Syngenta Seeds, Inc. v. Bunge N. Am., Inc.
| Decision Date | 20 October 2014 |
| Docket Number | No. 13–1391.,13–1391. |
| Parties | SYNGENTA SEEDS, INC., A Delaware corporation, Plaintiff–Appellant v. BUNGE NORTH AMERICA, INC., a New York corporation, Defendant–Appellee. |
| Court | U.S. Court of Appeals — Eighth Circuit |
OPINION TEXT STARTS HERE
Steven J. Wells, argued, Minneapolis, MN (Daniel J. Brown, Timothy J. Droske, Minneapolis, MN, on the brief), for Appellant.
Christopher Martin Hohn, argued, Saint Louis, MO (John R. Musgrave, Kimberly M. Bousquet, Saint Louis, MO, John C. Gray, Sioux City, IA, on the brief), for Appellee.
Before BYE, BRIGHT, and SMITH, Circuit Judges.
Syngenta Seeds, Inc. (Syngenta) sued Bunge North America, Inc. (Bunge), alleging Bunge (1) breached an obligation under the United States Warehouse Act (USWA), 7 U.S.C. §§ 241–256; (2) breached a duty to third-party beneficiaries of a licensing agreement between Bunge and the federal government; and (3) engaged in false advertising, in violation of the Lanham Act, 15 U.S.C. § 1125. The district court dismissed Syngenta's USWA and third-party beneficiary claims on the pleadings, and granted Bunge summary judgment on the Lanham Act claim. Syngenta appeals. We affirm the dismissal of the USWA and third-party beneficiary claims and remand the Lanham Act claim for further proceedings.
Syngenta is a biotechnology company. One of Syngenta's products is a strain of genetically-modified corn seed it markets under the name Agrisure Viptera (Viptera). Syngenta began selling Viptera in the fall of 2010 for planting in the spring of 2011. Before it began selling Viptera, Syngenta obtained regulatory approval for Viptera's sale in the United States. Syngenta also obtained regulatory approval from numerous foreign countries, allowing for corn grown from Viptera seed to be imported into those countries. Syngenta had not, however, obtained such approval from China. At all times pertinent to this case, China maintained a zero-tolerance policy regarding imports of corn grown from seed with genetically-modified traits China had not approved. Pursuant to the policy, Chinese officials could prohibit an entire shipment of corn from entering the Chinese market if the shipment contained traces of corn with an unapproved genetically-modified trait.
Bunge is an agricultural product storage and transport company. It purchases agricultural products from domestic farmers, stores the products in local elevators, processes them at regional facilities, and transfers the products to purchasers in domestic and foreign markets. Bunge has purchase contracts with a number of farmers who purchased Viptera seed from Syngenta. The purchase contracts contain provisions authorizing Bunge to refuse to accept agricultural products containing genetic modifications for which import approval has not been obtained in foreign export markets.
Bunge is also a federally licensed warehouse operator. To become federally licensed, Bunge entered into a licensing agreement (License Agreement) with the federal government. Bunge's obligations under the License Agreement and USWA are secured by a bond, as required by the USWA. See7 U.S.C. § 245(a).
Among the countries to which Bunge ships corn is China. In the summer of 2011, due to significant increases in the amount of corn being imported into China, Bunge started treating China as a major export market for domestically-grown corn. Because of China's zero-tolerance policy regarding unapproved genetically modified traits, such as the one in Viptera, in July 2011 Bunge began refusing to accept corn grown from Viptera seed. To notify producers, Bunge placed signs in its regional facilities and on its website which read:
Please note that Bunge currently is unable to accept delivery of corn/soybeans produced from the following seed products for the 2011/2012 growing season:
Agrisure® VipteraTM—MIR162 (Syngenta)
PlenishTM soybeans (DuPont/Pioneer)
These seed products have not received necessary international approval from major export destinations for the U.S.
Bunge facilities are integrated into the export market, which is why the terms of Bunge's purchase contract states that Bunge will not accept grains and oil seeds containing transgenic events not approved for U.S. export markets.
Bunge will accept a listed product once the seeds receive approval from major export markets.
Bunge refused to accept corn grown from Viptera seed throughout the 2011–2012 growing season. Syngenta alleges the refusal resulted in some farmers who had purchase contracts with Bunge and who had planted Viptera corn seed incurring additional expenses due to having to transport their harvested crops to non-Bunge warehouses, obtain non-Viptera corn to fulfill their contracts with Bunge, or buy out their contracts at a loss. Syngenta alleges many of those farmers expressed dissatisfaction with Syngenta and, as a result, Syngenta lost profits, market share, and goodwill in the fall of 2011 and in subsequent seasons.
