Louis Dreyfus Company Grains Merchandising LLC v. Syngenta AG et al
Filing
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MEMORANDUM AND ORDER denying 93 Defendants' Motion for Judgment on the Pleadings. Signed by District Judge John W Lungstrum on 10/30/2018. (ses)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
IN RE: SYNGENTA AG MIR 162
CORN LITIGATION
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This Document Relates To:
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Louis Dreyfus Company Grains
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Merchandising LLC v. Syngenta AG, et al.,
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No. 16-2788-JWL
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MDL No. 2591
Case No. 14-md-2591-JWL
MEMORANDUM AND ORDER
This single case within this MDL presently comes before the Court on the motion
(Doc. # 93 in Case No. 16-2788) filed by defendants Syngenta AG; Syngenta Crop
Protection AG; Syngenta Corporation; Syngenta Crop Protection, LLC; and Syngenta
Seeds, LLC (collectively “Syngenta”) for judgment on the pleadings with respect to the
remaining claims asserted by plaintiff Louis Dreyfus Company Grains Merchandising LLC
(“LDC”). For the reasons set forth below, the Court cannot conclude as a matter of law
that LDC’s remaining claims are time-barred, and therefore the Court denies the motion.
I.
Background
This MDL includes hundreds of similar suits filed against Syngenta by corn farmers
and others in the corn industry. The suits generally relate to Syngenta’s commercialization
of genetically-modified corn seed products, Viptera and Duracade, which contained the
trait MIR 162, without approval of that trait by China, an export market. The plaintiffs
have alleged that Syngenta’s commercialization of its products caused the geneticallymodified corn to be commingled throughout the corn supply in the United States; that
China rejected imports of all corn from the United States because of the presence of MIR
162; that such rejection caused corn prices to drop in the United States; and that corn
farmers and others in the industry were harmed by that market effect. The Court certified
state-wide classes for tort claims by producers under the law of eight different states.1
The particular case within the MDL to which this order relates was brought by
plaintiff LDC in the District of Minnesota. LDC alleges that it operates grain elevators and
that it buys, sells, and exports corn.2 By its first amended complaint, LDC asserted claims
against Syngenta under the federal Lanham Act and state-law claims for negligence,
fraudulent misrepresentation, and tortious interference with business expectations. By
Memorandum and Order of January 19, 2018, the Court dismissed plaintiff’s Lanham Act
and fraud claims, as well as the negligence claim to the extent based on certain theories.
See In re Syngenta AG MIR 162 Corn Litig., 2018 WL 489098 (D. Kan. Jan. 19, 2018)
(Lungstrum, J.). Syngenta now seeks judgment on the remaining negligence and tortious
interference claims.
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The Court also certified a nationwide Lanham Act class of producers, but it
subsequently granted summary judgment in favor of Syngenta on the claims under that
statute.
2
More precisely, LDC alleges that it sold corn to an affiliate that exported corn from
the United States, but that the affiliate has assigned its claims against Syngenta to LDC.
Thus, for convenience, the Court has referred to LDC in this MDL generally as an elevator
operator and an exporter.
2
II.
Governing Standard
A motion for judgment on the pleadings under Fed. R. Civ. P. 12(c) is analyzed
under the same standard that applies to a motion to dismiss for failure to state a claim under
Fed. R. Civ. P. 12(b)(6). See Park Univ. Enterprises, Inc. v. American Cas. Co., 442 F.3d
1239, 1244 (10th Cir. 2006). The Court will dismiss a cause of action for failure to state a
claim only when the factual allegations fail to “state a claim to relief that is plausible on its
face,” see Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007), or when an issue of
law is dispositive, see Neitzke v. Williams, 490 U.S. 319, 326 (1989). The complaint need
not contain detailed factual allegations, but a plaintiff’s obligation to provide the grounds
of entitlement to relief requires more than labels and conclusions; a formulaic recitation of
the elements of a cause of action will not do. See Bell Atlantic, 550 U.S. at 555. The Court
must accept the facts alleged in the complaint as true, even if doubtful in fact, see id., and
view all reasonable inferences from those facts in favor of the plaintiff, see Tal v. Hogan,
453 F.3d 1244, 1252 (10th Cir. 2006). Viewed as such, the “[f]actual allegations must be
enough to raise a right to relief above the speculative level.” See Bell Atlantic, 550 U.S. at
555. The issue in resolving a motion such as this is “not whether [the] plaintiff will
ultimately prevail, but whether the claimant is entitled to offer evidence to support the
claims.” See Swierkiewicz v. Sorema N.A., 534 U.S. 506, 511 (2002) (quoting Scheuer v.
