DENVER (Legal Newsline) - A group of farmers who sued the law firms that represented them in litigation over genetically modified corn -- and then sued the lawyers representing them in that second action – lost at the 10th Circuit Court of Appeals when it rejected all of their claims.
Farmers across the Midwest sued Syngenta after they planted genetically modified seeds only to learn that China had banned the importation of GM corn. Some of the farmers, identified as the “Kellogg farmers” in the litigation, signed on with Watts Guerra and several other law firms to pursue individual claims, while plaintiff lawyers also assembled a class action on behalf of all farmers who used the Syngenta seed.
The Kellogg farmers sued their lawyers, claiming they were misled into pursuing individual suits because the attorneys sought to collect inflated contingency fees when the farmers would have been better off in the class action. Syngenta ultimately settled all the cases for $1.5 billion, with the plaintiff lawyers claiming $500 million of that in fees.
On appeal, the Kellogg lawyers challenged a string of orders the district court made, including the dismissal of their claims, an order separating them from the class action, and the court’s refusal to remand their case to where they filed it. They also appealed sanctions the trial court imposed on them after their lawyers refused to participate in pretrial proceedings.
The 10th Circuit rejected all of their claims in a July 26 decision, saying the trial court acted properly and it didn’t have jurisdiction to decide many of the farmers’ claims. The farmers argued the trial judge should have been removed from the case after engaging in ex parte communications with the class-action lawyers, but the appeals court said there was no evidence of that and the judge explained the reason for refusing to recuse.
The court also rejected the farmers’ claim they suffered an economic injury because $500 million of the settlement flowed to the lawyers. First, the court said Syngenta paid the fees into a “separate pool,” seemingly ignoring the economic reality that companies calculate the total cost of a settlement and leave it to the plaintiffs to determine the split between claimants and their lawyers.
But even if that was the case, the appeals court said, the farmers failed to preserve that argument on appeal since they referred to it in a single sentence of their filing. Since they ultimately participated in the $1 billion class settlement and failed to provide evidence of economic injury, the court said, their racketeering claims were moot.
“The Kellogg farmers argue that the entire settlement (including the pool of funds allotted to the attorneys) belonged to the class members,” the court said. “But the Kellogg farmers waived this argument by failing to sufficiently brief it and presenting it too late.”
The appeals court said the farmers did present valid claims under Minnesota’s consumer protection laws that their former lawyers misled them about the benefits of joining the class action. But it also upheld the trial court’s dismissal of those claims, saying the farmers hadn’t shown any public interest was at stake. The appeals court also upheld sanctions levied against the farmers.