Syngenta Seeds, Inc. v. Bunge North America, Inc.

• Citation: 820 F.Supp.2d 953
• Decision Date: 26 September 2011
• Docket Number: No. C 11–4074–MWB.,C 11–4074–MWB.
• Parties: SYNGENTA SEEDS, INC., a Delaware corporation, Plaintiff, v. BUNGE NORTH AMERICA, INC., a New York corporation, Defendant.
• Court: U.S. District Court — Northern District of Iowa

820 F.Supp.2d 953

SYNGENTA SEEDS, INC., a Delaware corporation, Plaintiff,

v.BUNGE NORTH AMERICA, INC., a New York corporation, Defendant.

No. C 11–4074–MWB.

United States District Court,N.D. Iowa,Western Division.

Sept. 26, 2011.

David A. Tank, Megan Flynn, Dorsey & Whitney, LLP, Des Moines, IA, for Plaintiff.

John C. Gray, Heidman Redmond Fredregill Patterson Plaza Dykstra & Prahl, Sioux City, IA, for Defendant.

MEMORANDUM OPINION AND ORDER REGARDING PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

MARK W. BENNETT, District Judge.

+-----------------+
                ¦TABLE OF CONTENTS¦
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                I. INTRODUCTION                                                       957
                

 A. Factual Background                                              957
                

 1. The parties                                                957
                        2. The transgenic corn at issue                               958
                        3. The parties' dispute                                       958
                

 a. Domestic and foreign approval                          958
                            b. Bunge's Policy                                         959
                            c. The “major importer” dispute                       960
                            d. Bunge's refusal to change its Policy                   961
                

 4. Positions of other elevator companies                      962
                        5. Syngenta's evidence of irreparable harm                    963
                

 B. Procedural Background                                           964
                

 1. Syngenta's Complaint                                       964
                        2. Syngenta's Motion For A Preliminary Injunction             965
                        3. Syngenta's Amended Complaint                               966
                        4. Additional briefing                                        966
                        5. The evidentiary hearing                                    966
                

                II. LEGAL ANALYSIS                                                    967
                

 A. Standards For A Preliminary Injunction                          967
                   B. Likelihood Of Success On The Merits                             969
                

 1. The USWA claim                                             969
                

 a. Arguments of the parties                               969
                            b. Analysis                                               972
                

 i. Purpose and provisions of the USWA                972
                

 ii. Courts to consider a private right of action under the USWA                   974
                            iii. Congressional authorization of private rights of action                       975
                            iv. Whether § 247 creates a private right of action                              977
                            v. Whether § 245(d) creates a private right of action for violation of § 247   979
                            vi. Standing                                                                      981
                            vii. The merits                                                                    981
                

 2. The other warehousing claims                               982
                        3. Third–party beneficiary contract claim                   982
                

 a. Arguments of the parties                               982
                            b. Analysis                                               983
                

 4. The Lanham Act claim                                       984
                

 a. Arguments of the parties                               984
                            b. Analysis                                               985
                

 C. Irreparable Harm To Syngenta                                    987
                

 1. Arguments of the parties                                   987
                        2. Analysis                                                   987
                

 D. Balance Of Equities                                             988
                

 1. Arguments of the parties                                   989
                        2. Analysis                                                   989
                

 E. The Public Interest                                             991
                

 1. Arguments of the parties                                   991
                        2. Analysis                                                   991
                

                III. CONCLUSION                                                        992
                

Can a grain elevator company refuse to accept certain corn at its facilities, on the ground that the corn has not received approval from “major” export destinations, and post signs stating this, when the seed producer has received clearances from the United States and several foreign countries, but not from China or the European Union? The seed producer argues that the grain elevator company cannot do so, at least not without violating the United States Warehouse Act (USWA), 7 U.S.C. § 241 et seq., comparable provisions of state statutory and common law, and the Lanham Act, 15 U.S.C. § 1125(a)(1)(B), and causing irreparable injury to the seed producer's business and reputation. Thus, the seed producer seeks a preliminary injunction against the grain elevator company enjoining the grain elevator company's refusal to accept the transgenic corn, while the seed producer litigates its USWA, Lanham Act, and state common-law and statutory claims. The grain elevator company counters that the seed producer has no likelihood of success on its claims, because there is no private right of action under the USWA; the seed producer has no standing to assert such a claim if a private right of action does exist; all of the grain elevator company's elevators are licensed pursuant to the USWA, which preempts state statutes and common law; and the grain elevator company is not a competitor of the seed producer, which defeats the seed producer's Lanham Act claim. Moreover, the grain elevator company argues that it will be disproportionately harmed, if the court grants the preliminary injunctive relief requested.

