A wave of Syngenta class action lawsuits are building against agricultural company Syngenta AG. The plaintiffs allege Syngenta’s actions led to a ban on imports of U.S. corn by China and a resulting drop in corn prices.

Viptera Corn

The Syngenta controversy is over a strain of genetically modified corn called Viptera, also known as MIR162. Syngenta engineered Viptera to produce a protein that kills certain common corn pests such as black cutworms and corn earworms. Following approval for sale by authorities in the United States, Argentina and Brazil, Syngenta has sold Viptera corn in all three of those countries since 2011.

In March 2010, Syngenta submitted a Viptera sample to be approved for sale in China. That approval had still not been granted years later when Chinese authorities found traces of Viptera in shipments of U.S. corn. China responded by rejecting the shipments of over 1 million tons of U.S. corn and by banning all imports of U.S. corn from November 2013 until December 2014, when Chinese officials finally approved Viptera for import.

Simultaneous with the Chinese ban, the price of U.S. corn sank. One trade association estimates industry losses from that price drop at over $1 billion, while others estimate total losses as high as $3 billion.

Syngenta Corn Lawsuits

Based on the financial losses resulting from that price drop, thousands of farmers, grain exporters, and others in the corn industry have filed Syngenta corn lawsuits in both state and federal courts, many of them seeking class action status. The list of plaintiffs continues to grow quickly, sometimes by dozens per day, as new plaintiffs sue and join existing Syngenta lawsuits.

Participants on both sides of the Syngenta lawsuits seem to agree it will be difficult to determine exactly how much of the drop in corn prices can be attributed to China’s ban. Other factors affecting corn prices, some of which had been foreseen, contributed to the 2013 price drop. Good weather produced bumper crops of corn in 2013 and 2014, increasing supply relative to demand. Between July and October 2013, one month before China’s ban, the price of corn declined by 32 percent.

But the uncertainty of causes doesn’t mean a damage amount can’t be determined. Some plaintiffs’ attorneys calculate the price drop attributable to the Chinese ban at 11 cents per bushel.

The plaintiffs allege that Syngenta over-marketed Viptera before securing the Chinese government’s approval. They argue that Syngenta misled purchasers by suggesting that the China Viptera approval was imminent and by understating the significance of the Chinese market for U.S. corn prices – even though before the Chinese ban, China had been the third largest importer of U.S. corn. They accuse Syngenta of shifting the risk inherent in the introduction of a new product onto the backs of farmers and exporters.

Syngenta maintains the Viptera lawsuits have no merit. They insist Viptera complies with all applicable legal requirements in all countries where Viptera is sold. They point out that other agricultural companies, Monsanto and Dow, have sold new strains of corn in the United States before first getting approval for Chinese import, without generating similar controversy.