Kansas Federal Jury Awards $218 Million in Syngenta Litigation

Kansas Federal Jury Awards $218 Million in Syngenta Litigation

On June 23 a federal jury awarded $218 million in damages to 7300 Kansas farmers for lost revenue from China rejecting corn shipments containing unapproved Syngenta varieties.

Syngenta is being sued by thousands of corn producers, exporters, grain elevators, and shippers regarding GMO seed varieties approved for sale in the US but not approved for import into China. In November 2013 China rejected US corn shipments as possibly containing corn grown from the unapproved Syngenta varieties. Corn prices dropped by more than half between summer 2012 and fall 2014. In response, grain exporters, corn producers and others have sued Syngenta, contending that China’s rejection of US corn imports caused much or most of the price decline.

In last week's decision the Kansas jury did something pretty remarkable. Not only did they rule against Syngenta, they gave the farmers everything they asked for: $218 million in damages or about $15,000-$18,000 per farm.

It's not unusual for plaintiffs’ lawyers to ask for the moon in extensive money damages, but getting the award is unheard of. In this case the jury awarded the full amount.

The Kansas case was the first trial in what could be a series of similar federal trials across the US.  The second trial is scheduled for July in Minnesota. Syngenta will almost certainly appeal the Kansas verdict.

What about Nebraska corn farmers? They are part of a class of Nebraska corn producers unless they took themselves out of the lawsuit. If they didn’t do anything, they are in the case. A Nebraska trial against Syngenta has not been scheduled yet and wouldn't be held until next year at the earliest.

There may not even be a Nebraska trial if the Minnesota jury reacts similarly to the Kansas jury, and the jury awards stand up on appeal. In that case Syngenta may be willing to negotiate settlements of the remaining producer lawsuits. If the Minnesota jury reacts differently than the Kansas jury—awarding less money for damages, for example—we might see a few more trials.

The damages awarded by the Kansas jury don’t seem that large per farm. We don’t know how many bushels were involved in the Kansas producer class over how many years, so it is hard to be precise about what the damages are based on.The $15,000-$18,000 per farm would be the net recovery, assuming the jury verdict holds up on appeal.

Approximately 40-50% of that recovery will go to the law firms who actually financed the lawsuit. If the lawsuit had failed, the law firms would not be reimbursed for their time or expenses—they would absorb all the litigation costs as losses. This “contingent fee” approach is common in personal injury litigation in Nebraska and around the US. Farmers aren’t paying the lawyers fees—they basically get to sue Syngenta for nothing (or perhaps just a filing fee).