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In re Syngenta Mass. Tort Actions

United States District Court, S.D. Illinois

May 15, 2017

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

          MEMORANDUM AND ORDER

          DAVID R. HERNDON JUDGE.

         This matter comes before the Court on the Motion to Dismiss Consolidated Third Amended Complaint and Motion for Oral Argument, [doc. 137], filed by Syngenta AG, Syngenta Biotechnology, Inc., Syngenta Corporation, Syngenta Crop Protection AG, Syngenta Crop Protection, LLC, and Syngenta Seeds, Inc.[1]Plaintiffs filed their response opposing the motion on October 20, 2016 [doc. 172]. For the following reasons stated below, Syngenta's motion to dismiss is GRANTED in part and DENIED in part.

         I. BACKGROUND[2]

         This mass action arises from Syngenta's commercialization of its genetically modified (“GMO”) corn trait MIR162, which was sold under the trade name Agrisure VIPTERA™. Agrisure VIPTERA™, and its second-generation variant containing both MIR 162 and Event 5307, DURACADE™, (“genetically-modified products”), contained multiple genetically enhanced modified traits and were sold for their insect-resistant capabilities. Syngenta claimed the GMO seeds would increase yields due to the improved resistance to insects. However, at the time of production and distribution prior to the 2011 growing season, MIR162 was barred for sale in several countries, including China-where it was not yet approved for purchase or consumption.

         In 2013, shipments of MIR 162-infused corn arrived in China and were not approved for import and were subsequently rejected. 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 the GMO products 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™ to prevent the type of harm that befell plaintiffs.

         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 true all well-pleaded facts alleged and resolve any factual disputes in favor of the plaintiff. Tamburo v. Dworkin, 601 F.3d 693, 700 (7th Cir. 2010).

         Illinois' long-arm statute enables personal jurisdiction over a party to the extent allowed under the due process provisions of the Illinois and United States Constitutions. See 735 Ill. Comp. Stat. 5/2-209(c) (2016) (courts may exercise jurisdiction on any other basis now or hereafter permitted by Illinois Constitution and Constitution of United States); see also Kipp v. Ski Enterprise Corp. of Wisc., Inc., 783 F.3d 695, 697 (7th Cir. 2015) (stating governing Illinois statute permits courts to exercise personal jurisdiction up to limits of Due Process Clause of Fourteenth Amendment). The Illinois Constitution's due process and equal protection guarantee - Ill. Const. art. I, § 2 - permits the assertion of personal jurisdiction “when it is fair, just, and reasonable to require a nonresident defendant to defend an action in Illinois, considering the quality and nature of the defendant's acts which occur in Illinois or which affect interests located in Illinois.” Rollins v. Ellwood, 141 Ill.2d 244, 275 (Ill. 1990). When interpreting these principles, a court may look to the construction and application of the federal due process clause. Id. The Seventh Circuit Court of Appeals has suggested that there is no operative difference between Illinois and federal due process limits on the exercise of personal jurisdiction. Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 715 (7th Cir. 2002). Therefore, if the contacts between the defendant and Illinois are sufficient to satisfy the requirements of federal due process, then the requirements of both the Illinois long-arm statute and the Illinois Constitution have also been met, and no other inquiry is necessary.

         The Due Process Clause of the Fourteenth Amendment limits when a state may assert personal jurisdiction over nonresident individuals and corporations. See Pennoyer v. Neff, 95 U.S. 714, 733 (1877), overruled on other grounds by Shaffer v. Heitner, 433 U.S. 186 (1977). Under federal due process standards, a court can have personal jurisdiction over a defendant only if the defendant has “certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.'” Int'l Shoe Co. v. State of Wash., 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)); uBID, Inc. v. GoDaddy Group, Inc., 623 F.3d 421, 425 (7th Cir. 2010) (quoting Int'l Shoe, 326 U.S. at 316). The defendant must have purposefully established such minimum contacts with the forum state such that it “should reasonably anticipate being haled into court there, ” WorldWide Volkswagen Corp. v. Woodson, 444 U.S 286, 297 (1980), because it has “purposefully avail[ed] itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws, ” Hanson v. Denckla, 357 U.S. 235, 253 (1958). In deciding whether exercising jurisdiction offends traditional notions of fair play and substantial justice, the Court may also consider “the burden on the defendant, the interests of the forum State, and the plaintiff's interest in obtaining relief.” Asahi Metal Indus. Co., Ltd. V. Super. Ct. of Cal., Solano Cty., 480 U.S. 102, 113 (1987).

