LITTLE ROCK — A Circuit Court jury in Stuttgart awarded $136.8 million Friday to Riceland Foods Inc. in a lawsuit against Bayer CropScience LP over genetically modified rice.
Riceland, a farmers cooperative based in Stuttgart, is the world’s biggest miller and marketer of rice. It sued Bayer over losses it suffered when Bayer’s experimental varietyof genetically modified rice made its way into the U.S. rice supply. That prompted the European Union to ban imports of the rice when the contamination became known in August 2006.
Most of the Arkansas County Circuit Court judgment against Bayer - $125 million - was for punitive damages. The remainder, $11.8 million, was for compensatory damages.
Litigation against Bayer, a German company, has been filed by thousands of farmers or farm corporations because of the contamination. The biggest court award before Friday came in April when a Lonoke County Circuit Court jury ordered Bayer to pay farmers and agriculture operations $48 million, of which $42 million was punitive damages.
Bill Reed, a Riceland spokesman, said via e-mail Friday evening, “We are pleased that the jury’s award recognizes the tremendous harm caused to Riceland and the entire rice industry when Bayer contaminated the U.S. rice supply with its Liberty Link rice. Riceland feels vindicated that the jury also found that Bayer was solely responsible for the farmers’ damages resulting from the loss of the European Union market.
“Although Riceland sought more in compensatory damages, we respect the jury’s verdict,” he said.
The trial in Stuttgart, about 50 miles southeast of Little Rock, began Feb. 22. Attorneys made closing arguments Thursday.
Bayer, in a statement, said it was disappointed in the verdict and left the door open to an appeal. The statement also asserted, “The punitive damages award exceeds what is permitted by Arkansas law and will therefore be limited to the statutory cap of $1 million.”
Punitive damages may be awarded to plaintiffs in addition to compensatory damages if the jury believes the defendant acted recklessly.
“The company believes to infer a malicious act by Bayer CropScience in this case is unjustified,” the Bayer statement said.
Chuck Banks, an attorney who has represented farmers in litigation against Bayer but was not involved in the Stuttgart trial, said Friday that the jury decided on a large award but the amount needed to be looked at in context.
“The size of the punitive award tells you that something was seen by the jury that caused them to believe that amount of [punitive] damages were necessary,” he said.
Bayer stated in its release that the rice meant for Europe was diverted to other countries, so the damage to Riceland and farmers was minimal.
The European Commission allowed unrestricted U.S.rice imports to the European Union to resume in June 2010 after emergency measures had been in place since 2006, when traces of Liberty Link 601, Bayer’s genetically modified variety, were discovered in the U.S. rice supply. The EU has strict restrictions or bans on many types of genetically modified foods.
Arkansas produces more long-grain rice than any other state.
This is at least the seventh ruling against Bayer involving the Liberty Link 601 rice. Previously, three federal juries and three juries in Arkansas awarded more than $53 million - most of it in the $48 million Lonoke County case. Bayer has appealed several of the judgments.
Bayer had partnered with Louisiana State University to test its genetically modified rice at a school-run facility in Crowley, La., in 1998. Though the U.S. Department of Agriculture has said the rice variety posed no health or environmental risk, the rice had not been approved for human consumption at the time.
Experts previously have said that when the European Union halted U.S. rice imports, it started getting rice from Thailand and South America, which would make it difficult for U.S. rice farmers to break back into the market.
Business, Pages 29 on 03/19/2011