Monday, April 10, 2017

Causation failure dooms Lanham Act claim in bioengineered corn case

In re: Syngenta AG MIR 162 Corn Litig., MDL No. 2591, 2017 WL 1250791 (D. Kan. Apr. 5, 2017)

Plaintiffs asserted various claims against Syngenta relating to Syngenta’s commercialization of the corn seed products Viptera and Duracade, containing a genetic trait known as MIR 162, when China, a key export market, didn’t approve that corn. Plaintiffs alleged that Syngenta’s acts caused corn containing MIR 162 to be commingled throughout the corn supply in the United States; that China therefore rejected imports of all corn from the US, causing corn prices to drop; and that plaintiffs (who didn’t use Syngenta corn) were harmed by that market effect. The court previously 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. Here, Syngenta got rid of all Lanham Act claims, as well as any claim of negligence in which liability was based on any alleged misrepresentation, a voluntary undertaking, a failure to warn, or a duty to recall.  The negligence analysis contains a lot that seems quite interesting, but I’ll focus on the Lanham Act claims.

An August 17, 2011, letter to all Syngenta purchasers stated that Syngenta expected import approval from China for Viptera in late March 2012.  The court found that plaintiffs couldn’t prove injury causation. To show causation, they’d have to show both that farmers read and were influenced by the letter and that the impact of the letter was great enough to cause the embargo that allegedly caused the price drop in this country. Of the more than 100 farmers deposed in this MDL and the related Minnesota litigation, only one testified that he had seen the letter, and none testified that he purchased Viptera or Duracade because of that letter. There was no other survey or expert evidence.  By the time of the letter, Syngenta had been selling Viptera for many months and planting for the 2011 season had been completed. “[T]here was already more than enough corn containing MIR 162 in the system to cause the alleged trade disruption.”  This justified summary judgment for Syngenta on the Lanham Act claims.

Syngenta also won summary judgment on the negligence claims to the extent they were based on alleged misrepresentations made in Syngenta’s deregulation petition or in the course of a lawsuit suit against another market participant.  Plaintiffs argued that they weren’t asserting any negligent misrepresentation claims, but that the alleged misrepresentations were part of the totality of Syngenta’s conduct regarding the commercialization of Viptera that was allegedly unreasonable; the applicable standard of care allegedly included transparency in communications.  The court disagreed.  “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,” even when additional negligent conduct was also alleged.  However, failure to warn might be part of the negligence claim.

Among the other rulings on negligence, the court rejected Syngenta’s attempt to compare the fault of the Chinese government in causing plaintiffs’ harm, which creates interesting questions about judging foreign governments’ conduct in domestic disputes.

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