Judge nixes Syngenta injunction suit against Bunge
Sept. 27, 2011
by Josh Sosland
SIOUX CITY, IOWA — A federal court has denied a motion by Syngenta AG to enjoin Bunge Ltd. from refusing to accept Syngenta’s Agrisure Viptera corn. The lawsuit, which was filed Aug. 19 in the U.S. District Court, Northern District of Iowa, Western Division, had drawn widespread attention across the grain handling industry.
Reacting to the decision by Judge Mark W. Bennett, Bunge said, “This ruling is consistent with and validates Bunge’s decision to reject Agrisure Viptera corn at all of our locations as a legitimate and reasonable business decision.
“In rejecting Syngenta’s request, the court said the public interest would best be served ‘…in fostering export markets for United States corn, in allowing business to make legitimate business decisions, and in allocating the risk of commercialization of a new transgenic corn trait upon the party that commercialized the trait…’
“We believe that the court will not vary from the opinion denying the preliminary injunction and will ultimately confirm its ruling that Syngenta’s case is without merit. We believe the court’s final ruling will further validate the actions Bunge took to protect the integrity of our export supply chain.”
Bunge has posted notifications at its grain elevators, informing growers Viptera would not be accepted. Bunge said its refusal was because China has not approved Viptera.
Syngenta filed the lawsuit in response to Bunge’s decision not to accept Viptera, which has been approved for planting in Canada, Argentina and Brazil, and for import in Australia, Brazil, Mexico, New Zealand, the Philippines, South Korea, and Taiwan.
“We are taking this action to remove the illegal impediment Bunge imposed on growers when they announced mid-season that they would not accept grain enhanced by the Agrisure Viptera trait,” David Morgan, president, Syngenta North America, said after the suit was filed. “When a product has been legally approved, growers should be able to use that technology without subsequently being subjected to arbitrary actions. Our first priority is growers. Growers inherently face a myriad of risks and Bunge's decision to change grain specifications when farmers had already planted their corn is unacceptable. We are working with farmers who are impacted by this decision to help them find alternatives for delivering their grain.”
In his Sept. 27 decision, Judge Bennett said he refused to issue the temporary injunction because it was unlikely Syngenta would prevail in its claims.
“I find no likelihood that Syngenta will succeed on the merits of the claims on which it focused, its warehousing, Lanham Act, and third-party beneficiary contract claims,” he said. “That being so, the remaining factors do not change the balance against granting preliminary injunctive relief. While I acknowledge that Syngenta does face a substantial threat of reputational harm in the absence of a preliminary injunction, I am not convinced that the harm is of Bunge’s making. Moreover, I find that disproportionate harm would fall upon Bunge, if I were to enjoin its actions in the manner that Syngenta requests.
“Bunge’s decision to reject Viptera corn at all of its locations was a legitimate and reasonable business decision; the injunction would impose prodigious costs on Bunge for a situation that Bunge did not create; and Bunge’s purported promise in April 2010 to accept Viptera corn once that corn had received import approval in Korea and Japan simply does not make it inequitable for Bunge to decide for the following crop year not to accept Viptera corn, so that it could service substantial export contracts for corn to China.
“Finally, where Syngenta has no likelihood of success on the merits of its claims, the public interest favors denying preliminary injunctive relief, because the public interest in fostering export markets for United States corn, in allowing business to make legitimate business decisions, and in allocating the risk of commercialization of a new transgenic corn trait upon the party that commercialized the trait would thereby be best served.”
Also in its response, Bunge said it remains a proponent of agricultural biotechnology and the benefits it offers to the entire value chain “when responsibly managed.”
Asked for a comment on the ruling, Paul Minehart, head of corporate communications for Syngenta North America, said, “This lawsuit is only part of Syngenta’s determination to secure greater clarity for growers regarding industry marketing practices for newly approved technologies, enabling them to market their grain with confidence. From this perspective, our determination is unchanged.”
A bioengineered product, Syngenta said its Agrisure Viptera 3111 trait stack has greater insect control than any other corn trait currently on the market. “It features demonstrated, unsurpassed multi-pest control of 14 yield- and quality-robbing insects including corn borer, corn rootworm and the multi-pest complex, a collection of insects that cost American corn growers more than $1.1 billion annually in lost yield and grain quality,” Syngenta said.