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In re Syngenta Mass. Tort Actions

United States District Court, S.D. Illinois

February 20, 2017

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

          MEMORANDUM AND ORDER

          DAVID R. HERNDON UNITED STATES DISTRICT JUDGE.

         Before the Court is Syngenta's motion to dismiss plaintiff's First Consolidated Amended Complaint (Doc. 59) for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2), and failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6) (Doc. 115). Plaintiffs oppose the motion (Doc. 133). Syngenta raises numerous arguments regarding why plaintiffs' complaint should be dismissed, only two of which are worthy of close analysis, and are analyzed fully below. Based on the following, the Court DENIES Syngenta's motion to dismiss and request for oral argument.

         I. BACKGROUND

         A. Introduction

         In March 2016, Roland Poletti, et al.[1] (“plaintiffs”) filed their First Consolidated and Amended Complaint against Syngenta, [2] under the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d).[3] Plaintiffs alleged that Syngenta prematurely commercialized the genetically modified corn trait “MIR162, ”[4] and in doing so, acted negligently, recklessly, and deceptively, causing harm to plaintiffs and contaminating the entire United States corn supply. Plaintiffs further contended that-at the time of the alleged acts-Syngenta knew of and foresaw the risk to plaintiffs, and thereby breached the duty owed in preventing the harm alleged (Doc. 59).

         B. MIR162 & VIPTERA™ Controversy

         Plaintiffs note that United States exportation of corn amounts to billions of dollars annually, and because the U.S. corn marketing system is commodity-based, [5] the highest standards of purity are required to be maintained (Id. at 282). Moreover, plaintiffs point to the premature release of Agrisure VIPTERA™ as the sole cause of foreign export-market refusal to import U.S. grown corn, and further maintain that heavy financial losses have been incurred (Id. at 282).

         In 2009, Syngenta introduced and sold the genetically modified (“GMO”) corn trait MIR162 to U.S. farmers under the trade name Agrisure VIPTERA™; at the time, MIR162 was barred for sale in several countries, including China- where it was not yet approved for purchase or consumption (Id.). Agrisure VIPTERA™ and its variant DURACADE™, were licensed and marketed by Syngenta; and, both products contained multiple genetically enhanced modified traits and were sold to seed manufactures for their insect resistance capabilities (Id. at 283). Syngenta's corn modification process used biotechnology to insert genetic substances into corn seeds from the bacterium Bacillus thuringiensis (“Bt”), in order to produce certain proteins that have insecticidal properties. One of the produced proteins, Vip3A, binds to the pest insect's midgut and forms pores which kill the insect before crop damage takes place. VIPTERA™'s bio-engineered origin required foreign regulatory approval before it was able to be cultivated or imported outside of the United States (Id. at 290-91).

         Plaintiffs vie that Syngenta intentionally and recklessly released VIPTERA™ and DURACADE™ into the U.S. corn market before gaining MIR162 GMO approval (Id. at 283). Allegations begin in the spring of 2010, when plaintiffs charge that Syngenta decided to release VIPTERA™ for the 2010-2011 corn season; all while lacking the necessary approval for import into foreign markets, namely China-who, in 2009-2010, imported 1, 296 thousand metric tons of U.S. corn (Id. at 291-92).[6] Plaintiffs claim that at the time of VIPTERA™'s release, Syngenta assured consumers that import approval in Japan and European Union countries was pending-but made no mention in regard to China (Id.). Plaintiffs alleged that in 2012 Syngenta misinformed U.S. corn farmers, grain elevators, grain exporters, landowners, the general public, and even Syngenta's own investors, by directing all to believe that MIR162 GMO approval from China was forthcoming (Id. at 284). The misinformation was followed by Syngenta's creation of documentation that implicitly established the belief that MIR162 had been accepted by Chinese importers. U.S. corn farmers-upon reliance on Syngenta's statements-immediately began to plant corn containing MIR162; however, China did not approve MIR162 until 2014 (Id.).

         B. U.S. Corn Crop Contamination

         Factual evidence suggests that planting, harvesting, and transporting assorted corn varieties together creates a risk of contamination, commingling, and cross pollination from one corn plant to another, resulting in an exchange of genetic traits (Id. at 292-94). Plaintiffs allege that notwithstanding this risk, Syngenta offered “a ‘side-by-side program' which encouraged farmers to plant VIPTERA corn side-by-side with other corn seed.” This encouragement of side-by-side planting of VIPTERA™ and non-VIPTERA™ corn led to the comingling of VIPTERA™GMO corn with the wide-ranging U.S. corn supply (Id.).

