Jury: German Company Must Pay $1.5M to U.S. Rice Farmers

A federal court jury in St. Louis, Mo., has ordered the German conglomerate Bayer CropScience to pay $1.5 million to farmers in Arkansas and Mississippi whose rice seed was contaminated with a genetically altered strain.

The verdict was the second against Bayer CropScience for losses sustained by farmers when an experimental variety of rice that the company was testing infiltrated crops.

A jury awarded about $2 million to two Missouri farmers in December, and three additional test cases are scheduled for this year involving farmers from Louisiana and Texas as well as a rice exporter. No punitive damages have been awarded in any of the verdicts.

About 6,000 rice producers have filed claims against Bayer since the U.S. Department of Agriculture announced in August 2006 that trace amounts of the genetically modified Liberty Link rice were found in U.S. long-grain rice stocks, according to Don Downing, lead attorney for the plaintiffs in the first two cases.

Bayer and Louisiana State University had been testing genetically modified rice, bred to resist a Bayer brand of herbicide, at a school-run facility in Crowley, La.

Though the USDA said at the time of the crop contamination that the rice variety posed no health or environmental risk, Japan and the European Union moved to ban U.S. rice, leading to a plunge in rice prices and a drop in U.S. rice exports.

Downing said Bayer’s negligence was directly responsible for the loss of the European market.

“This was all, we believe, very preventable by Bayer, if they had just exercised the kind of care they should have exercised in handling the (Liberty Link) rice,” Downing said after the verdict.

Downing was disappointed that the jury did not award punitive damages, and said he would continue to seek them in future cases.

In a statement responding to the verdict, Bayer said it was pleased with the jury’s decision not to award punitive damages, but otherwise was disappointed in the ruling. The company said a USDA investigation was not able to determine how the altered strain entered the rice supply.

“Bayer CropScience maintains that it acted responsibly and appropriately at all times” in the handling of its biotech rice, the statement said.

Cases scheduled for trial will be different both in claimed damage amounts and underlying facts, according to Bruce Mackintosh, general counsel for Bayer CropScience LP.

“We are presently preparing for those trials and intend to defend ourselves vigorously,” Mackintosh said.

Joe and Jim Penn of Portia in Lawrence County, Ark., were awarded $480,692 in compensatory damages, and Jerry Catt of Corning in Clay County was awarded $96,996 by the jury. The jury also awarded Black Dog Planting Co., of Lyon, Miss., awarded $923,154 in compensatory damages.

The jury awarded damages under a formula involving the number of acres each farmer planted and the impact of the contamination.

Gary Sebree, chairman of the Arkansas Rice Producers Association, said the state’s rice producers are still feeling the effects of the contamination 31/2 years later.

“We still don’t have (the European) market, and I don’t know if we’ll ever have it like we had before,” he said. “It definitely has affected every rice farmer in Arkansas.”