Category Archives: Business and Financial

Farmers Have One Month to Decide Whether to Stay in Syngenta Litigation

Farmers are receiving a lot of attention from law firms these days, from video mailers to offers of free consultations, dinners, hats and more.  The purpose of these marketing efforts is to entice farmers away from participating in the current class action lawsuit against Syngenta.  Law firms want farmers to exclude themselves from the class action litigation and participate in individual lawsuits their firms would bring against Syngenta.  With a deadline of April 1 looming, farmers must decide whether to remain in or step away from the class action lawsuit.

The class action lawsuit, known as “In re Syngenta AG MIR162 Corn Litigation,” is pending before the U.S. District Court in Kansas.  It is one of two major lawsuits regarding corn rejected by China in 2013 because China had not yet approved Syngenta’s Duracade and Viptera brands of genetically-modified corn.  The lawsuit consolidated hundreds of similar federal court cases that all claimed that Syngenta should be liable for the drop in corn prices that followed China’s rejections because Syngenta stated that it had obtained all necessary regulatory approvals for Duracade and Viptera, but instead released the seed before receiving China’s approval.

Class Certification

Last September, the court certified the litigation as a class action lawsuit, which allows the case to commence on behalf of all class members.  Any farmer that fits within the class definitions is automatically included in the lawsuit and does not have to pursue individual litigation against Syngenta.  The court established a nationwide class of “producers,” defined as any person or entity listed as a producer on an FSA-578 form filed with the USDA who priced corn for sale after November 18, 2013 and who did not purchase Viptera or Duracade corn seed (farmers who used Syngenta’s seed have different legal claims).  The nationwide class is for producers bringing claims under federal law.  The court also certified eight state classes for producers bringing claims under state laws, including Ohio.  Syngenta appealed the class certification, but the Tenth District Court of Appeals denied the appeal.

Ohio farmers who fit the definition of “producers” are now automatically members of both the nationwide and Ohio classes.  This means that every Ohio producer can receive a share of any award or settlement that results from the litigation, with required documentation.  However, Ohio producers may choose to exclude themselves from or “opt out” of their classes and bring their own individual actions against Syngenta.  The district court required attorneys for the class action suit to notify all potential producers of the lawsuit and of a producer’s right to be excluded from the litigation.   A producer must send an exclusion request by April 1, 2017, following the process for exclusion stated in the court’s order, available here.

Pros and Cons of Staying in the Class

A major benefit of remaining in the class action lawsuit is convenience.  Class members in the lawsuit have no responsibility for the proceedings, which falls upon the attorneys who represent the entire class.  However, convenience comes at the cost of deferring decision making authority and losing a share of the award or settlement to court-ordered attorney fees, although class members may file objections to such decisions.  Exclusion from the class gives producers freedom to pursue their own actions, which will likely lead to a stronger role in decision making and the ability to negotiate attorney fees.  Exclusion also allows a farmer who may not agree with the litigation on principal to dissociate from the lawsuit.

What’s Next?

The court has scheduled “bellwether” cases in the lawsuit, which will go to trial in June.  Bellwether cases are chosen to be representative of the class.  Allowing these cases to go to trial gives an indication of how the litigation will play out—the strength of each side, how juries react and how the law applies to the situation.   Upon completion of the bellwether cases, both sides should be better able to decide whether to settle the lawsuit or continue with litigation.

The U.S. District Court’s website for the Syngenta class action lawsuit is http://www.ksd.uscourts.gov/syngenta-ag-mir162-corn-litigation/

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New Law Increases Access to Ohio Small Claims Court

The Ohio General Assembly has enacted a law that raises the monetary limit for cases handled through Ohio’s small claims court system.  To read this post, visit our new blog site at http://aglaw.osu.edu/blog.

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Ohio Creates New “Farm Winery” Liquor Permit

Governor Kasich has signed legislation to create a new “Ohio Farm Winery Liquor Permit.” To read this post, visit our new blog site at http://aglaw.osu.edu.

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OSU Extension to Offer Farmland Leasing Workshops in February

Ohio State University Extension will offer four Farmland Leasing Workshops throughout Ohio next month.  The three hour workshops will include topics of interest to both landowners and farm operators, such as factors affecting leasing options and rental rates, analyzing rent survey data and legal requirements and provisions for farm leases.  To read this post, visit our new website at aglaw.osu.edu/blog.

