- Syngenta has attempted to remove all GMO corn lawsuits filed in state court to federal court.
- On May 5, 2015, a federal court remanded lawsuits filed by Cargill and ADM to Louisiana state court.
- On May 29, 2015, the same court remanded more than 1000 additional GMO corn lawsuits to state court.
- This is the first of, hopefully, many wins for the plaintiffs in the GMO corn litigation.
Thousands of farmers, grain elevators, and grain exporters have filed suit against Syngenta for negligently causing a substantial drop in the price of corn. Syngenta began marketing a GMO corn seed in the United States before obtaining approval from major U.S. trade partners, including China. Predictably, Syngenta’s GMO corn infiltrated the U.S. corn supply. After detecting unapproved corn in U.S. shipments, China placed a ban on all U.S. corn imports. The price of corn proceeded to drop precipitously from approximately $7/bushel to approximately $3.25/bushel in just a few months.
The vast majority of GMO corn lawsuits have been filed in state court and include only state-law causes of action. Syngenta, however, has removed these cases to federal court, arguing that the plaintiffs’ claims “arise under” federal law because they require a determination of the lawfulness of (1) China’s failure to approve Syngenta’s GMO corn, and (2) China’s decision to ban the import of U.S. corn. According to Syngenta, these issues present a question of federal law under the federal common law of foreign relations.
All cases removed to federal court (in addition to cases originally filed in federal court) have been consolidated in a Multi-District Litigation (“MDL”) in the U.S. District Court for the District of Kansas. That court was faced with the question of whether cases originally filed in state court should remain in the MDL or be remanded to state court.
On May 5, 2015, Hon. Judge John Lungstrum, presiding over the MDL, ruled that lawsuits filed by Cargill, Inc. and Archer Daniels Midland Co. against Syngenta in Louisiana state court should be remanded to Louisiana state court. In his decision, Judge Lungstrum followed the law as set forth by the Supreme Court of the United States in Gunn v. Minton, 133 S. Ct. 1059 (2013). In Gunn, the Supreme Court explained that federal jurisdiction exists over a state-law claim only if a federal issue is:
- necessarily raised;
- actually disputed;
- substantial; and
- capable of resolution without disrupting the federal-state balance approved by Congress.
Judge Lungstrum ruled in favor of the plaintiffs on the first prong of the Gunn test, holding that Cargill and ADM’s claims do not necessarily raise a federal issue.
To prove their claim of negligence, the plaintiffs must prove that their injury (the drop in the price of corn) was a foreseeable cause of Syngenta’s conduct. Syngenta argued that, to determine whether China’s ban on U.S. corn imports—which caused the price drop—was foreseeable, the Court must first determine whether China’s ban on U.S. corn imports violated international law. But, Judge Lungstrum ruled, ““[t]here is no reason why plaintiffs here could not prove that it was foreseeable that China might reject shipments of corn that Syngenta introduced to the market absent Chinese approval without addressing the lawfulness of that act by China.” Indeed, the plaintiffs have alleged that China’s ban on U.S. corn imports was not only foreseeable, but actually foreseen by Syngenta, in light of the fact that Syngenta was warned by two corn industry trade organizations about the possible effects of such a ban.
Although Judge Lungstrum’s May 5 decision applied only to the Cargill and ADM lawsuits, he also ordered the parties to show cause why all other lawsuits removed to federal court based solely on the federal common law of foreign relations should not also be remanded to state court. On May 29, 2015, Judge Lungstrum proceeded to apply the May 5 decision to all cases removed to federal court based solely on this ground.
Over 1000 GMO corn lawsuits, representing thousands of individual plaintiffs, have been remanded to state court. Accordingly, Judge Lungstrum’s decisions are the first of, hopefully, many wins for the plaintiffs in the GMO corn litigation.
Written by:
Linda K. Leibfarth
Watts Guerra LLP
4 Dominion Drive, Bldg. 3, Suite 100
San Antonio, Texas 78257
Phone (210) 447-0500
© Watts Guerra LLP 2015
