A U.S. jury has held a biotech company liable for damages due to contamination from a genetically modified crop variety.
Bayer CropScience has been ordered to pay two Missouri farmers $2 million for losses they sustained when trace amounts of LLRICE601, a herbicide tolerant LibertyLink rice variety not yet approved for human consumption, was discovered in the commercial rice supply, causing rice futures to plunge.
Martin Phillipson, a law professor at the University of Saskatchewan who has been following GM crop contamination cases, said this is the first time he can remember where a judge or jury came to such a conclusion.
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“It is significant that there is an award against a purveyor of a GM crop for contamination.”
However, he also said Bayer will likely appeal the jury decision.
“Juries give away all kinds of money in the United States,” Phillipson said.
Following the U.S. Department of Agriculture’s Aug. 18, 2006, announ-cement of the discovery of an unapproved variety, Japan stopped imports of U.S. long grain rice and the European Union said it would require all imports from the United States be tested and certified as free of GM traits.
Producers from Arkansas, Louisiana, Mississippi, Missouri and Texas, which account for 13 percent of the global rice trade, saw rice prices drop in the wake of the incident. Chicago rough rice futures fell 13 percent in the weeks following the USDA announcement.
A report prepared for Greenpeace International estimated total global costs of the contamination incident were $741 million to $1.29 billion US.
Opponents of GM crops have long argued that biotech seed companies should be held responsible for this type of damage.
It might be the first legal decision, but it is not the first time growers have received money for a contamination incident.
In 2003, StarLink Logistics and Advanta USA paid growers $110 million plus interest in a case where corn prices plummeted after a GM corn variety that was not approved for human consumption was found in taco shells. The companies settled with growers before the class action suit went to trial.
The GM rice case also started as a class action suit but in an Aug. 14, 2008, decision, federal district court judge Catherine Perry refused to certify the case as a class action.
The $1.97 million in compensatory damages awarded to Missouri farmer Ken Bell and $53,336 to Johnny Hunter, also of Missouri, are the first of what could be a long line of such awards.
Adam Levitt, co-lead of the litigation and a partner with Wolf Haldenstein Adler Freeman & Herz LLP, said about 3,000 individual cases are waiting to go to trial.
“We are prepared to try as many of these cases as necessary to hammer the message home that Bayer is responsible,” he said.
Levitt is pleased with the verdict handed down in the first trial.
“Companies such as Bayer who elect to test and develop these crops in the United States have been very specifically and firmly told by a federal jury in the United States that if they’re going to do this, they need to play by the rules and not put American farmers at risk,” he said.
“When corners are cut and corporate greed takes precedence over best practices and due care, which is what this jury concluded happened here, the resulting impact on our hard-working American farmers can be catastrophic.”
Bayer said it was pleased the jury decided not to award punitive damages, but is disappointed by the award of compensatory damages.
“At this time there are additional cases scheduled for trial in the near future, which will be different from these initial cases both in plaintiffs’ situations and claims,” said Bruce Mackintosh, general counsel for Bayer.
Levitt said the potential damages are huge. The jury didn’t award punitive damages in the first case, but Levitt and co-lead Don Downing of Gray Ritter & Graham will continue to seek both compensatory and punitive damages.
“It’s certainly a healthy nine-figure case,” he said.
Perry will be using the first four bellwether cases to determine how to proceed with the mass tort litigation. The next trial is scheduled for Jan. 11.
