Judge John Lungstrum in the US District Court for the District of Kansas ruled Monday that the counterclaims and third-party complaints brought against the companies by Syngenta as part of the ongoing Viptera lawsuit were preempted by the US Grain Standards Act (GSA).
“It is, therefore, ordered by the court that the joint motion to dismiss defendants’ [Syngenta] counterclaims and third-party complaints filed by ADM, Cargill, and Rail Transfer (Doc. # 1434) is granted, and the third-party claims and counterclaims asserted against those parties in this MDL are hereby dismissed,” ruled the judge.
A Cargill spokesperson told us that the agribusiness giant was pleased with the ruling. And Rail Transfer lawyer Hart Robinovitch said the company was satisfied with the outcome.
The ruling concluded that federal regulations govern the inspection and handling of US grain, said a spokesperson for Syngenta. The basis for the ruling also has implications for claims being made against Syngenta in the Viptera China lawsuits, he said.
“In the meantime, Syngenta will continue to defend itself in the Viptera China lawsuits in order to protect the right of American farmers to have access to safe, effective, US approved technologies,” said the Syngenta spokesperson.
Background to ruling
In 2014, ADM, Cargill and Rail Transfer along with producer and non-producer plaintiffs filed claims against the Swiss company for selling strains of genetically-modified corn prior to its approval for import to China. The corn had been approved for use in the US.
Syngenta, in turn, brought counterclaims against Rail Transfer and third-party claims against ADM, Cargill and Rail Transfer stating that the companies were negligent in handling the corn, allowed for commingling between corn and corn carrying the Viptera trait and made it possible for that mixed corn to be shipped to China.
But those companies said that the claims were preempted by the US Grain Standards Act (GSA) and the US Warehouse Act. The GSA covers grain characteristics and entities that can set standards regarding them.
Shipping claims ruling
However, Syngenta also argued that its claims against movants [ADM Cargill, et al] survive in part because it has claimed they breached a duty of reasonable care by selling and shipping to China corn known to contain Viptera.
“Thus, the issue for the Court is whether the GSA’s preemption provision also reaches Syngenta’s shipping claims,” noted Judge Lungstrum.
The court found that allowing liability for a breach of duty not to sell or ship corn to China that included the engineered corn trait would have required the companies involved to make an inspection to a standard or about a characteristic of the corn, he said.
“Imposing such a duty would require either that the shipped or sold corn be tested for the presence of the Viptera trait or that the corn be effectively described as Viptera-free,” he said. “The only alternative would be a complete ban on the sale of any corn to China because of the possibility of the presence of the Viptera trait, and such a ban imposed by state law would run afoul of Congress’s unmistakable intent to reserve to the federal government any such regulation on interstate or foreign commerce in grain based on characteristics of the grain. Thus, under the plain language of Section 87g(a), Syngenta’s claims are preempted.”