Bayer Blamed at Trial for Crops ‘Contaminated’ by Modified Rice

By Andrew M. Harris

Nov. 4 (Bloomberg) -- Bayer CropScience AG is responsible for financial damage sustained by Missouri farmers when their rice crops were contaminated by genetically modified seeds, the growers’ lawyer told a federal court jury in St. Louis.

Their trial is the first of a series the Bayer AG unit is defending against farmers from five states making similar claims. More than 1,200 such cases have been filed.

“Bayer was supposed to be careful,” attorney Don Downing told the jury of four men and five women during his opening statement yesterday. “Bayer was not careful and that rice did escape into our commercial rice supplies.”

The farmers, who grow rice in southeastern Missouri, claim the export market for their crops was curtailed when the U.S. Department of Agriculture in 2006 announced that trace amounts of the genetically modified rice, designed by Bayer to be herbicide resistant, were found in U.S. long-grain stocks.

Bayer and Louisiana State University had been testing the rice, which hadn’t been approved for human consumption, for resistance to the company’s Liberty herbicide.

Bayer’s genetically modified strains “contaminated” more than 30 percent of U.S. ricelands, Downing told jurors.

Rice Futures Fall

Within four days of the USDA announcement, a decline in rice futures cost U.S. growers about $150 million, according to a consolidated complaint filed by the farmers. News of that contamination caused futures prices to fall about 14 percent.

As a result, farmers like plaintiffs Ken Bell and Johnny Hunter got less cash for their crops than they otherwise could have, Downing said. The men haven’t asked for specific money damages.

Exports also fell, the growers said, as the European Union, Japan, Russia and other overseas markets slowed for testing or stopped their imports of the U.S.-grown long grain rice.

Defense lawyer Mark Ferguson said Bayer CropScience wanted to do right by its farmer clientele.

“Everyone at Bayer regrets that this happened. Farmers are Bayer’s customers,” Ferguson told jurors during his opening remarks. “The one thing that they were trying to avoid, happened.”

Claims Disputed

The Bayer unit said biotech rice, called LibertyLink, posed no food safety issues.

Ferguson disputed claims that U.S. rice growers are still suffering financially from the release of Bayer’s LibertyLink rice, arguing that crop prices have since recovered and exceeded pre-contamination levels.

Bayer’s containment protocols were equal to or exceeded industry standards when the test rice escaped into the general supplies, the defense lawyer said.

“Even the best practices can’t guarantee perfection,” Ferguson said.

The USDA deregulated one of the two grains implicated in the lawsuits in November 2006, approving it for human consumption, the company has said. The strain has never been commercially marketed.

Farmers in Texas, Louisiana, Mississippi, Arkansas and Missouri filed separate lawsuits against Leverkusen, Germany- based Bayer and its CropScience unit, which were consolidated before U.S. District Judge Catherine Perry for pre-trial proceedings.

The farmers’ lawyers told the jury Bayer was rushing its herbicide-resistant rice through testing to compete with St. Louis-based Monsanto Co., which was developing its own herbicide-resistant crop seed varieties.

‘Very Profitable’

“If you’re first to the market with a new product, it can be very, very profitable,” Downing told the jury. The evidence will show that in its haste, Bayer became sloppy, the lawyer said.

“Bayer did not keep track of its genetically modified seed,” Downing said later.

“This is a living, growing organism,” plaintiffs lawyer Grant Davis, Downing’s co-counsel, said in his opening statement. “That’s why you have to be so careful.”

Ferguson disputed that his client was rushing, telling jurors Bayer withheld from the market a different FDA-approved herbicide-resistant rice because of concerns it would adversely affect growers’ ability to sell their rice on the world market.

‘Reasonable Precautions’

“Safety is not an issue in this case,” Ferguson said. From a food-standpoint, Bayer’s LibertyLink rice is ‘no different than conventional rice,” he said.

“Bayer did fulfill its duty to take reasonable precautions” against contamination, he said..

Ferguson said only a lack of regulatory approval prevents it from being imported into the nations of the European Union, which he blamed on “political opposition” to genetically modified foods.

Testing of one of the LibertyLink strains at Louisiana State University was completed in 2001. While there has never been a specifically identified contamination event, Ferguson said, studies suggest an event of cross-pollination with ordinary rice or a mixing of regular and genetically modified seed occurred then.

Perry in August 2008 rejected the farmers’ bid to proceed as a single injured class, subdivided by state, finding there were too many ways for them to market their crops, meaning they weren’t all injured in the same manner.

Public Nuisance

Perry last month threw out the farmers’ claim that Bayer had created a public nuisance, as well as Bayer’s defense that there could have been an intervening cause, other than negligence, that led to the contamination.

Jury selection was completed Nov. 2. The trial may last until early December, Perry said.

The case is In Re Genetically Modified Rice Litigation, 06-md-01811, U.S. District Court, Eastern District of Missouri (St. Louis).

To contact the reporter on this story: Andrew Harris in St. Louis federal court in at