When you think about product liability and defective product lawsuits, the mind usually conjures images of items such as children’s toys, vehicles and auto parts, and even breast implants. Rarely would anyone immediately think about corn – yes, the kind that farmers grow – in a product liability or defective product lawsuit. However, the world’s second leading agriculture company (underneath American owned Monsanto), Syngenta, is now facing class action lawsuits over its genetically modified corn (Agrisure Viptera) seeds.
The Swiss-owned company, Syngenta, came up with a formula for corn seeds by genetically altering it to make it more resistant to crop-threatening insects such as black cutworms and corn earworms. This genetically modified corn, MIR 162, also known as Agrisure Viptera, was approved by the U.S. in 2010. However, in 2013, China rejected American corn seeds that had the MIR 162 trait, which caused turmoil in the commodity markets. The biggest mistake Syngenta made was not obtaining approval to import the corn seeds and promoting and marketing the seeds to U.S. corn farmers before it received approval for import from China.
Now, U.S. farmers in at least 14 states are now in the process of filing lawsuits against Syngenta. According to farmers who purchased, planted, and then attempted to sell the modified corn, they experienced tremendous losses. These farmers claim that Syngenta is responsible for their fiscal losses, which is the direct consequence of misrepresentation and unacceptable marketing of a product.
Syngenta marketed the MIR 162 corn seeds to major potential buyers, saying that Chinese approval of the seeds for import was imminent. Many of the farmers claim that Viptera was widely misrepresented in this statement and that Syngenta was aggressively promoting the product to them. However, while Syngenta promoted their corn seeds as nearly being approved, China was still profusely refusing to approve it, as well as turning around ships that were full of the corn from the U.S. In fact, China did not give their consent on this product until December of 2014.
Crop Sales Predictions
The main reason farmers bought so much of the MIR 162 corn seeds was because of the financial predictions for American corn crop sales to China. Sales were predicted to top over $1.14 billion during the 2013-2014 year. With China turning away boatloads of corn with the MIR 162 trait, and U.S. corn prices dropping down more than 11 cents less per bushel, American farmers lost billions of dollars in profit that they expected to gain.
Corn Crop Losses
The National Grain and Feed Association estimates that the U.S. corn industry experienced losses that added up to nearly 2.9 billion dollars. All fingers point to Syngenta, the Viptera corn seeds, and the complications that arose due to the bad marketing, as the direct result of the losses that farmers experienced during that time frame. America encountered a gross overproduction issue and plummeting prices of crops, which together ultimately ripped billions of dollars from the U.S. economy.
Cargill Sues Syngenta
In September of 2014, Cargill, the Minneapolis-based exporter, sued Syngenta in Louisiana for the financial losses the agribusiness giant experienced due to China’s refusal to accept the MIR 162 corn. When Cargill attempted to export their MIR 162 corn to China, the country rejected the shipment. The president of Cargill Grain & Oilseed Supply Chain North America, Mark Stonacek, said:
“Unlike other seed companies, Syngenta has not practiced responsible stewardship by broadly commercializing a new product before receiving approval from a key export market like China. Syngenta also put the ability of U.S. agriculture to serve global markets at risk, costing both Cargill and the entire U.S. agricultural industry significant damages.”
Syngenta does not see the situation in the same light as the American farmers and Cargill Grain & Oilseed Supply Chain North America, of course. Their standpoint was publicly announced in response to Cargill’s president’s announcement. The company said that it “believes that the lawsuit is without merit and strongly upholds the right of growers to have access to approved new technologies that can increase both their productivity and their profitability.”
In other words, they are refusing to admit that they practiced bad marketing techniques in order to sell the corn seeds, but rather sold these seeds to farmers who simply wanted to try a new product. Additionally, Syngenta pointed out that other countries have approved the genetically modified corn seed for import. Finally, Syngenta stands firm that they “commercialized the trait in full compliance with regulatory and legal requirements.”
The Syngenta Argument vs. Promotion of the Product
The problem with Syngenta’s argument, however, is that China happens to be the number one country for corn imports from the U.S. Therefore, farmers are not wrong in expecting that China would be purchasing the corn crops that were grown in America. When Syngenta told farmers that China was on the verge of approving the MIR 162 seeds, it also implied that farmers could expect to reap profits from the billions of dollars in sales to China if they purchased the seeds and grew the corn.
Now that extreme financial losses have occurred for the agriculture industry, someone has to be held accountable. Think about the time that it takes just to grow corn, let alone the investment into the genetically modified corn seeds that farmers were counting on to sell with tremendous profits. If a company promotes and markets their products under false pretenses, they need to be held accountable for the consequences that occur due to the false marketing.
Holding Companies to Truthful Marketing
When product liability is considered, the safety of the product is normally the first thing consumers think about. However, it is important that we hold companies accountable for truthful marketing of their products, as well. Otherwise, companies will get away with saying whatever they want to ensure sales of their products.
In cases like this, you need an Indianapolis product liability attorney who believes that companies need to be held accountable. The attorneys at Rowe & Hamilton will help you in any product liability case and fight for the compensation you deserve.