Rhodes, 416 U.S. 232, 236 (1974)).
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III.
Analysis
A.
Applicable Limitations Period
As the Court has previously noted in this case, in this MDL the Court applies the
choice of law rules of the state in which the particular action was originally filed, in this
case Minnesota. See In re: Syngenta AG MIR 162 Corn Litig., 2018 WL 489098, at *3 (D.
Kan. Jan. 19, 2018) (Lungstrum, J.) (citing Johnson v. Continental Airlines Corp., 964 F.2d
1059, 1063 n.5 (10th Cir. 1992)). Minnesota statutes provide that if a claim is substantively
based on the law of another state, that state’s limitation period and tolling rules apply to
the claim. See Minn. Stat. § 541.31, subd. 1(a)(1); id. § 541.32; see also Whitney v. Guys,
Inc., 700 F.3d 1118, 1123 n.6 (8th Cir. 2012). The Court has already ruled that LDC’s
common-law tort claims are governed by Connecticut law. See In re: Syngenta, 2018 WL
489098, at *3-4. Accordingly, LDC’s remaining negligence and tortious interference
claims are subject to Connecticut’s limitations periods and tolling rules. LDC does not
dispute that Connecticut law governs the timeliness of its claims.
Syngenta argues that LDC’s negligence claim is barred by Conn. Gen. Stat. § 52584, which provides a two-year statute of limitations for certain negligence actions. As
LDC points out, however, that statute applies on its face only to negligence actions to
recover damages for injury to person or personal property, while the present action involves
only alleged economic injuries. See id.; Tanasi v. CitiMortgage, Inc., 257 F. Supp. 3d 232,
277 (D. Conn. 2017) (negligence claims for physical injuries must be brought within two
years under Section 52-584, while negligence claims for economic damages are subject to
the three-year period in Section 52-577). In its reply brief, Syngenta has not disputed that
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Section 52-584 cannot apply to LDC’s claims of economic injuries. Accordingly, the Court
will not apply Section 52-584’s two-year limitations period in this case.
The parties agree that LDC’s claims are subject to the three-year statute of repose
imposed by Conn. Gen. Stat. § 52-577. See Tanasi, 257 F. Supp. 3d at 277; Travelers
Indem. Co. v. Rubin, 551 A.2d 1220, 1223 (Conn. 1988) (Section 52-577 applies to all tort
actions that do not fall within Section 52-584 or some other statute of limitation); PMG
Land Assocs., L.P. v. Harbour Landing Condominium Ass’n, Inc., 42 A.3d 508, 512 (Conn.
Ct. App. 2012) (applying Section 52-577 to a tortious interference claim). Section 52-577
provides as follows: “No action founded upon a tort shall be brought but within three years
from the date of the act or omission complained of.” See Conn. Gen. Stat. § 52-577. This
is an occurrence statute---the three-year period runs not when the plaintiff discovers its
injury, but rather on the date the defendant’s conduct occurs. See Watts v. Chittenden, 22
A.3d 1214, 1219 (Conn. 2011). LDC filed this action against Syngenta on October 21,
2016. Therefore, in the absence of any tolling of this statute, LDC’s claims are time-barred
to the extent based on conduct by Syngenta occurring prior to October 21, 2013.
Syngenta argues that LDC’s claims are barred because they are based on Syngenta’s
allegedly negligent commercialization of Viptera, which would have taken place in 2010
and early 2011 when that product was first launched in anticipation of the 2011 planting
and growing season. In response, LDC argues that it is entitled to American Pipe tolling.
LDC further argues that it has alleged wrongful conduct occurring after October 2013 and
that its claims are made timely by Connecticut’s continuing course of conduct doctrine.
The Court addresses those two assertions of tolling in turn.
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B.
