Thomas P. Redick Gene Editing RT7 October 24, 2017 NC - PowerPoint PPT Presentation

Thomas P. Redick Gene Editing RT7 October 24, 2017 NC Biotechnology Center

• Background: Starlink & Liberty Link • Facts of Viptera Corn Launch by Syngenta • Major Issues to Raised in 2017 Syngenta Trial & up to $1.5 Billion Settlement • Implications of Potential Legal Rulings on Innovation in Biotech Crops

 Starlink corn broke liability ground  Illegal in U.S. food supply (massive recall)  Huge Economic Liability for disrupting corn exports & U.S. recall  Small Personal Injury settlement ($6 million for alleged allergy injuries)  Commingling of Starlink was “physical injury” with economic loss recoverable despite “stranger economic loss doctrine”

 1999 – Illegal release from field trials.  2006 -- Key export markets in rice disrupted  No US recall, USDA promptly approved its release.  2010 -- Summary judgment allows negligence etc.  Settlements over 1.2 bil.

LL Rice Planting Distance Target A. Hokkaido, Japan - 300 m. B. 120 ft. – Dr. Linscombe Top Rice Expert C. 30 ft. Bayer Contract D. 12 ft. USDA

LL Rice Planting Distance Target A. Hokkaido, Japan - 300 m. B. 120 ft. – Dr. Linscombe Top Rice Expert C. 30 ft. Bayer Contract D. 12 ft. USDA

LL Rice Planting Distance Target A. Hokkaido, Japan - 300 m. B. 120 ft. – Dr. Linscombe Top Rice Expert C. 30 ft. Bayer Contract D. 12 ft. USDA

LL Rice Planting Distance Target A. Hokkaido, Japan - 300 m. B. 120 ft. – Dr. Linscombe Top Rice Expert C. 30 ft. Bayer Contract D. 12 ft. USDA

LL Rice Planting Distance Target A. Hokkaido, Japan - 300 m. B. 120 ft. – Dr. Linscombe Top Rice Expert C. 30 ft. Bayer Contract D. 12 ft. USDA

LL Rice Planting Distance Target A. Hokkaido, Japan - 300 m. B. 120 ft. – Dr. Linscombe Top Rice Expert C. 30 ft. Bayer Contract D. 12 ft. USDA

LL Rice Planting Distance Target A. Hokkaido, Japan - 300 m. B. 120 ft. – Dr. Linscombe Top Rice Expert “God” & USDA C. 30 ft. Bayer Contract (Will Bayer’s Act of God Defense work for a field trial?) D. 12 ft. USDA

• Farmers who did not buy from Syngenta were economically harmed by commingling. • National Corn Growers Association policy allowed sale without China approval given the benefits – corn growers need to fight resistant insects with new modes of action • Bunge NA warned Syngenta of China becoming potentially “major” market in 2011.

• Syngenta sued Bunge citing NCGA policy in 2011, nearly all claims dismissed by court. • China corn buying increases 2011-2013 – importing traces of Viptera for two years. • Nov. 2013 – China turns away US corn citing presence of Viptera. • Nat’l Grain and Feed Ass’n 2014 report says over $3 billion in economic loss.

• Grain trade and grower class actions filed in Q3 2014 across the Corn Belt.  Grower lawsuits seek billions for price impacts, alleging:  Syngenta “misrepresentations” re China approval status are alleged - recklessness.  Syngenta has a duty to prevent loss of foreseeable major export market like China.  Negligent disruption of export grain flows.  Growers consolidated -- federal KC KS court

• December 2014 – Syngenta gets China approval for Viptera, dismissed Bunge case. • Syngenta motions for dismissal and summary judgment trim complaint. • Trial required for claims for negligence etc. remaining in 2017 . • Settled for $1.5 billion on Sept 25, 2017

• Negligence (not Nuisance) • Did Syngenta have a duty to third parties to seek approval in FORSEEEABLE major markets before commercial launch? • Stranger Econ Loss bar recovery? • What is a “major” market?  Should biotech seed companies have to wait for “major market approval” before sale of GM crop?  Will this long wait hurt growers more?

 Scope and Provability of Damages  Drop in Corn Prices Lead to Recoverable Economic loss?  Certified Class Action make recovery easier?  Punitive Damages  Could Syngenta’s alleged misrepresentations give rise to punitive damages liability?  Test Trials Teed up for later in 2018

• Who Runs U.S. Agriculture Options Should US policy, including common law claims, • allow trading partners like the EU and China to dictate what can be grown by U.S. Farmers?  Could such liability risk seriously impede innovation in biotech crops?  Novel plant breeding methods (genetic editing) will transform industry, bring benefits and enhanced safety in food and environment.  High cost to seek overseas approval – when new laws are being drafted under the Cartagena Protocol on Biosafety, will more nations become “foreseeable” major markets?

 Will identity-preserved production (IPP) like specialty crops grow in closed-loops pending overseas approvals?  Monsanto corn handling – issue in SYN trial  RR2 XTEND lacked EU approval 2016  Dow Agro E3 Soy 2018 IPP; wait EU-China  Some “output trait” crops (e.g. high oleic soybeans) need IP to meet purity stds.  Can the smaller genetic editing companies afford to keep contained and wait years?

 “Anticipatory” common law nuisance Canada’s Hoffman case denied an injunction  Illinois court enjoined a feedlot even after regulatory permit issued by state.  Threat of suit is a powerful tool to enforce strict costly stewardship on biotech seed company  File Federal Suit, seek mediation  Economic impact creates nuisance liability for Syngenta that could have been mediated.

 Big seed cos do costly stewardship for major markets  Smaller gene-editing cos. lack $  U.S. Biotech Crops Alliance brings grain and seed companies and growers together for liability avoidance plans  Metrics -- Stewardship for biotech crops & overseas approvals helps to prevent disruptive, costly litigation .

 Worst billion dollar cases could have been prevented through management of liability risks (gregate Starlink-LL rice)  No EU/China approval? Economic risks can be managed most effectively by US growers  Foresight for emerging liability threats requires a facilitated interdisciplinary team.  Stewardship will play major role in securing future pipeline from damaging liability cases.

 Know Before You Grow, NAT’L CORN GROWERS ASS’N, http://www.ncga.com/for-farmers/know-before-you-grow  EXCELLENCE THROUGH STEWARDSHIP, http://excellencethroughstewardship.org/  Thomas P. Redick, Drew Kershen et al., “Innovation and Liability in Biotechnology: Transnational and Comparative Perspectives”. (Edward Elgar press) (2010) http://www.amazon.com/Innovation-Liability-Biotechnology- Transnational-Perspectives/dp/1847206646  Lewis Bass and Thomas P. Redick, Products Liability: Design and Manufacturing Defects, 2017-2018 ed. (The West Group), (2017). http://legalsolutions.thomsonreuters.com/law- products/Treatises/Products-Liability-Design-and- Manufacturing-Defects-2017-2018-ed/p/104867917