Tweet et al v. Syngenta AG et alMEMORANDUM in Support re Joint MOTION to Dismiss Syngenta's Third-Party ComplaintsS.D. Ill.September 11, 2017i UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ILLINOIS IN RE SYNGENTA ACTIONS This Document Relates to: Poletti, et al. v. Syngenta AG, et al. No. 3:15-cv-01221-DRH and Tweet, et al. v. Syngenta AG, et al. No. 3:16-cv-00255-DRH Judge David R. Herndon ACD COMPANIES’ MEMORANDUM IN SUPPORT OF JOINT MOTION TO DISMISS SYNGENTA’S THIRD-PARTY COMPLAINTS Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 1 of 76 Page ID #5047 ii TABLE OF CONTENTS TABLE OF CONTENTS ______________________________________________________ ii TABLE OF AUTHORITIES ___________________________________________________ v INTRODUCTION____________________________________________________________ 1 SUMMARY OF ARGUMENT _________________________________________________ 3 BACKGROUND _____________________________________________________________ 7 I. Plaintiffs’ Allegations Regarding Syngenta’s Improper Commercialization of Seeds Containing the MIR162 and Event 5307 Traits. _____________________________ 8 II. Syngenta’s Third-Par ty Claims Against the ACD Companies. ________________ 10 ARGUMENT _______________________________________________________________ 11 I. FEDERAL LAW COMPREHENSIVELY REGULATES THE GRAIN TRADE AND PREEMPTS SYNGENTA’S STATE-LAW CLAIMS FOR CONTRIBUTION AND INDEMNITY. ___________________________________________________ 11 A. As multiple courts-including this Court-have held, the GSA preempts state-law claims like those Syngenta asserts against the ACD companies. ____________ 12 1. Syngenta cannot avoid GSA preemption by trying to shift the focus to the seeds used to grow harvested corn. _____________________________ 15 2. Syngenta cannot avoid GSA preemption of its shipping-related claims by trying to limit those claims to shipments known to contain Viptera. ___ 19 B. The GSA impliedly preempts Syngenta’s claims because those claims conflict with the purposes behind the GSA.___________________________________ 22 C. The Warehouse Act preempts a large swath of Syngenta’s claims against the ACD companies. _____________________________________________________ 24 1. The Warehouse Act, its implementing regulations, and U.S. Supreme Court authority interpreting them set forth the Warehouse Act’s broad preemptive scope. __________________________________________ 24 2. Syngenta’s third-party claims against the ACD companies for activities at licensed warehouses fall squarely within the Warehouse Act’s preemptive scope. ___________________________________________________ 26 D. The dormant Commerce Clause forecloses Syngenta’s claims against the ACD companies as they relate to shipping corn to China. ______________________ 29 II. SYNGENTA CANNOT ESTABLISH DUTY AND CAUSATION AS A MATTER OF LAW. ____________________________________________________________ 31 A. State law does not impose a duty on the ACD companies to reorganize their operations in response to Syngenta’s unilateral decision to release a genetically modified commodity crop. _________________________________________ 32 Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 2 of 76 Page ID #5048 iii 1. The duty to guard against plaintiffs’ damages rests squarely and solely on Syngenta, which created the risk to plaintiffs. ____________________ 32 2. Other factors relevant to the duty analysis weigh against imposing a duty on the ACD companies to prevent the harm caused by Syngenta. _____ 36 B. As other courts have recognized, the allegations against the ACD companies cannot, as a matter of law, establish that the ACD companies caused plaintiffs’ damages. _______________________________________________________ 39 III. SYNGENTA’S THIRD-PARTY CLAIMS FAIL FOR REASONS SPECIFIC TO THE LAWS OF INDIVIDUAL STATES. _________________________________ 41 A. Syngenta cannot recover in contribution from the ACD companies in states in which liability is purely several because Syngenta cannot possibly pay more than its share of damages in those states. __________________________________ 42 1. Florida, Georgia, Kansas, Michigan, New Mexico, and Oklahoma: Contribution claims under the law of these states are impermissible because liability in tort is purely several. ________________________ 42 2. Colorado: Liability in tort is several and proportional in Colorado, and contribution claims cannot be used to seek an allocation of proportional fault. ____________________________________________________ 45 3. Kentucky: Under Kentucky law, liability in tort is purely several, and contribution claims serve only to allocate fault. ___________________ 46 4. North Dakota: Under North Dakota law, contribution claims are impermissible in tort cases that do not involve concerted action. _____ 47 B. Most of Syngenta’s indemnity claims fail as a matter of law because neither plaintiffs’ allegations, nor those of Syngenta, satisfy the essential elements of an indemnity claim under state law. ____________________________________ 48 1. Alabama, Connecticut, Delaware, Maryland, Mississippi, and North Carolina: Indemnity claims under these states’ laws fail because plaintiffs bring claims of active negligence against Syngenta. _______________ 48 2. Arkansas: Syngenta’s Arkansas indemnity claims fail because Syngenta fails to allege the necessary special relationship. __________________ 49 3. Nevada: Syngenta’s Nevada indemnity claims fail both because plaintiffs allege active negligence and because Syngenta has not alleged the required special relationship._________________________________________ 50 4. Iowa and Minnesota: These indemnification claims fail because Syngenta has not alleged facts to show the existence of a duty running from the ACD companies to Syngenta. _________________________________ 51 5. Kansas: Syngenta’s Kansas claims for comparative implied indemnity fail because Syngenta has not settled plaintiffs’ claims ________________ 52 6. Kentucky and Nebraska: These claims for indemnity fail because Syngenta’s negligence is not alleged to be constructive or secondary. _ 53 Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 3 of 76 Page ID #5049 iv 7. Missouri: Syngenta’s Missouri indemnity claims fail because Syngenta does not, and cannot, allege that the third-party defendants are vicariously liable to it. ________________________________________________ 54 8. Tennessee: Syngenta’s Tennessee indemnity claims fail because Syngenta’s liability, if any, will not arise solely by imputation of law from its relationship with the third-party defendants. ___________________ 54 9. Idaho: Syngenta’s Idaho indemnity claims fail because Syngenta’s liability is not based on passive neglect, it did not owe merely a secondary duty to plaintiffs, and it is not vicariously liable for plaintiffs’ injuries. ______ 55 10. Wisconsin: Syngenta’s Wisconsin indemnity claim fails because Syngenta cannot be both faultless and in need of indemnification. ____________ 56 C. Syngenta cannot recover in contribution or apportionment from the ACD companies under Connecticut or New York law because plaintiffs seek only economic damages from Syngenta. __________________________________ 57 IV. THIS COURT LACKS PERSONAL JURISDICTION OVER CARGILL AND LDC WITH RESPECT TO SYNGENTA’S STATE-LAW CLAIMS FOR CONTRIBUTION AND INDEMNITY. ___________________________________ 58 CONCLUSION _____________________________________________________________ 61 Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 4 of 76 Page ID #5050 v TABLE OF AUTHORITIES Page(s) Federal Cases Allenberg Cotton Co. v. Staple Cotton Coop. Ass’n, No. 07-123, 2009 WL 1619950 (N.D. Miss. June 9, 2009).....................................................29 Allstate Prop. & Cas. Ins. Co. v. Omega Flex, Inc., No. 13-879, 2014 WL 1292588 (N.D. Ga. Mar. 31, 2014) .....................................................43 Arizona v. United States, 567 U.S. 387 (2012) ...........................................................................................................11, 22 Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, 137 S. Ct. 1773 (2017) .............................................................................................................59 Campbell v. BNSF Ry. Co., 756 F. Supp. 2d 1109 (D.N.D. 2010) .......................................................................................47 Compton v. City of Harrodsburg, No. 12-302, 2013 WL 5503195 (E.D. Ky. Oct. 2, 2013) ........................................................47 Crosby v. Nat’l Foreign Trade Council, 530 U.S. 363 (2000) ...........................................................................................................23, 24 Daimler AG v. Bauman, 134 S. Ct. 746 (2014) .........................................................................................................58, 59 Edwards v. Honeywell, Inc., 50 F.3d 484 (7th Cir. 1995) .....................................................................................................34 Farmers Elevator Mut. Ins. Co. v. Jewett, 394 F.2d 896 (10th Cir. 1968) .................................................................................................25 Geier v. Am. Honda Motor Co., 529 U.S. 861 (2000) ...........................................................................................................22, 24 Heart of Am. Grain Inspection Serv., Inc. v. Mo. Dep’t of Agric., 123 F.3d 1098 (8th Cir. 1997) .................................................................................................26 Hefley v. Textron, Inc., 713 F.2d 1487 (10th Cir. 1983) ...............................................................................................42 Holtz v. J.J.B. Hilliard W.L. Lyons, Inc., 185 F.3d 732 (7th Cir. 1999) ...................................................................................................34 Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 5 of 76 Page ID #5051 vi Hostetter v. Idlewild Bon Voyage Liquor Corp., 377 U.S. 324 (1964) .................................................................................................................31 Ileto v. Glock, Inc., 349 F.3d 1191 (9th Cir. 2003) .................................................................................................30 Japan Line, Ltd. v. Los Angeles Cty., 441 U.S. 434 (1979) .................................................................................................................30 Kipp v. Ski Enter. Corp. of Wis., Inc., 783 F.3d 695 (7th Cir. 2015) .............................................................................................58, 59 Lemke v. Farmers’ Grain Co. of Embden, N.D., 258 U.S. 50 (1922) ...................................................................................................................31 Lopez v. Am. Baler Co., No. 11-0227, 2013 WL 4782155 (D.N.M. Aug. 12, 2013) .....................................................45 Merrill Lynch, Pierce, Fenner & Smith, Inc. v. First Nat’l Bank of Little Rock, Ark., 774 F.2d 909 (8th Cir. 1985) ...................................................................................................50 Mike’s Train House, Inc. v. Lionel, L.L.C., 472 F.3d 398 (6th Cir. 2006) ...................................................................................................44 Nash v. Fla. Indus. Comm’n, 389 U.S. 235 (1967) .................................................................................................................23 Nat’l Foreign Trade Council v. Natsios, 181 F.3d 38 (1st Cir. 1999 .......................................................................................................31 Nat’l Meat Ass’n v. Harris, 565 U.S. 452 (2012) .................................................................................................................22 Nerenhausen v. Chicago, Milwaukee, St. Paul & Pac. R.R. Co., 479 F. Supp. 750 (D. Minn. 1979) ...........................................................................................52 Nucci v. Buchanan Ingersoll & Rooney PC, No. 15-518-17, 2016 WL 5843429 (M.D. Fla. Oct. 4, 2016) ..................................................43 Oregon Waste Sys., Inc. v. Dep’t of Envtl. Quality of State of Or., 511 U.S. 93 (1994) ...................................................................................................................30 Pyramid Condo. Ass’n v. Morgan, 606 F. Supp. 592 (D. Md. 1985) ........................................................................................41, 48 Reading v. Archer-Daniels-Midland Co., No. 11-45, 2011 WL 3626409 (E.D. Mo. Aug. 16, 2011) .......................................................27 Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 6 of 76 Page ID #5052 vii Rice v. Santa Fe Elevator Corp., 331 U.S. 218 (1947) ...............................................................................................25, 26, 27, 29 Rowe v. N.H. Motor Transp. Ass’n, 552 U.S. 364 (2008) .................................................................................................................21 S.-Cent. Timber Dev., Inc. v. Wunnicke, 467 U.S. 82 (1984) (plurality opinion) ....................................................................................30 Shafer v. Farmers’ Grain Co. of Embden, 268 U.S. 189 (1925) .................................................................................................................31 Sprietsma v. Mercury Marine, 537 U.S. 51 (2002) ...................................................................................................................22 St. Francis Reg’l Med. Ctr. v. Critical Care, Inc., 997 F. Supp. 1413 (D. Kan. 1997) ...........................................................................................44 Staple Cotton Coop. Ass’n v. D.G. & G., Inc., 503 F. Supp. 2d 1217 (E.D. Mo. 2007)....................................................................................29 In re StarLink Corn Prods. Liab. Litig., 212 F. Supp. 2d 828 (N.D. Ill. 2002) .......................................................................................36 In re Syngenta AG MIR 162 Corn Litig., 131 F. Supp. 3d 1177 (D. Kan. 2015) .............................................................................. passim In re Syngenta AG MIR 162 Corn Litig., MDL No. 2591, 2016 WL 1312519 (D. Kan. Apr. 4, 2016) ........................................... passim In re Syngenta AG MIR 162 Corn Litig., MDL No. 2591, 2016 WL 4382772 (D. Kan. Aug. 17, 2016) ........................................ passim In re Syngenta AG MIR162 Corn Litig., __ F. Supp. 3d __, MDL No. 2591, 2017 WL 1250791 (D. Kan. Apr. 5, 2017) .................6, 40 In re Syngenta Mass Tort Actions (Poletti v. Syngenta AG), __ F. Supp. 3d ___, No. 15-1221, 2017 WL 1277898 (S.D. Ill. Apr. 3, 2017) ............... passim In re Syngenta Mass Tort Actions (Tweet v. Syngenta AG), __ F.3d __, No. 16-255, 2017 WL 2117728 (S.D. Ill. May 15, 2017) ............................ passim In re Syngenta Mass Tort Actions (Tweet v. Syngenta AG), No. 16-255, 2017 WL 54345 (S.D. Ill. Jan. 4, 2017) ...................................................... passim Syngenta Seeds, Inc. v. Bunge N. Am., Inc., 820 F. Supp. 2d 953 (N.D. Iowa 2011) ............................................................................ passim Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 7 of 76 Page ID #5053 viii Time & Sec. Mgmt., Inc. v. Pittway Corp., 422 F. Supp. 2d 907 (W.D. Tenn. 2006)..................................................................................55 Tokio Marine & Fire Ins. Co. v. Amato Motors, Inc., No. 90 C 4823, 1995 WL 493434 (N.D. Ill. Aug. 15, 1995) ...................................................40 U.S. Fid. & Guar. Co. v. Alliance Ins. Grp. of Arkadelphia, Inc., 123 F. Supp. 2d 480 (W.D. Ark. 2000)....................................................................................50 U.S. Gypsum Co. v. LaFarge N.A., Inc., 508 F. Supp. 2d 601 (N.D. Ill. 2007) .......................................................................................58 United States v. Cumberland Farms of Conn., Inc., 647 F. Supp. 1166 (D. Mass. 1986), aff’d, 826 F.2d 1151 (1st Cir. 1987) ..............................11 Watters v. Pelican Int’l, Inc., 706 F. Supp. 1452 (D. Colo. 1989) ..........................................................................................46 Zurich Ins. Co. v. Am. Ins. Co., No. 87 C 2286, 1989 WL 134515 (N.D. Ill. Oct. 12, 1989) ....................................................60 State Cases In re Amendments to the Okla. Unif. Jury Instructions-Civ. (Second), 2014 OK 17 (Supreme Court order adopting this instruction, among others) .........................45 B.R. v. West, 275 P.3d 228 (Utah 2012) ........................................................................................................34 Baker & McKenzie, LLP v. Evans, 123 So. 3d 387 (Miss. 2013) ....................................................................................................48 Bd. of Water Works Trs. of City of Des Moines v. Sac Cty. Bd. of Supervisors, 890 N.W.2d 50 (Iowa 2017) ....................................................................................................34 Beitzel v. Orton, 827 P.2d 1160 (Idaho 1992).....................................................................................................56 Brown v. LaChance, 477 N.W.2d 296 (Wis. Ct. App. 1991) ....................................................................................56 Browning v. Syngenta Seeds, Nos. 15-L-157 (Ill. Cir. Ct. 1st Jud. Cir. Aug. 18, 2017) ................................................. passim Children’s Corner Learning Ctr. v. A. Miranda Contracting Corp., 879 N.Y.S. 2d 418 (N.Y. App. Div. 2009) ..............................................................................57 Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 8 of 76 Page ID #5054 ix City of Wood River v. Geer-Melkus Constr. Co., 444 N.W.2d 305 (Neb. 1989)...................................................................................................53 Crime Fighters Patrol v. Hiles, 740 S.W.2d 936 (Ky. 1987) .....................................................................................................53 Degener v. Hall Contracting Corp., 27 S.W.3d 775 (Ky. 2000) .................................................................................................46, 53 Discount Tire Co. of Nev., Inc. v. Fisher Sand & Gravel Co., No. 69103, 2017 WL 1397333 (Nev. Apr. 14, 2017) ..............................................................50 Dix & Assocs. Pipeline Contractors, Inc. v. Key, 799 S.W.2d 24 (Ky. 1990) .......................................................................................................46 Dodge City Implement, Inc. v. Bd. of Cty. Comm’rs of the Cty. of Barber, 205 P.3d 1265 (Kan. 2009) ......................................................................................................52 Edward R. Bacon Grain Co. v. City of Chicago, 59 N.E.2d 689 (Ill. App. Ct. 1945) ..........................................................................................25 Edwards v. Hamill, 138 S.E.2d 151 (N.C. 1964) .....................................................................................................48 Ellis v. Union Pacific R.R. Co., 643 P.2d 158 (Kan. 1982) ........................................................................................................52 Engvall v. Soo Line R.R. Co., 632 N.W.2d 560 (Minn. 2001).................................................................................................51 In re Farmers Coop. Ass’n, 8 N.W.2d 557 (S.D. 1943) .......................................................................................................25 Fast v. Marston, 282 S.W.3d 346 (Mo. 2000) ....................................................................................................54 Glenn v. Fleming, 732 P.2d 750 (Kan. 1987) ........................................................................................................44 Gouty v. Schnepel, 795 So. 2d 959 (Fla. 2001).......................................................................................................43 Graber v. Westaway, 809 P.2d 1126 (Colo. App. 1991) ............................................................................................46 Gulf Ins. Co. v. Cottone, 148 P.3d 814 (N.M. Ct. App. 2006) ........................................................................................44 Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 9 of 76 Page ID #5055 x Halderson v. Star Blends, LLC, No. 2015AP739, 2016 WL 121365 (Wis. Ct. App. Jan. 12, 2016) .........................................56 Hiway 20 Terminal, Inc. v. Tri-County Agri-Supply, Inc., 443 N.W.2d 872 (Neb. 1989)...................................................................................................53 Holton v. A+ Ins. Assocs., Inc., 661 N.W.2d 248 (Mich. Ct. App. 2003) ..................................................................................44 Johnson v. Interstate Power Co., 481 N.W.2d 310 (Iowa 1992) ............................................................................................30, 51 Kennedy v. City of Sawyer 618 P.2d 788 (Kan. 1980) ........................................................................................................52 Kokx v. Bylenga, 617 N.W.2d 368 (Mich. Ct. App. 2000) ..................................................................................44 Estate of Kriefall v. Sizzler U.S. Franchise, Inc., 801 N.W.2d 781 (Wis. Ct. App. 2011) ....................................................................................56 