Federal Law Prevents Syngenta’s Claims Against Grain Handlers: Syngenta Corn Class Action Update
Updated: Jul 2
This post should not be construed as legal advice.
Many of you have received letters requesting you join a class-action lawsuit involving Syngenta’s Viptera corn and are fully aware of the on-going suit. In 2015, the trial judge found that Syngenta potentially owed a duty of care to the farmers currently suing. Syngenta then filed a third-party complaint against a group of grain handlers (Cargill, ADM, and Rail Transfer) claiming the handlers were negligent for failing to segregate Viptera corn to prevent it from being shipped to China. For more on this see Potential Ramifications of Agrisure Viptera Class Action Litigation. This third-party complaint was dismissed recently due to the Grain Standards Act (GSA) preempting Syngenta’s claims.
Before we start, let’s discuss preemption. Preemption is a doctrine where a law from the higher body supersedes/ preempts the lower body’s law on the same subject. For example, if the United States has a law regulating X then the state is preempted from implementing a law to regulate X. In this case, the judge found federal law preempted state law tort claims.
The Grain Standards Act (GSA) has a provision which states:
No State or subdivision thereof may require the inspection or description in accordance with any standards of kind, class, quality, condition, or other characteristics of grain as a condition of shipment, or sale, of such grain in interstate or foreign commerce, or require any license for, or impose any other restrictions upon the performance of any official inspection or weighing function under this chapter by official inspection personnel. Otherwise nothing in this chapter shall invalidate any law or other provision of any State or subdivision thereof in the absence of a conflict with this chapter. 7 U.S.C. § 87g(a)
This provision means that states do not have the ability to set requirements on the sale of grain between buyers in two states or on a buyer in an international market. Syngenta conceded that this language meant the court could not impose a state tort law duty, such as imposing a duty to segregate grain that Syngenta was trying to impose through its negligence suit.
Syngenta then argued the GSA did not preempt Syngenta’s claims that the grain handlers had a duty of reasonable care in shipping the grain. The court disagreed, concluding that imposing a duty not to ship would impose a state law condition on the shipment or sale in violation of the GSA. To the court, this reading of the GSA was in line with Congress’s intent to fully regulate the sale of grain with foreign markets. The court dismissed Syngenta’s third-party complaint against the grain handlers.
So what now? Syngenta can appeal this decision and we will have to see what happens. For those interested in the most recent filings in the class-action litigation, the court has set up a special page at http://www.ksd.uscourts.gov/syngenta-ag-mir162-corn-litigation/.