Tweet v. Syngenta AG (In re Actions)

IN RE SYNGENTA MASS TORT ACTIONS

This Document Relates to:

Tweet et al. v. Syngenta AG et al.

No. 3:16-cv-00255-DRH

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ILLINOIS

May 15, 2017

Judge David R. Herndon

MEMORANDUM and ORDER

HERNDON, District Judge:

This matter comes before the Court on the Motion to Dismiss Consolidated Third Amended Complaint and Motion for Oral Argument, [doc. 137], filed by Syngenta AG, Syngenta Biotechnology, Inc., Syngenta Corporation, Syngenta Crop Protection AG, Syngenta Crop Protection, LLC, and Syngenta Seeds, Inc.¹ Plaintiffs filed their response opposing the motion on October 20, 2016 [doc. 172]. For the following reasons stated below, Syngenta's motion to dismiss is GRANTED in part and DENIED in part.

I. BACKGROUND²

This mass action arises from Syngenta's commercialization of its genetically modified ("GMO") corn trait MIR162, which was sold under the trade name Agrisure VIPTERA™. Agrisure VIPTERA™, and its second-generation variant containing both MIR 162 and Event 5307, DURACADE™, ("genetically-modified products"), contained multiple genetically enhanced modified traits and were sold for their insect-resistant capabilities. Syngenta claimed the GMO seeds would increase yields due to the improved resistance to insects. However, at the time of production and distribution prior to the 2011 growing season, MIR162 was barred for sale in several countries, including China—where it was not yet approved for purchase or consumption.

In 2013, shipments of MIR 162-infused corn arrived in China and were not approved for import and were subsequently rejected. In recent years, China has been a major export market for American corn. Thus, when the Viptera corn was shipped to China and rejected, it resulted in a swift decrease in the demand for U.S. corn, and in turn, a drop in U.S. corn prices. Plaintiffs also allege that Distiller's Dried Grains with Solubles (DDGS) were marketed and shipped to China alongside U.S. corn. DDGS are produced when corn is processed into ethanol and is used in animal feed.

The plaintiffs in this case are corn farmers from multiple states who never purchased or knowingly planted VIPTERA™ or DURACADE™ brand seeds. Plaintiffs seek to hold Syngenta liable for their losses resulting from the reduced price for their corn caused by Syngenta's release of the GMO products into the marketplace. Specifically, plaintiffs allege that Syngenta owed a tort duty - not a contract duty - to act reasonably in the timing, manner, and scope of its commercialization of VIPTERA™ to prevent the type of harm that befell plaintiffs.

II. LEGAL STANDARDS

A. Personal Jurisdiction under 12(b)(2)

When personal jurisdiction is challenged pursuant to Fed. R. Civ. P. 12(b)(2), plaintiffs bear the burden of establishing personal jurisdiction over defendants. N. Grain Mktg., LLC v. Greving, 743 F.3d 487, 491 (7th Cir. 2014) (citing Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773 (7th Cir. 2003). If the issue of personal jurisdiction is raised by a motion to dismiss and decided on written material rather than an evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdictional facts. Id. The Court must take as true all well-pleaded facts alleged and resolve any factual disputes in favor of the plaintiff. Tamburo v. Dworkin, 601 F.3d 693, 700 (7th Cir. 2010).

Illinois' long-arm statute enables personal jurisdiction over a party to the extent allowed under the due process provisions of the Illinois and United States Constitutions. See 735 Ill. Comp. Stat. 5/2-209(c) (2016) (courts may exercise jurisdiction on any other basis now or hereafter permitted by Illinois Constitutionand Constitution of United States); see also Kipp v. Ski Enterprise Corp. of Wisc., Inc., 783 F.3d 695, 697 (7th Cir. 2015) (stating governing Illinois statute permits courts to exercise personal jurisdiction up to limits of Due Process Clause of Fourteenth Amendment). The Illinois Constitution's due process and equal protection guarantee — Ill. Const. art. I, § 2 — permits the assertion of personal jurisdiction "when it is fair, just, and reasonable to require a nonresident defendant to defend an action in Illinois, considering the quality and nature of the defendant's acts which occur in Illinois or which affect interests located in Illinois." Rollins v. Ellwood, 141 Ill. 2d 244, 275 (Ill. 1990). When interpreting these principles, a court may look to the construction and application of the federal due process clause. Id. The Seventh Circuit Court of Appeals has suggested that there is no operative difference between Illinois and federal due process limits on the exercise of personal jurisdiction. Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 715 (7th Cir. 2002). Therefore, if the contacts between the defendant and Illinois are sufficient to satisfy the requirements of federal due process, then the requirements of both the Illinois long-arm statute and the Illinois Constitution have also been met, and no other inquiry is necessary.