Lagrone v. Am. Mortell Corp., No. 04C-10-116, 2008 WL 4152677 (Del. Super. Ct. Sept. 4, 2008) .....................................48 Larson Mach., Inc. v. Wallace, 600 S.W.2d 1 (Ark. 1980) ........................................................................................................49 Lowe v. Norfolk & W. Ry. Co., 753 S.W.2d 891 (Mo. 1988) ....................................................................................................54 Lunsford v. Goodwin, No. CV116017153S, 2011 WL 7095161 (Conn. Super. Ct. Dec. 28, 2011) ...........................57 Markley v. Oak Health Care Inv’rs of Coldwater, Inc., 660 N.W.2d 344 (Mich. Ct. App. 2003) ..................................................................................44 State ex rel. Miller v. Philip Morris Inc., 577 N.W.2d 401 (Iowa 1998) ..................................................................................................51 Mitchell v. Valerio, 858 P.2d 822 (Idaho Ct. App. 1993) ..................................................................................55, 56 Mosley Mach. Co., Inc. v. Gray Supply Co., 833 S.W.2d 772 (Ark. 1992) ....................................................................................................49 Moszer v. Witt, 622 N.W.2d 223 (N.D. 2001) ..................................................................................................47 Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 10 of 76 Page ID #5056 xi Owens v. Truckstops of America, 915 S.W.2d 420 (Tenn. 1996) ............................................................................................54, 55 Pack v. LaTourette, 277 P.3d 1246 (Nev. 2012) ......................................................................................................50 Payne v. Hall, 137 P.3d 599 (N.M. 2006) .......................................................................................................45 Peoples Bank of N. Ky., Inc. v. Crowe Horwath, 390 S.W.3d 830 (Ky. Ct. App. 2012) ......................................................................................47 Reed v. Univ. of N.D., 589 N.W.2d 880 (N.D. 1999) ..................................................................................................47 Rodriguez v. Primadonna Co., LLC, 216 P.3d 793 (Nev. 2009) ............................................................................................41, 50, 60 Sherman Concrete Pipe Mach., Inc., v. Gadsden Concrete & Metal Pipe Co., 335 So. 2d 125 (Ala. 1976) ......................................................................................................48 Skuzinski v. Bouchard Fuels, Inc., 694 A.2d 788 (Conn. 1997) .....................................................................................................48 In re Syngenta Litig., No. 27-CV-15-3785 (Minn. Dist. Ct. 4th Jud. Dist. Sept. 14, 2016) ............................... passim In re Syngenta Litig., No. 27-CV-15-12625 (Minn. Dist. Ct. 4th Jud. Dist. Aug. 17, 2017) ............................. passim Tolbert v. Gerber Indus., Inc., 255 N.W.2d 362 (Minn. 1977).................................................................................................52 United Gen. Title Ins. Co. v. Malone, 858 N.W.2d 196 (Neb. 2015)...................................................................................................53 Watco Cos., Inc. v. Campbell, 371 P.3d 360 (Kan. Ct. App. 2016) .........................................................................................52 Williams v. Davis, 974 So. 2d 1052 (Fla. 2007).....................................................................................................42 Zalvidar v. Prickett, 774 S.E.2d 688 (Ga. 2015).......................................................................................................43 Federal Statutes 7 U.S.C. § 74(a) .............................................................................................................................23 Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 11 of 76 Page ID #5057 xii 7 U.S.C. § 87g ................................................................................................................................22 7 U.S.C. § 87g ..........................................................................................................................12, 18 7 U.S.C. § 241(1) ...........................................................................................................................27 7 U.S.C. § 242(a) ...........................................................................................................................25 7 U.S.C. § 248(a) ...........................................................................................................................27 Federal Meat Inspection Act ..........................................................................................................22 Grain Standards and Warehouse Improvement Act of 2000, Pub. L. No. 106-472, 114 Stat. 2058 ..........................................................................................................................11 United States Grain Standards Act, 7 U.S.C. §§ 71-87k .................................................................3 United States Warehouse Act, 7 U.S.C. §§ 241-56 .........................................................................6 State Statutes Colo. Rev. Stat. § 13-21-111.5 ................................................................................................45, 46 Conn. Gen. Stat. § .........................................................................................................................57 Fla. Stat. § 768.81(3) (2011) ..........................................................................................................43 Ga. Code Ann. § 51-12-33 .............................................................................................................43 Kan. Stat. Ann. § 60-258a(d) (2010) .......................................................................................43, 44 Ky. Rev. Stat. § 411.182(1)(b) .......................................................................................................46 Mich. Comp. Laws § 600.2956 (1996) ..........................................................................................44 N.M. Stat. Ann. § 41-3A-1 ............................................................................................................44 Okla. Stat. Title 23, § 15(A) (2011) ...............................................................................................45 Rules Fed. R. Civ. P. 14 ...........................................................................................................................42 Fed. R. Evid. 201(b)(2) ..................................................................................................................26 N.Y. C.P.L.R. § 1401 .....................................................................................................................57 Regulations 7 C.F.R. pt. 735 ..................................................................................................................26, 27, 28 Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 12 of 76 Page ID #5058 xiii Constitutional Provisions U.S. Const. Article I, § 8, cl. 3 .......................................................................................................30 U.S. Const. Article VI, cl. 2 ...........................................................................................................11 Other Authorities 3 Moore’s Federal Practice-Civil § 14.04(b) (2015) ..................................................................42 Agrisure Duracade® Corn Trait, Syngenta Global (July 17, 2017), https://www4.syngenta.com/media/media-releases/yr-2017/17-07-2017 (last visited Sept. 8, 2017) .................................................................................................................9 American Heritage Dictionary 311-12 (5th ed. 2016) ...................................................................18 90th Cong. 38 (1967) (statement of Roy F. Hendrickson, Exec. Sec’y, Nat’l Fed’n of Grain Coops.).......................................................................................................................23 Erwin Chemerinsky, Constitutional Law: Principles and Policies § 5.2, at 429 (5th ed. 2015) ...........................................................................................................................25 Farm Service Agency, USDA, WA-402: Licensing Agreement for Grain and Rice Warehouse Operators 17-18 (Nov. 3, 2011), https://forms.sc.egov.usda.gov/ efcommon/eFileServices/eForms/WA402.PDF (last visited Sept. 8, 2017)............................27 H.R. 2121 .......................................................................................................................................23 H.R. 11162 .....................................................................................................................................23 Resp. to Pub. Cmts. on Syngenta SYN-05307-1 Corn, at 24 ..........................................................33 United States Warehouse Act, http://www.fsa.usda.gov/programs-and-services/ commodity-operations/warehouse-services/united-states-warehouse-act/index .....................26 Webster’s Third New International Dictionary 376 (1993) ..........................................................18 Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 13 of 76 Page ID #5059 1 INTRODUCTION In this lawsuit and in many others like it throughout the country-including lawsuits filed by each of the third-party defendants-Syngenta is alleged to have acted negligently when it carelessly and prematurely commercialized Viptera and Duracade seeds before the genetically modified (“GM”) traits in those seeds were approved in China. A jury in the federal MDL recently confirmed Syngenta’s negligence related to its commercialization of Viptera and Duracade by awarding over $217 million in damages to Kansas farmers who sued Syngenta. Syngenta has repeatedly-and unsuccessfully-attempted to shift the blame for the damages caused by its negligent conduct onto others. In the cases before this Court, like in the cases pending in the federal MDL and Minnesota consolidated litigation, Syngenta has filed contribution and indemnity claims against certain grain handlers and exporters, claiming that they should be held responsible for the farmers’ injuries. But this Court has already had occasion to consider substantially identical claims brought against the very same grain handlers and exporters, and has found them to be legally baseless. In re Syngenta Mass Tort Actions (Tweet v. Syngenta AG), No. 16-255, 2017 WL 54345 (S.D. Ill. Jan. 4, 2017) (“Tweet Dismissal Order”). For the same reasons this Court previously dismissed claims against Archer Daniels Midland Company (“ADM”), Cargill, Incorporated and Cargill International SA (collectively “Cargill”), and Louis Dreyfus Company LLC and Louis Dreyfus Company Grains Merchandising LLC (collectively “LDC”) (collectively “the ACD companies”), the Court should reject Syngenta’s attempt to shift the blame away from itself and onto others through third-party claims. Dismissing Syngenta’s third-party claims is precisely what Judge Lungstrum did in the federal MDL. Judge Lungstrum dismissed as legally insufficient third-party claims for contribution and indemnity brought by Syngenta against ADM and Cargill. In fact, Judge Lungstrum’s opinion dismissing these claims formed part of the basis for this Court’s own ruling Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 14 of 76 Page ID #5060 2 dismissing claims against the ACD companies in Tweet. Tweet Dismissal Order, 2017 WL 54345, at *3-5. And Judge Sipkins, presiding over the Minnesota proceedings, refused even to permit Syngenta to file similar third-party claims against ADM and Cargill because, among other reasons, he held they were futile. Once again, Syngenta groundlessly seeks to shift liability for the damages that it caused farmers to those few grain handlers and exporters who have sued it for its negligent commercialization of Viptera and Duracade.1 1 There are numerous companies involved in handling and exporting grain, including companies that exported corn to China. Yet each time that Syngenta has filed third-party claims, it has filed claims only against companies that have themselves sued Syngenta for its negligent commercialization. Having sued Syngenta in 2014, ADM and Cargill were included as third- party defendants in Syngenta’s third-party complaints in the MDL and Minnesota. LDC has now been added after filing suit against Syngenta in October 2016. But there is no more basis for Syngenta’s third- party claims now than there was when Syngenta brought these claims in cases before Judge Lungstrum and Judge Sipkins. It is Syngenta alone that decided when and how to commercialize its GM seeds, and it is Syngenta alone that must account for the harm caused by its actions. See Syngenta Seeds, Inc. v. Bunge N. Am., Inc., 820 F. Supp. 2d 953, 992 (N.D. Iowa 2011) (“[T]he public interest strongly favors allocating the risks of a decision to introduce a new transgenic grain into the commercial market on the company that decided to commercialize that grain before obtaining all import approvals, not on the party that is simply confronted with that decision,” such as grain handlers and exporters). This Court’s decision dismissing claims against the ACD companies in Tweet, see Tweet Dismissal Order, 2017 WL 54345, and the decisions of other courts dismissing claims like those Syngenta brings here, are fully dispositive of Syngenta’s third-party claims against the ACD companies. Syngenta’s third-party claims should be dismissed with prejudice yet again. Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 15 of 76 Page ID #5061 3 SUMMARY OF ARGUMENT Courts have uniformly and consistently refused to impose on grain handlers and exporters the very duties that Syngenta2 • Syngenta brought contribution and indemnity claims in a third-party complaint against ADM and Cargill in the federal MDL, and the MDL Court dismissed those claims in their entirety, finding them to be preempted by the United States Grain Standards Act (“GSA”), 7 U.S.C. §§ 71-87k. In re Syngenta AG MIR 162 Corn Litig., MDL No. 2591, 2016 WL 1312519 (D. Kan. Apr. 4, 2016) (Lungstrum, J.) (“MDL Preemption Order I”). seeks to impose through its third-party complaints: • In consolidated litigation in Minnesota, Syngenta sought to bring virtually identical contribution and indemnity claims against ADM and Cargill. The court did not even permit Syngenta to file its third-party complaint, finding that Syngenta’s claims were “futile.” In re Syngenta Litig., No. 27-CV-15-3785, Order at 2, 12 (Minn. Dist. Ct. 4th Jud. Dist. Sept. 14, 2016) (Sipkins, J.) (“Minn. TPC Order”) (attached as Exhibit A). The Minnesota state court rejected Syngenta’s effort to “craft” a third-party complaint against ADM and Cargill “in an effort to circumvent or avoid the rulings in the Federal MDL.” Minn. TPC Order at 12. More recently, citing its prior futility ruling, the court struck Syngenta’s affirmative defense that sought to allocate fault to ADM and Cargill, holding that the GSA preempts and displaces the common-law duty that Syngenta sought to impose on ADM and Cargill. See In re Syngenta Litig., No. 27-CV-15-12625, Order at 22-23 (Minn. Dist. Ct. 4th Jud. Dist. Aug. 17, 2017) (Sipkins & Miller, JJ.) (“Minn. SJ Order”) (attached as Exhibit B). • This Court, the MDL Court, and the Illinois state court in Viptera-related litigation have each dismissed producers’ first-party claims brought against a group of grain handlers and exporters that included the ACD companies-claims for negligence (and other assorted causes of action) that mirror the claims brought here. Tweet Dismissal Order, 2017 WL 54345; In re Syngenta AG MIR 162 Corn Litig., MDL No. 2591, 2016 WL 4382772 (D. Kan. Aug. 17, 2016) (Lungstrum, J.) (“MDL Preemption Order II”); Browning v. Syngenta Seeds, Nos. 15-L-157 et al., Order (Ill. Cir. Ct. 1st Jud. Cir. Aug. 18, 2017) (Bleyer, J.) (“Browning Dismissal Order”) (attached as Exhibit C). 2 Defendants/Third-Party Plaintiffs Syngenta AG, Syngenta Crop Protection AG, Syngenta Corporation, Syngenta Crop Protection LLC, Syngenta Biotechnology, Inc., and Syngenta Seeds, Inc., are collectively referred to as “Syngenta.” Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 16 of 76 Page ID #5062 4 Syngenta’s third-party claims against the ACD companies are as baseless now as they were in the federal MDL and the Minnesota litigation, and they are as baseless as the Phipps Group’s first-party claims that this Court, the MDL Court, and the Illinois state court dismissed. The Court should dismiss Syngenta’s third-party claims for multiple reasons: 1. Syngenta’s third-party claims are preempted by the GSA. The multitude of orders rejecting the very duties that Syngenta seeks to impose here are so clear that one can fairly assume that Syngenta brings its third-party claims simply to preserve arguments for appeal. Indeed, Syngenta appears to concede as much: “To the extent that the Court’s order dismissing the Tweet Plaintiffs’ claims against the ABCD[3] Defendants [on GSA preemption grounds] is also held to require dismissal of Syngenta’s third-party claims against the grain-trade defendants here, Syngenta asserts these third-party claims to preserve all of its rights and claims.” Poletti TPC, ECF No. 229, ¶ 83; Tweet TPC, ECF No. 229, ¶ 83 (collectively “TPC”).4 Syngenta wrongly suggests that some of its claims “are not entirely preempted by the Grain Standards Act even under the Court’s prior order dismissing [the Tweet] Plaintiffs’ claims against the ABCD Defendants.” TPC ¶ 84. First, Syngenta contends that the ACD companies could be liable for their alleged “failure to inquire about the seeds used to grow the corn they are purchasing,” because the proposed duty to inquire ostensibly “involves seed, not the inspection or description of ‘grain’ within the meaning” of the GSA. Id. ¶ 84; see also id. ¶ 132 (a) (alleging that the ACD companies should have “require[d] warranties and/or certification from the sellers 3 The Tweet plaintiffs also asserted claims against Bunge North America, Inc. (“Bunge”)-a company that Syngenta has not sued here, presumably because Bunge has not sued Syngenta. That said, Syngenta did unsuccessfully sue Bunge in 2011 to try to force Bunge to refrain from the types of testing, channeling, and segregating activities that Syngenta now says the ACD companies were required to undertake. Bunge, 820 F. Supp. 2d at 992. 4 The allegations in Syngenta’s third-party complaints in Poletti and Tweet are identical, and therefore this brief uses “TPC” generally to mean both third-party complaints. Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 17 of 76 Page ID #5063 5 about their planting practices, including the genetic variety of seeds used and whether the seller purchased or used Viptera or Duracade seeds”). Second, Syngenta contends that the ACD companies could be liable for shipping “commingled U.S. corn to China . . . that they already knew contained Viptera,” because imposing such a duty not to ship corn to China would not- according to Syngenta-require the ACD companies to inspect or describe their corn shipments and thus would not run afoul of the GSA. Id. ¶ 84; see also id. ¶ 132 (c)-(g). But these theories of liability have been asserted in related litigation (including by Syngenta) and have been repeatedly rejected by courts across the country (including this Court) because they are preempted by the GSA. Syngenta asserted both theories in other third-party complaints against ADM and Cargill in the federal MDL and the related Minnesota action.5 In this Court, the Tweet plaintiffs also alleged that grain handlers and exporters, including the ACD companies, were negligent for (1) “purchasing corn from producers without requiring seed certification paperwork or other written documentation,” and (2) “[k]nowingly shipping and continuing to ship contaminated U.S. corn and DDGS to China, . . . despite actual knowledge that their shipments were contaminated with unapproved Viptera corn.” Tweet Compl., ECF No. 65 ¶ 807 (e), (f), & (m). This Court dismissed those claims against the ACD companies The MDL Court rejected these third-party claims, holding that they were preempted by the GSA. MDL Preemption Order I, 2016 WL 1312519, at *2. The Minnesota state court refused to even allow Syngenta to bring these claims, finding the claims to be “futile.” Minn. TPC Order at 12. 5 See In re Syngenta AG MIR 162 Corn Litig., MDL No. 2591, ECF No. 1225, Third- Party Compl. ¶ 50 (“MDL TPC”); In re Syngenta Litig., No. 27-CV-15-3785, Proposed Third- Party Compl. ¶ 116 (Minn. Dist. Ct. 4th Jud. Dist. Sept. 2, 2016) (“Minn. TPC”); see also In re Syngenta AG MIR 162 Corn Litig., MDL No. 2591, ECF No. 1808, MTD Third-Party Compl. Hr’g Tr. at 48 (Mar. 30, 2016) (“MDL Hr’g Tr.”) (arguing that “asking up front what kind of seed did you plant is [sic] nothing to do with anything pre-empted by the Grain Standards Act”); see also id. at 44-45 (arguing that shipping claims are not preempted). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 18 of 76 Page ID #5064 6 as preempted by the GSA. See Tweet Dismissal Order, 2017 WL 54345, at *3. The Illinois state court recently dismissed identical claims, also on GSA preemption grounds, as did the MDL Court when it dismissed eight class actions against the ACD companies. See Browning v. Syngenta Seeds, No. 15-L-157, Fourth Am. Consolidated Compl. ¶ 101(e), (f), & (o) (attached as Exhibit D); Browning Dismissal Order at 2; see, e.g., Anderson v. Syngenta Seeds, Inc., No. 16- 2005, ECF No. 22, Am. Class Action Compl ¶ 86(e), (f), & (n) (D. Kan.) (“Anderson Compl.”); MDL Preemption Order II, 2016 WL 4382772, at *2. 