Syngenta Settles Farmer's Contamination Suit Ahead of Trial

(Bloomberg) -- Syngenta AG reached a confidential settlement with a Nebraska farmer who claimed the company mishandled marketing of its genetically modified seed, causing U.S. corn prices to plummet.

With the settlement, Syngenta averts a trial that was scheduled to start July 10. Terms weren’t disclosed.

Two weeks ago, Syngenta lost a $218 million jury verdict for a class of Kansas farmers who brought similar claims against the Swiss agrochemical company, which has been acquired by China National Chemical Corp. The Basel-based company completed its $43 billion takeover by ChemChina in June.

Syngenta faces its next class action in a Minnesota court in August, where farmers are seeking more than $600 million.

Settlement Reached

The company reached the settlement with farmer Daniel Mensik last week, as a scheduled trial neared in state court in Minnesota, plaintiffs’ attorney Mikal Watts said Thursday by phone. The settlement was confirmed by the court.

The farmers claim Syngenta rushed its GMO seed to market before getting approval from China to export the grain there. In 2013, China stopped shipments after calling the corn contaminated by the GMO seed, setting off a five-year depression in prices, the farmers claim. They also allege Syngenta misled them on when the Chinese would approve the seed.

The settlement may not have implications for the rest of the cases, said Anthony Sabino, a law professor at St. John’s University in New York.

“Call it a tactical retreat,” he said. “Most likely, Syngenta felt the case of a single farmer versus the big corporation was too risky to take to trial, and the dollars paid were within an acceptable range.”

Case Facts

Syngenta has disputed the damages claimed by farmers, or that it did anything wrong. The company didn’t sell the seed until approved by the U.S. and didn’t need Chinese approval, Syngenta lawyers have argued. 

“The resolution allows the company to focus on another upcoming trial scheduled to begin in August, and does not represent a change in strategy for the company,’’ Paul Minehart, Syngenta spokesman, said in an email. “Syngenta will continue to defend the litigation and the rights of farmers to have access to safe and effective U.S. seed technologies.’’

Mensik’s claim was set to be the first to trial in the corn litigation in April, but that ended in a mistrial when the judge couldn’t find enough jurors. Mensik, who has a 300 acre-farm in Morse Bluff, Nebraska, claims he lost $125,000 in sales because of Syngenta’s mishandling of the GMO corn.

“We’re hopeful that Dan and Bonnie Mensik are the first of tens of thousands of farmers who recover their damages from Syngenta,’’ said Watts, plaintiffs’ attorney.

The federal judge overseeing multiple class actions in Kansas set several trial dates Thursday for additional class actions to be tried in that court. The claims of Arkansas and Missouri farmers will go forward in January, while Illinois and Nebraska go to trial in April.

Syngenta won dismissal June 28 of a separate corn contamination claim brought by an Ohio ethanol producer. The Ohio state court found that there was no requirement to delay agricultural development or progress okayed by the U.S. while waiting for approval by a foreign government.

The case is Mensik v. Syngenta, 27-CV-15-16826, District Court for Hennepin County, Minnesota (Minneapolis).

--With assistance from Todd Melby.

To contact the reporters on this story: Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net, Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net.

To contact the editors responsible for this story: Elizabeth Wollman at ewollman@bloomberg.net, Paul Cox, Andrew Martin