Summary of a Recent
Judicial Development in
Biotechnology

Farmers Barred from Bringing Tort Claims Against Manufacturer of GMO Seeds

Mengesha Tadesse Seyoum
National AgLaw Center Graduate Fellow

In Sample v. Monsanto Co., 283 F.Supp.2d 1088 (E.D.Mo.2003), the United States District Court for the Eastern District of Missouri ruled that the "economic loss doctrine" barred plaintiffs from bringing tort claims against the producer of genetically modified corn and soybean seeds.

Plaintiffs Frederick Sample and George Naylor brought a putative class action against defendant Monsanto Co. (Monsanto), a company that manufactured genetically modified corn and soybean seeds. See Sample, 283 F.Supp.2d. at 1091. The plaintiffs argued that farmers, such as themselves, who did not grow genetically modified crops "lost revenue because the European community rejected Monsanto's genetically modified products and boycotted all American corn and soybean as a result." Id. at 1091. The plaintiffs brought claims for negligence and public nuisance against Monsanto for introducing the non-genetically modified seeds into the market. See id. Neither plaintiff had suffered injury "to his person or his property" due to the presence of genetically modified corn and soybeans on the market. See id. at 1091-92.

Monsanto moved for summary judgment, arguing that the economic loss doctrine bars negligence and public nuisance claims that are not based on physical injury to persons or property. See id. at 1092. Sample and Naylor raised two principal arguments in opposition to Monsanto's summary judgment motion. See id.

The plaintiffs' argued that the economic loss doctrine was inapplicable because "some jurisdictions permit recovery solely of special damages, such as loss of income, in public nuisance actions." Id. The court rejected this argument, stating that neither Illinois nor Iowa allows such actions. See id. at 1092. The court explained that in Illinois, "'[t]his rule limits the type of damages plaintiffs may recover in tort. Physical injuries to persons or property are compensable; solely economic injuries are not.'" Id. (quoting In re StarLink Corn Prods. Liability Litig., 212 F.Supp.2d 828, 838 (N.D.Ill.2002). It explained that under Iowa law a plaintiff "'cannot maintain a claim for purely economic damages arising out of a defendant's alleged negligence . . . ." Id. (quoting Nebraska Innkeepers, Inc. v. Pittsburgh-Des Moines Corp., 345 N.W.2d 124,128 (Iowa 1984); Audio Odyssey, Ltd. v. United States, 243 F.Supp.2d 951, 961-62 (S.D. Iowa 2003)).

The court stated that

[a]s in Starlink, plaintiffs alleged physical injury to their property and therefore survived dismissal. . . . However, their claims against Monsanto are . . . based solely on the theory that they lost revenue because the European Union . . . has rejected GM seed and boycotted all American corn and soy as a result. The evidence is undisputed that Sample and Naylor did not sustain physical "contamination" or injury to their property. As such, the economic loss doctrine precludes recovery for their nuisance claims as a matter of law.

Id.

The plaintiffs also argued that the economic loss doctrine "should not bar their negligence claims because there is no contractual or warranty relationship between Monsanto and the non-GM farmers." Id. at 1093. More specifically, the plaintiffs argued that because the parties lacked the opportunity to allocate the risk of loss through contractual means, the economic loss doctrine is inapplicable. See id. The court rejected this argument, stating that although the economic loss doctrine is rooted in freedom of contract theory, the doctrine has nonetheless "'grown beyond its original freedom-of-contract based policy justifications. Farmers' expectations of what they will receive for their crops are just that, expectations. Absent a physical injury, plaintiffs cannot recover for drops in market prices.'" Id. (quoting StarLink, 212 F.Supp.2d at 842).

The court concluded that "[b]ecause the economic loss doctrine applies to all tort claims, . . . the plaintiffs' claims fail as a matter of law." Id.

The case was decided on Sept. 19, 2003; this summary was posted Feb. 9, 2004.