         In November 2013, the first shipments of MIR162-infused GMO corn arriving in China were not approved for import and were subsequently rejected (Id. at 297). Refusal continued until December of 2014; and plaintiffs claim that Syngenta's actions “shut down, for all intents and purposes” the 2014 U.S. corn market to China “causing billions of dollars of damages to U.S. exporters, including farmers, farm landowners, and farming entities” (Id. at 285). In fact, plaintiffs point to a National Grain and Feed Association (“NGFA”) statement indicating that Syngenta's premature release of VIPTERA™ corn cost the U.S. corn market between $1 Billion and $3 billion dollars due to rejection and seizures of containers and cargo ships transporting MIR162 GMO corn to China alone (Id. at 286).

         C. Request to Stop DURACADE™ Release

         Plaintiffs suggest that Syngenta continued “irreparable damage to U.S. exports of corn to China” by releasing a second version of MIR162 GMO corn- without Chinese approval-under the trade name DURACADE™ (Id. at 286-87). In anticipation of its release, the NGFA and North American Export Grain Association (“NAEGA”) released a joint statement requesting that Syngenta halt its release of DURACADE™ (Id. at 287). The statement explained that both organizations are gravely concerned about the serious economic harm resulting from Syngenta's current approach to VIPTERA™ management.[7] (Id. at 287). Plaintiffs contend that regardless of NGFA and NAEGA requests to halt production, Syngenta nevertheless released DURACADE™, further jeopardizing the Chinese import market (Id. at 287).

         D. Claims Asserted/Causes of Action

         Plaintiffs assert claims-against Syngenta-of public nuisance, private nuisance, negligence, products liability, tortious interference with business actions, strict liability as to certain classes of plaintiffs, and the violation of various state deceptive trade practices and consumer protection acts (Id. at 302-30).[8] Causes of action for damages include: the premature release of VIPTERA™ and DURACADE™ into the U.S. corn and corn seed supply; the materially misleading statements made relating to approval status of MIR162 in China upon which plaintiffs relied; the failure to disclose the material fact that MIR162 was not approved for import into China; and the continuing and future MIR162 contamination of the U.S. corn and seed supply (Id. at 288-89). Plaintiffs seek compensatory, consequential, and punitive damages, and injunctive relief (Id. at 331-33).

         E. Syngenta's Motion to Dismiss/Plaintiffs' Response in Opposition

         Syngenta filed a motion to dismiss plaintiffs' complaint for lack of personal jurisdiction and failure to state a claim for which relief may be granted (Doc. 115). In its memorandum in support, Syngenta discusses several legal principals which it believes warrants a grant of dismissal (Doc. 116). Namely, non-Illinois plaintiffs' lack of personal jurisdiction; and, the bar of plaintiffs' claims by the “Stranger” and “Contractual” Economic Loss Doctrines.[9] (Id.)

         Plaintiffs have filed a response to Syngenta's motion to dismiss and argue, inter alia, that Syngenta waived its “lack of personal-jurisdiction defense” when it compelled discovery coordination and complied with the Court's orders regarding discovery (Doc. 133). In its reply, Syngenta proclaims, among other things, that “[p]laintiffs' waiver arguments are baseless;” because waiving personal jurisdiction by proceeding with pretrial activities would only occur if Syngenta's actions gave plaintiffs belief it would proceed in defending the suit on the merits. See Mobile Anesthesiologists Chi., LLC v. Anesthesia Assoc. of Hous. Metroplex, P.A., 623 F.3d 440, 443 (7th Cir. 2010).

         II. LEGAL STANDARDS

         A. Personal Jurisdiction under 12(b)(2)

         When personal jurisdiction is challenged pursuant to Fed.R.Civ.P. 12(b)(2), plaintiffs bear the burden of establishing personal jurisdiction over defendants. N. Grain Mktg., LLC v. Greving, 743 F.3d 487, 491 (7th Cir. 2014) (citing Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773 (7th Cir. 2003). If the issue of personal jurisdiction is raised by a motion to dismiss and decided on written material rather than an evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdictional facts. Id. The Court must take as ...


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