Farmers Line Up in Generics Lawsuits

LINCOLN, Neb. (DTN) -- Farmers are turning out in droves in the federal court system to file class-action lawsuits against Syngenta, Corteva, CHS Inc., Nutrien, BASF and others, alleging the farmers suffered financial losses as a result of the companies paying distributors to block competitors from selling less-expensive generic crop protection products.

As of Thursday, at least 26 lawsuits have been filed by individual farmers and farms. Those lawsuits were transferred or are in the process of being transferred from federal courts in Indiana, Illinois and Mississippi to the U.S. District Court for the District of Middle North Carolina, including five on Wednesday.

The court has scheduled a status conference for April 6 in Winston-Salem, as the beginning of what usually is a years-long process for class-action lawsuits.

Farmers started lining up to cash in after the Federal Trade Commission and attorneys general from California, Colorado, Illinois, Iowa, Indiana, Minnesota, Nebraska, Oregon, Texas and Wisconsin, filed a lawsuit alleging the companies violated the Sherman Act and its antimonopoly provisions.

Syngenta and Corteva recently filed motions to dismiss the FTC and states' lawsuit. In filing the motions, the companies defended the legality of the loyalty programs at the center of the lawsuits. Earlier this week, the court gave the companies until March 3 to file additional documents on the motion.

The FTC and the states have alleged distributors only get paid if they limit business with competing manufacturers. Such arrangements, the complaint said, are "cutting off" competition and allowing the companies to "inflate their prices and force American farmers to spend millions of dollars more for their products."

In particular, the FTC lawsuit alleged Syngenta has a monopoly and market power on the fungicide azoxystrobin and the herbicides mesotrione and metolachlor. The suit cites Corteva's herbicides rimsulfuron and acetochlor and the insecticide and nematicide oxamyl.

Syngenta and Corteva are two of the largest pesticide manufacturers operating in the United States. Syngenta, based in Switzerland, is a subsidiary of a Chinese state-owned company. Corteva, headquartered in Indianapolis, is the company formed as part of a merger between DuPont and Dow Chemical Company.

In a September 2022 news release, the FTC and the 10 state attorneys general said, "Cutting off competition has allowed the defendants to inflate their prices and force American farmers to spend millions of dollars more for their products."

In January 2023, Syngenta and Corteva filed separate motions asking the court in North Carolina to dismiss the lawsuit. Both companies defended the use of loyalty programs.

The companies said in those motions that loyalty programs are legal.

"Plaintiffs ignore the fact that loyalty discounts, which come in many forms, are not only 'extremely common' but also 'presumptively lawful in all but a few carefully defined circumstances,'" Corteva said in a motion to dismiss.

Syngenta said in its motion to dismiss that the lawsuit advances an "unprecedented and unfounded theory" that an industry-standard rebate program offering a "modest, optional discount" to customers to incentivize increased purchases violates antitrust laws.

"Rebate programs that reduce prices to above-cost levels are permissible as a matter of law, except in narrow circumstances where customers are forced to participate by coercive non-price features," Syngenta said. "Nothing of the sort is pleaded or present here."

Read more on DTN:

"Chem Companies Defend Loyalty Programs," https://www.dtnpf.com/…

"Syngenta, Corteva Sued by FTC, States," https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @DTNeeley

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