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In re Syngenta Mass. Tort Actions

United States District Court, S.D. Illinois

January 4, 2017

IN RE SYNGENTA MASS TORT ACTIONS
v.
Syngenta AG et al. This Document Relates to: Tweet et al.

          MEMORANDUM AND ORDER

          DAVID R. HERNDON JUDGE

         This matter comes before the Court on two motions to dismiss plaintiff's third amended complaint filed by Archer Daniels Midland Company, Bunge North America Inc., Cargill, Incorporated, Louis Dreyfus Commodities LLC[1] (hereinafter referred to collectively as “ABCD defendants”) (Doc. 138) and Gavilon Grain, LLC (hereinafter referred to as “Gavilon”)(Doc. 140). Plaintiffs filed responses opposing both motions (Doc. 170 &171) and Syngenta[2] also filed a response to the ABCD defendants' motion (Doc. 169). For the reasons stated below, the ABCD defendants' motion to dismiss is GRANTED (Doc. 138) and Gavilon's motion to dismiss is GRANTED (Doc. 140).

         I. Background[3]

         This mass action arises from Syngenta's commercialization of its Viptera brand corn seed containing a genetically modified (“GM”) trait known as MIR 162 At the time of its production and distribution prior to the 2011 growing season, MIR 162 was not approved in China. Syngenta claimed the Viptera seeds would increase yields due to improved resistance to insects. Syngenta also developed Duracade, a second-generation of Viptera that includes both MIR 162 and a new GM trait known as Event 5307, which was released, distributed, and sold in 2014.

         In recent years, China has been a major export market for American corn. Thus, when the Viptera corn was shipped to China and rejected, it resulted in a swift decrease in the demand for U.S. corn, and in turn, a drop in U.S. corn prices. Plaintiffs also allege that Distiller's Dried Grains with Solubles (DDGS) were marketed and shipped to China alongside U.S. corn. DDGS are produced when corn is processed into ethanol and is used in animal feed.

         The plaintiffs in this case are corn farmers from multiple states who never purchased or knowingly planted Viptera or Duracade brand seeds. Plaintiffs seek to hold Syngenta liable for their losses resulting from the reduced price for their corn caused by Syngenta's release of Viptera into the marketplace. Specifically, plaintiffs allege that Syngenta owed a tort duty - not a contract duty - to act reasonably in the timing, manner, and scope of its commercialization of Viptera timing, manner, and scope of its commercialization of Viptera.

         In addition to the claims brought against Syngenta, plaintiffs also allege that the ABCD defendants and Gavilon are at fault based on a “breach of their duties by failing to exercise reasonable care to prevent a foreseeable risk of harm that would naturally result from their improper conduct in the marketing, sourcing, selling, and shipping U.S. corn and DDGS.

         The motions to dismiss at issue were previously brought before the United States District Court for the District of Kansas in the related Syngenta multidistrict litigation (“MDL”). In the MDL, which includes eight putative class actions, the plaintiffs asserted claims against the ABCD defendants and Gavilon similar to those brought in this action. However, those claims were recently dismissed by Judge Lungstrum. See Syngenta AG MIR 162 Corn Lit9ig., 14-md-2591, (Doc. 2426).

         II. Motion to Dismiss

         A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) challenges the sufficiency of the complaint for failure to state a claim upon which relief may be granted. Gen. Hallinan v. Fraternal Order of Police Chicago Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). “To survive a motion to dismiss under Rule 12(b)(6), a complaint must allege sufficient factual matter to state a claim to relief that is plausible on its face.” Firestone Fin. Corp. v. Meyer, 796 F.3d 822, 826 (7th Cir. 2015) (quotation omitted). The Supreme Court explained in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007), that a complaint “does not need detailed factual allegations” but must contain “enough facts to state a claim for relief that is plausible on its face.” in order to withstand Rule 12(b)(6) dismissal. Twombly, 550 U.S. at 570.

         Despite Twombly and Ashcroft v. Iqbal, 556 U.S. 662 (2009) retooling federal pleading standards, notice pleading remains all that is required in a complaint. “A plaintiff still must provide only ‘enough detail to give the defendant fair notice of what the claim is and the grounds upon which it rests and, through his allegations, show that it is plausible, rather than merely speculative, that he is entitled to relief.'” Tamayo v. Blagojevich, 526 F.3d 1074, 1083 (7th Cir. 2008) (citation omitted). In making this assessment, the district court accepts as true all well-pleaded factual allegations and draws all reasonable inferences in the plaintiff's favor. See Rujawitz v. Martin, 561 F.3d 685, 688 (7th Cir. 2009); St. John's United Church of Christ v. City of Chi., 502 F.3d 616, 625 (7th Cir. 2007). With this in mind, the Court turns to plaintiff's claims against the ABCD defendants and Gavilon.

         III. Analysis

         The ABCD defendants and Gavilon, referred to as the “ABCDG defendants”, seek dismissal of the claims alleged against them under Rule 12(b)(6). The ABCDG defendants argue that plaintiff' claims against them mirror those asserted by the Phipps' plaintiffs in the MDL and therefore, this Court should apply the same rationale finding that plaintiffs' claims are preempted under the United States Grain Standards Act (GSA). The ABCD defendants also assume for the sake of argument that even if the “fringe theories”, put forth by the plaintiffs in their third amended complaint, are not preempted, those claims still fail under Rule 12(b)(6) for failure to allege a duty.[4] The Court will address the arguments in turn.

         a. Preemption

         The ABCDG defendants argue that plaintiffs' negligence claims against them are preempted by the United States Grain Standards Act (GSA), 7 U.S.C. §§ 71-87k. Plaintiffs, however, argue that their common law negligence claims against the ABCDG ...


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