Syngenta filed suit in district court. It alleged, in addition to claims not at issue in this appeal, claims (1) under the USWA and (2) as a third-party beneficiary of the License Agreement, that Bunge had breached USWA and contractual obligations to treat depositors of agricultural products fairly; and (3) under the Lanham Act, that Bunge had engaged in false advertising. On Bunge's motion, the district court dismissed Syngenta's USWA and third-party beneficiary claims on the pleadings, concluding neither allowed for the causes of action Syngenta had been pleading. The district court also granted Bunge summary judgment on Syngenta's Lanham Act claim, concluding Syngenta had failed to introduce sufficient evidence regarding whether Bunge's signs constituted commercial speech. Syngenta voluntarily dismissed its remaining claims to pursue this appeal.
On appeal, Syngenta argues the district court erred by dismissing its claims under the USWA and as a third-party beneficiary to the License Agreement.
Syngenta bases its USWA claim on Bunge's decision not to accept corn grown from Viptera seed because Viptera had not been approved for import into the Chinese market. Syngenta argues this decision violated Bunge's bonded obligation under 7 U.S.C. § 247(a) to treat depositors of agricultural products fairly and Syngenta, as an entity which sells seed to Bunge's depositors, was harmed as a result. The district court dismissed Syngenta's USWA claim on the pleadings, concluding the USWA did not authorize the cause of action Syngenta had pled.
On appeal, Syngenta offers two arguments the USWA authorizes it to sue a warehouse operator for an alleged breach of a duty to treat depositors fairly. Syngenta first contends the private cause of action expressly authorized by 7 U.S.C. § 245(d) for violations of the USWA allows it to sue Bunge for breach of a warehouse operator's fair treatment obligation under 7 U.S.C. § 247(a). In the alternative, Syngenta contends the text of 7 U.S.C. § 247(a) itself indicates Congress intended to imply a private cause of action for breach of the fair treatment obligation.
In pertinent part, 7 U.S.C. § 245(d) sets forth:
Any person injured by the breach of any obligation arising under this chapter for which a bond or other financial assurance has been obtained as required by this section may sue with respect to the bond or other financial assurance in a district court of the United States to recover the damages that the person sustained as a result of the breach.
As a federally licensed warehouse operator, a status which required Bunge to submit a bond to secure its obligations, Bunge has an obligation to treat depositors of agricultural products in a fair and reasonable manner, provided certain conditions are met. See id. § 247(a). The dispute here is whether Syngenta can sue Bunge under 7 U.S.C. § 245(d) for damages related to its lost market share, profits, and goodwill, allegedly resulting from a breach of a warehouse operator's fair treatment obligation under 7 U.S.C. § 247(a).
Syngenta argues it qualifies as a “person” for the purposes of 7 U.S.C. § 245(d), which it contends allows it to sue Bunge. Assuming without deciding Syngenta qualifies as a “person” for the purposes of 7 U.S.C. § 245(d), we conclude a different provision of the text precludes Syngenta's USWA claim against Bunge. In pertinent part, 7 U.S.C. § 245(d) authorizes persons injured by a breach of a warehouse operator's USWA bonded obligations to sue “ with respect to the bond or other financial assurance[.]” (Emphasis added).
Congress added the “with respect to the bond” provision to the USWA in 2000. The previous version of 7 U.S.C. § 245(d) authorized persons injured by breaches of a warehouse operator's bonded obligations to sue in their own name “on the bond.” 7 U.S.C. § 249 (amended 2000). In 2000, Congress amended the USWA, moving the section authorizing suits for breaches of a warehouse operator's bonded obligations to 7 U.S.C. § 245(d) and replacing the “on the bond” provision with the “with respect to the bond” provision. Grain Standards and Warehouse Improvement Act of 2000 § 201.
Syngenta asserts Congress replacing “on the bond” with “with respect to the bond” broadened the scope of possible suits authorized by 7 U.S.C. § 245(d). Syngenta argues this broadening allows any person injured by a warehouse operator's breach of a bonded USWA obligation to sue the warehouse operator for damages resulting from the breach. We disagree. As an initial matter, Syngenta's proposed interpretation of the statute would render the phrase “with respect to the bond or other financial assurance” superfluous. “We ‘avoid interpreting a statute in a manner that renders any section of the statute superfluous or fails to give effect to all of the words used by Congress.’ ” Morrison Enters., LLC v. Dravo Corp., 638 F.3d 594, 609 (8th Cir.2011) (quoting Westerfeld v....
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