Bayer Settles Texas Suits Over Contaminated Rice

A Bayer AG unit settled a lawsuit brought by three Texas growers over claims its genetically engineered seed contaminated U.S. long-grain rice fields, causing a plunge in exports to Europe.

The settlement was reached Oct. 15 after three days of trial in federal court in St. Louis and announced to the judge over the weekend, said attorney Don Downing, who represents the Texas rice farmers. The settlement only covers claims by the growers in trial and doesn’t affect more than 6,000 other claims, Downing said in an interview today.

“It’s an historic event,” Downing said. “It’s the first time there has been a settlement in a farmers’ case” against Bayer involving contaminated rice, he said.

Farmers in five states claim Bayer negligently contaminated the U.S. long-grain rice crop with its genetically modified LibertyLink seed, leading to export restrictions, bans on two kinds of high-yield seeds and a plunge in prices. Bayer, based in Leverkusen, Germany, denies negligence and disputes the damages claims, contending that rice sales rebounded after an initial drop.

The Texas trial was the seventh against Bayer in the genetically modified rice litigation. Bayer lost the first six, for a total of about $54 million. The company is challenging the verdicts in appeals and post-trial motions.

“Bayer CropScience has always been willing to settle such biotech rice litigation cases on reasonable terms and is pleased to be able to do so in this instance,” CropScience Chief Executive Officer Bill Buckner said in an e-mailed statement. The company said it would continue mediation over the claims by the remaining plaintiffs.

‘Small Farmers’

The three Texas growers were seeking $430,000 in damages, plus unspecified punitive damages, Downing said. They settled for $290,000, he said.

“These are relatively small farmers with relatively small acreage,” he said.

The plaintiffs are John Gaulding and John Donaho, partners in the Gaulding farm in Winnie, Texas; James Gentz Jr. and Carol Barton Gentz, who also have a farm in Winnie; and Lee and Robbie Hafernick, owners of an operation in Edna, Texas. Winnie and Edna are near Houston.

Bayer lost the first three trials in federal court, one for about $2 million in December, another in February for about $1.5 million, and the third, for about $500,000 in July.

Bayer also lost the first three trials in state court, all in Arkansas. The first of those trials ended in a jury verdict of about $1 million, including $500,000 in punitive damages. The second resulted in a verdict of almost $48 million, with a punitive award of $42 million, according to data compiled by Bloomberg. The third, for about $950,000 in July, didn’t include punitive damages, Coffey said last week.

The federal case is In re Genetically Modified Rice Litigation, 06-md-1811, U.S. District Court, Eastern District of Missouri (St. Louis).

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