Bayer's Liberty Link Rice
Lawyers Seek Class-Action for
Biotech Rice Suit
CHRISTOPHER LEONARD / AP 22may2008
ST. LOUIS - A federal judge will decide whether to consolidate several lawsuits over genetically engineered rice under one class-action suit that would include thousands of rice farmers throughout the United States.
U.S. District Judge Catherine Perry heard arguments in the case Thursday that hinged on whether farmers suffered economic damage after a strain of Bayer CropScience AG's experimental rice was released into the food supply in 2006.
Some foreign countries temporarily banned U.S. rice exports after the release of the so-called Liberty Link rice, drying up key foreign markets and causing the price for U.S. rice to drop.
Perry made no ruling Thursday, but if she grants the suit class-action status, it could have potentially enormous implications for the biotech seed industry. Every major biotech seed company grows experimental biotech crops outdoors. The U.S. rice farmers say the companies should be held liable for any economic losses on global grain markets if experimental strains escape and crimp export markets.
The Liberty Link strain of rice was not considered harmful to humans, but it wasn't approved for human consumption by the U.S. Department of Agriculture. The department determined the rice likely escaped from a corporate-funded test plot at Louisiana State University, where it was being grown alongside commercial varieties.
Bayer attorney Mark Ferguson said making dozens of lawsuits into a single class-action against his client would be impractical because it would include any rice farmer who set a price for their crop after Liberty Link was released in August 2006.
The price of rice has since skyrocketed, making it hard to determine if those farmers actually suffered a loss from the Liberty Link incident, he said.
"This kind of uncertainty makes the class completely unmanageable," said Ferguson, who is with the Chicago-based firm Bartlit Beck Herman Palenchar & Scott.
Don Downing, an attorney for Gray Ritter and Graham of St. Louis, who represents a group of farmers in the case, said the farmers suffered the same damage because they sell a commodity whose price is set by global markets. Downing said farmers get a price for their rice that is closely tied to those listed by the Chicago Board of Trade. Those prices plunged after the Liberty Link episode was announced.
Downing didn't say what kind of financial damages the farmers would seek. But the sum could be vast, according to testimony from Colin Carter, an agricultural economics professor at the University of California, Davis.
Carter said the rice markets were "shocked" in 2006 when European nations restricted U.S. rice imports. Such a shock becomes a permanent factor in setting the price for a commodity like rice, because traders always know it might happen again.
"If there's a shock, the market remembers that, and it does not dissipate," Carter said. "It's a permanent-type shock."
U.S. rice farmers want class action against Bayer CAREY GILLAM / Reuters 23may2008
KANSAS CITY, Mo.- Germany's Bayer AG (BAYG.DE: Quote, Profile, Research) is battling to keep thousands of U.S. rice farmers from becoming part of a massive class-action lawsuit over the contamination of commercial rice supplies by a Bayer biotech rice not approved for human consumption.
In hearings this week in federal court in St. Louis, Missouri, lawyers representing rice farmers said about 7,000 long-grain producers in Missouri, Arkansas, Louisiana, Mississippi and Texas should be allowed to seek unspecified damages against Bayer for contamination that was uncovered in August 2006.
Farmers suffered extensive losses, both from a plunge in rice prices, and in a drop in export business as Japan and the European Union moved to restrict U.S. rice from crossing their borders.
Many farmers also were not able to plant a crop the following year because of seed shortages tied to the contamination, and had to undertake costly clean-up efforts, according to plaintiffs' attorneys.
Bayer is fighting the class-action move, and both sides are now awaiting a ruling from U.S. District Judge Catherine D. Perry .
"We believe that the individual actions brought by plaintiffs are not appropriate for consolidation under the rules governing class-action proceedings," Bayer attorney Bruce Mackintosh said in a statement.
Plaintiffs' attorney Don Downing said class-action status was the best way to help farmers who lost money, markets, and in some cases, an entire season's crop.
"This is their livelihood," Downing said.
About 700 rice farmers have filed lawsuits against Bayer following the August 2006 disclosure that the company's genetically altered experimental rice had somehow contaminated food supplies.
While the United States is a small rice grower, it has been one of the world's largest exporters, sending half of its crop to foreign buyers.
The genetically engineered long-grain rice in question has a protein known as Liberty Link, which allows the crop to withstand applications of a herbicide used to kill weeds.
The U.S. Department of Agriculture and Food and Drug Administration said there was no public health or environmental risks associated with the genetically engineered rice and the two agencies elected not to punish Bayer for the contamination.
Editing by Walter Bagley