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Speaker 1: Syngenta stopped a class action trial with twenty two thousand

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Speaker 1: Minnesota farmers over their corn losses on Tuesday to announce

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Speaker 1: a settlement with more than one hundred thousand farmers, resolving

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Speaker 1: all farmers litigation in the US. Sint Jenta agreed to

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Speaker 1: pay more than one point four billion dollars to the

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Speaker 1: farmers who complained that the companies roll out of genetically

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Speaker 1: modified corn seeds shut them out of the Chinese market.

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Speaker 1: That's according to people familiar with the deal. The agreement

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Speaker 1: comes three months after the Swiss agrochemical giant loss to

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Speaker 1: two hundred eighteen million dollar jury verdict to a class

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Speaker 1: of Kansas farmers in the first Bellweather trial over the

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Speaker 1: corn contamination claims. Joining us to talk about the litigation

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Speaker 1: are Margaret Cronin Fisk, a Bloomberg News legal reporter, and

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Speaker 1: Andrew Torrence, a professor at the University of Kansas School

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Speaker 1: of Law. Peggy, let's start by having you explained the

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Speaker 1: farmers claims against Cingenta. Well, basically the lawsuit was about

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Speaker 1: is that Cjeta had marketed its genetically modified corn seeds

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Speaker 1: before getting approval from China and then lied about when

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Speaker 1: China would approve that improve the seat. The farmers also

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Speaker 1: said that sin Jetta failed to keep the GMO seats

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Speaker 1: from contaminating the rest of the US corn crops and

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Speaker 1: at backfired and the farmers when China rejected US corn imports,

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Speaker 1: setting off, according to the farmers, a five year decline

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Speaker 1: in corn prices. So, Andrew, you know, the case had

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Speaker 1: really not been going that well for sinjector to say

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Speaker 1: the least. So what is that why they settled? Well,

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Speaker 1: I think it's a combination of that. They had an

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Speaker 1: early indication in the Kansas District Court that they might

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Speaker 1: lose more widely and that the damages would be significant.

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Speaker 1: But my understanding is that Monday Syngenta had some trouble

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Speaker 1: with a bond and part of the reason for that

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Speaker 1: was connected to the liability hanging over them from these litigations. So,

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Speaker 1: whether it's coincidence or not, on Tuesday, this settlement was announced,

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Speaker 1: and it may help to actually raise the money for Centa,

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Speaker 1: which will be needed for part of the chem China

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Speaker 1: take over. Peggy, let's go back for a moment to

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Speaker 1: the claims themselves. Explain what CENTA officials had denied causing

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Speaker 1: any harm, wor damages. What was their explanation A couple

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Speaker 1: of things. One thing is their position is that they

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Speaker 1: never needed to get Chinese approval, and waiting for Chinese

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Speaker 1: approval would have meant that China had had a lock

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Speaker 1: on on what what US companies or any company could

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Speaker 1: do the United States. China rejected the corn, according to

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Speaker 1: s Jeta, because it's been unlocked into a deal at

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Speaker 1: higher prices and was looking for a way out, and

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Speaker 1: any price declines weren't caused by Syngenta but by a

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Speaker 1: bumper crop. In two thousand and thirteen, which is when

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Speaker 1: China turned back to the U S corn andrew that

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Speaker 1: that defense, you know, didn't work in the earlier case,

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Speaker 1: the earlier portion of this case, and now they've settled.

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Speaker 1: Why is it that that argument for c genter really

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Speaker 1: doesn't seem to have flown well in today's global agricultural markets.

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Speaker 1: It's hard to make the argument that your grain will

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Speaker 1: not reach uh, you know, grain storage facilities where other

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Speaker 1: people's grain that may not be genetically modified as also stored.

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Speaker 1: That's one of the reasons why despite the fact there's

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Speaker 1: a settlement for the farmers, the grain handlers, cargo and

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Speaker 1: archer Daniels Midlands and several other companies are maintaining their litigation.

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Speaker 1: There's been no settlement there because today everything mixes together.

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Speaker 1: And I think the argument is that sent Genta ought

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Speaker 1: to have known that its activities would potentially harm the

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Speaker 1: market value of agricultural products sold by other companies and

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Speaker 1: other farmers and other handlers of grain. Even if they

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Speaker 1: had US approval, they really had to be behind the

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Speaker 1: great wall of Chinese regulatory approval if they wanted to

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Speaker 1: be safe from liability. Peggy, what is the situation for

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Speaker 1: the farmers now? Well, what's going to happen right now?

