In re Syngenta AG Mir 162 Corn Litig.

• Decision Date: 11 September 2015
• Docket Number: Case Nos. MDL 2591,14–MD–2591–JWL.
• Parties: In re SYNGENTA AG MIR 162 CORN LITIGATION. This Document Relates To All Cases.
• Court: U.S. District Court — District of Kansas

131 F.Supp.3d 1177

In re SYNGENTA AG MIR 162 CORN LITIGATION.

This Document Relates To All Cases.

Case Nos. MDL 2591

14–MD–2591–JWL.

United States District Court, D. Kansas.

Signed Sept. 11, 2015.

MEMORANDUM AND ORDER

JOHN W. LUNGSTRUM

, District Judge.

Table of Contents

Summary of Ruling	1185
Background	1186
Governing Standards	1187
Choice of Law	1188
Analysis	1188

I.	Duty	1188
II.	Proximate Cause	1193
III.	Economic Loss Doctrine	1193
IV.	FIFRA Preemption	1207
V.	Claims Based on Duracade/Event 5307	1208
VI.	Trespass to Chattels	1209

A.	Intermeddling	1209
B.	Contact with Producer Plaintiffs' Corn	1211
C.	Damage	1212
D.	Intent	1212

VII. Private Nuisance 1212

A.	Syngenta's Participation in the Invasion	1212
B.	Invasion of Plaintiffs' Land	1215
C.	Unreasonable Invasion	1216

VIII. Tortious Interference with Business Expectancy 1217

A.	Identification of Relationships	1217
B.	Intent	1218
C.	Improper Means	1218
D.	Termination of Relationship	1219

IX. Trans Coastal's Claim for Negligent Interference 1219

A.	Improper Means	1220
B.	Duty of Care	1220

X. Lanham Act Claims 1221

A.	Standing—Fairly Traceable/Proximate Cause	1221
B.	Statutory Standing—Within the Zone of Interests	1222
C.	"Commercial Advertising or Promotion"	1224
D.	Forward–Looking Statements	1224

XI. Trans Coastal's Misrepresentation Claims 1227

A.	Fraud Claims	1227
B.	Negligent Misrepresentation Claims	1228

XII. Minnesota Consumer Protection Claims 1229

A.	Public Benefit	1229
B.	Purchasers as Merchants	1231
C.	Application to Non–Minnesota Residents	1232

XIII.	Colorado Consumer Protection Claims	1234
XIV.	Illinois Consumer Protection Claims	1235

A.	Standing	1235
B.	Exemption for Authorized Actions	1237

XV. Nebraska Consumer Protection Claims 1237

A.	Standing	1237
B.	Exemption for Regulated Actions	1238

XVI. North Carolina Consumer Protection Claims 1238

A.	Standing	1238
B.	Effect on Consuming Public	1239
C.	Reliance on Misrepresentations 113	1240

XVII. North Dakota Consumer Protection Claims 1240

MEMORANDUM AND ORDER

Summary of Rulings

In this multi-district litigation ("MDL"), three groups of plaintiffs—corn producers, non-producer corn sellers, and milo producers—have brought claims against various related Syngenta entities ("Syngenta"). The corn producers and non-producers have asserted claims on behalf of variously defined classes, while the milo claims are asserted on behalf of three individual plaintiffs. This matter comes before the Court on Syngenta's motion to dismiss the corn producer and non-producer complaints (Doc. # 856) and its motion to dismiss the milo producers complaint (Doc. # 929). For the reasons set forth below, the motions are granted in part and denied in part. The Court grants the motions with respect to the following claims, which are hereby dismissed:

all claims based on an alleged failure to warn to the extent based on a lack of warnings in materials accompanying the products (Part IV, infra );

for claims under all states' laws except Louisiana, the corn producer and non-producer plaintiffs' trespass to chattels claims (with leave granted to amend to allege facts to support specific damages other than under a market theory that were caused by contamination by corn grown specifically by Syngenta and, in the case of producer plaintiffs, facts to show that particular plaintiffs' own corn was contaminated in the fields or in an elevator while maintaining a possessory interest) (Part VI);

the corn producers' claims for private nuisance (with leave granted to amend to allege facts to show that particular plaintiffs' land suffered contamination and that Syngenta exercised continuing control over its products post-sale) (Part VII);

plaintiffs' Lanham Act claims to the extent based on representations in the deregulation petition, earnings conference call, and request form (with leave granted to amend to allege facts to show that the representations constituted commercial advertising or promotion) (Part X);

non-producer plaintiff Trans Coastal's fraud claim based on the request form (with leave granted to amend to plead the claim with sufficient particularity) (Part XI.A);

