September 24, 2003
Judge Allows Antitrust Case Against Seed Producers
HICAGO, Sept. 23 - A federal judge on Friday let proceed an antitrust case that accused the Monsanto Company and other big agricultural seed giants of conspiring to control the world's market in genetically modified crops.
In a 13-page decision, Rodney W. Sippel, a federal district judge in St. Louis, dismissed part of a class-action lawsuit that was filed in 1999 by a group of farmers who said they had suffered huge losses because of global opposition to genetically modified crops.
But Judge Sippel allowed the antitrust portion of the case to proceed, possibly setting the stage for a court battle over whether the world's biggest producers of agricultural seeds got together in the late 1990's to fix prices and control the market for those valuable biotechnology seeds, which are now planted on more than 100 million acres worldwide.
Judge Sippel denied an effort by the big seed companies to dismiss the antitrust claims and end the possibility of a trial.
While the judge has not yet ruled on whether to give the case class-action status, his decision to allow the antitrust case to move forward means thousands of internal documents about how some of the world's biggest biotechnology companies set their prices could be presented in court.
Lawyers representing the farmers who filed the suit have said in court that some documents show that Monsanto and its competitors conspired to fix prices for years.
Monsanto and its co-defendants in the case, Bayer, Syngenta and Pioneer, the world's biggest seed company, have strongly denied any conspiracy took place.
Executives at Monsanto, which produces about 90 percent of the world's biotechnology traits, the genes that transform ordinary seeds into new types of crops, say the company legally patented and licensed its traits to other seed companies, including its three rivals and co-defendants.
Today, both sides in the case claimed some victory in the judge's decision.
Richard Lewis, a lawyer at Cohen, Milstein, Hausfeld & Toll, which filed the class-action suit in 1999, said today, "The farmers are pleased that this challenge to the progress of the case has been defeated."
But executives at Monsanto, which is based in St. Louis, said the judge's ruling significantly narrowed the scope of the case, and that if the judge denied the class-action status, the case would be even further diminished.
The 1999 lawsuit, which was filed by some of the nation's most prominent antitrust lawyers, originally argued that Monsanto, a pioneer in the development of biotechnology crops, was at the center of a global conspiracy to control the market for those crops.
The suit also accused Monsanto of rushing genetically modified crops to market without properly testing them and harming farmers who suffered crop losses when some export markets began to shun biotechnology crops.
Monsanto executives say most of the original claims - including those that said even farmers who used conventional seeds were harmed by biotechnology crops - have been dismissed.
"The broad claims have been so significantly narrowed, so it's clear that what they were charging about biotech is not true," a spokesman for Monsanto, Bryan Hurley, said. "This is absolutely an interim step and if it moves forward we believe it's a case without merit and we're confident the court will recognize that."
The other seed companies involved made similar statements.
"We don't think the case has any merit," said Doyle Karr, a spokesman at Pioneer Hi-Bred, a subsidiary of DuPont.
Bayer, which acquired Aventis CropScience in June 2002, also dismissed the price-fixing accusations.
"We don't believe the claim against Bayer is valid," said Mark Ryan, a Bayer spokesman. "We'll defend ourself vigorously in court against that claim."
But antitrust experts say a contentious antitrust court battle is brewing.
"The judge is saying this antitrust case can go forward," said Robert Mnookin, a professor at the Harvard Law School. "He's refusing to throw out the antitrust case because there's a material dispute of fact over whether Monsanto and these other companies conspired to fix prices."