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Speaker 1: The exact details of the settlement won't come out until

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Speaker 1: it's filed with the court, and then, because it's a

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Speaker 1: class action, the farmers will be given the details on

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Speaker 1: how to make a claim and individual farmers farmers will

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Speaker 1: be making a claim with the court showing what losses

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Speaker 1: they can prove, and then the money will start going

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Speaker 1: out to them. It'll it's a process, it's a long

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Speaker 1: processes is a class action. It'll be months and months

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Speaker 1: before they ever get any money. Go ahead. Can anyone

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Speaker 1: object at this point? Can any of the of the

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Speaker 1: farmers say I don't want to be in this from

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Speaker 1: from the statement that they had yesterday, that's not clear.

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Speaker 1: Typically in a class action process, you have the ability

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Speaker 1: to opt out or object. Uh So, more than likely

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Speaker 1: that will happen. But it's simply difficult for a farm

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Speaker 1: to proceed on its own after you've got this big

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Speaker 1: settlement there. It would be too costly. So yes, some

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Speaker 1: people would opt out, that always happens, that likely would

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Speaker 1: be a very small number, Andrew, So you've got the

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Speaker 1: potential here for some farmers to opt out. But basically

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Speaker 1: this seems to the in all likelihood, this was resolved

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Speaker 1: almost all the claims by the farmers. But what about

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Speaker 1: the other claims you talked about what kind of liability

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Speaker 1: might see gent to face in those other cases. Well,

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Speaker 1: the liability that's being claimed by cargo and Archer, Daniels

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Speaker 1: Midland and the other grain handlers that rises into the

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Speaker 1: multiple billions as well. Um In addition to that, you

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Speaker 1: have a Canadian class action suit that was filed in

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Speaker 1: Ontario back in two thousand and fifteen that covers all

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Speaker 1: farmers in Canada putitively, so there's there's quite a few

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Speaker 1: other legal matters that are hanging over the head of

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Speaker 1: this steel. I think Cyngenta is likely to attract most

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Speaker 1: of the farmers in the US to this settlement, in

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Speaker 1: part because we only have a district court decision. We

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Speaker 1: don't know what the appeals court or the Supreme Court

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Speaker 1: it took such a case would decide, and so at

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Speaker 1: the moment, the farmers are riding high, but everything could

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Speaker 1: be reversed on appeal, and I think a lot of farmers,

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Speaker 1: being risk averse, will simply choose to take what they

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Speaker 1: can now and um, you know, quit while they're winning.

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Speaker 1: This was the second what's called a bell Weather trial

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Speaker 1: where the both sides trying to figure out where they

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Speaker 1: are in the litigation and how to go forward. Is

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Speaker 1: this a quick settlement as far as as these Bellweather

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Speaker 1: cases go, Not necessarily, since it's a class action, and

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Speaker 1: it was pretty clear from the first trial that it

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Speaker 1: was not going to go St. Gents's way, and from

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Speaker 1: what was what we were hearing in Minnesota that the

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Speaker 1: evidence was coming in pretty pretty strongly for the farmers.

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Speaker 1: One of the things, as as he pointed out, is

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Speaker 1: that you never knew was gonna gonna happen on appeal.

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Speaker 1: I think one of the big problems with the cases

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Speaker 1: on the farmer's side was improving damages. Now, the jury

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Speaker 1: in Kansas City was fine with it, and we were

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Speaker 1: assuming that probably that was going to happen in Minnesota.

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Speaker 1: But an Appella court made might look at it a

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Speaker 1: different way. That's why a settlement for the farmers is

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Speaker 1: a good thing at this point too. We've been talking

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Speaker 1: with Margaret Cronin fisca Bloomberg News legal reporter, and Andrew Torrance,

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Speaker 1: professor at the University of Kansas School of Law, about

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Speaker 1: cy Gentas settlement with more than one hundred thousand farmers,

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Speaker 1: resolving all farmers litigation in the US for more than

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Speaker 1: one point four billion dollars, according to people familiar with

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Speaker 1: the deal Andrew, the farmers were claiming as much as

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Speaker 1: thirteen billion dollars in losses. According to Bloomberg News, some

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Speaker 1: plaintiffs lawyers had been privately saying they hoped to force

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Speaker 1: the company into a three billion dollar resolution of the claims.

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Speaker 1: So why settle for this amount when they were doing

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Speaker 1: so well at trial? Well, first of all, you always

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Speaker 1: ask for far more than you expect to get, and

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Speaker 1: so I wouldn't take either of those numbers as the

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Speaker 1: actual expectation of what attorneys thought would result from the litigation.

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Speaker 1: I think that UM at the district court level, they've

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Speaker 1: done very well. The the opponents of Senta, the farmers.