Trans Coastal's negligent misrepresentation claims (Part XI.B);

plaintiffs' claims under the Minnesota consumer protection statutes (with leave granted to amend to allege claims on behalf of Minnesota residents under the MUTPA provision allowing for a private right of action) (Part XII);

corn producer plaintiffs' class claims for violations of Colorado's consumer protections statutes (Part XIII);

corn producer plaintiffs' claims for violations of North Carolina's consumer protection statutes to the extent based on misrepresentations (Part XVI.C); andcorn producer plaintiffs' claims for violations of North Dakota's consumer protection statutes to the extent based on representations in the deregulation petition, earnings conference call, or request form (with leave granted to amend to allege facts to show that such representations were made in connection with the sale or advertisement of Syngenta's products (Part XVII)).

Plaintiffs are granted leave to file amended complaints to cure certain of these deficiencies, as set forth herein, by October 4, 2015. The motions are otherwise denied.

Background

Plaintiffs generally allege the following facts. Syngenta develops and sells genetically-modified crop seeds. Syngenta developed MIR 162 and Event 5307, genetic traits that it included in products called Viptera and Duracade, which products were intended to make the resulting corn crops more resistant to certain pests. After a period of development, Syngenta petitioned the United States Department of Agriculture (USDA) in 2007 for deregulation of Viptera, and the USDA approved the product for sale in 2010. Syngenta petitioned the USDA for deregulation of Duracade in 2011, and approval was granted for that product in 2013. Corn grown by farmers who did not purchase Syngenta's products gradually became contaminated with the MIR 162 and Event 5307 traits through cross-pollination from neighboring fields. In addition, Viptera- and Duracade-grown corn was commingled with other corn in grain elevators and other storage facilities. Eventually, Viptera corn infiltrated the general domestic corn supply.

Syngenta developed and commercialized Viptera and Duracade before those products were approved for import into China. In November 2013, China began rejecting all corn from the United States containing the MIR 162 trait. China eventually approved such corn in December 2014, but the loss of the Chinese market for that period caused prices to decrease in the United States, which in turn caused harm to plaintiffs.

Syngenta misled the public and made misrepresentations to the public and the USDA concerning the status and likelihood and imminence of Chinese approval of the products and about the products' impact on export markets. Syngenta also misled the public and made misrepresentations concerning the ability of growers and others to avoid infiltration of Viptera into the entire corn supply (through channeling and otherwise) and concerning steps Syngenta pledged to take in that regard (including by implementing stewardship practices). Syngenta's actions actually increased the risk of contamination and commingling of the corn.

Thousands of separate lawsuits based on these allegations have been filed against Syngenta in federal and state courts. An MDL was created, and all such federal court cases have been transferred to this Court for that purpose. This Court appointed lead and liaison plaintiffs' counsel, who filed separate amended master complaints on behalf of producer plaintiffs and non-producer plaintiffs, which complaints include class action allegations, and on behalf of individual milo producers. Most individual plaintiffs have filed notices to conform their pleadings to the master complaints. A substantial number of cases have been remanded to state courts on the basis of the Court's ruling that Syngenta's invocation of the federal common law of foreign relations in removing those cases did not in fact create a basis for federal jurisdiction.

The producer plaintiffs are corn growers who did not use Syngenta's seeds in growing their corn. By their master complaint, the producer plaintiffs assert claims for violations of the federal Lanham Act (on behalf of all producers); claims for violations of Minnesota's consumer protection statutes (on behalf of all producers); and various state-law claims on behalf of the named plaintiffs and state-wide classes of putative plaintiffs residing in 22 different states, including (for each state) claims for negligence and some combination of claims for trespass to chattels, private nuisance, tortious interference, and statutory consumer protection violations.¹

The four named non-producer plaintiffs (residing in Illinois, Louisiana, Minnesota, and Mississippi respectively) exported, stored, transported, or sold corn. They assert individual and class action claims for violations of the Lanham Act, violations of Minnesota's consumer protection statutes, negligence, and trespass to chattels. One of the named non-producer plaintiffs also asserts claims for fraudulent and negligent misrepresentation and a claim under California law for negligent interference with prospective economic relations.

The three individual milo plaintiffs (residing in Arkansas, Kansas, and Missouri respectively) are milo growers. They allege that the milo market in the United States is so closely tied to the corn market that they suffered the same economic damages that corn producers did. They assert claims for violations of the Lanham Act and Minnesota's consumer protection statutes. In addition, the Arkansas and Missouri milo plaintiffs assert state-law claims for negligence and for tortious interference, and the Kansas milo plaintiff asserts a claim for negligence.

Syngenta has moved to dismiss all three master complaints. The Court has considered the parties' briefs, including sur-reply and sur-sur-reply briefs relating specifically to the...