American Pipe Tolling
In American Pipe and Construction Co. v. Utah, 414 U.S. 538 (1974), the United
States Supreme Court recognized the following tolling rule under federal law: “the
commencement of a class action suspends the applicable statute of limitations as to all
asserted members of the class.” See id. at 554. LDC argues that if American Pipe tolling
were applied in this case, the running of the three-year limitations period would have been
suspended from September 12, 2014, to September 19, 2016, when LDC was a member of
an asserted class in a case brought by Trans Coastal, and LDC would then be able to assert
claims based on conduct as far back as October 16, 2011, without running afoul of Section
52-577. Syngenta argues in response that Section 52-577, a statute of repose, should not
be subject to American Pipe tolling. The Court agrees with Syngenta that Connecticut law
does not authorize the use of American Pipe tolling as an exception to Section 52-577’s
clear prohibition against actions filed more than three years after the allegedly wrongful
conduct.
Last year, in California Public Employees’ Retirement System v. ANZ Securities,
Inc., 137 S. Ct. 2042 (2017), the Supreme Court held that the federal Securities Act’s threeyear statute of repose was not subject to American Pipe tolling. See id. The Court noted
that the time bar in that case was a true statute of repose, in that it provided a complete
defense to any suit after a particular period of time, which would preclude tolling unless
“there is a particular indication that the legislature did not intend the statute to provide
complete repose but instead anticipated the extension of the statutory period under certain
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circumstances.” See id. at 2050. Thus, the Supreme Court effectively limited American
Pipe tolling to periods of limitations other than true statutes of repose.
In Grimes v. Housing Authority of the City of New Haven, 698 A.2d 302 (Conn.
1997), the Connecticut Supreme Court adopted American Pipe’s rule for tolling statutes of
limitation. See id. at 307. Grimes, however, did not involve the application of Section 52577 or some other statute of repose, but instead involved Section 52-584’s two-year
limitations period that incorporates a discovery rule. See id. at 305 (trial court dismissed
based on Section 52-584’s two-year period). No appellate court in Connecticut has applied
American Pipe tolling to Section 52-577 or any other statute of repose. Moreover, in
applying the American Pipe rule in Grimes, the Connecticut Supreme Court also applied
the U.S. Supreme Court’s extension of American Pipe (which involved a class member
seeking to intervene) to asserted class members who file individual actions. See id. at 306
n.8 (citing Crown, Cork & Seal Co. v. Parker, 462 U.S. 345 (1983)). The Grimes court
also chose to follow Second Circuit law interpreting the American Pipe rule not to require
claims identical to the previously-asserted class action claims. See id. at 307-10 (following
Cullen v. Margiotta, 811 F.2d 698 (2d Cir. 1987)). This commitment by the Connecticut
Supreme Court to follow federal law in adopting the American Pipe rule for purposes of
state law suggests that the court would also adopt the U.S. Supreme Court’s limitation of
its own American Pipe rule to limitations periods other than true statutes of repose.
Section 52-577 states unequivocally that no tort action shall be brought more than
three years from the date of the act or omission complained of, see Conn. Gen. Stat. § 52577, and it is therefore a true statute of repose, akin to the Securities Act provision at issue
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in ANZ. See Barrett v. Montesano, 849 A.2d 839, 845 (Conn. 2004) (although Section 52577 is sometimes called a statute of limitation, it technically functions as a statute of
repose). In the absence of authority from Connecticut’s appellate courts, this Court must
apply the statute as clearly written, prohibiting tort claims brought more than three years
after the occurrence without provision for any possible tolling.
LDC notes that Connecticut’s courts have applied other tolling rules to Section 52577’s three-year repose period, but those tolling rules are distinguishable. First, as more
fully discussed below, The Connecticut Supreme Court has applied the continuing course
of conduct doctrine to toll the running of Section 52-577’s three-year period. See, e.g.,
Flannery v. Singer Asset Fin. Co., LLC, 94 A.3d 553, 569-76 (Conn. 2014). That rule of
tolling, however, does not really result in a suspension of the limitations period while
running; more accurately described, it determines the date on which the three-year period
begins to run in the case of ongoing conduct that occurs over a period of time. See Carter
v. University of Conn., 2006 WL 2130730, at *3 (D. Conn. July 28, 2006) (making this
distinction in rejecting an argument for equitable tolling of Section 52-577), aff’d on other
grounds, 264 F. App’x 111 (2d Cir. 2008).
