What is in this article?:
- Riceland wins historic award in GM rice case against Bayer.
- Case stems from 2006 discovery of trace amounts of GM traits in several U.S. rice varieties.
- Damages awarded may be subject to cap -- Arkansas Supreme Court to decide.
Verdict and cap
On the verdict amount…
“The verdict was $16.9 million on compensatory damages for Riceland – basically on a lost profits claim – what was lost on milled rice.
“That amount was reduced because the jury found 30 percent negligence on Riceland. I’m really not sure what the jury thought that was attributable to. But Bayer’s argument was that Riceland continued to sell into the European market during the time period between (early) 2006 up until August, when (the USDA) announced (GM traits had been found in rice). They argued that … Riceland knew there was problem and shouldn’t have continued selling.
“In my mind, that’s why the jury put that 30 percent on us. So, the $16.9 million is reduced by 30 percent – down to around $11.8 million.
“Then, the jury found against Bayer for punitive damages of $125 million. The punitive legal standard in Arkansas – and the instruction the jury got – is that Bayer knew, or should have known, their conduct would result in damage and they continued that conduct in reckless disregard of the consequences. The evidence was replete that they knew if this got out – if there was an escape of a regulated material – it would shut off the foreign markets to U.S. rice. That’s exactly what happened.
“As long as these (GM rice) cases aren’t settled and the longer this thing goes on, the EU is still almost shut down today. And we’re almost five years from the USDA announcement. Before that, the EU market was a premium market for U.S. rice, for Riceland and Producers Rice Mill. Both sold a lot of parboiled rice to the EU market.”
Is it true this verdict is the largest for punitive damages in the state’s history?
“I think it is.”
How long before you collect?
“In Arkansas, there is a cap on punitive damages. The legislature passed the Civil Justice Reform Act in 2003. In that legislation, the legislature put a cap on punitive damages of $1 million.
“The jury doesn’t know that when they go back to decide.
“So, right now, Bayer will say ‘we don’t owe $125 million. We owe you $1 million.’
“Riceland will appeal the cap. In fact, the cap is already being appealed. The Lonoke County verdict – I think it was (around) $40 million – was a year ago and it’s on appeal, right now. The cap issue is also a factor in that case.
“The issue is whether, when the legislature passed that cap eight years ago, it was constitutional. That will be decided by the Arkansas Supreme Court. And it’ll probably be decided in the Lonoke County case before the Riceland case ever gets to the Supreme Court.
“But, yes, there will an appeal. Riceland will actually appeal on the cap limitation. If the Supreme Court says the cap is constitutional, Riceland will never get that money.
“The Lonoke County case is up, right now. Bayer has already submitted its briefs to the Supreme Court. I just talked to the lawyers for the plaintiffs and their briefs are due in the next 30 days. As soon as the briefing is done, it will go to the Supreme Court, there will likely be oral arguments and it’ll be decided sometime this year.
“My guess is it may be late summer when that is decided.”
Has anyone suggested during this Arkansas legislative session that the cap be rescinded?
“Not in this session. But it’s likely to come up again.
“It was very controversial legislation. It didn’t just involve caps on punitive damages. The nickname for it was ‘tort reform.’ A number of states have passed tort reform. Most of the impetus was due to medical malpractice cases and doctors saying they couldn’t get insurance…
“But one of the things that got thrown into the act was the limitation on punitive damages. Generally, that’s viewed as ‘pro-business’ legislation. But Riceland certainly believes that in business cases there can be egregious conduct, even in significant business disputes like Riceland against Bayer. … There ought to be a remedy where a jury isn’t limited on the amount of a punitive award.”