Swiss agribusiness giant Syngenta said Tuesday it has agreed to settle tens of thousands of U.S. lawsuits by farmers over the company’s rollout of a genetically engineered corn seed variety before China approved it for imports.
Terms weren’t disclosed, though Bloomberg News reported the settlement would exceed $1.4 billion, citing people familiar with the deal.
Syngenta said in a statement that the settlement would establish a fund to pay claims by farmers and others who contracted to price corn or corn byproducts after Sept. 14, 2013. Details will be announced after the agreement is submitted for court approval later this year, it said.
Syngenta began selling Viptera to U.S. farmers for the 2011 growing season with U.S. government approval. But China didn’t approve it until December 2014. The dispute escalated into lawsuits on behalf of tens of thousands of farmers in state and federal courts alleging that Syngenta’s move wrecked China as an increasingly important export market for U.S. corn and resulted in price drops that hurt all producers.
Syngenta contended that larger market forces, not China’s rejection of Viptera, drove corn prices down, and that China wasn’t a big corn importer when it launched Viptera. The company also said China should not have effective veto power over the varieties U.S. farmers choose to plant.
The number of U.S. growers who will benefit has yet to be determined, Syngenta spokesman Paul Minehart said.
The proposed settlement doesn’t constitute an admission by either side over the merits of the cases, the company’s statement said.
“Syngenta firmly maintains that its actions were appropriate and continues to believe that American farmers should have access to the latest U.S.-approved technologies to help them increase their productivity and crop yield,” Minehart said.
The settlement does not include exporters such as Cargill and ADM that are also suing Syngenta, he said, nor does it include Canadian litigation.
“Syngenta will continue to vigorously defend those cases,” Minehart said.
The announcement came three weeks into a jury trial in state court in Minneapolis that was the second “bellwether” test case to go to trial. The first ended in June with a federal jury in Kansas awarding nearly $218 million to more than 7,000 growers from that state. The two trials were meant to provide guidance to attorneys and the courts for how the complex web of litigation in state and federal courts in Minnesota, Kansas and Illinois could be resolved.
Lew Remele, the lead attorney for farmers in the Minnesota case, said the two sides had settlement discussions before and after the Kansas verdict.
“Finally when we were in the middle of this trial things started to warm up and we were able to reach a deal,” said Remele, who did not confirm the settlement amount reported by Bloomberg. “We’re definitely pleased. Our intent was to get some money back to farmers and I think this is going to accomplish that.”
Minnesota is also the venue for a class action by corn producers represented by Bill Sieben and Dan Gustafson.
The settlement is subject to court approval and a plan for administration of claims will ensue, said Remele. It covers claims by farmers, ethanol plants and non-corporate grain elevator operators in Minnesota, Kansas and Illinois, said Remele. There are class actions and multi-district litigation cases throughout the Corn Belt, Remele said.
Within about 30 days, more information on the amount and instructions for claimants will be available, Remele said. The amount of attorney fees has not been determined, he said.
Syngenta, whose seed division is based in Minnetonka, says it invested more than $100 million and 15 years in developing Viptera, which has a trait called MIR162 that protects against pests such as earworms, cutworms, armyworms and corn borers. The litigation also involved a newer variety called Duracade, which adds corn rootworm protection. It got Chinese approval this year.
Most of the farmers suing Syngenta didn’t grow Viptera or Duracade, but China rejected millions of tons of their grain because elevators and shippers typically mix grain from large numbers of suppliers, making it difficult to source corn free of the trait.
Minnesota Lawyer editor Barbara L. Jones contributed to this report.