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Speaker 1: I think that the decision in Kansas this summer, the

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Speaker 1: two eighteen million dollar decision, was a very positive result

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Speaker 1: for the farmers, but I think that it was lower

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Speaker 1: than it was expected by some of them, and I

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Speaker 1: think it concentrated their minds on whether to take the

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Speaker 1: money now or to risk and appeal and to risk

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Speaker 1: or reduced damages amount, or perhaps even to have the

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Speaker 1: appeals court reversed the entire thing. UM sin Jenta had

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Speaker 1: some arguments. One of its arguments was that it fully

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Speaker 1: complied with American law. Another argument that it had was

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Speaker 1: that taking china Needs law into account was too speculative

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Speaker 1: to warrant liability in the US. So I think that

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Speaker 1: the combination of those two things encouraged both sides to

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Speaker 1: settle for the one point four billion dollars that's been

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Speaker 1: reported rather than hold out for a higher amount. And

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Speaker 1: I think Syngenta didn't want to risk a larger UM decision.

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Speaker 1: They didn't want to risk that Kansas decision being iterated

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Speaker 1: over the entire country. So I think both sides had

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Speaker 1: strong incentives to settle, And as I mentioned before, I

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Speaker 1: think cy Genta might have had other reasons to get

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Speaker 1: out of this litigation as soon as it could, including

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Speaker 1: UM debt issues, and including pressure from KEM China that

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Speaker 1: wants to wrap up this transaction and and get on

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Speaker 1: with selling corn Peggy the You know, this was litigation

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Speaker 1: all over the country. It wasn't just one case, right.

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Speaker 1: We already had the one trial and then you had

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Speaker 1: multiple United States cases going on. How is it that

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Speaker 1: this actually ended up getting negotiated. It must have been

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Speaker 1: a difficult. It must have been difficult to wrap up

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Speaker 1: all of these cases at once, not necessarily because you

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Speaker 1: had the same attorneys who are working on all the cases.

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Speaker 1: You had the case that was going to try it

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Speaker 1: within trial in Minnesota, but many of the lawyers that

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Speaker 1: were involved there were also involved in the cases that

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Speaker 1: were combined in in in Kansas. Most cases were combined

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Speaker 1: in the federal court in Kansas, and that's where you

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Speaker 1: had the first trial. Plus you had four trials that

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Speaker 1: were scheduled for next year then involving classes. For instance,

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Speaker 1: in January of Arkansas and Missouri, and then you had

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Speaker 1: multiple states all through the all through the rest of

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Speaker 1: the year. So it wasn't that hard to just they

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Speaker 1: knew who the which lawyers have talked to. The PLANEFF

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Speaker 1: lawyers set up at their own committee negotiating committee with Cngenta,

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Speaker 1: so Cngenta didn't have to like talk to people all

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Speaker 1: over the country, they just had to talk to those lawyers.

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Speaker 1: Andrew tell us more about the lawsuits the grain exporters. Well,

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Speaker 1: there's a variety of other actors in this dispute. Aside

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Speaker 1: from the farmers. You have the handlers, You've got the hollers,

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Speaker 1: You've got various middle people that are involved as well.

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Speaker 1: Those as far as we know, and we don't know

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Speaker 1: all the details in the settlement, but those, as far

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Speaker 1: as we know UM continue to be live cases, and

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Speaker 1: cy Genta I believe has given some indications that they

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Speaker 1: will continue to litigate that vigorously. UM. The theory there

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Speaker 1: is that although these folks didn't produce corn themselves, they

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Speaker 1: make their money from making sure the corn goes from

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Speaker 1: the farmers to the markets, and that this entire schlaw

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Speaker 1: Mozel has affected their revenue tremendously because they no longer

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Speaker 1: handle as much corn that goes so these lawsuits may

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Speaker 1: continue even if the farmer lawsuits don't. I don't anticipate

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Speaker 1: that the final settlement, if there is one, would be

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Speaker 1: nearly as high as the farmers attleman, but it's unclear. Um,

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Speaker 1: the handlers and the hallers, etcetera. They're asking for a

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Speaker 1: tremendous amount as well, an amount that I don't think

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Speaker 1: they expect to get. How much your what is their number? Well,

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Speaker 1: it's in the multiple billions. Um, they're the figures that

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Speaker 1: that I'm aware of, our between m four and fifteen

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Speaker 1: billion dollars. I wouldn't expect. I wouldn't expect that the

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Speaker 1: four billion would even be realistic, But they're asking for

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Speaker 1: the moon. Well, um, I think the one point four

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Speaker 1: was equal to almost equals the one point five billion

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Speaker 1: that's in Genta generated in net income last year. So

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Speaker 1: perhaps the farmers did well. Thank you both for being

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Speaker 1: on Bloomberg Law. That's Andrew Torrance. He's a professor at

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Speaker 1: the University of Kansas School of Law. And of course,

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Speaker 1: Margaret Cronin Fisk is a Bloomberg News legal reporter.