2. Federal law beyond express GSA preemption precludes Syngenta’s third-party claims 3. . Although, given the strength of GSA preemption, the Court need not reach other grounds for dismissal, Syngenta’s third-party claims also fail because they are impliedly preempted by the GSA; field-preempted by the United States Warehouse Act, 7 U.S.C. §§ 241-56, which preempts claims based on duties to segregate or channel corn in licensed warehouses; and displaced by the dormant Commerce Clause, which forecloses claims based on a state-law duty not to ship certain corn to China. The absence of a state-law duty or causation also bars Syngenta’s third-party claims. In addition to federal preemption, there are numerous state-law bases for dismissal of Syngenta’s third-party claims. To begin, Syngenta’s third-party claims fail for lack of any legally cognizable duty. Black-letter principles of state tort law do not support imposing on the ACD companies a duty to reorganize their operations to avoid the harm caused by Syngenta’s actions. Syngenta’s third-party claims also fail for lack of causation, as both the MDL Court and the Minnesota state court recognized in striking Syngenta’s affirmative defense of allocating fault to ADM and Cargill based on the companies’ shipment of MIR162 corn to China. See In re Syngenta AG Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 19 of 76 Page ID #5065 7 MIR162 Corn Litig., __ F. Supp. 3d __, MDL No. 2591, 2017 WL 1250791, at *14 (D. Kan. Apr. 5, 2017) (“MDL SJ Order”); Minn. SJ Order at 24-25. 4. Syngenta’s third-party claims for contribution and indemnity are not cognizable under some states’ laws 5. . Syngenta’s claims for contribution and indemnity, whatever the theory of negligence that underlies them, fail as a matter of state law for various state-specific reasons. Personal jurisdiction is lacking as to Cargill and LDC BACKGROUND . Syngenta’s third-party claims against Cargill and LDC must be dismissed for lack of personal jurisdiction. Neither Cargill nor LDC is subject to general jurisdiction in Illinois, and specific personal jurisdiction is lacking because Syngenta’s third-party claims are unrelated to Cargill’s and LDC’s Illinois contacts. In light of this Court’s familiarity with these cases, the ACD companies provide only an abbreviated overview of the relevant factual and procedural background. Plaintiffs are farmers who produce and sell corn in states throughout the country.6 6 In Tweet, plaintiffs reside in Iowa, Illinois, Kansas, Colorado, Arkansas, Indiana, Minnesota, North Carolina, South Dakota, and Wisconsin. In Poletti, there are plaintiffs from these same states, as well as from Alabama, Arizona, California, Florida, Georgia, Idaho, Kentucky, Louisiana, Maryland, Michigan, Mississippi, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Vermont, and Virginia. The crux of plaintiffs’ action is that Syngenta indiscriminately and improperly commercialized certain genetically modified (“GM”) corn traits “[k]nowing . . . that contamination of the U.S. corn supply . . . would result.” Tweet Compl. ¶ 768; see also Poletti Compl., ECF No. 59 ¶¶ 3056, 3078. As a result of Syngenta’s negligent conduct, U.S. corn and DDGS exports to China dropped drastically. Tweet Compl. ¶ 786; see also Poletti Compl. ¶ 3115. Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 20 of 76 Page ID #5066 8 I. PLAINTIFFS’ ALLEGATIONS REGARDING SYNGENTA’S IMPROPER COMMERCIALIZATION OF SEEDS CONTAINING THE MIR162 AND EVENT 5307 TRAITS. Syngenta commercialized Viptera-brand corn seed, which contains the GM trait known as MIR 162, for the 2011 growing season. Tweet Compl. ¶ 4. When Syngenta began commercializing Viptera in the United States, China had not approved corn grown from Viptera for import. Tweet Compl. ¶¶ 768, 794; Poletti Compl. ¶ 3100. Plaintiffs allege that Syngenta knew “that contamination of the U.S. corn supply with Viptera would result” from its actions, but nonetheless “risked U.S. farmers’ livelihood on the approval of Viptera by the major corn importing countries.” Tweet Compl. ¶ 768; see also Poletti Compl. ¶ 3087. Syngenta also “knew that it was not possible to completely isolate Viptera corn from other types of corn,” and that “Viptera corn would cross-pollinate with other nearby corn plants.” Tweet Compl. ¶ 772; see also Poletti Compl. ¶¶ 3076-91. In short, Syngenta knew that its actions “would contaminate the U.S. corn supply with the traits found in Viptera.” Tweet Compl. ¶ 778; see also Poletti Compl. ¶ 3091. Syngenta concedes as much in its third-party complaints, where it admits that it knew commingling of Viptera corn and non-Viptera corn would happen “at harvest”-that is, before the corn even left the farm. TPC ¶ 72. Beginning in November 2013, China began rejecting shipments of U.S. corn and distiller’s dried grains with solubles (“DDGS”) after inspections revealed the presence of Viptera. Tweet Compl. ¶¶ 781, 784; Poletti Compl. ¶ 3109. Exports of U.S. corn to China “were down 85% in 2014 compared to 2013,” and “[t]his dramatic reduction in exports of U.S. corn to China continues to date.” Tweet Compl. ¶ 3; see also id. ¶¶ 786, 794; see also Poletti Compl. ¶¶ 3115, 3117. Plaintiffs allege that “[t]he loss of the Chinese market to U.S. corn and DDGS has caused diminished prices for corn in the United States, and Plaintiffs’ resulting damages.” Tweet Compl. ¶ 794; see also Poletti Compl. ¶ 3155. Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 21 of 76 Page ID #5067 9 Before China approved Viptera in December 2014, Syngenta had doubled down by marketing corn seeds containing yet another trait that had not been approved for import in China. In 2014, Syngenta commercialized Duracade, which contains a GM trait known as Event 5307, “despite having full knowledge of the market disruption resulting from its negligent commercialization of Viptera.” Tweet Compl. ¶ 782; see also Poletti Compl. ¶¶ 3054, 3056(g). Syngenta thus “intensified and extended the disruption to, and loss of, the Chinese market to U.S. corn” by “negligently and prematurely commercializing its Duracade corn seed.” Tweet Compl. ¶ 782. Duracade was not approved until July of 2017.7 Syngenta moved to dismiss the Poletti and Tweet plaintiffs’ complaints, and this Court largely denied those motions. As this Court held, “policy considerations do not warrant that Syngenta did not have a duty to exercise reasonable care and judgement in its commercialization of VIPTERA™ to avoid risk of harm to plaintiffs.” In re Syngenta Mass Tort Actions (Tweet v. Syngenta AG), __ F.3d __, No. 16-255, 2017 WL 2117728, at *12 (S.D. Ill. May 15, 2017) (“Tweet-Syngenta Dismissal Order”); In re Syngenta Mass Tort Actions (Poletti v. Syngenta AG), __ F. Supp. 3d ___, No. 15-1221, 2017 WL 1277898, at *11 (S.D. Ill. Apr. 3, 2017) (“Poletti- Syngenta Dismissal Order”). The Court concurred with the reasoning of the MDL Court, which held that “the law reasonably imposes” on Syngenta a duty “to exercise reasonable care not to commercialize and sell its product in a way that creates a risk of widespread harm resulting from the intended use of the product by all of its customers.” In re Syngenta AG MIR 162 Corn Litig., 131 F. Supp. 3d 1177, 1191 (D. Kan. 2015) (“MDL-Syngenta Dismissal Order”); id. at 1193 (recognizing Syngenta’s duty “to exercise reasonable care in the manner, timing, and scope of its 7 Syngenta Receives China Import Approval for Agrisure Duracade® Corn Trait, Syngenta Global (July 17, 2017), https://www4.syngenta.com/media/media-releases/yr-2017/17- 07-2017 (last visited Sept. 8, 2017). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 22 of 76 Page ID #5068 10 commercialization of its Viptera and Duracade products”). As the MDL Court held, recognition of such a duty is warranted where Syngenta is “engaged in affirmative conduct that contributed to the [plaintiffs’] harm.” Id. at 1190. II. SYNGENTA’S THIRD-PARTY CLAIMS AGAINST THE ACD COMPANIES. Syngenta now seeks to do precisely what it has attempted but failed to do in its motions to dismiss, motions for summary judgment, and third-party complaints filed throughout the country: point the finger elsewhere in an attempt to evade responsibility for the consequences of its affirmative and intentional conduct. Through its third-party claims, Syngenta, once again, asks that its liability for its own allegedly negligent actions be shifted onto “the grain elevators, shippers, and exporters who commingle commodity corn together.” TPC ¶ 3. (Notably, Syngenta has not asserted claims against all “grain elevators, shippers, and exporters,” instead pursuing only the companies that have themselves sued Syngenta based on its negligent commercialization. See n.1, above.) At the heart of Syngenta’s third-party claims is the assertion that, if anyone owed a duty to plaintiffs in this litigation, it is the grain handlers and exporters, none of whom are alleged to have had any control over the only duty that has been found to exist in this Viptera-related litigation: the duty “to exercise reasonable care in the manner, timing, and scope of [Syngenta’s] commercialization of its Viptera and Duracade products” so as not to “create[] a risk of widespread harm resulting from the intended use of the product by all of [Syngenta’s] customers.” MDL-Syngenta Dismissal Order, 131 F. Supp. 3d at 1191-93. As described above, Syngenta and the Phipps Group have made these same allegations and brought these same claims in courts throughout the country, including this Court, and each court has rejected Syngenta’s view of where the duty should lie. For the reasons described below, this Court should follow its prior holding in Tweet and once again dismiss the claims against the ACD companies. Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 23 of 76 Page ID #5069 11 ARGUMENT I. FEDERAL LAW COMPREHENSIVELY REGULATES THE GRAIN TRADE AND PREEMPTS SYNGENTA’S STATE-LAW CLAIMS FOR CONTRIBUTION AND INDEMNITY. There can be no dispute that “this country as breadbasket of nations represents the greatest agricultural success story in the history of the world.” United States v. Cumberland Farms of Conn., Inc., 647 F. Supp. 1166, 1168-69 (D. Mass. 1986) (taking judicial notice of this fact), aff’d, 826 F.2d 1151 (1st Cir. 1987). The success of U.S. agriculture has been facilitated in large part by two federal statutes: the GSA and the U.S. Warehouse Act (“Warehouse Act”). These acts are part of the same overarching regime for the federal regulation of agricultural products. Both were enacted in 1916 in the same bill, see Act of Aug. 11, 1916, ch. 313, pt. B (GSA), 39 Stat. 482; id., pt. C (Warehouse Act), 39 Stat. 486, and both were amended in 2000 through the same bill, see Grain Standards and Warehouse Improvement Act of 2000, Pub. L. No. 106-472, 114 Stat. 2058. Both acts broadly preempt state law. The Supremacy Clause of the United States Constitution empowers Congress to preempt state law through statutes such as the GSA and the Warehouse Act. U.S. Const. art. VI, cl. 2. Congress can preempt state law either expressly, “by enacting a statute containing an express preemption provision,” or impliedly. Arizona v. United States, 567 U.S. 387, 399 (2012). Implied preemption takes two forms: (1) field preemption, under which “the States are precluded from regulating conduct in a field that Congress . . . has determined must be regulated by its exclusive governance,” and (2) conflict preemption, under which “state laws are preempted when they conflict with federal law,” either because compliance with both federal and state law is impossible, or because a state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Id. (internal quotation marks and citation omitted). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 24 of 76 Page ID #5070 12 A. As multiple courts-including this Court-have held, the GSA preempts state-law claims like those Syngenta asserts against the ACD companies. This Court, the MDL Court, the Illinois state court, and the Minnesota state court have each held that the GSA governs the handling and export of grain and expressly preempts state law on those subjects, including state-law negligence claims. Tweet Dismissal Order, 2017 WL 54345, at *3; MDL Preemption Order II, 2016 WL 4382772, at *2; MDL Preemption Order I, 2016 WL 1312519, at *2; Browning Dismissal Order at 2; Minn. SJ Order at 25; see also Minn. TPC Order at 12 (finding Syngenta’s proposed third-party claims to be “futile”). In fact, the Minnesota state court recently dismissed Syngenta’s defense seeking to allocate fault to ADM and Cargill for their respective decisions to ship corn to China, holding that “[t]he defense fails because federal preemption from the GSA acts to nullify any duty that could be imposed to find the grain handlers negligent.” Minn. SJ Order at 25. The reasoning underlying the courts’ dismissal of the claims and third-party claims before them also necessitates dismissal of Syngenta’s third-party claims here, as those claims also are preempted under the GSA. Congress’s intent in enacting the GSA could not be clearer: as this Court explained in Tweet, the GSA contains numerous provisions that “demonstrate ‘Congress’s intent to regulate foreign commerce in grain’ and facilitate and promote grain trade” and not leave that a subject for the laws of the fifty states. Tweet Dismissal Order, 2017 WL 54345, at *3 (quoting MDL Preemption Order I, 2016 WL 1312519, at *3); see also MDL Preemption Order I, 2016 WL 1312519, at *3. Among the provisions that manifest Congress’s intent to regulate the grain trade exclusively at the federal level is the GSA’s express-preemption provision, 7 U.S.C. § 87g(a). Under that provision: “No State . . . may require the inspection or description in accordance with any standards of kind, class, quality, condition, or other characteristics of grain as a condition of shipment, or sale, of such grain in interstate or foreign commerce . . . .” 7 U.S.C. § 87g(a). This Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 25 of 76 Page ID #5071 13 Court, like every court in this Viptera-related litigation that has reviewed claims against grain handlers and exporters like the ACD companies, has held that this provision expressly preempts any purported state-law duties like those Syngenta seeks to impose here that would require the “inspection” or “description” of corn with respect to its characteristics (including its genetic content). Tweet Dismissal Order, 2017 WL 54345, at *3 (“The GSA preempts plaintiff’s negligence claims as they relate to inspection and description requirements, sourcing and segregating requirements, and shipping requirements of the Viptera and dried grains with solubles (‘DDGS’).”).8 As those courts have held, imposing state-law duties to test corn shipments for GM traits, describe corn shipments as GM-free, or refrain from shipping corn because of potential GM contamination “would run afoul of Congress’s unmistakable intent to reserve to the federal government any such regulation on interstate or foreign commerce in grain based on characteristics of the grain.” MDL Preemption Order I, 2016 WL 1312519, at *2. Where claims like Syngenta’s claims here “would impose a duty that would either require the grain handlers and exporters to inspect corn for the presence of a genetic trait or to describe corn with respect to the presence of that trait, or require them to ensure that others do so,” MDL Preemption Order II, 8 Accord MDL Preemption Order I, 2016 WL 1312519, at *3 (“[T]he imposition of liability on [ADM and Cargill] would amount to a condition on the shipment or sale of corn based on the presence of the Viptera trait, compliance with which would require testing or description of the corn as Viptera-free. Thus, enforcement of the state-law duty asserted by Syngenta is preempted under the GSA.”); MDL Preemption Order II, 2016 WL 4382772, at *11 (“[C]laims against Syngenta are preempted [under the GSA] to the extent that they are based on duties that would require inspection or description of corn by reference to the presence or absence of MIR 162.”); Minn. SJ Order at 22 (reiterating that third-party claims by Syngenta against grain handlers “would be futile due to GSA preemption”); Browning Dismissal Order at 2 (“Plaintiffs’ negligence claims against the ABCD companies would impose a federally preempted state-law duty to inspect or describe corn for the presence of certain genetic traits as a condition of shipment, or sale, of such corn in interstate or foreign commerce, and therefore those claims fail as a matter of law.”). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 26 of 76 Page ID #5072 14 2016 WL 4382772, at *4, this Court and others uniformly have held that the claims were preempted under the GSA. See, e.g., MDL Preemption Order II, 2016 WL 4382772, at *4; Tweet Dismissal Order, 2017 WL 54345, at *3. As a partial beneficiary of GSA preemption,9 Syngenta’s third-party complaint, however, shows that Syngenta is unwilling to accept the full implications of the GSA’s express-preemption provision as applied by this Court and others. Recycling arguments that have been repeatedly rejected, Syngenta attempts to evade GSA preemption of its contribution and indemnity claims through two theories: (1) that the ACD companies had a duty to ask farmers what seed they planted to grow their corn, and (2) that the ACD companies had a duty to refrain from shipping corn to China that they allegedly knew contained MIR 162. TPC ¶ 84. Neither theory can save Syngenta’s claims from dismissal. Syngenta has expressed its agreement with this Court’s and the MDL Court’s preemption-related rulings. For instance, Syngenta has agreed that whether corn contains a GM trait such as MIR 162 is a “characteristic” of that corn for purposes of GSA preemption. See MDL Preemption Order I, 2016 WL 1312519, at *2 (noting that “[t]he parties”-including Syngenta-“agree that one ‘characteristic’ of corn under [the GSA’s preemption] provision is whether it contains the trait found in Viptera”). Syngenta also “does not dispute that [GSA] preemption applies to state common law claims.” Id. at *2 n.3. Accordingly, in the MDL, “Syngenta concede[d] that its claims based on [ADM’s and Cargill’s] handling of corn are preempted”-claims that Syngenta nevertheless asserts again here. Id. at *2. 9 This Court and the MDL court have held that certain claims against Syngenta are also barred by GSA preemption. See Poletti-Syngenta Dismissal Order, 2017 WL 1277898, at *8; Tweet-Syngenta Dismissal Order, 2017 WL 2117728, at *9; MDL Preemption Order II, 2016 WL 4382772, at *8-11. Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 27 of 76 Page ID #5073 15 1. Syngenta cannot avoid GSA preemption by trying to shift the focus to the seeds used to grow harvested corn. Syngenta, which sells corn seed rather than harvested corn, was only partly successful in using the GSA to defeat claims against it. Trying to extract a silver lining from those partly unfavorable rulings, Syngenta now argues that the GSA does not preempt imposing a duty on the ACD companies to ask farmers about what seed they planted to grow their corn. TPC ¶¶ 84, 132(a). Syngenta cannot evade preemption of claims that assert this theory. To begin, the MDL Court and the Minnesota state court already rejected Syngenta’s attempt to assert this same liability theory. See MDL Preemption Order I, 2016 WL 1312519, at *2 (finding claims preempted under the GSA); Minn. TPC Order at 12 (holding such claims would be futile); see also MDL TPC ¶ 50(2); Minn. TPC ¶ 116; MTD Third-Party Compl. Hr’g Tr. at 48, In re Syngenta AG MIR 162 Corn Litig., MDL No. 2591, ECF No. 1808 (Mar. 30, 2016) (“MDL Hr’g Tr.”) (counsel for Syngenta arguing that “asking up front what kind of seed did you plant is [sic] nothing to do with anything pre-empted by the Grain Standards Act”). Similarly, this Court dismissed claims by the plaintiffs in Tweet alleging that grain handlers and exporters, including the ACD companies, were negligent for “[p]urchasing corn from producers without requiring seed certification paperwork or other written documentation.” Tweet Compl. ¶ 807 (e) & (f). This Court held that the claims were squarely preempted by the GSA. See Tweet Dismissal Order, 2017 WL 54345, at *3. The Illinois state court recently dismissed identical claims on GSA preemption grounds, as did the MDL Court. See Browning v. Syngenta Seeds, No. 15-L-157, Fourth Am. Consolidated Compl. ¶ 101(e) & (f); Browning Dismissal Order at 2; see, e.g., Anderson Compl. ¶ 86(e) & (f); MDL Preemption Order II, 2016 WL 4382772, at *2. Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 28 of 76 Page ID #5074 16 The courts in this Viptera-related litigation have dismissed claims related to representations about seeds for good reason. Both this Court and the MDL have held that the GSA “preempts all claims relating to segregation of Viptera corn.” Poletti-Syngenta Dismissal Order, 2017 WL 1277898, at *9; see also Tweet-Syngenta Dismissal Order, 2017 WL 2117728, at *9 (“To the extent these [negligent] allegations rest on a duty to ensure that MIR 162 corn is kept segregated from other corn, the GSA preempts such claims.”); MDL Preemption Order II, 2016 WL 4382772, at *8 (“[T]he GSA preempts any claim against Syngenta based on a duty to make sure that Viptera corn is kept segregated from other corn.”). Here, the duty that Syngenta would impose on the ACD companies-namely, the duty to ask farmers whether they used Viptera seeds to grow corn, see TPC ¶ 132 (a)-is plainly a claim related “to segregation of Viptera corn” and thus preempted by the GSA under this Court’s and the MDL Court’s prior orders. After all, asking about the seeds used would merely be an empty exercise in the absence of some proposed action to be taken on the basis of the answer-i.e., either declining to accept the delivered corn or segregating it, which is precisely what the GSA prohibits. Moreover, imposing a requirement to ask about the seed used to grow corn is little more than another form of mandated “description” of the corn itself, which is directly barred by the GSA. On both of these grounds, GSA preemption directly applies to the seed-inquiry duty that Syngenta proposes, which is why other courts have repeatedly rejected claims based on this theory. In that regard, in ruling on Syngenta’s own motion for judgment on the pleadings and motion to dismiss claims against it on GSA preemption grounds, the MDL Court held that “claims based on duties that do not require anyone to have acted with respect to corn, after it has been grown by the farmers, would not be preempted.” MDL Preemption Order II, 2016 WL 4382772, at *10. As the MDL Court explained, “the seed sold by Syngenta did not become a Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 29 of 76 Page ID #5075 17 grain subject to the GSA until after it grew into corn.” Id. “That distinction”-i.e., the distinction between seeds that have not yet grown into corn and seeds that have-“provides the basic dividing line between preempted claims and those claims that survive.” Id. This Court agreed with the MDL Court’s analysis. Tweet-Syngenta Dismissal Order, 2017 WL 2117728, at *9-10. Syngenta’s third-party claims against the ACD companies clearly fall on the preempted side of the line. Under the MDL Court’s analysis, a claim survives GSA preemption only if it is “based on duties that do not require anyone to have acted with respect to corn, after it has been grown by the farmers.” MDL Preemption Order II, 2016 WL 4382772, at *10 (emphasis added). Syngenta’s claim that the ACD companies had a non-preempted duty to “inquire about the seeds used to grow the corn they are purchasing” is therefore incorrect. TPC ¶ 84 (emphasis added). After all, “the corn that [the ACD companies] are purchasing” is, in the MDL Court’s words, “corn, after it has been grown by farmers,” and a duty to ask about the seed used to grow the harvested corn is therefore a preempted duty to act with respect to grown, harvested corn. MDL Preemption Order II, 2016 WL 4382772, at *10. Syngenta tries to sidestep preemption by making the same argument that failed when Syngenta made it to the MDL Court-i.e., that the alleged “failure to inquire about the seeds used to grow the corn they are purchasing involves seed, not the inspection or description of ‘grain’ within the meaning of the [GSA.]” TPC ¶ 84; see MDL Hr’g Tr. at 48. But something can involve a description of both seed and corn; the two are not mutually exclusive. Thus, a question about “the corn [grain handlers] are purchasing” doesn’t stop being a question about corn just because the question is, “What seed did you use to grow this corn?” Accordingly, under the MDL Court’s analysis and this Court’s order in Tweet granting in part Syngenta’s motion to dismiss-an order that Syngenta is ostensibly relying on, TPC ¶ 84-Syngenta’s proposed duty Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 30 of 76 Page ID #5076 18 to ask farmers what seed they planted to grow the corn the ACD companies were considering whether to purchase and thus handle is expressly preempted by the GSA.10 This conclusion is compelled by the GSA preemption clause’s prohibition on the imposition of a state-law inspection or description requirement with respect to a “characteristic[] of grain” such as corn. 7 U.S.C. § 87g(a). As this Court (and others) held (and Syngenta has agreed), corn’s genetic content “qualifies as a characteristic” of corn “[u]nder the ordinary meaning of the [GSA’s] text.” Tweet Dismissal Order, 2017 WL 54345, at *3. 11 And under the ordinary meaning of the word “characteristic,” the fact that corn was grown from a certain type of seed containing a particular GM trait is equally an “other characteristic” of that corn.12 10 Syngenta also advanced the identical argument in its improper “response” brief filed in support of the Phipps plaintiffs’ claims in the Tweet case. Syn. Resp. to ABCD Defs. MTD at 18- 24, Tweet v. Syngenta AG (In re Syngenta Mass Tort Actions), No. 16-255, ECF No. 169 (S.D. Ill. Oct. 20, 2016). Despite the argument, this Court dismissed the Phipps plaintiffs’ claims against grain handlers and exporters. Tweet Dismissal Order, 2017 WL 54345, at *7. Indeed, asking a farmer, “Was this corn grown from Viptera seed?” is just another way of asking, “Are the genetic traits in Viptera a characteristic of this corn?” Just as the GSA forbids a state to impose a tort-law duty on the ACD companies to ask farmers to describe their grown, harvested corn in terms of its genetic content, the GSA equally forbids a state to impose a tort-law duty on 11Accord MDL Preemption Order II, 2016 WL 4382772, at *2 (“The Court therefore interprets ‘other characteristic’ to include the presence or absence of MIR 162, in accord with the plain meaning of the statute.”); MDL Preemption Order I, 2016 WL 1312519, at *2 (noting Syngenta’s agreement “that one ‘characteristic’ of corn under [the GSA’s preemption] provision is whether it contains the trait found in Viptera”). 12 See Webster’s Third New International Dictionary 376 (1993) (defining “characteristic” as “a trait, quality, or property or a group of them distinguishing an individual, group, or type: that which characterizes or is characteristic”); American Heritage Dictionary 311-12 (5th ed. 2016) (defining “characteristic” as “[a] feature that helps identify, tell apart, or describe recognizably; a distinguishing mark or trait”). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 31 of 76 Page ID #5077 19 the ACD companies to ask farmers to describe their grown, harvested corn in terms of the seed from which it was grown.13 2. Syngenta cannot avoid GSA preemption of its shipping-related claims by trying to limit those claims to shipments known to contain Viptera. In continuing to advance its shipping-related claims against the ACD companies, Syngenta is asking this Court to reject its own prior ruling in Tweet with respect to those claims, as well as the rulings of every other court to have considered and rejected the same claims. Syngenta has not provided, and cannot provide, any reason for the Court to do so. In a ruling whose “rationale” this Court “adopt[ed]” with respect to GSA preemption, Tweet Dismissal Order, 2017 WL 54345, at *3, the MDL Court addressed, and flatly rejected, Syngenta’s knowing-shipment theory: [A]llowing liability for a breach of the duty asserted by Syngenta-a duty not to ship or sell to China corn that is known to include the Viptera trait-would impose, as a condition of shipment or sale, a requirement of inspection or description in accordance with a standard concerning a characteristic of the corn. . . . [I]mposing such a duty would require either that the shipped or sold corn be tested for the presence of the Viptera trait or that the corn be effectively described as Viptera-free. The only alternative would be a complete ban on the sale of any corn to China because of the possibility of the presence of the Viptera trait, and such a ban imposed by state law would run afoul of Congress’s unmistakable intent to reserve to the federal government any such regulation on interstate or foreign commerce in grain based on characteristics of the grain. Thus, under the plain language of Section 87g(a), Syngenta’s claims are preempted. 13 While Syngenta does not base its claims on this allegation, Syngenta includes in its third-party complaints an allegation regarding seed sales by an ACD company. TPC ¶ 42. That same allegation was included in the third-party complaint that the Minnesota state court held was “futile.” Minn. TPC ¶ 116; Minn. TPC Order at 12. It was also addressed by the Illinois state court, where first-party claims based on seed sales were before the court. As the Illinois state court held, those claims “fail to state a legally cognizable claim” due to, among other things, “the absence of any duty by the ABCD companies.” Browning Dismissal Order at 5-6. As the court held, “[t]he only duty that has been recognized-and the only duty that exists in this regard-is the duty of Syngenta, as the developer and manufacturer of Viptera and Duracade, to exercise reasonable care in the manner, timing, and scope of its commercialization of Viptera and Duracade so as not to create a risk of widespread harm resulting from the intended use of that product by Syngenta’s customers-customers that include seed dealers.” Id. at 6. Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 32 of 76 Page ID #5078 20 MDL Preemption Order I, 2016 WL 1312519, at *2. Expressly rejecting Syngenta’s argument that a duty to refrain from shipping “corn known to be contaminated” would not run afoul of the GSA, the MDL Court explained: [E]nforcement of such a duty would equate to the imposition of a condition on sales based on the presence of a characteristic of the corn (the presence of the Viptera trait), as [grain handlers and exporters] would effectively be required, in making a shipment, to represent to the best of their knowledge that the shipment was Viptera-free. Id. at *3. The MDL Court reiterated this view in its order dismissing the Phipps Group’s class actions against grain handlers and exporters, including the ACD companies, stating that “any claim that the grain exporters should not have shipped or sold Viptera or Duracade corn to Chinese buyers is preempted,” and that “any requirement to describe the shipments as Viptera- free would [be] preempted.” MDL Preemption Order II, 2016 WL 4382772, at *6. In adopting the MDL Court’s holdings, this Court recognized that among the preempted claims of the Phipps Group were claims based on “shipping requirements of the Viptera and dried grains with solubles (‘DDGS’).” Tweet Dismissal Order, 2017 WL 54345, at *3. Notably, this Court dismissed the Tweet plaintiffs’ claims as preempted, even though Syngenta argued that the Court should not dismiss those plaintiffs’ claims, advancing the exact same knowing- shipment-as-tort theory that Syngenta asserts here.14 14 Syn. Resp. to ABCD Defs. MTD at 18-24, Tweet v. Syngenta AG (In re Syngenta Mass Tort Actions), No. 16-255, ECF No. 169, (S.D. Ill. Oct. 20, 2016). Similarly, more recently, the Illinois state court adopted the reasoning of this Court and the MDL and dismissed the negligence claims (including claims based on the shipment of corn to China) against the ACD companies and others. See Browning Dismissal Order at 2. Finally, the Minnesota state court held that Syngenta’s third-party claims against ADM and Cargill-including “claims based on Cargill and Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 33 of 76 Page ID #5079 21 ADM’s decision to sell or ship corn to China”-were “futile,” and thus denied Syngenta leave to bring those claims. Minn. TPC Order at 12 (emphasis added). Again, these courts’ rejections of Syngenta’s knowing-shipment-as-tort theory are well reasoned. As a matter of common sense, the ACD companies can only comply with a state-law duty not to ship corn containing MIR 162 by inspecting the corn for the presence of MIR 162. How else can the ACD companies know that the corn they are shipping to China contains MIR 162? But when a federal law like the GSA preempts a particular type of state-law duty, states may not escape federal preemption by imposing the preempted duty indirectly, such as by imposing a scienter requirement like the one that Syngenta seeks to impose here. The Supreme Court made this clear in Rowe v. New Hampshire Transport Association, 552 U.S. 364 (2008). There, the Court held that federal law preempted a Maine law forbidding the shipment of packages sent by certain unlicensed tobacco dealers that “impose[d] civil liability upon the carrier, not simply for its knowing transport of (unlicensed) tobacco, but for the carrier’s failure sufficiently to examine every package.” Id. at 372-73. The duty that Syngenta seeks to impose here, like the preempted duty at issue in Rowe, would require the ACD companies to conduct inspections to avoid liability for shipping and is equally preempted. Moreover, as the courts considering this claim have held, even if the ACD companies somehow knew whether a shipment of corn contained MIR 162 without inspecting the corn, the prohibition on selling corn containing MIR 162 to China would still impose a preempted description requirement-namely, describing corn shipped to China as being free of MIR 162. See MDL Preemption Order I, 2016 WL 1312519, at *3. The only alternative to such a description requirement would be an outright ban under state law on selling any corn to China because of the possibility that the corn might contain MIR 162. But such a ban would also be Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 34 of 76 Page ID #5080 22 preempted by the GSA because, as the MDL Court explained, it would “run afoul of Congress’s unmistakable intent to reserve to the federal government any such regulation on interstate or foreign commerce in grain based on characteristics of the grain.” MDL Preemption Order I, 2016 WL 1312519, at *2; cf. Nat’l Meat Ass’n v. Harris, 565 U.S. 452, 464 (2012) (“[I]f the sales ban were to avoid the [Federal Meat Inspection Act (FMIA)]’s preemption clause, then any State could impose any regulation on slaughterhouses just by framing it as a ban on the sale of meat produced in whatever way the State disapproved[, which] would make a mockery of the FMIA’s preemption provision.”). Syngenta’s knowing-shipment-as-tort theory has been rejected by courts, including this one, at least five times, and fails as a matter of law yet again. B. The GSA impliedly preempts Syngenta’s claims because those claims conflict with the purposes behind the GSA. Although the GSA expressly preempts Syngenta’s third-party claims-and that alone is a sufficient basis to dismiss those claims-implied preemption also provides a basis for dismissal. Because Syngenta’s claims pose “an obstacle to the accomplishment and execution of the full purposes and objectives of Congress” in enacting the GSA, they are impliedly preempted.15 15 The existence of an express-preemption clause such as 7 U.S.C. § 87g neither “bar[s] the ordinary working of conflict preemption principles” nor creates a “special burden” for establishing that laws falling outside the clause are preempted. Arizona, 567 U.S. at 406 (internal quotation marks omitted); see also Geier v. Am. Honda Motor Co., 529 U.S. 861, 869 (2000) (explaining that neither a savings clause nor an express-preemption clause “bar[s] the ordinary working of conflict pre-emption principles”). Sprietsma v. Mercury Marine, 537 U.S. 51, 64 (2002) (internal quotation marks omitted) (describing types of implied conflict preemption). As a general rule, “a state law cannot stand that either frustrates the purpose of the national legislation or impairs the efficiency of those agencies of the Federal government to discharge the duties, for the performance of which they were created.” Nash v. Fla. Indus. Comm’n, 389 U.S. 235, 240 (1967) (citation and internal Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 35 of 76 Page ID #5081 23 quotation marks omitted). Further, “[w]hat is a sufficient obstacle is a matter of judgment, to be informed by examining the federal statute as a whole and identifying its purpose and intended effects.” Crosby v. Nat’l Foreign Trade Council, 530 U.S. 363, 373 (2000). In enacting the GSA, Congress intended to facilitate the export of grain by providing a comprehensive framework for inspecting, weighing, and describing grain in foreign commerce- indeed, even in foreign ports. The GSA reflects “Congress’s unmistakable intent to reserve to the federal government any such regulation on interstate or foreign commerce in grain based on characteristics of the grain.” MDL Preemption Order I, 2016 WL 1312519, at *2. Congress explained its objective in unambiguous terms: “that grain may be marketed in an orderly and timely manner and that trading in grain may be facilitated.” 7 U.S.C. § 74(a). The legislative history of the GSA further demonstrates that eliminating the multiplicity of state requirements for the inspection and description of grain has been key to facilitating trading in grain.16 The common-law duties that Syngenta seeks to impose through its third-party claims, however, share a central purpose: to use state law to affect interstate and foreign commerce in grain, using categories and characteristics that are unknown to the federal scheme of regulation. To achieve this purpose, Syngenta seeks to impose a state-law duty upon the ACD companies to (1) demand seed-certification paperwork or warranties from farmers about the seeds they used to grow corn, and (2) refrain from exporting corn and corn products like DDGS that contain the MIR 162 GM trait. See TPC ¶¶ 84, 132. But the duty to require seed certifications and warranties 16 See Amend the Grain Standards Act: Hearings on H.R. 2121 and H.R. 11162 Before the Subcomm. on Livestock & Grains of the H. Comm. on Agric., Part 2, 90th Cong. 38 (1967) (statement of Roy F. Hendrickson, Exec. Sec’y, Nat’l Fed’n of Grain Coops.) (“We do not want to see a return to the chaotic situation which existed prior to 1916. A study of the phraseology in use in the grain marketing industry in this country in 1906 disclosed 338 grades or grade titles. Of these, 133 were for wheat, 63 for corn, 77 for oats, 53 for barley, 10 for rye, and 1 each for ‘no grade’ and ‘no established grade.’”). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 36 of 76 Page ID #5082 24 before a grain handler may purchase or accept corn is plainly a requirement to segregate and channel corn based on the corn’s genetic content. And the duty to refrain from exporting corn based on the corn’s genetic content imposes additional and unintended burdens on foreign commerce in grains. In short, allowing such duties to be imposed under state law would sabotage the comprehensive framework set out in the GSA and its implementing regulations, and would “stand as an obstacle to the accomplishment and execution” of Congress’s objectives. Geier v. Am. Honda Motor Co., 529 U.S. 861, 873 (2000) (internal quotation marks omitted); see also Crosby, 530 U.S. at 373-74 (finding obstacle preemption in light of Congressional objective of uniformity with regard to this country’s economic relations with foreign nations). Ordinary principles of conflict preemption therefore also mandate dismissal of Syngenta’s claims against the ACD companies. C. The Warehouse Act preempts a large swath of Syngenta’s claims against the ACD companies. Because the GSA preempts Syngenta’s third-party claims, the Court need not decide whether the Warehouse Act also preempts those claims. See Tweet Dismissal Order, 2017 WL 54345, at *3 n.6; MDL Preemption Order II, 2016 WL 4382772, at *4 n.4. But the Warehouse Act provides an additional basis for finding that federal law preempts Syngenta’s claims with respect to the handling of corn and DDGS at the ACD companies’ federally licensed facilities. 1. The Warehouse Act, its implementing regulations, and U.S. Supreme Court authority interpreting them set forth the Warehouse Act’s broad preemptive scope. Enacted together with the GSA, the Warehouse Act comprehensively and pervasively regulates the operations of warehouses licensed under the act.17 17 The Warehouse Act’s purposes include “facilitat[ing] and safeguard[ing] commerce in agricultural products.” Edward R. Bacon Grain Co. v. City of Chicago, 59 N.E.2d 689, 693 (Ill. App. Ct. 1945); see also In re Farmers Coop. Ass’n, 8 N.W.2d 557, 561-62 (S.D. 1943) (same). The Supreme Court has held that Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 37 of 76 Page ID #5083 25 the Warehouse Act preempts the field of state law with respect to licensed warehouses, stating that “Congress can act so unequivocally as to make clear that it intends no regulation except its own” and that “Congress has done just that by the 1931 amendments [to the Warehouse Act].” Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 236 (1947) (citation omitted); see also Erwin Chemerinsky, Constitutional Law: Principles and Policies § 5.2, at 429 (5th ed. 2015) (describing Rice as “[p]erhaps the most frequently cited case concerning field preemption”). The broad preemptive scope of the Warehouse Act is apparent from its statutory language. The Warehouse Act provides that the Secretary of Agriculture “shall have exclusive power, jurisdiction, and authority, to the extent that [the Warehouse Act] applies, with respect to . . . each warehouse operator licensed under” the Act. 7 U.S.C. § 242(a) (emphasis added). In deciding the import of virtually identical language in an earlier version of the statute, the Supreme Court explained, in a case in which it found Illinois state law preempted, that “Congress did more than make the [Warehouse] Act paramount over state law in the event of conflict.” Rice, 331 U.S. at 234. Rather, Congress established in plain terms that a licensee under the [Warehouse] Act can do business “without regard to State acts”; that the matters regulated by the [Warehouse] Act cannot be regulated by the States; that on those matters a federal licensee . . . is subject to regulation by one agency and by one agency alone. Id. (quoting the legislative history) (emphasis added). Accordingly, “state grain warehouse laws can be preempted even when they do not collide with a specific federal law; no direct conflict is required.” Heart of Am. Grain Inspection Serv., Inc. v. Mo. Dep’t of Agric., 123 F.3d 1098, 1104 The Warehouse Act “provides a national system of warehouse bonding for the protection of depositors, sets up a national system of inspection and grading of grain, and established warehouse receipts as a secure and readily negotiable form of property.” Farmers Elevator Mut. Ins. Co. v. Jewett, 394 F.2d 896, 899 (10th Cir. 1968). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 38 of 76 Page ID #5084 26 (8th Cir. 1997). In short, “warehousemen electing to come under the [Warehouse] Act need serve but one master”-the USDA. Rice, 331 U.S. at 234.18 2. Syngenta’s third-party claims against the ACD companies for activities at licensed warehouses fall squarely within the Warehouse Act’s preemptive scope. Syngenta’s allegations that the ACD companies “indiscriminately commingled corn and corn grain as they purchased, stored, transported, resold, and exported corn,” TPC ¶ 3, cannot support Syngenta’s third-party claims because the conduct described involves activities directly regulated by the Warehouse Act and its implementing regulations.19 18 The Warehouse Act’s implementing regulations, found in 7 C.F.R. part 735, confirm the law’s broad preemptive scope. Under 7 C.F.R. § 735.1(a), if the regulations in part 735 “are more restrictive, or more lenient, with respect to the same activities governed by State law, the provisions of [part 735] shall prevail.” (emphasis added). And section 735.1(c) provides: “Compliance with State laws relating to the warehousing, grading, weighing, storing, merchandising or other similar activities is not required with respect to activities engaged in by a warehouse operator in a warehouse subject to a license issued in accordance with this part.” 7 C.F.R. § 735.1(c) (emphasis added). The Warehouse Act includes a section titled “Commingling of agricultural products” that states: “A warehouse operator may commingle agricultural products in a manner approved by the Secretary [of 19 The Court may take judicial notice under Rule 201 of the Federal Rules of Evidence of the fact that the ACD companies’ warehouses were federally licensed in the years since Viptera and Duracade were commercialized. The fact of such licensure is “not subject to reasonable dispute” because it “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned,” Fed. R. Evid. 201(b)(2), namely the federal government’s annual lists of Warehouse Act licensees dating back to 2000. See Farm Service Agency, USDA, United States Warehouse Act, http://www.fsa.usda.gov/programs-and-services/commodity- operations/warehouse-services/united-states-warehouse-act/index (see links under headings “Licensed Warehouse Lists” and “Archived Licensed Warehouse Lists”) (last visited Sept. 8, 2017); see, e.g., Farm Service Agency, USDA, Warehouses Licensed Under the U.S. Warehouse Act: As of December 31, 2016, https://www.fsa.usda.gov/Assets/USDA-FSA- Public/usdafiles/Comm-Operations/warehouse-services/united-states-warehouse- act/pdfs/whselst2016.pdf (listing the ACD companies’ warehouses) (last visited Sept. 8, 2017); see also Reading v. Archer-Daniels-Midland Co., No. 11-45, 2011 WL 3626409, at *5 (E.D. Mo. Aug. 16, 2011) (granting ADM’s motion to dismiss on Warehouse Act-preemption grounds where ADM’s brief showed that its warehouse was Warehouse Act-licensed). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 39 of 76 Page ID #5085 27 Agriculture].” 7 U.S.C. § 248(a) (emphasis added).20 Further, the Secretary directly regulates the commingling of agricultural products by licensed warehouses through federal license agreements. To begin, 7 C.F.R. § 735.105 provides that “[e]ach warehouse operator must at all times[] . . . exercise such care in regard to stored and non-storage agricultural products in their custody as required in the applicable licensing agreement.” And the “applicable licensing agreement” expressly authorizes a warehouse operator both “to commingle grain in store” and, when delivering commingled grain, to deliver “grain of the kind, quantity, numerical grade, and class as obligated or better.” Federal regulations also permit commingling by allowing a warehouse operator to issue a warehouse receipt “[f]or a single unit, multiple units, identity preserved or commingled lot.” 7 C.F.R. § 735.300(a)(2) (emphasis added). 21 Under these provisions, the commingling of agricultural products by the ACD companies at licensed warehouses is plainly a subject “regulated by” the Warehouse Act. Rice, 331 U.S. at 236. Accordingly, no duties can be imposed under state law with respect to the commingling or segregation of agricultural products at such warehouses.22 Moreover, the Warehouse Act preempts Syngenta’s third-party claims even if the alleged duty is formulated more generally as a “duty of reasonable care with respect to the acceptance, handling, and disposition of grain that [the ACD companies] know or should have known is 20 See also 7 U.S.C. § 241(1) (defining the term “agricultural product” to include “a processed product of an agricultural commodity”). 21 Farm Service Agency, USDA, WA-402: Licensing Agreement for Grain and Rice Warehouse Operators 17-18 (Nov. 3, 2011), https://forms.sc.egov.usda.gov/efcommon/ eFileServices/eForms/WA402.PDF (last visited Sept. 8, 2017). 22 Syngenta does not even attempt to allege that any of the ACD companies violated the terms of a federal licensing agreement or a warehouse receipt, both of which expressly permit commingling of agricultural products. Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 40 of 76 Page ID #5086 28 likely to enter export channels and that they know or should have known is likely to contain a GM trait that has not been approved for export to certain countries.” TPC ¶ 57. Section 242(g) of the Warehouse Act provides: Subject to the other provisions of this chapter, the Secretary [of Agriculture] may prescribe the duties of a warehouse operator operating a warehouse licensed under this chapter with respect to the warehouse operator’s care of and responsibility for agricultural products stored or handled by the warehouse operator. 7 U.S.C. § 242(g) (emphasis added). Relatedly, the Warehouse Act’s implementing regulations provide that “[e]ach warehouse operator must at all times . . . exercise such care in regard to stored and nonstorage agricultural products in their custody as required in the applicable licensing agreement.” 7 C.F.R. § 735.105 (emphasis added). And section 735.1(c) of those regulations expressly relieves licensed warehouses of any obligation to comply with state laws that might impose a different standard of care: “Compliance with State laws relating to the warehousing, grading, weighing, storing, merchandising or other similar activities is not required” of a Warehouse Act-licensed warehouse. 7 C.F.R. § 735.1(c) (emphasis added). Courts have confirmed that the Warehouse Act preempts state-law claims premised on a theory that the operator of a federally licensed warehouse violated a state-law-based standard of care by handling stored agricultural products improperly.23 23 Allenberg Cotton Co. v. Staple Cotton Coop. Ass’n, No. 07-123, 2009 WL 1619950, at *5 (N.D. Miss. June 9, 2009) (“The USWA clearly regulates the standard of care expected of warehousemen in the operation of a warehouse[] . . . . The very fact that the USWA addresses the matter is sufficient to preempt any state regulation of it.”); Staple Cotton Coop. Ass’n v. D.G. & G., Inc., 503 F. Supp. 2d 1217, 1224 (E.D. Mo. 2007) (holding that state-law claims by cotton owners against a Warehouse Act-licensed warehouse for, among other things, negligently storing and handling bales of cotton were “clearly preempted by the [Warehouse Act], the implementing regulations, and the Licensing Agreement” between the warehouse and the USDA). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 41 of 76 Page ID #5087 29 Finally, the Warehouse Act preempts Syngenta’s third-party claims to the extent that they rest on a purported duty to refuse to handle MIR 162-contaminated corn in the first place.24 In short, the Warehouse Act preempts Syngenta’s third-party claims against the ACD companies to the extent that those claims arise from activities of the ACD companies at their federally licensed warehouses, including the handling and storing of corn as well as the subsequent sale and export of such corn. Congress has “touched” the acceptance and handling of corn and DDGS by licensed warehouses, rendering those matters “untouchable” by state law. Rice, 331 U.S. at 242 (Frankfurter, J., dissenting) (describing the majority’s holding as to the scope of Warehouse Act preemption). As discussed above, the Warehouse Act and its implementing regulations permit licensed warehouse operators to receive and commingle agricultural products in store. States may not forbid what the Warehouse Act permits. D. The dormant Commerce Clause forecloses Syngenta’s claims against the ACD companies as they relate to shipping corn to China. Syngenta’s export-related allegations are also barred by the dormant Commerce Clause. Syngenta contends that the ACD companies acted wrongly by shipping corn that contained MIR 162 to China rather than to other countries where MIR 162 was approved for import. TPC ¶ 132(c)-(g). Through these claims, Syngenta effectively seeks to use the law of individual states 24 See TPC ¶ 132(a) (faulting the ACD companies for allegedly “[p]urchasing and accepting corn . . . without requiring warranties and/or certification from the sellers about . . . whether the seller purchased or used Viptera or Duracade seeds”); id. ¶ 132(b) (alleging that the ABCD companies “adopt[ed] inconsistent and ineffective policies and practices regarding their acceptance of corn based on its genetic content”). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 42 of 76 Page ID #5088 30 to ban the export of corn that contains a particular GM trait from the United States to any foreign country where that trait is not approved.25 The Commerce Clause gives Congress the power “[t]o regulate Commerce with foreign Nations, and among the several States.” U.S. Const. art. I, § 8, cl. 3. “Though phrased as a grant of regulatory power to Congress, the Clause has long been understood to have a ‘negative’ aspect that denies the States the power to unjustifiably discriminate against or burden the interstate flow of articles of commerce.” Oregon Waste Sys., Inc. v. Dep’t of Envtl. Quality of State of Or., 511 U.S. 93, 98 (1994). Notably, “state restrictions burdening foreign commerce are subjected to a more rigorous and searching scrutiny” than those burdening mere interstate commerce. S.-Cent. Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 100 (1984) (plurality opinion) (emphasis added). Such heightened scrutiny is called for because “[f]oreign commerce is preeminently a matter of national concern.” Japan Line, Ltd. v. Los Angeles Cty., 441 U.S. 434, 448 (1979). The dormant Commerce Clause thus does not permit states to regulate, through tort law or otherwise, grain exports to foreign countries. Indeed, the Supreme Court used the dormant Commerce Clause to strike down state laws regulating interstate shipments of grain in both Lemke v. Farmers’ Grain Co. of Embden, N.D., 258 U.S. 50 (1922), and then (after the North Dakota legislature replaced the statute struck down in Lemke) in Shafer v. Farmers’ Grain Co. of Embden, 268 U.S. 189 (1925). The North Dakota law at issue in Shafer required grain buyers, among other things, to separate certain material from purchased wheat and either return it or pay for it separately and to keep various records. 268 U.S. at 200-01. The Court struck down the challenged law, holding: “[T]he Act directly interferes with and burdens interstate commerce, 25 Although dormant Commerce Clause cases typically involve challenges to state laws and regulations rather than, as here, a challenge to the imposition of state tort liability, “a statute or regulation is not necessary for asserting a dormant Commerce Clause claim.” Ileto v. Glock, Inc., 349 F.3d 1191, 1217 (9th Cir. 2003). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 43 of 76 Page ID #5089 31 and is an attempt by the state to prescribe rules under which an important part of such commerce shall be conducted. This no State can do consistently with the commerce clause.” Id. at 201 (emphasis added); see also Hostetter v. Idlewild Bon Voyage Liquor Corp., 377 U.S. 324, 329 (1964) (observing that, if the commodity involved in the case were “grain or lumber,” as opposed to liquor, “the Commerce Clause would clearly deprive New York” of the power to regulate sales for delivery to foreign countries (emphasis added)). In short, Syngenta’s effort to impose what amounts to a state-law ban on exports of MIR 162-contaminated corn to China is an impermissible effort to restrict foreign trade. But state laws that are “designed to limit trade with a specific foreign nation” in the way that Syngenta seeks to do through its negligence-based contribution and indemnity claims “are precisely one type of law that the Foreign Commerce Clause is designed to prevent.” See Nat’l Foreign Trade Council v. Natsios, 181 F.3d 38, 67 (1st Cir. 1999), aff’d on other grounds sub nom. Crosby v. Nat’l Foreign Trade Council, 530 U.S. 363 (2000). The Commerce Clause thus forecloses Syngenta’s export-related third-party claims. II. SYNGENTA CANNOT ESTABLISH DUTY AND CAUSATION AS A MATTER OF LAW. Even if Syngenta’s third-party claims were not preempted, those claims also would fail as a matter of law because Syngenta cannot establish duty and causation. If the Court addresses the questions of duty and causation, it should join every other court to have considered those questions and confirm that the ACD companies, who were confronted with a problem of Syngenta’s making, had no state-law duty to try to fix that problem and, in any event, could not have fixed it, and thus did not cause the damages that Syngenta seeks to shift to them. Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 44 of 76 Page ID #5090 32 A. State law does not impose a duty on the ACD companies to reorganize their operations in response to Syngenta’s unilateral decision to release a genetically modified commodity crop. The MDL Court recognized that Syngenta owed “a duty of reasonable care with respect to the timing, manner, and scope of Syngenta’s commercialization of its Viptera and Duracade products.” MDL-Syngenta Dismissal Order, 131 F. Supp. 3d at 1188. The MDL Court held that “the law reasonably imposes a duty on a manufacturer to exercise reasonable care not to commercialize and sell its product in a way that creates a risk of widespread harm resulting from the intended use of the product by all of its customers.” Id. at 1191 (emphasis added). This Court subsequently adopted the MDL Court’s analysis with respect to the duty at stake in this litigation. Poletti-Syngenta Dismissal Order, 2017 WL 1277898, at *11. Under fundamental principles of tort law, that duty extends to Syngenta alone, not to the ACD companies. And that is precisely what this Court, as well as all other courts to consider the matter, have held in dismissing claims brought against the ACD companies, whether by Syngenta or the Phipps Group. 1. The duty to guard against plaintiffs’ damages rests squarely and solely on Syngenta, which created the risk to plaintiffs. Under Syngenta’s theory, the duty to detect and prevent the spread of a GM trait that is unapproved in key export markets does not fall on the party that introduced the trait-here, Syngenta-but rather on every party that subsequently handles grain containing that trait.26 26 See TPC ¶ 3. Syngenta again suggests, just as it did in its prior third-party complaints that were dismissed at the threshold, that the federal government has somehow placed a duty on grain handlers and exporters to prevent the dispersion of prematurely released GM traits. Specifically, Syngenta says that the USDA has “expressly announced” a policy that those who want to export U.S. corn to major markets where GM traits are unapproved “should bear the burden of implementing the necessary safeguards to enable them to do so.” TPC ¶ 64. Syngenta does not cite any such policy (because none exists) but instead quotes, without attribution, the USDA’s response to public comments on Syngenta’s application for approval of the GM trait in Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 45 of 76 Page ID #5091 33 Effectively, Syngenta seeks to foist a duty on the rest of the agricultural industry to reorder their operations in order to remedy the consequences of Syngenta’s own negligence. As the Illinois state court recently explained in the related litigation: The only duty that has been recognized-and the only duty that exists in this regard-is the duty of Syngenta, as the developer and manufacturer of Viptera and Duracade, to exercise reasonable care in the manner, timing, and scope of its commercialization of Viptera and Duracade so as not to create a risk of widespread harm resulting from the intended use of that product by Syngenta’s customers . . . . Browning Dismissal Order at 6. Similarly, the MDL Court rejected an attempt by the Phipps Group to impose a duty on the ACD companies, observing that “[t]he duty asserted here . . . against the ABCDG defendants, however, is easily distinguished from the duty asserted against Syngenta, who is alleged to have started a harmful chain of events by commercializing these [GM] seeds.” MDL Preemption Order II, 2016 WL 4382772, at *5. And more recently, the Minnesota state court distinguished its imposition of a duty on Syngenta to act reasonably with respect to the timing, manner, and scope of its commercialization of new GM products and the duties that Syngenta sought to impose on grain handlers like the ACD companies. See Minn. SJ Order at 24 (dismissing Syngenta’s comparative-fault defense against Cargill and ADM for lack of duty, explaining that “[a]lthough the Court has found that Syngenta owed a duty based on the Duracade. See Resp. to Pub. Cmts. on Syngenta SYN-05307-1 Corn, at 24 (resp. to cmt. 7), http:// www.aphis.usda.gov/brs/aphisdocs/10_33601_rtc.pdf (last visited Sept. 8, 2017). To begin with, Syngenta overstates the scope of the USDA’s mere response to comments. Nothing in that response suggests that corn purchasers must identify, through testing or otherwise, the presence of GM traits in incoming corn and then segregate and channel corn accordingly. Rather, the USDA simply said that purchasers could refuse to buy corn known to contain a GM trait, or could buy it for domestic use only. Even more fundamentally, Syngenta can point to no authority suggesting that a federal agency’s mere response to a public comment can give rise to a state-law duty-particularly when that purported duty is preempted by federal law. In fact, the same USDA document relied on by Syngenta emphasized the importance of Syngenta taking steps “[t]o avoid adversely affecting international trade in corn commodities exported from the US.” Id. at 23 (resp. to cmt. 7). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 46 of 76 Page ID #5092 34 interconnected industry and market, the negligence alleged by the grain handlers occurred farther down the supply chain and after the alleged negligence by Syngenta”). The reason “the only duty that exists” in this case rests on Syngenta is simple: only Syngenta could have prevented the harm that it caused, and only Syngenta is responsible for affirmatively creating the risk of that harm in the first place. Browning Dismissal Order at 6. As a general rule, “duties should rest upon the least-cost avoider.” Holtz v. J.J.B. Hilliard W.L. Lyons, Inc., 185 F.3d 732, 743 (7th Cir. 1999). Syngenta accepts this principle, having asserted in the MDL that “[t]he usual approach under tort law is to place the duty ‘on the person in the best position to avoid the loss.’” Syngenta Mem. Supp. MTD at 28, In re Syngenta AG MIR 162 Corn Litig., MDL No. 2591, ECF No. 857 (June 19, 2015) (quotation omitted). As Judge Posner put it in a case about liability for a fire-related death, “[i]n most cases the best way to avert fire damage is to prevent the fire from starting rather than to douse it with water after it has started.” Edwards v. Honeywell, Inc., 50 F.3d 484, 490 (7th Cir. 1995).27 The illogic and injustice of imposing a duty on the ACD companies under these circumstances was recognized recently by the Illinois state court, which dismissed claims brought against the ACD companies because plaintiffs “at most allege[d] that the ABCD Likewise, in a case like this one, the best way to avert the dispersion of a GM trait throughout the commodity corn supply is to prevent that dispersion from starting rather than trying to contain and segregate the trait after it has been released into the environment through a commercialization of the sort Syngenta undertook with Viptera and Duracade. 27 See also Bd. of Water Works Trs. of City of Des Moines v. Sac Cty. Bd. of Supervisors, 890 N.W.2d 50, 66 (Iowa 2017) (“Economic theory underlying tort law favors placing liability on the party who can avoid the harm at the least cost.”); B.R. v. West, 275 P.3d 228, 236 (Utah 2012) (considering “whether the defendant is best situated to take reasonable precautions to avoid injury” when deciding whether to impose a duty). