GMO Liability Threats for Farmers
By David R. Moeller, Farmers’ Legal Action Group
Reprinted with permission of
FLAG, GE Food Alert and
the Farmer to Farmer Campaign
on Genetic engineering
The introduction of GMOs into commercial crop production alters the risks farmers must consider when making decisions about buying seed and planting and marketing their crops. These include the possible loss of export markets and other market risks, as well as potential legal liability. Legal issues raised by the production of crops containing GMOs include tort-based liability, such as those claims arising when genetic drift and crop contamination occur; contract-based liability, such as might arise under farmers’ Technology Agreements with seed companies or farmers’ assurances to crop purchasers; and regulatory liability, such as might arise if farmers’ actions or circumstances result in violations of statutes or regulations. The discovery by Genetically Engineered Food Alert of genetically modified StarLink corn in taco shells and other food products starting in September 2000 caused ripple effects throughout the grain handling and food industries. StarLink corn had only been approved by the U.S. Environmental Protection Agency (EPA) for animal feed or industrial uses (non-food consumption) because the corn contains a biopesticide that may cause allergic reactions in humans. For farmers who planted StarLink corn and any neighbors whose crops were contaminated, the introduction of StarLink corn into human foods has had lasting effects. Aventis CropScience, the company that engineered StarLink corn, instituted a buyback program intended to compensate farmers for their extra costs and lost markets resulting from the funneling of StarLink corn into the entire corn distribution chain. Despite a buy-back agreement worked out between Aventis and 17 state Attorneys General, however, farmers encountered problems finding a location to deposit their StarLink or StarLink-contaminated corn, experienced delays in making debt repayments due to late buy-back payments, and face the continuing possibility of civil litigation by neighbors or grain elevators over contamination issues.
Tort Liability
One of farmers’ primary GMO-related problems that the StarLink situation revealed is that what a neighbor plants may seriously affect the farmer’s own crops. Certain crops-such as corn and canola-cross-pollinate, causing genetic material to migrate beyond where the crop was planted. Until “genetic fences” are developed that stop genetic drift from occurring during cross-pollination, disputes may arise between farmers who plant GMOs and their neighbors who do not. Neighbors may suffer damages, for example, by being unable to market their non-GMO crop as they wish if the non-GMO crops test positive for GMOs that came from a neighboring farmer’s field. Farmers growing GMO crops should be aware that if effective barriers to genetic pollution are unavailable or these barriers fail, they might face tort liability from their neighbors and others for contaminated crops. Aventis attempted to create a “genetic fence” for StarLink by having farmers plant a 660-foot buffer strip of non-StarLink corn around StarLink cornfields. Corn grown in the buffer strip was also only approved for animal feed or industrial purposes. The use of buffer strips was to limit cross-pollination to non-GMO corn and also create a refuge where European corn borers and other targeted pests would not as quickly develop resistance to the bio-pesticide Bacillus thuringiensis (Bt) found in StarLink corn. Many farmers were reportedly unaware of the buffer strip requirement, resulting in many cases of StarLink corn being planted directly adjacent to a neighbor’s non-StarLink corn. This non-StarLink corn then tested positive for the StarLink insecticidal protein Cry9C. Farmers and seed companies who are responsible for genetically contaminating neighboring fields might be liable for a neighbor’s damages based on tort claims of trespass to land, nuisance, negligence, or strict liability. The tort claim of trespass to land arises when someone intentionally enters another person’s land and causes damage. This claim could arise in a GMO context if a farmer and/or seed company knew that genetic traits from a GMO crop would enter a neighbor’s property and genetic drift in fact occurs, causing harm to the neighbor’s crop. The farmer and/or seed company could then be liable for any resulting harms caused by the GMO crop. A similar tort is nuisance. Nuisance occurs when someone interferes with another person’s use and enjoyment of his or her property. The interference is generally an act that results in obnoxious noise, sights, or smells emanating from the defendant’s property and sensed from the other person’s land. The interfering act does not need to cause property damages, just affect a person’s ability to use and enjoy his or her property. GMO contamination could affect what crops a neighboring farmer can grow, thereby interfering with the farmer’s ability to use his or her property. The negligence tort claim arises when a person fails to act reasonably under the circumstances and this failure causes harm to another. The elements of a negligence claim are: (1) the existence of a duty on the part of the defendant to protect plaintiff from injury; (2) failure of defendant to perform that duty; and (3) injury to the plaintiff resulting from such failure.To prove that GMO contamination was the result of negligence, a person would have to prove that a neighboring landowner had a duty to prevent GMO contamination and that there was a reasonably foreseeable likelihood of injury. Given the potential for certain GMO crops to contaminate neighboring fields, a court could find that farmers have a duty to prevent this injury to their neighbors. If a duty is established, neighbors would then have to show that this duty was breached by the GMO crop grower. Failure to properly select seed, adhere to specified buffer zones, or follow growing and harvesting procedures could mean a breach of that duty. If one of these failures is linked to another person’s injuries, the farmer that caused the GMO contamination could be liable for negligence. Another potential claim related to GMO contamination is strict liability. Strict liability arises when someone engages in an abnormally dangerous activity; in such cases, a person harmed by the abnormally dangerous activity can recover damages from the person who engaged in the activity, without having to prove that the person who did the activity was reckless or negligent. Courts have found abnormally dangerous activities to include housing wild animals, storing and using explosives, or spraying pesticides. Some legal scholars argue that if a farmer and/or seed company know that a GMO crop is difficult to control and that it will likely cross-pollinate with crops in adjacent fields, the farmer and/or seed company should be held strictly liable for any resulting damages. Courts assessing genetic contamination claims based on strict liability may compare them to past pesticide drift cases. In an often-cited 1977 Washington State Supreme Court case, the court held that an aerial spray company, which allowed pesticides to drift onto an organic farm, was strictly liable for damages because the organic farm faced losing its ability to market organic crops and, due to the prevalent use of contracts by organic farms, the farmer would be unable to sell crops on the regular commercial market due to failure to enter into a contract before the growing season began. Langan v. Valicopters, 567 P.2d 218 (Wash. 1977). The holding in that case may be used by to argue that seed companies who develop and farmers who raise GMO crops that genetically “pollute” a crop should be strictly liable for damages to neighboring crops. Such damages could include: loss of organic certification with resulting loss of ability to meet contract obligations or market crops at higher premiums, costs related to violating identity-preserved crop contracts because the crops no longer meet the required specifications, or even litigation costs when neighboring farmers are sued by companies for “stealing” genetic intellectual property that was in actuality blown onto their fields.
