Only a lowdown man crosses family and friends. So when Martin Phipps heard GM rice class action attorneys had claimed in a Delta Farm Press article that attorneys shepherding individual lawsuits weren't presenting a full picture of the litigious situation, his ire was set to boil.
In August, class co-counsel Adam Levitt said attorneys advocating individual suits were within their rights (see http://deltafarmpress.com/rice/070823-GM-suit/index.html). “But what we've seen and heard is some information being imparted … that's both inaccurate and, frankly, misleading.
“It creates a negative impression of what's going on, it oversells, it ignores the process and effect of the class certification ruling in the case (which hasn't happened yet), it overstates potential recoveries and puts the farmers in a position of making a decision without having all the information…”
Phipps, a partner in the San Antonio, Texas-based Goldman, Pennebaker and Phipps, vehemently rejects those charges and others made in the article.
“We weren't trolling for clients. We were called because we have family members who are rice farmers. We now represent over 100 Texas rice farmers and began meeting with them at their request. We're a defense firm and don't normally represent plaintiffs, don't advertise for them.
“We're not fighting with the class. I'm not here to defeat the class. I'm here to make sure farmers are provided all their options. How is that not in their best interest?”
Phipps took calls from farmers immediately after the Aug. 18, 2006, USDA announcement that Bayer's GM LibertyLink trait had been found in U.S. rice supplies. Following the announcement, markets were jolted and later several popular varieties found with the trait were banned from production. Lawsuits — both individual and class action — were filed.
Jim Thompson of Hare, Wynn, Newell and Newton, LLP, is also unhappy with anyone steering farmers away from individual cases.
“If you get into a class action, 99 times out of 100 you won't be made whole,” says Thompson, whose firm — with offices in Birmingham, Ala., and Little Rock, Ark. — is representing some 275 individual Arkansas farmers. “Just look at the StarLink case to see that. If you are in an individual suit, you have the opportunity to say ‘my damages are X, and I want every penny.’
A few years ago, the StarLink case made global headlines when a GM trait was found in U.S. corn and food products were pulled from market shelves. Thompson says the class action brought on behalf of farmers achieved little outside heaping coin into class attorney pockets.
“They settled that StarLink case for $110 million. Then, they shipped out a bunch of Visa debit cards to the members for about $1,000 a piece. The lawyers made $34 million. So a class action isn't always the way to go.
“We know what we're doing when it comes to farming, we know what (our clients') damages are and they're a lot more than $1,000 a piece.”
Thompson promises the individual cases will take the opposite course. “Each farmer has a unique situation on his farm. One may have more damages than another. Whatever those damages are, we'll prove and we'll ask a jury to give it to them — to the penny.”
From south Texas, Phipps echoes Thompson. “We've retained an expert who has done these type of cases since 1993. We decided to go with individual cases … and each farmer will be looked at individually and won't be clumped in with general damages. We're giving each person the right of control. We'll have a team of experts and each farmer will have his farm studied and a damage model will be done for each.”
Phipps' partner, Doug Pennebaker, says there is an obvious philosophical difference between him and class attorneys “as to what type of litigation is in farmers' best interest. We have a fair disagreement on that.
“Class action lawyers believe a class action is the quicker way to get a recovery for farmers, with the least effort by farmers. And that's true. As a general rule, in a class action most of the farmers won't do anything.”
Class actions are most suitable when there are a many people who have small, similar damages, says Pennebaker, originally from Indianola, Miss. “For example, if you've got $100 in damages, you won't hire a lawyer to represent you. In such situations, class actions serve a very important function of representing a mass of people that wouldn't be able to have legal representation otherwise.
“However, if a person's damages are large, a class action isn't necessarily the best option. That's also true if the damages are disparate.
“We believe it's best that our experts sit down, meet with the farmers, evaluate their operations, determine a damage model based on (findings), and present that in court. Now, Bayer won't just roll over and agree with the damage models. But our goal is to create a model that will capture all the farmers' damages.”