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Webinar will Help Attorneys Guide Clients through the New Farm Bill

Attorney Bill Bridgforth will present OSU’s next webinar on “The 2014 Farm Bill:  Guiding a Client through the New Law” on Friday, January 9 at 1 pm EST.  Bridgforth is a senior partner in the Arkansas law firm of Ramsay, Bridgforth, Robinson & Raley, LLP who represents agricultural producers around the United States.  He will explain the election decisions producers and landowners must make under the new Farm Bill and will provide examples of decision making impacts.

There is no registration or fee required for the webinar, which is accessible at https://carmenconnect.osu.edu.  A recording of the webinar and a listing of additional webinars is available at aglaw.osu.edu.

The Ohio Food, Agriculture & Environmental Law Webinar Series is an outreach project of OSU Extension’s Agricultural & Resource Law Program.

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OSU to Offer Ag and Natural Resource Tax Issues Workshop

Tax preparers and farmers who file their own farm tax returns have an opportunity to participate in OSU Extension’s Agriculture and Natural Resource Tax Issues Workshop on December 19, 2013.  The day long webinar-based workshop features Professor Phil Harris of the University of Wisconsin, a leading expert in farm and natural resource tax law.  Harris will address issues specific to farm tax returns and will be available for a live question and answer session during the workshop.  Attendees can view the webinar from home or office or at one of nine facilitated host locations around the state, and can receive continuing education credit for the workshop.  Visit this site for more information.

OSU Extension’s Larry Gearhardt, field specialist in taxation, organizes the workshop in concert with the OSU Income Tax Schools, a multi-day continuing education program for those who prepare federal tax returns.   More information and the tax school schedule for this fall are available at http://go.osu.edu/taxschools.

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New Law will Resolve Court’s Disagreement over Priority to Failed Grain Handler Proceeds

Peggy Hall, Asst. Professor, OSUE Agricultural &  Resource Law Program

The Ohio legislature has already addressed a legal issue that recently created discord on Ohio’s Sixth District Court of Appeals.  In its recent decision in Ohio Department of Agriculture v. Central Erie Supply & Elevator Association, the appeals court disagreed over how to interpret the statutory lien provisions in Ohio’s Agricultural Commodity Handler’s Law.  The majority held that the  statutory lien favors farmer claimants over all other interests while the dissent argued that the statute is “entirely silent” on the issue of priorities between farmers and competing parties who have security interests in the proceeds of a failed grain handler.  Obviously attuned to the problem, the Ohio legislature revised the  law just over a month ago to include language that removes any doubt on the matter.

Ohio’s Agricultural Commodity Handler’s law contains many provisions designed to protect farmers from the risks of doing business with a grain elevator or other grain handler.  If a handler suffers financial distress before paying farmers who’ve deposited grain with the handler, the law establishes an automatic statutory lien on behalf of the farmers.  The law grants the Director of the Ohio Department of Agriculture power to enforce the statutory lien against the grain handler and distribute lien proceeds among the unpaid farmers.  The law also states that the commodity handler’s law takes precedence over any conflicting provisions for secured transactions in another section of Ohio law, Ohio Revised Code section 1309.

In the Central Erie Supply case, the question before the court was whether the statutory lien for the farmers had priority over a $425,691 security interest established by Citizens Banking Company, a creditor of the failed grain handler.  The panel of judges examined the commodity handler’s law and reached opposite conclusions.  The majority concluded that the law conflicted with R.C. section 1309 and thus took precedence over the bank’s security interest that was established under section 1309.  The dissent argued that the language about conflicts between the different laws referred only to the issue of how to distribute proceeds between farmers and did not pertain to other security interests established under R.C. section 1309.  Both sides did agree, however, that the issue of priority between farmers and other security interests is a matter for the legislature, not the courts.  “Yet, unless and until the legislature acts, we are bound to interpret the law as it is currently written, not as we wish it to be,” stated dissenting Judge Yarbrough.

The Ohio legislature did act on the matter–and did so before the court had even issued its ruling.  In late June of this year, the legislature approved S.B. 66 (see our earlier post) and added this language to the commodity handler’s law:  “The lien established under this section shall have priority over all competing lien claims asserted against the  agricultural commodity assets.”   The legislation ascertains that upon its effective date of October 11, 2013, a statutory lien established under the commodity handler’s law will be first in line ahead of all other liens claimed against the assets of a failed grain handler.  Until October 11, the Central Erie Supply decision bolsters an argument seeking the same order of priority stated in the new law.   Based on the recent actions of the legislature and the court of appeals, the commodity handler’s statutory lien now has a few more teeth.

Read the Central Erie Supply decision here, S.B. 66 here and the Agricultural Commodity Handler’s Law here.

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