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 47 of 76 Page ID #5093 35 companies failed to prevent Syngenta’s tortious conduct.” Browning Dismissal Order at 4. For similar reasons, as noted above, the MDL Court dismissed claims by farmers against the ACD companies, explaining that Syngenta was “alleged to have started a harmful chain of events by commercializing [its] seeds,” whereas the actions of grain handlers and exporters “occurred farther down the supply chain, after the alleged negligence by Syngenta.” MDL Preemption Order II, 2016 WL 4382772, at *5 (emphasis added). Both rulings are consistent with Syngenta Seeds, Inc. v. Bunge North America, Inc., in which the Iowa district court rejected Syngenta’s argument that Bunge could not lawfully turn away Viptera corn but should instead be required to accept it and segregate it from non-Viptera corn if Bunge wanted to export to China. 820 F. Supp. 2d 953 (N.D. Iowa 2011). The court held: [N]o reasonable balance of equities would impose upon Bunge the prodigious additional expense of segregating Viptera corn (or segregating non-Viptera corn earmarked for Chinese export), where Bunge did not create the situation in which Viptera corn has not been yet approved for import in China. That situation arises entirely because Syngenta decided to commercialize Viptera corn knowing that it did not yet have Chinese and some other import approvals . . . . Syngenta accepted the risk of commercializing Viptera corn . . . without import approval from all of the reasonably likely foreign markets. I reject Syngenta’s request that I shift that risk, instead, to Bunge . . . . Id. at 990 (emphasis added);28 28 The evidence in that case had shown that “to develop a separate receiving system to ‘identity preserve’ Viptera corn separate from other commingled commodity corn . . . would cost $6 million to $8 million per facility.” Bunge, 820 F. Supp. 2d at 990. The court held that it was not “commercially reasonable or feasible for Bunge to make such modifications to its facilities.” Id. The court also cited “unrebutted evidence . . . that no testing for the Viptera trait known to Bunge would satisfy the ‘zero tolerance’ for unapproved genetic traits imposed by China.” Id. see also In re StarLink Corn Prods. Liab. Litig., 212 F. Supp. 2d 828, 834 (N.D. Ill. 2002) (holding that “[e]levators, storage and transportation facilities are generally not equipped to test and segregate corn varieties”). The Illinois state court adopted this reasoning when it dismissed farmers’ negligence claims against the ACD companies. Browning Dismissal Order at 4. In short, the only duty in this case rests on Syngenta, not on the ACD Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 48 of 76 Page ID #5094 36 companies, who were “‘simply confronted with’” the fallout from Syngenta’s unilateral decision. Id. (quoting Bunge, 820 F. Supp. 2d at 992). 2. Other factors relevant to the duty analysis weigh against imposing a duty on the ACD companies to prevent the harm caused by Syngenta. While the principle of placing duties on the least-cost avoider is, by itself, enough to warrant rejecting Syngenta’s proposed duty and dismissing its third-party claims, no duty exists even if the Court considers other potentially relevant factors. These factors lead to the conclusion that the ACD companies are not subject to the duty that Syngenta seeks to impose here. a. Imposing the duty that Syngenta advocates would wrongly create liability with no sensible or just stopping point. Just as Syngenta is plainly the least-cost avoider when it comes to preventing widespread harm from its unilateral decision about where, when, and how to commercialize its GM traits, so too is Syngenta plainly the actor with whom liability should both start and end. As this Court has observed, “imposing a duty on Syngenta to take reasonable steps in commercializing its genetically-modified seeds does not create unrestrained liability.” Tweet-Syngenta Dismissal Order, 2017 WL 2117728, at *11. In contrast, the risk of creating unrestrained liability has led courts to consistently reject imposing liability upon downstream market participants such as the ACD companies. As the MDL Court held in dismissing claims by farmers against ADM and Cargill: Unlike recognition of the duty underlying the claims against Syngenta, recognition of such a duty in the grain handlers would create too great a risk of open-ended liability; the Court certainly did not conclude that everyone in the industry owes a duty to everyone else in the industry to prevent any possible harm from all actions. MDL Preemption Order II, 2016 WL 4382772, at * 5 (emphasis added). The Illinois and Minnesota state courts have both agreed with the MDL Court’s conclusion that the risk of open- ended liability weighs against imposing on grain handlers a duty such as the one Syngenta seeks Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 49 of 76 Page ID #5095 37 to impose here. Browning Dismissal Order at 6; Minn. SJ Order at 24. Syngenta’s third-party complaints in Poletti and Tweet provide no reason or basis for this Court to hold otherwise. b. The duty that Syngenta seeks to impose will not prevent future harm by deterrence and is not aimed at morally blameworthy conduct. One purpose of tort law is “preventing future harm by deterrence.” MDL-Syngenta Dismissal Order, 131 F. Supp. 3d at 1189 (citing Dan. B. Dobbs et al., The Law of Torts § 255 (2d ed. 2017)). Here, the only party whose actions need to be deterred is the party that created the risk of harm in the first place: Syngenta. As noted above in Section II.A(1), Syngenta alleges not that the ACD companies engaged in any new course of conduct but, rather, that they simply continued the regular course of their operations. To require, as Syngenta would, that downstream grain handlers and exporters transform their established practices in response to the unilateral, irresponsible commercialization of a GM trait would impose huge costs on parties who do not share the benefits of such commercialization-i.e., profits to companies like Syngenta. And, for related reasons, this is not a circumstance where “moral blame” properly attaches to the ACD companies’ conduct. Id. Accordingly, considerations of the absence of moral blame and the need for appropriately targeted, effective deterrence foreclose the third-party duties Syngenta seeks to invent and impose. To begin, as the court in Bunge held, the “risks of a decision to introduce a new transgenic grain into the commercial market” must be placed on “the company that decided to commercialize that grain before obtaining all import approvals, not on the party that is simply confronted with that decision,” such as a grain handler or exporter. Bunge, 820 F. Supp. 2d at 992 (emphasis added). That court’s rationale for concluding that the balance of equities required Syngenta alone to bear the risk of its decision applies equally here, and bears directly on the questions of future deterrence and moral blame. Imposing liability on the ACD companies Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 50 of 76 Page ID #5096 38 would not deter them from creating a risk of harm; it would impose a new, affirmative obligation to take steps to remedy the risk of harm created by Syngenta. Indeed, instead of reducing future risks from the commercialization of GM traits, imposing a duty on grain handlers and exporters would actually undermine the incentive for biotechnology companies to avoid risky and irresponsible commercialization of new GM traits in the first instance. Just as the party that creates a risk in the first place is best situated to avoid creating that risk, so too is that party- here, Syngenta-the appropriate target of deterrence. Moreover, that point is underscored by Syngenta’s suggestion that the ACD companies (and presumably other exporters as well) should simply have not shipped to China but instead should have abandoned the market. The loss of the Chinese market is, however, precisely what gave rise to the alleged injury here. In short, Syngenta’s “solution”-i.e., requiring all others to adapt to and share in bearing the consequences of Syngenta’s own irresponsible commercialization-illustrates precisely why any duty here should not and cannot extend beyond Syngenta. Finally, this is not a circumstance in which the ACD companies are alleged to have broken any commitments to plaintiffs or ignored industry customs and standards that they had pledged to follow. Syngenta, in contrast, is alleged to have ignored its own policies and promises as well as industry customs and standards.29 Accordingly, the “moral blame” that attaches to Syngenta’s actions does not attach to the allegations against the ACD companies.30 29 Poletti Compl. ¶¶ 3049, 3095; Tweet Compl. ¶ 775; MDL-Syngenta Dismissal Order, 131 F. Supp. 3d at 1191 (concluding that Syngenta owed a duty to farmers on the basis of, among other things, “Syngenta’s representations that it would indeed take certain steps to protect corn sellers from the very harm that occurred”). 30 In the absence of any analogous representations, industry standards, or customs that would require the ACD companies to test and segregate corn or stop trading with key foreign markets in response to Syngenta’s decision to commercialize MIR 162 and Event 5307, Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 51 of 76 Page ID #5097 39 B. As other courts have recognized, the allegations against the ACD companies cannot, as a matter of law, establish that the ACD companies caused plaintiffs’ damages. Even if Syngenta’s third-party claims against the ACD companies were not preempted (they are) and were supported by a state-law duty (they are not), they would fail for yet another reason: Syngenta does not, and cannot, plausibly allege that the ACD companies caused plaintiffs’ damages. Although causation is typically a question of fact rather than law, whether Syngenta has plausibly alleged causation is a question of law-one that courts have consistently decided against Syngenta. Put simply, Syngenta has a dilemma. The damages that plaintiffs seek to recover-and for which Syngenta seeks contribution and indemnity-stem from an alleged drop in the market price for U.S. corn due to the effective closure of the Chinese market. See, e.g., Tweet Compl. ¶ 794; Poletti Compl. ¶ 3057. To the extent there was no such drop in the price for U.S. corn due to the effective closure of that market, Syngenta merely pleads a defense-and not a basis for contribution or indemnity. But to the extent that plaintiffs succeed in proving that the effective closure of the Chinese market caused a drop in the price for U.S. corn, Syngenta cannot base its contribution and indemnity claims on the theory that exporters should not have shipped U.S. corn to China. After all, if exporters had not shipped U.S. corn to China, that would have produced the Syngenta points to general statements about corporate responsibility and capabilities. For instance, Syngenta alleges that some of the ACD companies describe farmers, and others in the industry, as its “stakeholders.” See, e.g., TPC ¶ 58 (Cargill), ¶ 59 (ADM), ¶ 60 (LDC). But the general statements about corporate responsibility that Syngenta points to say nothing about a duty to test for GM traits, segregate, and channel, such as the duty Syngenta seeks to impose here. Syngenta does cite a statement from Cargill that it has “expertise in handling identity- preserved and differentiated products.” TPC ¶ 58. Of course, neither Syngenta nor plaintiffs allege that Viptera and Duracade were “identity-preserved and differentiated products” (because they weren’t). Beyond that, though, having expertise in doing something is a far cry from making a commitment or having a duty to do that thing-especially when someone else made it impossible for you to do that thing (here, Syngenta, through its widespread commercialization of Viptera and Duracade). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 52 of 76 Page ID #5098 40 very same loss of the Chinese market, only sooner. That simple and self-evident fact has been the basis for other courts rejecting, as a matter of law, Syngenta’s attempt to blame and shift liability to exporters. See, e.g., Minn. SJ Order at 24-25 (dismissing Syngenta’s defense to allocate fault to Cargill and ADM, holding that “causation for a negligence claim against the grain handlers is missing” because “[t]he Chinese market would still be lost regardless if exporters shipped U.S. corn to China to be rejected or did not ship U.S. corn to China”); id. at 25 (“Reasonable minds could not find that grain handlers were a substantial factor in causing the trade disruption and Plaintiffs’ alleged injuries.”); MDL SJ Order, 2017 WL 1250791, at *14 (dismissing Syngenta’s affirmative defense to allocate fault to Cargill and ADM, holding that “Syngenta has not offered evidence to create a question of fact concerning whether shipments by Cargill and ADM to China caused plaintiffs’ injuries.”); id. at *11 n.10 (explaining that “if all exporters had chosen not to ship any corn to China, then the same loss of the China market would have occurred, and Syngenta has failed to explain how that would not have been the case”). In short, Syngenta’s failure to plausibly plead the requisite causal relationship between the ACD companies’ exports to China and plaintiffs’ damages provides yet another reason to dismiss Syngenta’s third-party claims. See generally Tokio Marine & Fire Ins. Co. v. Amato Motors, Inc., No. 90 C 4823, 1995 WL 493434, at *5-6 (N.D. Ill. Aug. 15, 1995) (dismissing a negligence claim for lack of causation because the “ostensibly negligent omission” underlying the claim “would not have made a difference” with respect to the plaintiff’s injury and thus “cannot be considered the [injury’s] proximate cause”). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 53 of 76 Page ID #5099 41 III. SYNGENTA’S THIRD-PARTY CLAIMS FAIL FOR REASONS SPECIFIC TO THE LAWS OF INDIVIDUAL STATES.31 Syngenta’s third-party claims rest on the misbegotten theory that the ACD companies negligently caused plaintiffs’ damages. 32 Accordingly, Syngenta’s claims must fail because-as shown above, and as every court so far (including this Court) has held-the ACD companies cannot be liable for negligence toward plaintiffs.33 But even if the ACD companies could somehow be liable for negligence toward plaintiffs, many of Syngenta’s third-party claims would still fail as a matter of law, because although actionable negligence by the ACD companies is necessary for Syngenta’s third-party claims, it is not sufficient. Apart from alleging negligence by the ACD companies toward plaintiffs, Syngenta must also allege a basis in state law for contribution, indemnity, or apportionment.34 Syngenta has failed to do so under the law of many states.35 31 The ACD companies assume arguendo that the state laws on which Syngenta bases its third-party claims could apply. This memorandum therefore addresses Syngenta’s claims at the level of each state’s law without addressing choice-of-law questions with respect to each plaintiff’s claims against Syngenta for which Syngenta seeks contribution and indemnity. That said, Syngenta seems to have mistakenly asserted the same state-law claims in the Tweet third-party complaint as in the Poletti third-party complaint even though some of those state laws are not even arguably applicable in Tweet because there are no Tweet plaintiffs from those states. The only counts that arise out of states where Tweet plaintiffs reside are TPC Counts II & III (Arkansas), VI (Colorado), XIV (Illinois), XV & XVI (Iowa), XVII & XVIII (Kansas), XXIV & XXV (Minnesota), XXXV & XXXVI (North Carolina), XLIV (South Dakota), and XLVIII & XLIX (Wisconsin). 32 TPC ¶ 7 (“[T]he Third-Party Defendants’ negligence was a proximate cause of any injuries sustained by Plaintiffs, making the Third-Party Defendants jointly liable in contribution for their relative culpability.”). 33 See, e.g., Pyramid Condo. Ass’n v. Morgan, 606 F. Supp. 592, 598 (D. Md. 1985) (“When a plaintiff has no right of action against a third party, there can be no contribution entitling the defendant to join the third party as a defendant . . . .”); Rodriguez v. Primadonna Co., LLC, 216 P.3d 793, 802 (Nev. 2009) (“[A] potential indemnitor must be liable for the injuries to the plaintiff.”). 34 See, e.g., 3 Moore’s Federal Practice-Civil § 14.04(b) (2015) (to assert a viable contribution claim under Fed. R. Civ. P. 14, the defendant must “show[] under the applicable law Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 54 of 76 Page ID #5100 42 A. Syngenta cannot recover in contribution from the ACD companies in states in which liability is purely several because Syngenta cannot possibly pay more than its share of damages in those states. Syngenta is improperly pursuing contribution claims under the laws of at least nine states where liability is purely several in cases such as this one: Colorado, Florida, Georgia, Kansas, Kentucky, Michigan, New Mexico, North Dakota, and Oklahoma.36 1. Because Syngenta cannot possibly be liable for more than its share of damages under the law of these states, its contribution claims should be dismissed. Florida, Georgia, Kansas, Michigan, New Mexico, and Oklahoma Under Florida law governing negligence actions, “all those who may have contributed to causing an injury should be held liable for damages only to the extent of the actual percentage of fault each has been determined to be responsible.” Williams v. Davis, 974 So. 2d 1052, 1061 n.10 (Fla. 2007). : Contribution claims under the law of these states are impermissible because liability in tort is purely several. 37 that the third party is or may be liable to the defendant”); Hefley v. Textron, Inc., 713 F.2d 1487, 1498 (10th Cir. 1983) (dismissing a defendant’s third-party claims for contribution and indemnity under Kansas law because “no person could be liable [under Kansas law] to [the defendant] for all or part of the plaintiff’s claim against it”). Accordingly, a tortfeasor “is no longer in need of or entitled to contribution . . . by a claim against other tortfeasors.” Gouty v. Schnepel, 795 So. 2d 959, 964 (Fla. 2001) (quoting Wells v. Tallahassee Mem’l Reg’l Med. Ctr., Inc., 659 So. 2d 249, 256 (Fla. 1995) (Anstead, J., 35 In moving to dismiss only some of Syngenta’s third-party claims on state-specific grounds, the ACD companies do not concede that Syngenta’s other claims are legally viable under state law. The ACD companies reserve the right to seek dismissal on state-specific grounds of any claims that are not dismissed in response to this motion. 36 TPC Counts VI (Colorado), XI (Florida), XII (Georgia), XVIII (Kansas), XX (Kentucky), XXIII (Michigan), XXXIII (New Mexico), XXXVIII (North Dakota), XL (Oklahoma). 37 See also Fla. Stat. § 768.81(3) (2011) (“In a negligence action, the court shall enter judgment against each party liable on the basis of such party’s percentage of fault and not on the basis of the doctrine of joint and several liability.”). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 55 of 76 Page ID #5101 43 specially concurring)). Federal courts applying Florida law therefore consistently dismiss third- party claims for contribution in negligence actions as “obsolete.”38 Likewise, Georgia “has abolished contribution from joint tortfeasors.” Zalvidar v. Prickett, 774 S.E.2d 688, 697 n.7 (Ga. 2015). Instead, under Georgia law a trier of fact must “apportion its award of damages among the persons who are liable according to the percentage of fault of each person.” Ga. Code Ann. § 51-12-33(b) (2005). Those apportioned damages “shall not be a joint liability among the persons liable, and shall not be subject to any right of contribution.” Id. § 51-12-33(b). 39 Similarly, under Kansas law, an individual tortfeasor is liable for a plaintiff’s damages only “in the proportion that the amount of that party’s causal negligence bears to the amount of the causal negligence attributed to all parties against whom recovery is permitted.” Kan. Stat. Ann. § 60-258a(d) (2010) (emphasis added). The factfinder must “determin[e] the percentage of negligence attributable to each party,” id. § 60-258a(b), and upon a defendant’s motion, “any other person whose causal negligence is claimed to have contributed to” a plaintiff’s loss “must be joined as an additional party,” id. § 60-258a(c). Syngenta thus cannot seek contribution from the ACD companies under Kansas law. 40 38 Nucci v. Buchanan Ingersoll & Rooney PC, No. 15-518-17, 2016 WL 5843429, at *3 (M.D. Fla. Oct. 4, 2016) (collecting cases). 39 See also Ga. Code Ann. § 51-12-33(c) (“In assessing percentages of fault, the trier of fact shall consider the fault of all persons or entities who contributed to the alleged injury or damages, regardless of whether the person or entity was, or could have been, named as a party to the suit.”); Allstate Prop. & Cas. Ins. Co. v. Omega Flex, Inc., No. 13-879, 2014 WL 1292588, at *3 (N.D. Ga. Mar. 31, 2014) (“[D]efendants, so long as they properly name potentially liable nonparties, will only be held liable for their portion of the damages. Contribution, however is not permitted.”). 