$750 Million Settlement for Rice Farmers After Bayer's Unapproved GMO Strain Tainted the U.S. Supply

In August 2006, the U.S. Department of Agriculture detected trace amounts of LibertyLink LL Rice 601, an unapproved herbicide-resistant variety developed by Bayer CropScience, in commercial long-grain rice stocks. The strain had never been authorized for human consumption or for export to the European Union. Within weeks, European importing nations began rejecting U.S. rice shipments, rice futures dropped roughly 14 percent, and U.S. rice largely disappeared from European store shelves.

The financial fallout hit farmers across Arkansas, Louisiana, Mississippi, Missouri, and Texas. Rice growers who had never planted, purchased, or even heard of LibertyLink found their crops unmarketable because the gene could not be kept out of the conventional supply chain. Exporters, mills, and dealers suffered alongside the producers. Lawsuits multiplied across federal and state courts until the federal cases were consolidated into multidistrict litigation before Judge Catherine D. Perry in St. Louis.

Don Downing of Gray Ritter Graham was appointed co-lead counsel for the plaintiffs in the MDL, working alongside Adam Levitt of Wolf Haldenstein Adler Freeman and Herz. State-court litigation in Arkansas proceeded on a parallel track. Plaintiff attorneys built their negotiating position through the courtroom: bellwether trials in federal court produced three consecutive jury verdicts in favor of farmers, and an Arkansas state court jury returned a $42 million punitive damages award against Bayer (that award was under appeal at the time of settlement). Those results left Bayer with little leverage heading into final negotiations.

On July 1, 2011, the parties announced a settlement of up to $750 million. The agreement covered farmers, crop-share landlords, and other claimants who planted long-grain rice anywhere in the United States between 2006 and 2010. More than 11,000 claimants were eligible. Compensation was structured in three pools keyed to different categories of loss, with per-acre payments calculated from Farm Service Agency acreage records. The settlement required at least 85 percent participation from farmers representing covered acreage before Bayer could be held to the deal.

The case is among the largest agricultural contamination settlements in U.S. history. Downing, identified by the Insurance Journal as the attorney who led the negotiations with Bayer, secured a recovery whose scale reflected the market disruption the contamination caused across the entire Southern rice belt.