         What personal jurisdiction means in a particular case depends on whether the plaintiff asserts “general” or “specific” jurisdiction. Specific jurisdiction refers to jurisdiction over a defendant in a suit arising out of or related to the defendant's contacts with the forum. Hyatt, 302 F.3d at 716 (citing Helecopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 nn. 8, 9 (1984)). General jurisdiction, on the other hand, may exist even in suits that do not rise out of or relate to the defendant's contacts so long as the defendant has “continuous and systematic” contacts with the forum state. Hyatt, 302 F.3d at 713; Helicopteros Nacionales, 466 U.S. at 416.

         B. Failure to State a Claim under 12(b)(6)

         A motion to dismiss under Fed.R.Civ.P. 12(b)(6) challenges the sufficiency of the complaint. Rule 12(b)(6) permits a motion to dismiss a complaint for failure to state a claim upon which relief can be granted. Hallinan v. Fraternal Order of Police Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). The Supreme Court explained in Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007), that Rule 12(b)(6) dismissal is warranted if the complaint fails to set forth “enough facts to state a claim to relief that is plausible on its face.” Notice pleading remains all that is required in a complaint, even though federal pleading standards were overhauled by Twombly and Ashcroft v. Iqbal, 556 U.S. 662 (2009). “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).

         The Seventh Circuit offers further instruction on what a civil action must allege to endure 12(b)(6) dismissal. In Pugh v. Tribune Co., 521 F.3d 686, 699 (7th Cir. 2008), the Court reiterated the standard: “surviving a Rule 12(b)(6) motion requires more than labels and conclusions”; the complaint's allegations must “raise a right to relief above the speculative level.” A plaintiff's claim “must be plausible on its face, ” that is, “the complaint must establish a non-negligible probability that the claim is valid.” Smith v. Med. Benefit Adm'rs Grp., Inc., 639 F.3d 277, 281 (7th Cir. 2011).

         III. ANALYSIS

         A. Choice of Law

         In a diversity case, the Court applies the choice of law rules of the state in which the district court sits. Jackson v. Payday Fin., LLC, 764 F.3d 765, 774 (7th Cir. 2014) (citing Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938)). Illinois follows the most significant relationship test found in the Restatement (Second) Conflict of Laws. Denton v. Universal Am-Can, Ltd., 26 N.E.3d 448, 451 (Ill.App.Ct. 2015). Under Illinois choice of law rules, litigants can also stipulate to which substantive law applies to their case so long as the stipulation is reasonable. City of Clinton, Ill. v. Moffitt, 812 F.2d 341, 342 (7th Cir. 187); see also Rexford Rand Corp. v. Ancel, 58 F.3d 1215, 1219 n.6 (7th Cir. 1995).

         Importantly, a choice of law analysis is only required when a difference in the laws of the states will affect the outcome of a case. Denton, 26 N.E.3d at 451; see also Bridgeview Health Care Ctr., Ltd. v. State Farm Fire & Cas. Co., 10 N.E.3d 902, 909 (IL Sup. Ct. 2014) (“a choice-of-law determination is required only when the moving party has established an actual conflict between state laws.”). The Court is cognizant that defendants state they cite “exemplar cases for principles of law that apply across the relevant jurisdictions” and that Illinois' most significant relationship applies “in the event of a conflict of laws.” Doc. 137- 1 at 36. In reviewing the motion to dismiss, it is apparent that much of the case law cited and prominently argued is out of Illinois courts or discussing Illinois law.[3] Additionally, no actual conflicts have been highlighted by the parties between Illinois' and another states' law. As such, the Court presumes defendants believe, and that plaintiffs agree due to their silence on the issue, that Illinois cases properly serve as “exemplars” of the possible relevant jurisdictions. Accordingly, Illinois law is applicable and properly representative and the Court moves forward focusing on Illinois law. As this case involves multiple plaintiffs, to the extent a conflict does arise further on in the litigation, Illinois' most significant relationship test will be utilized to determine the proper states' law.[4]

         B. Personal Jurisdiction is Established Because All of Plaintiffs' Claims Arise Out of and Relate to Syngenta's Minimum Contacts with Illinois