40 See St. Francis Reg’l Med. Ctr. v. Critical Care, Inc., 997 F. Supp. 1413, 1430 n.23 (D. Kan. 1997) (“[T]he adoption of comparative fault in Kansas resulted in the abolition of the contribution cause of action because one tortfeasor can no longer be held liable for the fault of Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 56 of 76 Page ID #5102 44 Michigan has also generally “abolished joint and several liability in favor of allocation of fault or several liability.” Markley v. Oak Health Care Inv’rs of Coldwater, Inc., 660 N.W.2d 344, 349 (Mich. Ct. App. 2003). Under Mich. Comp. Laws section 600.2956 (1996), with limited exceptions not relevant here, “in an action based on tort or another legal theory seeking damages for personal injury, property damage, or wrongful death, the liability of each defendant for damages is several only and is not joint.” Michigan courts construe this statute to mean that “the trier of fact in a tort-based action must allocate liability among those at fault.” Holton v. A+ Ins. Assocs., Inc., 661 N.W.2d 248, 252 (Mich. Ct. App. 2003).41 Under New Mexico law, in most tort cases, including cases like this one, joint and several liability has been “abolished,” and “[t]he liability of . . . defendants shall be several.” N.M. Stat. Ann. § 41-3A-1(A) (1987). Accordingly, in a negligence action such as this one, “claims for contribution are no longer viable” under Michigan law. Kokx v. Bylenga, 617 N.W.2d 368, 373 (Mich. Ct. App. 2000). 42 another.” (emphasis added)); Glenn v. Fleming, 732 P.2d 750, 755 (Kan. 1987) (“[T]he right of contribution among joint judgment debtors disappeared with the advent of K.S.A. 60-258a.”). Crucially, “[n]o defendant who is severally liable shall be entitled to contribution from any other person,” id. § 41-3A-1(E) (emphasis added), because each 41 See Mike’s Train House, Inc. v. Lionel, L.L.C., 472 F.3d 398, 413-14 (6th Cir. 2006) (collecting cases interpreting Mich. Comp. Laws § 600.2956). 42 New Mexico has retained joint and several liability in the limited circumstances specified in N.M. Stat. Ann. § 41-3A-1(C), but none of those circumstances (intentional torts, vicarious liability, strict products liability, and a narrowly construed public-policy exception) could possibly apply here. See Gulf Ins. Co. v. Cottone, 148 P.3d 814, 821 (N.M. Ct. App. 2006) (collecting cases and declining to apply the public policy exception). Apart from those circumstances, liability is several whenever comparative fault applies, N.M. Stat. Ann. § 41- 3A1(A), namely “when concurrent tortfeasors negligently cause a single, indivisible injury.” Payne v. Hall, 137 P.3d 599, 604 (N.M. 2006). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 57 of 76 Page ID #5103 45 defendant is liable only for the portion of damages attributable to its own fault, id. § 41-3A- 1(B).43 Under Oklahoma’s regime of pure several liability, in a tort action, “the liability for damages caused by two or more persons shall be several only and a joint tortfeasor shall be liable only for the amount of damages allocated to that tortfeasor.” Okla. Stat. tit. 23, § 15(A) (2011) (emphasis added). Jury instructions promulgated by the Oklahoma Supreme Court confirm that the proportional liability of all tortfeasors is to be established at trial, and a defendant cannot be liable for more than its share of a plaintiff’s damages. 44 Given the several-liability regimes of Florida, Georgia, Kansas, Michigan, New Mexico, and Oklahoma, Syngenta’s contribution claims under the law of these states must be dismissed because the ACD companies are not “nonpart[ies] who [are] or may be liable to [Syngenta] for all or part of the claim against it.” Fed. R. Civ. P. 14(a)(1). 2. Colorado Under Colorado law, a defendant in a tort case has two mutually exclusive options: (1) identify a third party as a potentially responsible tortfeasor and have the factfinder allocate fault in accordance with Colo. Rev. Stat. section 13-21-111.5, in which case the defendant will have no contribution claim because it will pay only its share of damages; or (2) pay damages to the plaintiff without having the factfinder allocate fault to the third party, and then seek to : Liability in tort is several and proportional in Colorado, and contribution claims cannot be used to seek an allocation of proportional fault. 43 See Lopez v. Am. Baler Co., No. 11-0227, 2013 WL 4782155, at *20 (D.N.M. Aug. 12, 2013) (dismissing contribution claim because New Mexico has “extinguish[ed] any right of contribution” among joint tortfeasors in a negligence action). 44 See Okla. Unif. Jury Instructions-Civil No. 9.36 (effective April 23, 2014); In re Amendments to the Okla. Unif. Jury Instructions-Civ. (Second), 2014 OK 17 (Supreme Court order adopting this instruction, among others). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 58 of 76 Page ID #5104 46 establish the third party’s liability through a contribution claim.45 3. Here, Syngenta has not paid more than its pro rata share of a common liability, and if a factfinder determines the relative fault of Syngenta and the ACD companies in accordance with Colo. Rev. Stat. § 13-21-111.5, it never will. Thus, the Court should dismiss Syngenta’s claims for contribution under Colorado law and instead construe those claims as a request that a factfinder allocate fault among Syngenta and the ACD companies. Kentucky Under Kentucky’s regime of pure several liability and proportional fault, contribution claims are impermissible because a defendant is liable only for its share of damages. Under Kentucky law, the factfinder in a tort case must apportion “[t]he percentage of the total fault of all the parties to each claim,” Ky. Rev. Stat. § 411.182(1)(b), and damages are then awarded “in accordance with the respective percentages of fault.” Id. § 411.182(3). Under this regime, “liability among joint tort-feasors in negligence cases . . . is several only.” Dix & Assocs. Pipeline Contractors, Inc. v. Key, 799 S.W.2d 24, 27 (Ky. 1990). Accordingly, the ACD companies cannot be liable to Syngenta for contribution under Kentucky law. See Degener v. Hall Contracting Corp., 27 S.W.3d 775, 779 (Ky. 2000) (“[T]he apportionment of causation and the requirement of several liability obviates any claim for contribution among joint tortfeasors whose respective liabilities are determined in the original action.” (emphasis added)). : Under Kentucky law, liability in tort is purely several, and contribution claims serve only to allocate fault. 45 See, e.g., Watters v. Pelican Int’l, Inc., 706 F. Supp. 1452, 1454-56 (D. Colo. 1989) (discussing Colorado Revised Statutes § 13-21-111.5, which eliminates joint liability in favor of proportional allocation of fault in all tort cases except those involving a conscious conspiracy among tortfeasors); see also Graber v. Westaway, 809 P.2d 1126, 1127-29 (Colo. App. 1991) (failure to designate “a non-party at fault” did not bar post-settlement contribution claim because the defendant’s “compensation for the entire liability by settlement places him in the same position as a party who litigates proportionate liability in a subsequent action” (emphasis added)). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 59 of 76 Page ID #5105 47 Although Kentucky law does permit Syngenta to seek to apportion fault to a third-party, “apportionment is not a substantive cause of action in itself but depends on an initial finding of fault.” Peoples Bank of N. Ky., Inc. v. Crowe Horwath, 390 S.W.3d 830, 836 (Ky. Ct. App. 2012) (emphasis added). Accordingly, to preserve Syngenta’s right to the potential apportionment of liability, the Court should dismiss Syngenta’s Kentucky-law contribution claim while retaining the option-if the law and evidence support doing so-of instructing the jury to apportion to Syngenta only its share of fault.46 4. North Dakota Under North Dakota law, “tortfeasors who have not acted in concert are precluded from bringing claims for contribution against each other.” Moszer v. Witt, 622 N.W.2d 223, 232 (N.D. 2001) (emphasis added). In-concert liability creates a narrow exception to the general rule that “because a party is only liable for its own fault, a claim for contribution is generally foreclosed between tortfeasors.” Campbell v. BNSF Ry. Co., 756 F. Supp. 2d 1109, 1112 (D.N.D. 2010). But the exception for concerted action “requires an express or tacit agreement.” Reed v. Univ. of N.D., 589 N.W.2d 880, 888-89 (N.D. 1999). Neither Syngenta’s allegations nor plaintiffs’ would support a conclusion that Syngenta and the ACD companies acted in concert, and Syngenta’s contribution claims under North Dakota law must therefore be dismissed. : Under North Dakota law, contribution claims are impermissible in tort cases that do not involve concerted action. 47 46 See, e.g., Compton v. City of Harrodsburg, No. 12-302, 2013 WL 5503195, at *5 (E.D. Ky. Oct. 2, 2013) (taking this approach and discussing other federal cases doing the same). 47 Indeed, in the MDL, after the third-party defendants moved to dismiss on this very basis an identical North Dakota-law contribution claim brought by Syngenta, Syngenta expressly confirmed that it did not oppose dismissal of the claim. See MDL TPC Count XXIV; Syngenta’s Opp. to MTD Third-Party Compls., ECF No. 1661, at 52 n.31 (“Syngenta does not contest that its claim for contribution under North Dakota law . . . may be dismissed.”). Syngenta’s decision to bring this plainly baseless contribution claim again is inexplicable. Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 60 of 76 Page ID #5106 48 B. Most of Syngenta’s indemnity claims fail as a matter of law because neither plaintiffs’ allegations, nor those of Syngenta, satisfy the essential elements of an indemnity claim under state law. Syngenta is improperly pursuing indemnity claims under the laws of 17 states: Alabama, Arkansas, Connecticut, Delaware, Idaho, Iowa, Kansas, Kentucky, Maryland, Minnesota, Mississippi, Missouri, Nebraska, Nevada, North Carolina, Tennessee, and Wisconsin.48 1. In those states, an indemnity claim must rest on narrow and specific grounds, none of which are alleged here. Syngenta’s indemnity claims under these states’ laws should therefore be dismissed. Alabama, Connecticut, Delaware, Maryland, Mississippi, and North Carolina A tortfeasor that has committed active negligence is barred from seeking indemnification under the laws of Alabama, Connecticut, Delaware, Maryland, Mississippi, and North Carolina. : Indemnity claims under these states’ laws fail because plaintiffs bring claims of active negligence against Syngenta. 49 48 TPC Counts I (Alabama), II (Arkansas), VIII (Connecticut), X (Delaware), XIII (Idaho), XV (Iowa), XVII (Kansas), XIX (Kentucky), XXII (Maryland), XXV (Minnesota), XXVI (Mississippi), XXVII (Missouri), XXIX (Nebraska), XXXII (Nevada), XXXV (North Carolina), XLV (Tennessee), and XLIX (Wisconsin). Accordingly, Syngenta’s indemnity claims fail under these states’ laws because Syngenta’s liability can rest only on its active negligence. By Syngenta’s admission, its 49 Sherman Concrete Pipe Mach., Inc., v. Gadsden Concrete & Metal Pipe Co., 335 So. 2d 125, 127 (Ala. 1976) (holding that when joint tortfeasors are “each . . . chargeable with active or affirmative negligence . . . neither is entitled to indemnity from the other”); Skuzinski v. Bouchard Fuels, Inc., 694 A.2d 788, 790 (Conn. 1997) (“Indemnity shifts the impact of liability from passive joint tortfeasors to active ones.”); Lagrone v. Am. Mortell Corp., No. 04C-10-116, 2008 WL 4152677, at *8 (Del. Super. Ct. Sept. 4, 2008) (“[I]mplied indemnification . . .is not available to joint tortfeasors who allegedly are concurrently liable for active negligence.”); Pyramid Condo. Ass’n, 606 F. Supp. at 596 (under Maryland law, “a defendant may seek indemnification only when its liability is passive or secondary”); Baker & McKenzie, LLP v. Evans, 123 So. 3d 387, 412 (Miss. 2013) (Mississippi law supports an indemnity claim only when “the claimant did not actively or affirmatively participate in the wrong” (emphasis and internal quotation marks omitted)); Edwards v. Hamill, 138 S.E.2d 151, 153 (N.C. 1964) (North Carolina permits an indemnity claim only if “(a) one has been passively negligent but is exposed to liability through the active negligence of the other or (b) one alone has done the act which produced the injury but the other is derivatively liable for the negligence of the former”). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 61 of 76 Page ID #5107 49 indemnity claims depend on a recovery by plaintiffs against Syngenta.50 Attempting to sidestep this obvious barrier to its claims, Syngenta mischaracterizes plaintiffs’ claims, asserting that plaintiffs allege “that Syngenta was passively negligent in failing to prevent the rest of the corn industry . . . from commingling corn containing Viptera and exporting corn containing Viptera to China.” But plaintiffs can only recover if they establish what they allege-namely, Syngenta’s active negligence. 51 This is simply not true: plaintiffs’ entire case is premised upon allegations of active negligence on Syngenta’s part.52 2. Accordingly, Syngenta’s indemnification claims fail under Alabama, Connecticut, Delaware, Maryland, Mississippi, and North Carolina law. Arkansas In Arkansas, the right to equitable indemnity “may arise from a special relationship between the parties.” Larson Mach., Inc. v. Wallace, 600 S.W.2d 1, 12 (Ark. 1980). Conversely, when “there is no special relationship carrying with it an implied obligation to indemnify,” a claim for equitable indemnification is properly dismissed. Mosley Mach. Co., Inc. v. Gray Supply Co., 833 S.W.2d 772, 775 (Ark. 1992). Syngenta alleges in conclusory fashion that a “special relationship” between it and the ACD companies “imposes an independent duty of care” on the ACD companies that “carries with it an implied obligation” of indemnification. : Syngenta’s Arkansas indemnity claims fail because Syngenta fails to allege the necessary special relationship. 53 50 See, e.g., TPC ¶ 136 (“[I]f Syngenta is found liable for damages alleged by Plaintiffs, Syngenta may be, but should not be, required to pay a liability that . . . is altogether the responsibility of the Third-Party Defendants.”). But there is no 51 TPC ¶¶ 137, 308. 52 See, e.g., Tweet-Syngenta Dismissal Order, 2017 WL 2117728, at *11 (“The focus is not on controlling third parties’ activities, but rather on Syngenta’s own affirmative conduct . . . .”); Poletti-Syngenta Dismissal Order, 2017 WL 1277898, at *1-2 (describing the plaintiffs’ allegations of Syngenta’s affirmative misconduct). 53 TPC ¶¶ 143-44, 293-94. Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 62 of 76 Page ID #5108 50 Arkansas case in which anything like the relationship of participating in the agricultural industry has been found sufficient to support an equitable-indemnity claim.54 3. Because Syngenta does not allege facts that would satisfy the special-relationship requirement under Arkansas law, Syngenta’s Arkansas indemnity claim should be dismissed. Nevada Nevada law provides two independent reasons for dismissing Syngenta’s Nevada indemnity claims. First, in Nevada (as in the six states discussed in section III.B.1 above), a party that has been “actively negligent . . . has no right to indemnity from other tortfeasors.” Pack v. LaTourette, 277 P.3d 1246, 1249 (Nev. 2012). Because plaintiffs cannot prevail without establishing Syngenta’s active negligence, Syngenta’s Nevada-law indemnity claim fails. Second, like Arkansas law, Nevada law requires “some nexus or relationship between the indemnitee and indemnitor,” and indemnity claims are not permitted “where there is no connection between the cross-claimant [seeking indemnification] and the party from whom indemnification is sought.” Rodriguez v. Primadonna Co., 216 P.3d 793, 802 (Nev. 2009) (internal quotation marks omitted). Specifically, an indemnification claim is viable only if “a preexisting legal relation” exists between the parties or “some duty on the part of the primary tortfeasor to protect the secondary tortfeasor” has arisen. Discount Tire Co. of Nev., Inc. v. Fisher Sand & Gravel Co., No. 69103, 2017 WL 1397333, at *3 (Nev. Apr. 14, 2017) (internal : Syngenta’s Nevada indemnity claims fail both because plaintiffs allege active negligence and because Syngenta has not alleged the required special relationship. 54 See Merrill Lynch, Pierce, Fenner & Smith, Inc. v. First Nat’l Bank of Little Rock, Ark., 774 F.2d 909, 917-18 (8th Cir. 1985) (special relationship only arises under Arkansas case law where parties have a “legal relationship,” a principal/agent relationship, or in product- and premises-liability cases); U.S. Fid. & Guar. Co. v. Alliance Ins. Grp. of Arkadelphia, Inc., 123 F. Supp. 2d 480, 484 (W.D. Ark. 2000) (applying Merrill Lynch). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 63 of 76 Page ID #5109 51 quotation marks omitted). Syngenta’s failure to allege facts that would satisfy this standard provides another reason to dismiss its Nevada indemnification claims. 4. Iowa and Minnesota Syngenta fails to allege the existence of a duty that would support its Iowa and Minnesota indemnification claims. Under Iowa law, “common law indemnity is limited to circumstances where there is an express contract, vicarious liability, or a breach of an independent duty of the indemnitor to the indemnitee.” State ex rel. Miller v. Philip Morris Inc., 577 N.W.2d 401, 406 (Iowa 1998). Minnesota law restricts indemnity to similar circumstances. : These indemnification claims fail because Syngenta has not alleged facts to show the existence of a duty running from the ACD companies to Syngenta. 55 The existence of an independent duty sufficient to support common-law indemnity is a question of law.56 Syngenta’s legal theory appears to be that the ACD companies breached some independent duty to it. 57 The duty alleged by Syngenta, however, is simply the same duty that Syngenta contends underlies a negligence claim against the ACD companies, namely a duty of care with respect to handling corn.58 55 Engvall v. Soo Line R.R. Co., 632 N.W.2d 560, 571 (Minn. 2001) (explaining that, in the absence of a contract between the parties requiring indemnity, indemnity is available only to a party that (1) “has only a derivative or vicarious liability for damage caused by the one sought to be charged;” (2) “has incurred liability by action at the direction, in the interest of, and in reliance upon the one sought to be charged;” or (3) “has incurred liability because of a breach of duty owed to him by the one sought to be charged” (internal quotation marks omitted)). This alleged duty has nothing to do with whether the ACD companies should indemnify Syngenta for liability resulting from its own negligence, and it is not the type of duty that can support an indemnity claim under Iowa or Minnesota law. Under Iowa law, “an alleged breach of an independent duty must be shown to exist as a specific and defined duty before it will provide a basis for indemnity.” Johnson v. Interstate Power Co., 481 56 State ex rel. Miller, 577 N.W.2d at 406. 57 See TPC ¶¶ 211-13, 257-59. 58 See TPC ¶¶ 212, 258. Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 64 of 76 Page ID #5110 52 N.W.2d 310, 319 (Iowa 1992) (emphasis added). And under Minnesota law, indemnity based on the breach of a duty arises only when “the party seeking indemnity is . . . without personal fault, but is exposed to liability because of the failure of another to perform a duty which he was legally or contractually obligated to perform.” Tolbert v. Gerber Indus., Inc., 255 N.W.2d 362, 366 (Minn. 1977). Syngenta’s allegations do not show a “specific and defined duty” as required under Iowa law or a duty that the ACD companies were “legally or contractually obligated to perform” as required under Minnesota law.59 5. Accordingly, Syngenta’s Minnesota and Iowa indemnity claims should be dismissed. Kansas A claim for “comparative implied indemnity” is available in Kansas only in situations involving a settlement. : Syngenta’s Kansas claims for comparative implied indemnity fail because Syngenta has not settled plaintiffs’ claims. 60 59 Syngenta’s Minnesota indemnity claim also fails because Syngenta’s liability, if any, will be grounded in its “personal fault,” thus rendering indemnity unavailable as a matter of law. Tolbert, 255 N.W.2d at 366; Nerenhausen v. Chicago, Milwaukee, St. Paul & Pac. R.R. Co., 479 F. Supp. 750, 757 (D. Minn. 1979) (explaining that a party seeking indemnity based on the breach of a duty towards it “must itself be faultless”). This rationale for dismissal is essentially the same as that discussed in section III.B.1 above. But Syngenta does not allege that it has settled plaintiffs’ claims and obtained a complete release from them-a feature so central to a comparative-implied-indemnity claim that the Kansas Supreme Court has said that “comparative implied indemnity . . . is more accurately termed[] postsettlement contribution.” Dodge City Implement, Inc. v. Bd. of Cty. 60 That the party from whom indemnity is sought following a settlement is in the manufacturer’s chain of distribution is also an essential element. Ellis v. Union Pacific R.R. Co., 643 P.2d 158, 162 (Kan. 1982) (“Kennedy v. City of Sawyer[, 618 P.2d 788 (Kan. 1980),] recognized that, under certain circumstances, complete settlement may be made with the plaintiffs and the defending parties allowed to determine their proportionate responsibility in an action for comparative implied indemnity. Kennedy recognized this right to indemnity among parties in the manufacturer’s chain of distribution and supply following settlement by one defendant of the plaintiffs’ entire claim.”); Watco Cos., Inc. v. Campbell, 371 P.3d 360, 366-70 (Kan. Ct. App. 2016) (explaining the development of the doctrine of comparative implied indemnity in Kansas case law). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 65 of 76 Page ID #5111 53 Comm’rs of the Cty. of Barber, 205 P.3d 1265, 1276 (Kan. 2009). The lack of a settlement alone warrants dismissal. 6. Kentucky and Nebraska Under Kentucky law, common-law indemnity is the “right of a constructively or secondarily liable party to total indemnity from the primarily liable party with whom he/she is not in pari delicto.” Degener, 27 S.W.3d at 780. Nebraska law is similar, providing that “one who is secondarily, technically, constructively, or vicariously liable may seek indemnification from an active wrongdoer.” United Gen. Title Ins. Co. v. Malone, 858 N.W.2d 196, 218 (Neb. 2015) (internal quotation marks omitted). In other words, in Nebraska, “the party seeking indemnification must have been free of any wrongdoing, and its liability is vicariously imposed.” City of Wood River v. Geer-Melkus Constr. Co., 444 N.W.2d 305, 311 (Neb. 1989). : These claims for indemnity fail because Syngenta’s negligence is not alleged to be constructive or secondary. When (as here) vicarious-liability does not apply, common-law indemnity is available in both Kentucky and Nebraska only when a party seeking indemnity is secondarily liable because of that party’s failure to prevent the wrongful act of the party from whom indemnity is sought. In Degener, for instance, a company was permitted to bring a Kentucky common-law-indemnity claim against two men who had made a bomb from dynamite stolen from the company because the company’s liability was “premised solely on its failure to prevent them from making” the bomb. 27 S.W.3d at 781 (emphasis added).61 61 See also Crime Fighters Patrol v. Hiles, 740 S.W.2d 936, 940 (Ky. 1987) (holding that common-law indemnity was available where the party seeking indemnity had “fail[ed] to prevent” an assault by the person from whom indemnity was sought). Nebraska law is similar: “If one tort-feasor, by active conduct, has created a danger to the plaintiff, and the other has merely failed to discover or to remedy it, the passive tort-feasor may be entitled to indemnification.” Hiway 20 Terminal, Inc. v. Tri-County Agri-Supply, Inc., 443 N.W.2d 872, 876 (Neb. 1989) (emphasis added). Here, Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 66 of 76 Page ID #5112 54 plaintiffs do not seek to impose liability on Syngenta for failing to prevent wrongful acts by the ACD companies. Instead, if plaintiffs prevail against Syngenta, it will mean that Syngenta is a tortfeasor whose liability cannot be purely constructive, secondary, or vicarious. See Tweet- Syngenta Dismissal Order, 2017 WL 2117728, at *11 (“The focus is not on controlling third parties’ activities, but rather on Syngenta’s own affirmative conduct in . . . its commercialization of the GMO products.”); Poletti-Syngenta Dismissal Order, 2017 WL 1277898, at *1 (“[P]laintiffs point to [Syngenta’s] premature release of Agrisure VIPTERA™ as the sole cause of foreign export-market refusal to import U.S. grown corn . . . .”). The Court should thus dismiss Syngenta’s Kentucky and Nebraska indemnity claims. 7. Missouri Missouri recognizes a claim for indemnification only where the indemnitor is vicariously liable “based on a legal relationship, such as employer-employee, principal-agent, or partnership.” Lowe v. Norfolk & W. Ry. Co., 753 S.W.2d 891, 895 (Mo. 1988). : Syngenta’s Missouri indemnity claims fail because Syngenta does not, and cannot, allege that the third-party defendants are vicariously liable to it. 62 8. Syngenta does not, and cannot, allege that the third-party defendants are vicariously liable for Syngenta’s actions. Instead, Syngenta alleges that the ACD companies are joint tortfeasors-a relationship that does not support indemnity under Missouri law. Accordingly, the Court should dismiss Syngenta’s Missouri indemnity claims. Tennessee Under Tennessee law, an indemnity claim is viable only where a “legal relationship” imposes an independent duty of care on the party from whom indemnity is sought. Owens v. : Syngenta’s Tennessee indemnity claims fail because Syngenta’s liability, if any, will not arise solely by imputation of law from its relationship with the third-party defendants. 62 See also Fast v. Marston, 282 S.W.3d 346, 349 n.2 (Mo. 2000) (“The purpose of indemnity is to allow a vicariously liable party to recover from the negligent party.”). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 67 of 76 Page ID #5113 55 Truckstops of America, 915 S.W.2d 420, 434 (Tenn. 1996). Specifically, “[t]he law of indemnity may be applied where one party is held liable solely by imputation of law because of a relation to a wrongdoer.” Id. at 433. Relatedly, indemnification is unavailable under Tennessee law when a party is “defending [itself] against allegations of its own wrongdoing”-a principle that, by itself, defeats Syngenta’s claims. Time & Sec. Mgmt., Inc. v. Pittway Corp., 422 F. Supp. 2d 907, 916 (W.D. Tenn. 2006). Yet Syngenta tries to rest its Tennessee indemnity claims on the conclusory allegation that some “special relationship” between itself and the ACD companies “imposes an independent duty of care” on the ACD companies that “carries with it an implied obligation” of indemnification.63 9. Syngenta does not, however, adequately allege facts to show that Syngenta’s liability arises “solely by imputation of law because of a relation to” the ACD companies, Owens, 915 S.W.2d at 433, as opposed to from its own wrongdoing (as plaintiffs allege). Accordingly, Syngenta’s Tennessee indemnity claim should be dismissed. Idaho Under Idaho law, an indemnity claim must arise from an “indemnity relationship.” Mitchell v. Valerio, 858 P.2d 822, 824 (Idaho Ct. App. 1993). Such a relationship has been recognized in only three scenarios: “(1) when the indemnitee’s liability was based on passive neglect and the indemnitor was guilty of recklessness; (2) when the indemnitee owed only a secondary duty to the injured party and the indemnitor was primarily responsible; or (3) when the indemnitee was only vicariously liable.” Id. But neither Syngenta nor plaintiffs allege facts supporting any of these three scenarios. To begin, as explained in section III.B.1 above, plaintiffs allege more than “passive neglect” by Syngenta. Nor is there any basis in plaintiffs’ or : Syngenta’s Idaho indemnity claims fail because Syngenta’s liability is not based on passive neglect, it did not owe merely a secondary duty to plaintiffs, and it is not vicariously liable for plaintiffs’ injuries. 63 TPC ¶¶ 349-50. Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 68 of 76 Page ID #5114 56 Syngenta’s allegations to conclude that Syngenta “owed only a secondary duty” to plaintiffs. Under Idaho law, the “secondary duty” that gives rise to an indemnity claim arises in situations such as where “a municipal corporation has the primary duty to keep the streets in safe condition and the landowner has a secondary duty.” Beitzel v. Orton, 827 P.2d 1160, 1168 (Idaho 1992). A secondary duty does not arise in cases such as this one, in which any duty owed by the party from whom indemnity is sought (the ACD companies) is distinct from that owed by the party seeking indemnity (Syngenta). See Mitchell, 858 P.2d at 824. And of course, Syngenta does not, and cannot, allege that it is only vicariously liable. Accordingly, Syngenta’s Idaho indemnity claims should be dismissed. 10. Wisconsin Under Wisconsin law, “[t]he two basic elements of equitable indemnity are the payment of damages and lack of liability.” Brown v. LaChance, 477 N.W.2d 296, 299 (Wis. Ct. App. 1991) (emphasis added). : Syngenta’s Wisconsin indemnity claim fails because Syngenta cannot be both faultless and in need of indemnification. 64 64 See also, e.g., Halderson v. Star Blends, LLC, No. 2015AP739, 2016 WL 121365, at *10 (Wis. Ct. App. Jan. 12, 2016) (“The two basic elements of equitable indemnification are the payment of damages and lack of liability.”); Estate of Kriefall v. Sizzler U.S. Franchise, Inc., 801 N.W.2d 781, 818 (Wis. Ct. App. 2011) (“Equitable indemnity kicks in when one person is exposed to liability by the wrongful act of another in which he does not join.” (internal quotation marks omitted)). Just as Syngenta cannot recover in indemnity in states that foreclose indemnity for active tortfeasors, see section III.B.1. above, Syngenta cannot recover in indemnity under Wisconsin law because if plaintiffs award damages against Syngenta, then Syngenta necessarily will not “lack” liability. Syngenta’s Wisconsin indemnity claim therefore should be dismissed. Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 69 of 76 Page ID #5115 57 C. Syngenta cannot recover in contribution or apportionment from the ACD companies under Connecticut or New York law because plaintiffs seek only economic damages from Syngenta.65 Under Connecticut law, a defendant may seek apportionment from a third party only in “a negligence action to recover damages resulting from personal injury, wrongful death or damage to property.” Conn. Gen. Stat. § 52-572h(c) (1999) (emphasis added). 66 Accordingly, “negligence actions that implicate purely commercial or economic damages are not subject to apportionment.” Lunsford v. Goodwin, No. CV116017153S, 2011 WL 7095161, at *3 n.4 (Conn. Super. Ct. Dec. 28, 2011). Similarly, under New York law, contribution is available among “persons who are subject to liability for damages for the same personal injury, injury to property or wrongful death.” N.Y. C.P.L.R. § 1401 (emphasis added). Conversely, where “the underlying claim seeks purely economic damages, a claim for common-law contribution is not available” under New York law. Children’s Corner Learning Ctr. v. A. Miranda Contracting Corp., 879 N.Y.S. 2d 418, 421 (N.Y. App. Div. 2009). Syngenta does not dispute that plaintiffs seek purely economic damages.67 65 TPC Count VII (Connecticut), Count XXXIV (New York). Accordingly, Syngenta’s third-party claims for apportionment under Connecticut law and contribution under New York law should be dismissed. 66 Connecticut law provides for apportionment through the interplay of Conn. Gen. Stat. § 52-572h and § 52-102b, under which a defendant in a case “to which [Conn. Gen. Stat. §] 52- 572h applies” may seek “apportionment” from a third party “who is or may be liable pursuant to said section.” 67 Tweet Compl. ¶ 794 (“The loss of the Chinese market to U.S. corn and DDGs has caused diminished prices for corn in the United States, and Plaintiffs’ resulting damages.”); Poletti Compl. ¶ 3057 (alleging that Syngenta caused “economic damage” and “lost sales and income to the Plaintiffs”); Poletti, Syngenta Mem. Supp. MTD First Consolidated Am. Compl., ECF No. 116, at 1 (asserting that “Plaintiffs claim only economic injury”); TPC ¶ 127 (“Plaintiffs . . . alleg[e] that they suffered economic losses in the form of a decrease in the price of U.S. corn.”). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 70 of 76 Page ID #5116 58 IV. THIS COURT LACKS PERSONAL JURISDICTION OVER CARGILL AND LDC WITH RESPECT TO SYNGENTA’S STATE-LAW CLAIMS FOR CONTRIBUTION AND INDEMNITY. Because the claims asserted against the ACD companies should be dismissed on the merits for the reasons discussed above, the Court need not address the absence of personal jurisdiction over the third-party claims against nonresidents Cargill and LDC. See U.S. Gypsum Co. v. LaFarge N.A., Inc., 508 F. Supp. 2d 601, 642-43 (N.D. Ill. 2007) (holding that “when the case can be resolved in a defendant’s favor on the merits, it is sometimes appropriate to go directly to the merits” rather than resolving personal-jurisdiction issues first, particularly when “[t]he merits issues would still have to be resolved regarding the other defendants even if some defendants are dismissed for lack of personal jurisdiction.”), adhered to in part on reconsideration, No. 03 C 6027, 2007 WL 2091020 (N.D. Ill. July 18, 2007); see also Tweet Dismissal Order, 2017 WL 54345, at *5 n.7 (refraining from addressing personal jurisdiction because the claims were dismissed on the merits); MDL Preemption Order II, 2016 WL 4382772, at *6 n.5 (same). No such jurisdiction exists, however, because Syngenta’s third-party complaints do not make the prima facie showing necessary to support the exercise of personal jurisdiction over Cargill and LDC. See Kipp v. Ski Enter. Corp. of Wis., Inc., 783 F.3d 695, 697 (7th Cir. 2015) (requiring that the plaintiff establish a “prima facie case of personal jurisdiction”). Moreover, Swiss company Cargill International SA (“CISA”) and Louis Dreyfus Company Grains Merchandising (“LDCGM”) do not have minimum contacts with Illinois sufficient to subject them to personal jurisdiction in Illinois. With respect to general jurisdiction, Syngenta alleges no facts sufficient to show that Cargill’s and LDC’s contacts in Illinois are “so ‘continuous and systematic’ as to render [them] essentially at home in the forum State.” Daimler AG v. Bauman, 134 S. Ct. 746, 761 (2014) (quotation omitted). The Supreme Court has identified only two “paradigm” sources of personal Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 71 of 76 Page ID #5117 59 jurisdiction for a corporation, neither of which exists here: Cargill and LDC are not incorporated and do not have their principal places of business in Illinois.68 Nor does Syngenta allege facts sufficient for a prima facie showing of specific jurisdiction over Cargill and LDC. “Specific jurisdiction is case-specific; the claim must be linked to the activities or contacts with the forum.” Kipp, 783 F.3d at 698. As the U.S. Supreme Court recently held, there must be “a connection between the forum and the specific claims at issue” in order for a court to exercise specific personal jurisdiction. Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, 137 S. Ct. 1773, 1782 (2017). See id. at 760. Here, Syngenta concedes that many of the theories it advances in support of its contribution and indemnity claims are GSA preempted. As discussed above, the only theories that Syngenta contends-incorrectly-are not preempted relate to certifications regarding the seed the farmer grew and the ACD companies’ shipments to China of corn they allegedly knew contained Viptera. As explained above, the first issue is preempted, and, even if it were not, Syngenta has not alleged the existence of a cognizable duty on the part of the ACD companies to secure seed certifications in order to protect plaintiffs from Syngenta’s negligent commercialization of Viptera. This theory, which relies on non-tortious conduct, cannot support Syngenta’s third-party claims and thus cannot provide a basis for the Court to exercise personal jurisdiction over those claims. 68 Cargill, Incorporated is incorporated in Delaware and has its principal place of business in Minnesota; CISA is incorporated and has its principal place of business in Switzerland. TPC ¶¶ 15-16. Louis Dreyfus Company Grains Merchandising is alleged to be organized under the laws of Delaware with headquarters in Connecticut. Syngenta has incorrectly described Louis Dreyfus Company LLC as a corporation with corporate headquarters in the Netherlands. TPC ¶¶ 18-19. However, it is neither a corporation-as its name connotes, it is a limited liability company-nor is it headquartered in The Netherlands (Syngenta’s counsel has confirmed that it did not intend to name any foreign Louis Dreyfus entity). In any event, taking Syngenta’s erroneous allegations as true for purposes of this motion, neither LDC entity is subject to general jurisdiction in Illinois. Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 72 of 76 Page ID #5118 60 As to Syngenta’s export-related theory, that theory also fails because, as explained above, numerous courts have held that that theory is preempted by the GSA and fails due to the absence of a duty or causation. Even if that were not the case, that theory could not support the exercise of specific personal jurisdiction in Illinois because the conduct at issue-sending ocean-going shipments of U.S. corn to China-did not take place in Illinois. In attempting to manufacture specific personal jurisdiction over Cargill and LDC, Syngenta alleges that they “shipped corn to China that originated in Illinois.” TPC ¶ 15; see id. ¶ 18. But Syngenta tacitly concedes that Cargill and LDC did nothing unlawful by commingling that corn in Illinois, as they were expressly allowed to do under the GSA, and then shipping that corn through interstate commerce out of Illinois. The exporting actions through which Syngenta claims Cargill and LDC breached a duty happened entirely outside of Illinois. Syngenta also cannot point to alleged injuries suffered by plaintiffs arising out of Syngenta’s contacts with Illinois to establish specific personal jurisdiction over Cargill and LDC. In Spivey v. Adaptive Mktg., LLC, for example, a federal court in this district foreclosed this method of jurisdictional bootstrapping, rejecting a defendant/third-party plaintiff’s contention that the facts of an underlying complaint necessitated indemnification from a third-party defendant. No. 07-779, 2009 WL 1107904, at *4 (S.D. Ill. Apr. 24, 2009) (“Adaptive cannot bootstrap a third-party defendant into court based on Spivey’s complaint against Adaptive.”); see also Zurich Ins. Co. v. Am. Ins. Co., No. 87 C 2286, 1989 WL 134515, at *2 (N.D. Ill. Oct. 12, 1989) (“American further contends that practical necessity dictates that third-party defendants indemnify American in Illinois. American’s arguments are irrelevant to the application of the Illinois long-arm statute. American cannot bootstrap third-party defendants into court on the basis of [plaintiffs’] complaint against American.”). Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 73 of 76 Page ID #5119 61 Syngenta’s third-party claims against CISA and LDCGM not only should be dismissed because Syngenta has failed to plead a prima facie case of personal jurisdiction over third-party claims arising out of CISA’s or LDCGM’s contacts with Illinois, but they also should be dismissed because those companies have no contacts with Illinois. CISA owns no assets in Illinois, does not store or take title to commodities in Illinois, has no employees in Illinois, and does not grow or handle corn or corn byproducts or other agricultural commodities in any state in the United States, including Illinois. See Sawatzke Decl. ¶¶ 3-5 (attached as Exhibit E). Rather, from Geneva, CISA purchases corn on an F.O.B. (“Free on Board”) basis and takes delivery of the corn when it is loaded on seagoing vessels at export facilities in the Gulf of Mexico and the Pacific Northwest. Id. ¶ 6. CISA then sells that corn to international buyers. Id. LDCGM is not qualified to do business in Illinois, nor does it hold a grain-dealer license in Illinois. Eckert Decl. ¶¶ 8, 10 (attached as Exhibit F). LDCGM does not have employees based in Illinois, maintain offices in Illinois, own or lease any real property in Illinois, or own assets in Illinois. Id.¶¶ 5-6; 11-12. CONCLUSION It was Syngenta, and Syngenta alone, who decided how, when, and where it would commercialize its GM products. And thus it is Syngenta, and Syngenta alone, who must bear the consequences of its actions and the “risks of [its] decision to introduce a new transgenic grain into the commercial market . . . before obtaining all import approvals.” Bunge, 820 F. Supp. 2d at 992. In bringing third-party claims against certain grain handlers and exporters-specifically, three companies who sued Syngenta for the damages it caused-Syngenta seeks yet again to evade responsibility for its conduct. Claims like the third-party claims that Syngenta asserts here have been repeatedly and consistently rejected by courts across the country, including by this Court in Tweet when they were pleaded as first-party claims. Syngenta’s third-party claims are Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 74 of 76 Page ID #5120 62 preempted by federal law, fail for lack of duty and causation, and, in any event, fail under various states’ laws. Accordingly, the ACD companies respectfully request that the Court dismiss Syngenta’s third-party claims in their entirety and with prejudice. Respectfully submitted, By: /s/ Bart C. Sullivan Bart C. Sullivan, #06198093 ______________ FOX GALVIN, LLC One S. Memorial Drive, 12th Floor St. Louis, Missouri 63102 (314) 588-7000 Fax: (314) 588-1965 bsullivan@foxgalvin.com Attorneys for Archer Daniels Midland Company; Cargill, Incorporated; Cargill International SA; Louis Dreyfus Company LLC; and Louis Dreyfus Company Grains Merchandising LLC David F. Graham David Hoffman Frank J. Favia, Jr. Daniel A. Spira SIDLEY AUSTIN LLP 1 South Dearborn Street, Suite 900 Chicago, IL 60603 dgraham@sidley.com david.hoffman@sidley.com ffavia@sidley.com dspira@sidley.com Attorneys for Archer Daniels Midland Company John W. Ursu Kathryn N. Hibbard Kevin Zhao GREENE ESPEL PLLP 222 South Ninth Street, Suite 2200 Minneapolis, MN 55402 jursu@greeneespel.com khibbard@greeneespel.com kzhao@greeneespel.com Attorneys for Cargill, Incorporated & Cargill International SA Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 75 of 76 Page ID #5121 63 Patrick C. Doolittle Claude Stern QUINN EMANUEL URQUHART & SULLIVAN 50 California Street, 22nd Floor San Francisco, CA 94111 patrickdoolittle@quinnemanuel.com claudestern@quinnemanuel.com Attorneys for Louis Dreyfus Company LLC and Louis Dreyfus Company Grains Merchandising LLC CERTIFICATE OF SERVICE The undersigned certifies that a copy of the foregoing was filed by e-filing through the Electronic Filing System this 11th day of September, 2017, to all counsel of record in these matters. /s/ Bart C. Sullivan Case 3:16-cv-00255-DRH Document 261 Filed 09/11/17 Page 76 of 76 Page ID #5122