Syngenta may be forced to pay up in a big way aft er the Hennepin County District Court Judge Thomas Sipkins allowed the In re Syngenta litigation plaintiffs to seek punitive damages against the seed and agrichemical giant. No. 27-CV-15-3785.
The subject of the case is Syngenta’s Agrisure Viptera (MIR162) corn, which was genetically engineered with a Bt toxin to kill certain corn-eating insects upon digestion. Syngenta began selling Viptera seeds in August 2010, but China did not approve Viptera for importation until December 2014. Clearly, farmers were shocked in November 2013 when China began rejecting U.S. corn because it contained Viptera’s MIR162 trait. Corn and soybean prices dropped, causing farmers and grain traders to lose billions of dollars. The Minnesota farmers in this certified class action in Hennepin County and farmers across the United States, both those who bought the corn and those who did not, sued Syngenta, alleging that Syngenta had been negligent and misleading.
Under Minnesota law, a court may grant punitive damages if the plaintiff can prove by clear and convincing evidence that “the acts of the defendant show deliberate disregard for the rights or safety of others.” Minn. Stat. § 549.20. A defendant acts with “deliberate disregard” if “the defendant has knowledge of facts or intentionally disregards facts that create a high probability of injury to the rights or safety of others” and proceeds to act, either “in conscious or intentional disregard” or “with indifference” to the high probability of injury.
Punitive damages are meant to punish the wrongdoer, deter the wrongdoer from repeating the behavior, and to deter others from engaging in the same conduct. Jensen v. Walsch, 623 N.W.2d 247, 251 (Minn. 2001). The statute lists nine factors for a court to consider, including the misconduct’s profitability, the duration and any concealment of the misconduct, the degree of the defendant’s awareness of hazard and of its excessiveness, the defendant’s attitude and conduct upon discovering the misconduct, and the number and level of employees involved in causing or concealing the misconduct, and the defendant’s financial condition.
When the plaintiffs’ evidence against Syngenta is laid alongside these factors, they appear to have a good chance at proving that punitive damages are merited. For one, Syngenta knew the risks of commercializing Viptera without China’s approval, damningly from similar debacles with two other genetically engineered traits. First, with Syngenta’s genetically engineered Bt10 corn trait, which was not approved for use in the United States, the European Union or in Japan. Order, In re Syngenta, 27-CV-15-3785, at 3 (Jan. 9, 2017). Yet in 2005 it was discovered that Bt10 seed had been exported to Spain and to France. Id. Again, in 2007, Syngenta commercialized MIR604 (Agrisure RW) and began selling it prior to receiving import approval from Japan (at the time, the largest U.S. corn market), Canada and the European Union. Id. at 4-5. When MIR604 was detected in soybeans in 2009 the European Union halted the import of U.S. soybeans. Id. at 6.
The plaintiffs also have evidence that Syngenta was disingenuous about the timeline of Viptera’s approval by China. For example, when Cargill asked Syngenta whether Viptera would be approved by Fall 2011, Syngenta answered Cargill misleadingly, suggesting that the Fall 2011 approval of Viptera was imminent. Id. at 11-13. When Cargill appeared satisfied with the answer, one Syngenta head remarked to other officials, “It worked, I think.” Id. at 13.
Other evidence stacks up against Syngenta. For example, when grain trader Bunge North America posted signs stating that it would not accept Viptera, Syngenta sued them. Id. at 13, 16. Syngenta’s CEO described the strategy as a “no holds barred tone designed to … give [companies that refused to accept Viptera] something to think about … ” and noted that Syngenta would portray Bunge as not caring about farmers and “against new technology.” Id. at 14.
Finally, when one considers that punitive damages are supposed to be used to deter future misconduct, Syngenta is again not doing itself any favors. Despite the Viptera disaster in 2014, Syngenta began selling another MIR162 corn (Agrisure Duracade) that was, you guessed it, again not approved for import to China. Id. at 22.
Punitive damages are an extraordinary remedy and generally disfavored. Lewis v. Equitable Life Ass. Soc of the U.S., 389 N.W.2d 876, 892 (Minn. 1986). However, so far, the evidence known to the public suggests that Syngenta has been an incredibly irresponsible corporate citizen. The court may well decide that these farmers present a case with just the type of egregious circumstances that merit punitive damages. Sarah E. Korte