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In re Syngenta AG MIR 162 Corn Litigation

United States District Court, D. Kansas

August 26, 2019

IN RE SYNGENTA AG MIR 162 CORN LITIGATION
v.
Syngenta AG, et al., No. 17-2614-JWL This Document Relates To The DeLong Co., Inc.

          MEMORANDUM AND ORDER

          John W. Lungstrum, United States District Judge.

         This single case within this multi-district litigation (MDL) presently comes before the Court on the motion by defendants (collectively “Syngenta”) to dismiss Counts I, II, III, V, and VI of the complaint filed by plaintiff The DeLong Co., Inc. (“DeLong”) (Doc. # 12). For the reasons set forth below, the Court grants the motion and hereby dismisses the claims alleged in those counts, leaving only plaintiff's claim for negligence.

         I. Background

         This MDL includes hundreds of similar suits filed against Syngenta by corn farmers and others in the corn industry. The suits generally relate to Syngenta's commercialization of genetically-modified corn seed products known as Viptera and Duracade that contained a trait that had not been approved by China, an export market. The farmer plaintiffs (corn producers), who did not use Syngenta's products, alleged that Syngenta's commercialization of its products caused the genetically-modified corn 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 the trait; that such rejection caused corn prices to drop in the United States; and that corn farmers were harmed by that market effect.

         In 2015, in a lengthy opinion, the Court dismissed several claims asserted by corn producers in a consolidated complaint, but it allowed the plaintiffs' primary negligence claim to proceed. See In re Syngenta AG MIR 162 Corn Litig., 131 F.Supp.3d 1177 (D. Kan. 2015) (Lungstrum, J.) (“MTD Order”). In 2017, after certifying several state-wide classes for tort claims by producers, the Court granted summary judgment in favor of Syngenta against the Kansas class of producers on some claims (other than the negligence claim). See In re Syngenta AG MIR 162 Corn Litig., 249 F.Supp.3d 1224 (D. Kan. 2017) (Lungstrum, J.) (“SJ Order”). The Kansas class claims proceeded to trial, and eventually Syngenta entered into a global settlement of almost all related claims, which settlement the Court approved. Claims asserted by DeLong and a few other non-producers, however, were excepted from the settlement. In 2018, the Court dismissed Lanham Act and fraud claims asserted by one of those non-producers, Louis Dreyfus Company Grains Merchandising, LLC (“LDC”). See In re Syngenta AG MIR 162 Corn Litig., 2018 WL 489098 (D. Kan. Jan. 19, 2018) (Lungstrum, J.) (“the LDC Order”).

         In the present case, which DeLong initiated in October 2017 (after the Court had issued its MTD Order and SJ Order), DeLong asserts the following claims against Syngenta: violations of the federal Lanham Act, 15 U.S.C. § 1125(a) (Count I); violations of two Minnesota consumer protection statutes, Minn. Stat. §§ 325D.13 and 325F.69 (Count II); trespass to chattels (Count III); negligence (Count IV); fraudulent misrepresentation (Count V); and negligent misrepresentation (Count VI). DeLong alleges that it is a non-producer that purchased and exported corn and corn by-products to China, and that it suffered economic losses after China began rejecting corn shipments from the United States in November 2013 and the price of corn dropped. Syngenta now moves to dismiss all of these claims except for the negligence claim.

         II. Governing Standards

         The Court will dismiss a cause of action for failure to state a claim only when the factual allegations fail to “state a claim to relief that is plausible on its face, ” see Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007), or when an issue of law is dispositive, see Neitzke v. Williams, 490 U.S. 319, 326 (1989). The complaint need not contain detailed factual allegations, but a plaintiff's obligation to provide the grounds of entitlement to relief requires more than labels and conclusions; a formulaic recitation of the elements of a cause of action will not do. See Bell Atlantic, 550 U.S. at 555. The Court must accept the facts alleged in the complaint as true, even if doubtful in fact, see id., and view all reasonable inferences from those facts in favor of the plaintiff, see Tal v. Hogan, 453 F.3d 1244, 1252 (10th Cir. 2006).

