Corn lawsuits gathering pace

It would be hard not to notice all the 'Iowa Corn Lawsuit” advertisements popping up recently on websites accessed by Iowans.

Click on one, and you will be informed that thousands of farmers and corn sellers are filing lawsuits against the multinational biotech company Syngenta, which introduced a genetically modified corn seed, Agrisure Viptera, long before it had secured approval from U.S. trade partner China.

The lawsuits seek to compensate farmers for alleged financial losses suffered when corn prices fell following China's rejection of more than 1 million tons of U.S. corn after it found traces of the Syngenta trait commingled with most shipments.

'Syngenta believes the lawsuits have no merit,” company spokesman Paul Minehart said.

The company commercialized Agrisure Viptera is in full compliance with regulatory and legal requirements, he said.

China's ban on U.S. corn - from November 2013 through December 2014 - 'is absolutely a factor in lower corn prices” during that period, said Solon farmer Ed Ulch, who has signed up to participate in the lawsuits.

'Everyone I know will be signing up (for the lawsuit) except Syngenta dealers,” Ulch said.

Ulch hopes the lawsuits will send a message to Syngenta to be more responsible in its introduction of new products

Linn County farmer Curt Zingula said he has not yet signed on as a plaintiff but intends to.

Zingula said he knew at the time that the loss of the China market adversely would affect grain prices.

'I figured I was going to be a victim,” he said.

Though the lawsuits hold promise for recovery, Zingula added he remains skeptical that they will succeed.

The biggest hurdle, he said, will be 'nailing down how much of the decline in corn prices can be attributed to the loss of the China market.”

The National Grain & Feed Association estimates damages suffered by U.S. farmers and grain exporters from the drop in corn prices exceed $1 billion.

Grain exporters Cargill, Archer Daniels Midland and Trans Coastal Supply have all filed individual lawsuits against Syngenta seeking damages linked to China's rejection of shipments, and several law firms are recruiting individual farmers as plaintiffs, including Des Moines lawyer Jeff Link, whose 'Iowa Corn Lawsuit” ads have yielded 700 Iowa clients in recent weeks.

'The number is going up every day. We signed up 50 in the last two days,” Link said when contacted this past Tuesday.

Link said the lawsuit 'has nothing to do with whether genetically modified products are good or bad.”

His clients, he said, are seeking damages from a company that 'shifted all the risk inherent in introducing a new GMO product from itself to the backs of farmers.”

Link acknowledges that several factors, including prospective corn surpluses, caused the decline in corn prices in 2013.

'But Syngenta's actions contributed in a significant way,” he said.

Link said he is working with Texas attorney Mikal Watts, who has filed more than 3,000 individual lawsuits against Syngenta. As with Watts, Link said he will file his claims in Minnesota state court.

Rather than consolidating the individual suits in a class action, Link said they would be combined in a single civil action, known as a mass tort.

Critical advances

Roger Zylstra, chairman of the Iowa Corn Growers Association board of directors, said he believes the basis of the lawsuits is 'totally misguided.”

Zylstra, who will not participate in the lawsuits, said technological advances are critical to agriculture's future success and that trading partners should not exercise undue influence over their introduction.

Though Syngenta had not secured China's approval when it introduced the Viptera seeds, 'China was not a major importer of corn at the time,” said Zylstra, who farms near Lynnville.

Moreover, he said, 'Corn prices were already going down (because of anticipated surpluses and other factors) before the Chinese embargo took effect.”

The U.S. Department of Agriculture approved Agrisure Viptera, which was genetically altered to contain a protein that kills common corn pests such as earworms and cutworms, in 2010. The company began selling it to farmers in 2011.

The trait had been approved 'in the key import markets recommended at the time by the National Corn Growers Association and other industry associations,” according to a Syngenta website.

That website also noted that Monsanto and Dow have launched U.S.-approved corn traits in the United States without first securing Chinese import approval.

The website also cited the USDA statement that the commodity price of corn declined 32 percent - from $6.79 to $4.63 a bushel - between July and October 2013 - before China's rejection of U.S. corn a month later.

Des Moines attorney Link said he sees strong parallels between the Syngenta case and an earlier case in which his Watts, his Texas colleague, helped negotiate a $750 million settlement in 2011 with Bayer Crop Sciences for U.S. rice farmers harmed by the reduction of rice prices caused by contamination of the supply by GMO rice.

It was not as if no one foresaw the problem.

Out of concern that the lack of Chinese import approval could disrupt trade, Bunge North America, a grain shipment company with scores of facilities including grain terminals at McGregor and Burlington, refused to accept Viptera corn in the summer of 2011.

Syngenta sued Bunge, asserting that its reputation and good will with clients would be threatened if Bunge persisted in its refusal.

A federal-district court rejected Syngenta's request for an injunction forcing Bunge to accept Viptera corn, stating that its refusal was a legitimate and reasonable business decision.

Bunge's position generally was upheld in succeeding court clashes before both sides agreed to dismiss the case just before China's import approval in December.