I. INTRODUCTION

A. Factual Background

I am mindful of the general rule that “the findings of fact and conclusions of law made by a court granting a preliminary injunction are not binding at trial on the merits.” University of Texas v. Camenisch, 451 U.S. 390, 395, 101 S.Ct. 1830, 68 L.Ed.2d 175 (1981); accord United States Sec. and Exchange Comm'n v. Zahareas, 272 F.3d 1102, 1105 (8th Cir.2001) (“[W]e have long held that ‘findings of fact and conclusions of law made by a court granting a preliminary injunction are not binding.’ ”) (quoting Patterson v. Masem, 774 F.2d 251, 254 (8th Cir.1985)); National Credit Union Admin. Bd. v. Johnson, 133 F.3d 1097, 1103 n. 5 (8th Cir.1998) (quoting this principle from Camenisch ); Henderson v. Bodine Aluminum, Inc., 70 F.3d 958, 962 (8th Cir.1995) (citing this statement from Camenisch as the “general rule” for findings of fact and conclusions of law in preliminary injunction rulings). Thus, all findings of fact and conclusions of law in this ruling are provisional.

1. The parties

Plaintiff Syngenta is a major agribusiness company, incorporated in Delaware, with its principal place of business in Minnetonka, Minnesota. Among other things, Syngenta is involved in the commercial seed business, developing, producing, and selling, through dealers and distributors or directly to growers, a wide range of agricultural products, including corn and soybean seed with useful traits developed with modern biotechnology. Syngenta brands include Garst, Golden Harvest, and Northrup King; some of its seed is also labeled under the names of other smaller seed companies; and some of its seed or seed traits are also licensed to other seed companies, even competitors, such as Pioneer.

Defendant Bunge North America is a New York corporation with its principal place of business in St. Louis, Missouri. Bunge operates approximately 71 grain and milling facilities and at least 66 grain warehouses (or elevators) in the central United States, including two facilities in Iowa. Most of Bunge's facilities, like the two in Iowa, are located along the Mississippi River or its tributaries to facilitate barging of grain to Bunge's export facility near New Orleans, Louisiana. Syngenta asserted that most of Bunge's warehouses or elevators are licensed under the USWA, including Bunge's elevators and receiving stations in Meekers Landing and McGregor, Iowa, but Bunge asserts that all of its warehouses are licensed under the USWA.¹

2. The transgenic corn at issue

After the investment of as much as twenty years of product research and development and hundreds of millions of dollars (not including advertising costs), Syngenta has developed a genetic trait called MIR162 (or VIP 3A), sold under the Agrisure Viptera? trademark. The superior characteristic of Viptera corn is that it controls insects, such as the “multi-pest complex,” which Syngenta's evidence showed causes American corn growers more than $1.1 billion annually in lost yield and grain quality. The reduction in insect damage to corn as a result of the Viptera genetic trait also reduces the development of fungus and mycotoxins in stored corn. Bunge agrees that Viptera has insecticidal properties and, indeed, points out that Viptera corn is considered a federally-registered pesticide that is licensed under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), which Syngenta does not dispute.

Prior to the 2011–2012 crop year, Viptera corn was only grown in test plots and seed fields. However, Syngenta commercially launched Viptera corn seed in the United States for the 2011–2012 growing season when it opened its sales for the 2011 planting season in August of 2010. As part of its commercial launch of Viptera corn, Syngenta has offered farmers a “side-by-side program,” which encourages farmers to plant Viptera corn seed side-by-side with other seed in order to see how the Viptera trait's protection affects yields. Syngenta asserts that it has received excellent feedback from growers and resellers, to the effect that Viptera outperforms other corn on a variety of important measures. For the 2010–2011 crop year, Syngenta delivered Viptera products to approximately 12,000 growers and projected a yield of 250 million bushels of Viptera corn. Prior to the...