         Defendants do not dispute personal jurisdiction over plaintiffs besides the non-Illinois plaintiffs' group. Syngenta's primary argument for the dismissal of the non-Illinois plaintiffs' claims is that - under the Due Process Clause - the Court lacks personal jurisdiction to adjudicate, i.e., Syngenta is not subject to general personal jurisdiction, nor specific personal jurisdiction in Illinois for non-Illinois claims brought by non-Illinois plaintiffs. Regarding specific jurisdiction over the non-Illinois plaintiffs, this Court disagrees. Plaintiffs have sufficiently pled jurisdictional facts showing that the Syngenta defendants purposely availed themselves of the benefits and protections of Illinois laws. Nonresident defendants who “purposefully direct[]” their activities toward a forum create a legitimate basis to exercise personal jurisdiction, see Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473-74 (1985) and Trade Well Int'l v. United Cent. Bank, 825 F.3d 854, 859 (7th Cir. 2016) (“a district court may exercise personal jurisdiction over any party that purposefully avails itself of the forum”), and plaintiffs have shown that this litigation arises out of and is properly related to defendants' contacts with this forum.

         When determining whether personal jurisdiction exists, the Seventh Circuit uses a “quid pro quo” approach to decide whether litigation in a particular forum is reasonably foreseeable. See uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 430 (7th Cir. 2010). What is important, is that the relationship between the defendants' contacts and the forum be “intimate enough” to keep the quid pro quo inquiry proportional. Id. This can be shown by demonstrating that a defendant's contacts were “temporally and substantively related” to the lawsuit at hand. Id. at 431. See also Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 779 (1984) (personal jurisdiction is supported when cause of action arises out of the very activity being conducted in the forum state). Here, the Syngenta defendants argue that their contacts with Illinois are not part of the causal chain leading to the plaintiffs' alleged injuries, thus personal jurisdiction does not stand. The Court is not persuaded by this argument.

         Syngenta purposefully directed and conducted substantial business activities in Illinois, which either were a step to, or part of, the commercialization of its GMO products. According to plaintiffs' Third Amended Consolidated Complaint (“CAC”), Syngenta sells seeds in Illinois, uses “Syngenta Seed Advisors” to promote Syngenta products in Illinois, maintains physical facilities in Illinois, and also field tested the genetically modified trait, MIR 162, in Illinois. CAC ¶ 746. Taking the allegations as true, Syngenta's contacts with Illinois include promoting, making, and selling Viptera seeds which led to the alleged contamination of the U.S. corn supply, and also activities which made that commercialization possible in the first place, i.e. field testing the genetically modified trait. Plaintiffs' main cause of action is that Syngenta was negligent in the way it commercialized and marketed Viptera seeds, thus the listed contacts with Illinois are sufficient to demonstrate that Syngenta's Illinois contacts are directly related to plaintiffs' cause of action.

         The Court is cognizant of, and takes note of, defendants' arguments relying upon the sister litigation taking place in the United States District Court for the District of Kansas. There, the Honorable Judge Lungstrum presides over the Syngenta multi-district litigation, (“MDL”), dubbed the In re Syngenta AG MIR 162 Corn Litigation. In addressing defendants' personal jurisdiction arguments, Judge Lungstrum, on a motion to reconsider, held the court lacked personal jurisdiction over the non-Kansas plaintiffs. In re Syngenta AG MIR 162 Corn Litigation, 14-md-2591, Doc. 2047 at 16-18. While the Syngenta defendants brought comparable defenses against the non-Kansas plaintiffs, the arguments against the non-Illinois plaintiffs are distinguishable. Here, plaintiffs have additionally pled that Syngenta conducted numerous field tests in Illinois, which aided in the eventual commercialization of VIPTERA™, which is the stated underlying basis for all plaintiffs' claims. Defendants' assert that the field tests have nothing to do with plaintiffs' current allegations and that the MDL court held similarly. Doc. 182 at 4, n. 2. However, the passage Syngenta cites to is part of the MDL court's discussion on “Trespass to Chattels” and intermeddling, a claim and issue that are not raised here. As such, the Court finds that defendants' statement overreaches and breathes new meaning into the MDL quotation. The field testing is an important step leading to the commercialization of Syngenta's GMO products, and that, combined with the other Illinois contacts, is enough to satisfy minimum contacts doctrine.

