims. The applicable rule allows for summary judgment with respect to part of a claim, see Fed. R. Civ. P. 56(a), and as Syngenta points out, plaintiffs' theory based on a duty to conduct a limited launch is discrete from its alternative theory that Syngenta had a duty not to commercialize the products at all until they had been approved in China.

         Syngenta argues that any launch would have resulted in the presence of MIR 162 in the general corn supply through inevitable cross-pollination and commingling; that such presence would have resulted in the same trade disruption and embargo in light of China's policy of zero tolerance for corn with the MIR 162 trait; and that therefore Syngenta's failure to limit or safeguard its launch cannot have caused plaintiffs' economic injuries because there would have been the same effect on the market with any launch. The Court agrees with Syngenta that in order to prove causation under this theory, plaintiffs must show that its is more likely than not that a limited launch would not have caused the same trade disruption with China that allegedly occurred because of Syngenta's unlimited launch of Viptera. The Court does not agree with Syngenta, however, that, in light of China's zero-tolerance policy, plaintiffs effectively must show that no kernel of corn with the MIR 162 trait would have reached China under a limited launch. Plaintiffs have provided evidence that China tested only a small percentage of kernels sent to its shores, and plaintiffs can satisfy their burden by showing merely that it is more likely than not that no trade embargo would have occurred.

         Syngenta argues that expert testimony is required on this question of causation and that plaintiffs cannot point to any such admissible evidence. In Moore v. Associated Material and Supply Co., Inc., 263 Kan. 226 (1997), the defendant argued that “where the existence of proximate cause is not apparent to the average layman from common knowledge, expert testimony is required to establish causation.” See Id. at 234. The Kansas Supreme Court concluded that its prior caselaw did not support such a broad statement, that those cases only required expert testimony to establish negligence based on the departure from the reasonable standard of care in a particular profession, and that “[h]oldings of an expert testimony requirement outside the area of professional liability, where breach of a standard of care must be proven, are not easily found.” See Id. at 234-35. The court quoted with approval from a legal encyclopedia as follows:

While the testimony of witnesses having specialized education and training, or special experience and knowledge, is often admitted into evidence on the ground of necessity, a party is not necessarily required to resort to expert opinion testimony merely because the case involves matters of science, special skill, special ...

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