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Farmers study suing Syngenta

By Staff | Mar 26, 2015

-Farm News photo by Larry Kershner STEVE AND CHARLENE SANDVEN, of Humboldt, look over the information packet and contract offer in determining if they want to join a multidistrict litigation suit against Syngenta. The Sandvens were part of a March 18 gathering in Webster City.

“mailto:kersh@farm-news.com”>kersh@farm-news.com

WEBSTER CITY – If you had the chance to join a lawsuit that could eventually net $13,000 or more, without up-front attorney fees, and all you had to do is provide some crop and farming information, then wait several years for a settlement and a check, if any – would you do it?

That’s what 15 area farmers were asked March 18 in Webster City.

Attorneys for Gailey and Walsh Law Office, based in Newell; and Merman Law Firm, in Holstein; are holding a series of meetings throughout the state seeking farmers who have been injured by China’s year-long ban on all U.S. corn in November 2013 and U.S. distiller’s dried grain a month later.

Multiple pools of attorneys are out seeking corn growers and merchandisers who were injured by lost income created by China’s ban.

-Farm News photo by Larry Kershner ATTORNEY DEREK MERMAN, right, explains the litigation suit being compiled against Syngenta that alleges the presence of its Agrisure Viptera trait, MIR-162, in imported corn in China, led to a ban of all U.S. imports into that country. China has since approved the trait for import, but attorneys said a residual effect in lost corn demand will continue to plague the market and hurt corn growers.

Although the price of corn has dropped in terms of dollars per bushel, the Iowa Corn Growers Association estimated that between 11 to 15 cents per bushel of that loss is directly attributed to China’s ban. That totals between $1 billion and $2.9 billion, according to ICGA’s estimates.

For the average farmer – farming 704 acres with a average corn yield of 171 bushels per acre – the damage loss could range from $13,000 to $60,000.

And that’s just the loss on depressed corn prices.

Attorney Derek Merman said the suit will also seek consequential damages, such as having to haul grain farther or storing it longer because merchandisers like Bunge and Cargill refused corn with the MIR-162 trait.

Attorneys are blaming the ban on Syngenta, a company in Sweden, for releasing a corn trait, MIR-162, before China approved the GMO trait for importation.

-Farm News photo by Jolene Stevens NICK DEROOS, general manager of CF Industries, right, and Neal Adler, executive director of the Le Mars Business Initiative, discuss what CF’s current $2 billion expansion will mean not only to the northwest Iowa economy, but to producers in the region. DeRoos was the opening speaker for the annual Le Mars Agri-Business Luncheon held March 18 highlighting the National Ag Day observance.

“This case is not about whether GMOs are good or bad,” said Derek Merman, an Iowa native, who has experience in mass tort litigation while in Texas. His office has recently moved to Iowa.

Describing himself as a grain and livestock producer, Merman said GMOs have done good things for U.S. agriculture.

However, he said Syngenta took a gamble with farmers’ incomes by releasing MIR-162, as Agrisure Viptera, before China’s approval.

Once China discovered MIR-162 in a corn shipment in November 2013, it banned all U.S. corn imports. China reversed that decision in December 2014, but the damage was done.

And, according to Merman, the damage may continue for a few more years.

He said prior to the ban, the U.S. was almost exclusively China’s corn supplier. After the ban, China turned to other countries, including the Ukraine and Argentina. The continued loss in corn demand from China, he said, is part of the litigation.

Merman said this is not a class action suit, but a multi-district litigation.

Class-action lawsuits provide a blanket settlement for all members, while multidistrict litigation cases are grouped together, but resolved individually.

A recent class action was the StarLink GMO case against Aventis CropScience in 2000 that resulted in a $2 per acre settlement for farmers.

A recent MDL action was the Bayer GMO rice lawsuit that awarded in 2011, $750 million to farmers, or about $362 per acre.

Merman said attorneys skim the lion’s share of the settlement in class action cases, while clients get the larger portion in MDL settlements.

In Wednesday’s meeting, Merman said that if the case against Syngenta is successful, farmers will get 60 percent of the settlement and attorneys the other 40 percent. All legal fees and expenses, he said, will come from the 40 percent share.

“Attorneys are taking all the risks,” Merman said. “There is no possibility of any (client-paid) fees.

“Attorneys are paying all the fees upfront, out-of-pocket. If we lose, it was our risk.”

Of the 60 percent for farmers and businesses, each case will be settled individually with awards based primarily on production acres.

Terry Flattery, of Fort Dodge, said he was planning on joining the lawsuit. “I think it’s a good deal.”

Don Sandell, of Fort Dodge, said this was the second informational meeting he’s attended on the issue. The other was in Fort Dodge with a different pool of attorneys. He said the issues were similar, but compensations were different.

“I haven’t made up my mind yet,” Sandell said. “I’m going to talk to my attorney first.”

Merman said, those clients in the MDL who opt to reject any eventual settlement and take Syngenta on individually, can.

There is no deadline at present for joining the litigation, he said, but there are attorneys working to stop the MDL process and get the case termed a class action.

Merman said the more growers they have signed up, the louder voice they have to keep the effort as an MDL.

Merman said it’s possible that eight or 10 large farm operations may try the case individually. Those resolutions will used by both sides to determine how the rest of the suits will be determined.

“And the more farmers we can get involved,” Merman said, “then at the end of the day, (settlement) will be just another business decision for Syngenta.”

Merman encouraged those interested, but have attorney relationships, should consult with their legal advisors before joining the effort.

Josh Walsh, a lawyer with Gailey and Walsh Law Firm, said that as of March 18, 133 Iowans had joined the MDL action in the past five days. He said more than 800 in Nebraska had signed contracts.

The effort in Nebraska has been going on longer, he said, while bringing the opportunity to Iowa was less than a week old.

Merman told farmers that this process is in early stages and may take several years before any settlement is reached.

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