         Plaintiffs do not have to prove that Syngenta did all their business activities regarding commercialization and marketing of Viptera seeds in Illinois only. In M.M. ex rel. Meyers v. GlaxoSmithKline LLC, plaintiffs sued over congenital birth defects allegedly caused by taking the drug, Paxil. 61 N.E.3d 1026, 1041, appeal denied sub nom. M.M. v. GlaxoSmithKline LLC, 65 N.E.3d 842 (Ill. 2016). Specifically, plaintiffs claimed defendants failed to use reasonable care in avoiding injuring plaintiffs. Id. Plaintiffs were identified in mother/child pairs, and only two of the sixteen pairs were from Illinois. Defendants moved to dismiss the out of state plaintiffs' claims based on lack of personal jurisdiction due to claims not arising from Illinois contacts; the non-Illinois pairs did not receive or ingest Paxil in Illinois, did not suffer injury there, and did not serve as Paxil study subjects in Illinois. Id. at 1031. Defendants also argued, much like Syngenta's discussion regarding Illinois activities, that plaintiffs could not be correct in establishing personal jurisdiction because they focused only on a “tiny sliver” of Paxil clinical trials, when such trials took place in 44 states and abroad. Id. at 1033. The Paxil plaintiffs countered that while they were not domiciled, prescribed Paxil, or injured by Paxil in Illinois, their claims still arose directly out of or related to defendants' purposeful contacts with Illinois, despite similar activity occurring in other jurisdictions. Id.

         The Appellate court held that the defendants had failed to overcome plaintiffs' prima facie showing that they had minimum contacts in Illinois. In addressing defendants' arguments that they did not have enough contacts with Illinois to be meaningful, the court held that plaintiff's injuries arose, in part, from acts of omission during the clinical trials. Id. at 1041. It did not matter that a small percentage of the clinical trial took place in Illinois, a plaintiff only has to prove a proper place for personal jurisdiction. Id. at 1040. And a proper place for personal jurisdiction is when there is a nexus between a defendant's actions and plaintiff's cause of action that does not disrupt the quid pro quo. The Paxil trial court properly highlighted this concern when it asked, “[Am I] trying to figure out where the best location for this litigation is, or whether or not there's a significant nexus to Illinois?” Id. In relying on the GlaxoSmithKline case, this Court takes a different approach than the MDL court where that court's focus is on the amount of Viptera seed sales outside of Kansas. In re Syngenta AG MIR 162 Corn Litigation, 14-md-2591, Doc. 2047 at 18. This Court, instead, focuses its inquiry on whether those contacts are meaningful. See GlaxoSmithKline LLC, 65 N.E.3d at 1041 (“[W]hether Illinois contacts are meaningful depends entirely on their relation to the Plaintiffs' causes of action, and not at all on a percentage-based comparison between how much related conduct occurred outside of Illinois.”

         After minimum contacts have been established, a court must consider whether notions of fair play and substantial justice would be interrupted by litigating in the forum state. Courts typically consider factors like the burden on the defendant in litigating in the chosen state, the forum state's interest in adjudicating the dispute, and the plaintiff's interest in obtaining relief. See e.g. Arnold v. Miller, No. 08-234-DRH, 2009 WL 2020838, at *6 (S.D. Ill. July 9, 2009). Here, Syngenta argues that its contacts with Illinois does not make Illinois an all-purpose forum for all the claims surrounding VIPTERA™.

         The Court does not find a substantial burden on the defendants to litigate in Illinois. Given today's “ease of communications and travel capabilities” it is not outrageous to believe a large corporation like Syngenta can accommodate defending itself in Illinois. Arnold, 2009 WL 2020838 at *6. Additionally, this case will go forward in this Illinois forum despite defendants' arguments regarding non-Illinois plaintiffs as jurisdiction is not disputed as to the Illinois plaintiffs. The defendants have not shown how “piecemeal” litigation in different forums advances the goals of “efficient judicial resolution of the dispute.” GlaxoSmithKline LLC, 65 N.E.3d at 1042. Such splintered litigation raises costs overall while also running the risk of inconsistent verdicts. Id. The Court does not believe additional burden will befall defendants when they will already be litigating in this court, thus serving judicial economy. Worth noting as well regarding the “fair play factors, ” is that Illinois does have an interest in resolving the litigation. This case addresses the alleged consequences felt by contamination of the U.S. corn supply due to Syngenta's claimed negligence in the commercialization of Viptera brand seeds. The creation and commercialization of Viptera seeds is the seminal event relating to the claims of all plaintiffs, Illinois and non-Illinois. The activities performed in Illinois were necessary to produce and promote trait MIR 162. Accordingly, Illinois has an interest in resolving this litigation.

         Syngenta's contacts with Illinois gave rise to the claims of all plaintiffs. Therefore, specific personal jurisdiction has been established ...


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