Thompson points to his firm's recent success in backing aggrieved hog farmers taking on Tyson Foods (see http://deltafarmpress.com/news/farming_former_tyson_producer/index.html) and says similar success will come to rice growers. “When we represented the Tyson farmers, every one of them was made whole … We've got (rice) farmers with 6,000 acres of rice to those with 400 to 500 acres. They're scattered up and down the state.”
Does suing not only German-based Bayer but also Stuttgart, Ark.-based Riceland Foods give Thompson pause?
“Not in the least. Juries get the right answers if they get the facts of a case. Even a jury in Stuttgart can give a proper verdict. Tyson was an Arkansas company too. Eventually we'll be back in Arkansas trying these cases.”
Damage claims could cost Bayer in excess of $1 billion, says Thompson. He hasn't “looked into” how much the cases could cost Riceland.
Phipps claims eagerness to take on Bayer. “Listen, if we have to go to trial, there's no one I'd rather represent against a foreign company than an American farmer.”
When considering damages, the entire scope of the situation must be tallied, say the attorneys. After all, the StarLink genes are yet to be fully purged and rice seed can be viable for many years. How might volunteer rice affect future exports and shipment testing? If the trait gets into red rice, what will farmers do?
“There can be volunteer GM rice for 15 years,” says Phipps. “So (potential) damages won't be from just this year. We ask farmers how to stop the problem cold. No one has an answer.”
Damages won't be calculated based solely on acreage, says Thompson. “One farmer may have 700 acres and a $50,000 loss. Another farmer may have 3,000 acres with $1 million in losses.
“We've hired experts to study farms' numbers and tax returns so they can tell us what each farmer lost. We're not going to throw all the farmers in a cattle car and send them a $1,000 debit card and walk off with our $34 million fee. That's not right.”
How quickly might individual cases be tried? “We don't know,” says Pennebaker. “It will take another year, for sure — maybe two years.”
Time is “where we really have an advantage,” says Thompson. “We expect to have these cases prepared and tried by the end of 2008. The class action could drag on for years. The best they can do right now is a 2009 trial date.
“That's one advantage of being in a state court, in your backyard, where the judges will set cases for trial.”
Phipps tells farmers, “Yes, a class action is less work. The chance of (resolving the case) quicker is more likely. But you must weigh the possibility of recovery in a class versus an individual case.
“Our farmers will have both choices. If there's ever a class offer, I'll meet with every farmer and ask, ‘What do you want to do?’ I'm sure some farmers will take it.”
There is an element of gamesmanship and strategy leading up to trial, say all attorneys interviewed. “We tell farmers, ‘The more people we represent, when we negotiate with Bayer, the more we have to bargain with,’” says Phipps. “Not only that, but look at the company's expenses. As a practical matter, Bayer can call a class lawyer and try to settle most cases based on one farmer. That's a lot cheaper than, ‘Let's talk about Farmer A. Next, let's see what we'll do for Farmer B.’
“There are politics here, too. If too many individual cases are filed, it makes it more difficult to have a class action certified.”
The difference between the two sets of attorneys, claims Thompson, “is we're trial lawyers and they're class action attorneys. They don't go to court. They go to settle.”
Facing a possible schedule of hundreds of cases doesn't worry the firms. “We may have to go to trial with every single case,” says Phipps. “Each farmer may have to be deposed and answer discovery … I take offense at anyone who says we can't handle these cases because we're a small firm. These farmers include my friends and family! I will go to the ends of the earth for them. I have to look them in the eye. We will fight it to the end.”
Whatever happens, the lawyers say their rice-farming neighbors are sinking. “We get calls every week from farmers trying to restructure debt and on the verge of bankruptcy,” says Pennebaker. “Times were already tough before the (rice GM situation) happened.”
“A significant percentage of our farmers will go out of business,” claims Thompson, who vows to take no pay from any farming client who doesn't win more money individually than they would from the class action. “They can't pay their debts, they can't buy fertilizer, they can't buy seed rice. They can't stay in business because of this … Our only goal is to get the farmers justice.”
For more, see www.hwnn.com. Goldman, Pennebaker and Phipps can be reached at (210) 344-0500.