Second, the Connecticut Supreme Court has applied tolling based on fraudulent
concealment to a statute of repose. See Connell v. Colwell, 571 A.2d 116, 118 (Conn.
1990). Connecticut’s fraudulent concealment rule is imposed by statute, however. See
Conn. Gen. Stat. § 52-595. Thus, in Connell, in rejecting the argument that fraudulent
concealment tolling should not apply to a statute of repose, the supreme court could cite
evidence that the Connecticut Legislature intended that the fraudulent concealment rule
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apply across the board. See Connell, 571 A.3d at 118 n.4. There is no similar statutory
pronouncement from the Connecticut Legislature evincing an intent to make Section 52577 (or any other statute of repose) subject to American Pipe tolling.
Finally, American Pipe is a form of equitable tolling, see ANZ, 137 S. Ct. at 2052,
and as multiple courts have noted, Section 52-577’s statute of repose has never been held
to be subject to equitable tolling. See Gerena v. Korb, 617 F.3d 197, 206 (2d Cir. 2010)
(“[T]he possibility that equitable tolling might apply here is foreclosed by Connecticut
precedent, which establishes Conn. Gen. Stat. § 52-577 as a statute of repose not
susceptible to equitable tolling.”); Carter, 2006 WL 2130730, at *3-4 (rejecting argument
for tolling of Section 52-577); Essex Ins. Co. v. William Kramer & Assocs., Inc., 2016 WL
3198190, at *18 (D. Conn. June 8, 2016) (same).
Section 52-577 sets an absolute three-year bar on tort claims, and there is no
evidence that the Connecticut Legislature did not mean what it stated in that statute.
Moreover, LDC has not identified any Connecticut court that has extended American Pipe
beyond the U.S. Supreme Court’s own limitation to toll the statute’s three-year period. In
the absence of authority from Connecticut, this Court will not create such an exception to
the plain language of Section 52-577. Accordingly, the Court rejects LDC’s argument for
application of American Pipe tolling in this case.
C.
Continuing Course of Conduct Doctrine
Alternatively, LDC argues that it is entitled to tolling under the continuing course
of conduct doctrine. The Connecticut Supreme Court has applied the continuing course of
conduct doctrine to toll the running of Section 52-577’s three-year period. See, e.g.,
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Flannery, 94 A.3d at 569-76; Watts, 22 A.3d at 1219-28. The doctrine “reflects the policy
that, during an ongoing relationship, lawsuits are premature because specific tortious acts
or omissions may be difficult to identify and may yet be remedied.” See Watts, 22 A.3d at
1220 (quoting Martinelli v. Fusi, 963 A.2d 640 (Conn. 2009)). The supreme court has
defined the requirements for application of the doctrine as follows:
[T]his court has held that in order to support a finding of a continuing course
of conduct that may toll the statute of limitations there must be evidence of
the breach of a duty that remained in existence after commission of the
original wrong related thereto. That duty must not have terminated prior to
commencement of the period allowed for bringing an action for such a
wrong. Where we have upheld a finding that a duty continued to exist after
the cessation of the act or omission relied upon, there has been evidence of
either a special relationship between the parties giving rise to a continuing
duty or some later wrongful conduct of a defendant related to the prior act.
See Flannery, 94 A.3d at 570 (internal quotations omitted) (quoting Watts, 22 A.3d 1214);
accord Saint Bernard Sch. of Montville, Inc. v. Bank of America, 95 A.3d 1063, 1077
(Conn. 2014).
LDC argues that this doctrine may apply here because it has alleged facts showing
a special relationship with defendants. This Court has ruled that Syngenta may have owed
plaintiffs in this MDL a legal duty relating to the commercialization of its products, in part
because of the inter-connected nature of the relationships within this market. See In re:
Syngenta AG MIR 162 Corn Litig., 131 F. Supp. 3d 1177, 1188-93 (D. Kan. 2015)
(Lungstrum, J.). The Connecticut Supreme Court has stated, however, that although the
state’s appellate courts “have not defined precisely what constitutes a special relationship
for purposes of tolling,” usually such a relationship “is one that is built upon a fiduciary or
otherwise confidential foundation.” See Saint Bernard, 95 A.3d at 1077. LDC has not
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alleged such a fiduciary or confidential relationship---or even a business relationship of
any kind---with Syngenta, and Connecticut courts have not indicated that the mere
existence of any legal duty may be sufficient to satisfy this prong of having a special
relationship. Accordingly, LDC may not rely on the existence of such a relationship to
invoke the continuing course of conduct doctrine.