Contract Liability
Biotechnology companies and seed distributors marketing GMO seeds to farmers usually require that farmers sign grower or technology agreements. These agreements generally give the farmer rights to use the GMO seeds in exchange for complying with all of the company’s production methods and management requirements. The contract may require the farmer to allow company representatives access to fields to inspect crops and determine if the farmer is in compliance with the contract. The companies are generally seeking to secure a number of protections for themselves through the agreements. These agreements may include provisions designed to ensure that farmers follow specific guidelines directing where and how the GMO seed will be planted, to stop farmers from saving seed from the crop that is produced from the purchased seed, to protect the company’s intellectual property rights, and to ensure that disputes arising under the contracts are resolved either through binding arbitration or in a court convenient to the company. In addition to altering farmers’ year-to-year production practices, contract provisions that protect the companies’ intellectual property rights in the GMOs and prohibit farmers from saving seed to plant in the following year may also open farmers to liability for breach of contract. Monsanto, a chemical company based in St. Louis, Missouri, has brought complaints against farmers for allegedly saving seed in violation of either a technology agreement or Monsanto’s intellectual property rights.
Farmers’ Liability Under Non-GMO Seed and Marketing Contracts
Farmers market their crops utilizing a number of different methods. One method is the use of a marketing contract where the farmer agrees to deliver a certain number of bushels on a certain date to the food processor or cooperative. If the end use of the crop is for a non-GMO product, then the farmer will be under contract to deliver a non-GMO crop. Some of these marketing contracts are for identity-preserved crops, which provide the processor with specified characteristics such as high oil content. However, farmers may be unable to fulfill their marketing contracts if their crops are contaminated by GMOs from their neighbors or through the grain handling system. Farmers may face damages for failure to deliver on the contract and may need to find replacement crops or compensate the buyer for the costs of obtaining the crop elsewhere.
Farmers’ Liability Under Crop Sales Contracts
Because of the risks of genetic contamination and a farmer’s inability to ensure that he or she receives completely GMO-free seed from a seed supplier, even farmers who did not knowingly plant GMO seed should exercise caution in the guaranties and warranties that they make to the buyer of their crops. The risk is that a farmer may market crops that he or she believes are GMO-free but that later test positive for GMO genes. The farmer who guaranteed or warranted that his or her crops were GMO-free may then have those crops rejected by the buyer, may be liable for the buyer’s expenses to replace the purchased crops, and may even be held liable for any further damages incurred by the buyer if the GMO-positive crop mingles with and contaminates other crops To limit potential liability, when making sales farmers should only make representations about actions that were actually in their control. This might include the fact that the seed planted was represented by their seed company as being non-GMO seed and that care was taken to avoid contamination from GMO crops. For many farmers, taking precautions to clean equipment and bins and test their seed and crops for GMOs will result in significant costs that may not be recouped, but may lower liability exposure. Farmers should avoid promising that a crop contains all non-GMO material or promising that the crops were not genetically contaminated from a neighbor’s crop or during harvest and storage.
Regulatory Liability
GMO crops present potential liability for violation of statutes or regulations related to the companies’ genetic intellectual property or the control of GMO crop distribution, including whether the crop has the proper regulatory approvals for various uses including human consumption. Just as Monsanto is enforcing intellectual property rights for farmers who signed technology agreements, they are also suing farmers for alleged patent infringement by improperly using Monsanto technology without signing a technology agreement and paying the technology fee. For example, Monsanto sued a Canadian farmer, Percy Schmeiser, for growing Roundup Ready canola without a technology agreement. Schmeiser, an organic farmer for over 40 years, claimed that the GMO canola drifted onto his property. In May 2001, a Canadian court ruled in favor of Monsanto and ordered Schmeiser to pay for the alleged profits he received from growing GMO canola. Schmeiser is appealing the ruling. Monsanto has brought similar actions in the United States against farmers throughout the nation including farmers in North Dakota, South Dakota, Indiana, and Louisiana. Whether or not the farmers violated Monsanto’s intellectual property rights, they still must raise a defense in court ringing up thousands of dollars in attorneys’ fees.