         III. Lanham Act Claims (Count I)

         In Count I of its complaint, DeLong alleges violations of the Lanham Act, 15 U.S.C. § 1125(a), which provides for liability for certain false or misleading representations in “commercial advertising or promotion.” See Id. In this count, DeLong specifically cites five categories of representations by Syngenta as bases for its Lanham Act claims. Syngenta argues that claims based on various representations are foreclosed by the Court's prior rulings.[1] In its MTD Order, the Court dismissed Lanham Act claims based on alleged misrepresentations in Syngenta's 2007 deregulation petition, in a 2012 earnings conference call with investors and analysts, and in a Bio-Safety Certificates request form, on the basis that such representations were not made in “commercial advertising or promotion.” See MTD Order, 131 F.Supp.3d at 1224-27. In its SJ Order, the Court granted judgment to Syngenta on Lanham Act claims based on an August 2011 Grower Letter from Chuck Lee, on the basis that the plaintiffs had not presented evidence to show that farmers were influenced by the letter; or presented evidence to support a theory that any such misrepresentations could have caused the trade disruption, in light of the plaintiffs' theory that contamination of the corn supply would result from any significant planting of Syngenta's seed and the fact that the seed had already been sold and planted during the 2010-11 season. See SJ Order, 249 F.Supp.3d at 1230-31. Finally, in the LDC Order, the Court dismissed Lanham Act claims based on representations made after July 2011, on that same basis that any contamination would already have been inevitable under the plaintiff's theory because of the prior sales and planting of the seed in the 2010-11 season. See LDC Order, 2018 WL 489098, at *2-3.

         Syngenta argues that any claim by DeLong based on the same representations should be dismissed under the prior rulings. Syngenta further argues that any claim based on a 2014 fact sheet should also be dismissed because of the same timing issue with respect to causation. In its response, DeLong concedes that its arguments in support of any such claims are foreclosed by the Court's prior rulings, and it states that is has asserted such claims so that such issues may be argued on appeal. Accordingly, the Court dismisses DeLong's Lanham Act claims to the extent based on any such representations, including all representations made in or after July 2011.

         In its response, DeLong has identified only two possible additional representations by Syngenta on which it could still base a claim, alleged in paragraphs 331 through 339 of DeLong's complaint. First, DeLong cites a February 2011 statement by Syngenta to Randy Giroux of Cargill (alleged to be the largest grain handler in the United States) that Chinese approval could be expected by “harvest 2011.” Second, DeLong cites a March 2011 statement by Syngenta to Mr. Giroux that DeLong alleges was misleading concerning the timing and status of Syngenta's application for Chinese approval. DeLong alleges that Syngenta intended by its response to “fudg[e] the truth” and to buy some time so that Cargill would not put up signs warning farmers against planting Syngenta's seeds with the non-approved trait. DeLong alleges that because Cargill and others did not put up such signs, over 12, 000 farmers planted the seed and contaminated the corn supply in the United States. DeLong argues that a claim based on those representations do not run afoul of the Court's prior ruling concerning timing because they were made prior to the end of the 2011 planting season.

         Syngenta argues that such representations were not made in “commercial advertising or promotion” as required under the Lanham Act. Syngenta notes that these statements were not made to potential customers, but rather were allegedly made to a single person, in response to that person's questions. The Tenth Circuit has adopted the following four-part test:

In order for representations to constitute “commercial advertising or promotion” under [Section 1125(a)(1)(B) of the Lanham Act], they must be: (1) commercial speech; (2) by a defendant who is in commercial competition with plaintiff; (3) for the purpose of influencing consumers to buy defendant's goods or services. While the representations need not be made in a “classic advertising campaign, ” but may consist instead of more informal types of “promotion, ” the representations (4) must be disseminated ...

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