The Court turns then to the doctrine’s alternative requirement of later wrongful
conduct related to the original breach of duty. LDC argues that it has asserted claims based
on defendants’ commercialization of Viptera up to and after China’s first rejections of corn
containing MIR 162 in November and December 2013. A close examination of LDC’s
complaint, however, reveals an absence of any allegation regarding the commercialization
of Viptera after October 2013. LDC cites paragraphs 80 and 81 of its first amended
complaint, which refer to conduct “through 2013” and up to December 2013, but those
allegations relate specifically to omissions by Syngenta, and no claims remain based on
omissions. LDC also cites paragraphs 108 through 111, which relate to harm from the
closing of the China market after the rejections, but those paragraphs relating to damages
do not include allegations of conduct by defendants after October 2013. In fact, as shown
in paragraphs 7 and 83, LDC complains only about defendants’ commercialization of
Viptera for purposes of the 2011, 2012, and 2013 growing seasons, which (as made clear
in paragraph 62) would involve sales of seed ending before planting took place in the spring
of those years. Thus, a reasonable reading of the entire complaint shows that LDC has not
alleged continuing wrongful conduct involving Viptera after October 2013.
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LDC’s claims are also based, however, on defendants’ allegedly wrongful
commercialization of the Duracade product.
LDC’s direct allegations concerning
Duracade are minimal---its enumeration of defendants’ breaches in paragraph 114 includes
the premature commercialization of Viptera and Duracade---but it has also incorporated
the allegations made in the non-producer class action complaint filed in the MDL, which
contains more detailed allegations of the wrongful commercialization of Duracade for the
2014 growing season. Such allegations, reasonably construed in LDC’s favor, would
include conduct through Spring 2014, which would bring LDC within the three-year
limitations period.
Defendants argue that any such wrongful conduct involving Duracade was not
related to any prior wrongful conduct involving Viptera because the two products were
distinct, undergoing different approval processes in this country and in China. LDC has
alleged, however, that its injuries arose from China’s rejection of corn containing MIR 162,
a trait also found in Duracade, and thus defendants are alleged in both cases to have
negligently commercialized products containing that trait prior to Chinese approval.
Moreover, LDC has alleged non-segregable injuries---the drop in the price of corn and the
closure of the Chinese market---from the commercialization of both products, and the
Connecticut Supreme Court has distinguished conduct causing such a cumulative injury
from the case in which repeated events give rise to discrete injuries, which case would not
fall within this tolling doctrine. See Saint Bernard, 95 A.3d at 1078-79 (quoting Watts, 22
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A.3d 1214). Thus, LDC has alleged related conduct continuing after October 2013, which
would allow the doctrine to apply in this case.1
LDC will be required eventually to produce evidence of a continuing course of
conduct sufficient to support application of the tolling doctrine. At this stage, however,
based solely on the pleadings, the Court concludes that the doctrine could apply to toll the
running of the three-year period in Section 52-577 in this case. Thus, the Court cannot
conclude that LDC’s claims are untimely as a matter of law, and it therefore denies
Syngenta’s motion for judgment on the pleadings.
IT IS THEREFORE ORDERED BY THE COURT THAT defendants’ motion for
judgment on the pleadings (Doc. # 93 in Case No. 16-2788) is hereby denied.
IT IS SO ORDERED.
Dated this 30th day of October, 2018, in Kansas City, Kansas.
s/ John W. Lungstrum
John W. Lungstrum
United States District Judge
1
In addition, even if the later conduct involving Duracade was not related to prior
wrongful conduct involving Viptera, Syngenta would be entitled to judgment only to the
extent LDC’s claims are based on conduct occurring prior October 2013, and LDC’s claims
based on the commercialization of Duracade after that date would be timely and therefore
would survive.
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