The Due Process Clause of the Fourteenth Amendment limits when a state may assert personal jurisdiction over nonresident individuals and corporations. See Pennoyer v. Neff, 95 U.S. 714, 733 (1877), overruled on other grounds by Shaffer v. Heitner, 433 U.S. 186 (1977). Under federal due process standards, a court can have personal jurisdiction over a defendant only if the defendant has"certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" Int'l Shoe Co. v. State of Wash., 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)); uBID, Inc. v. GoDaddy Group, Inc., 623 F.3d 421, 425 (7th Cir. 2010) (quoting Int'l Shoe, 326 U.S. at 316). The defendant must have purposefully established such minimum contacts with the forum state such that it "should reasonably anticipate being haled into court there," World-Wide Volkswagen Corp. v. Woodson, 444 U.S 286, 297 (1980), because it has "purposefully avail[ed] itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws," Hanson v. Denckla, 357 U.S. 235, 253 (1958). In deciding whether exercising jurisdiction offends traditional notions of fair play and substantial justice, the Court may also consider "the burden on the defendant, the interests of the forum State, and the plaintiff's interest in obtaining relief." Asahi Metal Indus. Co., Ltd. V. Super. Ct. of Cal., Solano Cty., 480 U.S. 102, 113 (1987).

What personal jurisdiction means in a particular case depends on whether the plaintiff asserts "general" or "specific" jurisdiction. Specific jurisdiction refers to jurisdiction over a defendant in a suit arising out of or related to the defendant's contacts with the forum. Hyatt, 302 F.3d at 716 (citing Helecopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 nn. 8, 9 (1984)). General jurisdiction, on the other hand, may exist even in suits that do not rise out of or relate to the defendant's contacts so long as the defendant has "continuous andsystematic" contacts with the forum state. Hyatt, 302 F.3d at 713; Helicopteros Nacionales, 466 U.S. at 416.

B. Failure to State a Claim under 12(b)(6)

A motion to dismiss under Fed. R. Civ. P. 12(b)(6) challenges the sufficiency of the complaint. Rule 12(b)(6) permits a motion to dismiss a complaint for failure to state a claim upon which relief can be granted. Hallinan v. Fraternal Order of Police Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). The Supreme Court explained in Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007), that Rule 12(b)(6) dismissal is warranted if the complaint fails to set forth "enough facts to state a claim to relief that is plausible on its face." Notice pleading remains all that is required in a complaint, even though federal pleading standards were overhauled by Twombly and Ashcroft v. Iqbal, 556 U.S. 662 (2009). "A plaintiff still must provide only 'enough detail to give the defendant fair notice of what the claim is and the grounds upon which it rests and, through his allegations, show that it is plausible, rather than merely speculative, that he is entitled to relief.' " Tamayo v. Blagojevich, 526 F.3d 1074, 1083 (7th Cir. 2008) (citation omitted).

The Seventh Circuit offers further instruction on what a civil action must allege to endure 12(b)(6) dismissal. In Pugh v. Tribune Co., 521 F.3d 686, 699 (7th Cir. 2008), the Court reiterated the standard: "surviving a Rule 12(b)(6) motion requires more than labels and conclusions"; the complaint's allegations must "raise a right to relief above the speculative level." A plaintiff's claim "mustbe plausible on its face," that is, "the complaint must establish a non-negligible probability that the claim is valid." Smith v. Med. Benefit Adm'rs Grp., Inc., 639 F.3d 277, 281 (7th Cir. 2011).

III. ANALYSIS

A. Choice of Law

In a diversity case, the Court applies the choice of law rules of the state in which the district court sits. Jackson v. Payday Fin., LLC, 764 F.3d 765, 774 (7th Cir. 2014) (citing Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938)). Illinois follows the most significant relationship test found in the Restatement (Second) Conflict of Laws. Denton v. Universal Am-Can, Ltd., 26 N.E.3d 448, 451 (Ill. App. Ct. 2015). Under Illinois choice of law rules, litigants can also stipulate to which substantive law applies to their case so long as the stipulation is reasonable. City of Clinton, Ill. v. Moffitt, 812 F.2d 341, 342 (7th Cir. 187); see also Rexford Rand Corp. v. Ancel, 58 F.3d 1215, 1219 n.6 (7th Cir. 1995).

Importantly, a choice of law analysis is only required when a difference in the laws of the states will affect the outcome of a case. Denton, 26 N.E.3d at 451 ; see also Bridgeview Health Care Ctr., Ltd. v. State Farm Fire & Cas. Co., 10 N.E.3d 902, 909 (IL Sup. Ct. 2014) ("a...