$48 Million Trial Verdict Against Bayer CropScience for LibertyLink GMO Rice Contamination

In August 2006, the U.S. Department of Agriculture announced that trace amounts of LLRICE 601, a genetically modified rice strain developed by Bayer CropScience and never approved for commercial sale or human consumption, had turned up in the U.S. long-grain rice supply. The discovery was not the result of a deliberate release. Bayer had been field-testing the herbicide-resistant variety for years, and through cross-pollination and commingled seed stocks, it had quietly spread into commercial inventory.

The consequences were immediate and severe. The European Union banned imports of U.S. long-grain rice within days. Rice futures fell nearly 14 percent. American farmers who had no connection to Bayer's research program found themselves locked out of their most valuable export markets, unable to certify that their grain was free of the unapproved variety. Thousands of growers across Arkansas, Louisiana, Mississippi, Missouri, and Texas filed suit.

Scott Powell of Hare, Wynn, Newell and Newton served as trial counsel for a group of Arkansas growers. He was lead counsel in Schafer v. Bayer CropScience, tried in Lonoke County, Arkansas, on behalf of 11 rice-farming families. The jury returned a verdict of roughly $48 million: $5,975,605 in compensatory damages and $42 million in punitive damages. The Arkansas Supreme Court affirmed that judgment on December 8, 2011, upholding the punitive damages award after Bayer challenged the constitutional validity of the state's statutory cap on such damages and losing that argument. Bruce McKee was among the Hare Wynn attorneys of record for the farmers in that proceeding, alongside Don McKenna and Paul Byrd.

The Lonoke County verdict was one of several bellwether trial outcomes across federal and state courts that demonstrated Bayer's exposure at scale. The broader litigation was consolidated as a multidistrict proceeding before U.S. District Judge Catherine D. Perry in the Eastern District of Missouri, where plaintiffs' counsel spent four years conducting discovery and trying representative cases. Each adverse verdict, including the Schafer judgment, added pressure on Bayer to resolve the docket as a whole.

On July 1, 2011, Bayer CropScience reached a global settlement of up to $750 million covering all U.S. long-grain rice producers, including farmers and crop-share landlords, who planted rice from 2006 through 2010. The settlement was structured across three compensation pools addressing market losses and additional economic losses. Participation required that farmers representing at least 85 percent of total applicable U.S. rice acreage opt into the deal; that threshold was met, and the settlement became final. The court-appointed co-lead counsel for the consolidated federal cases were Don Downing of Gray, Ritter and Graham and Adam Levitt of Wolf Haldenstein.