GMOs and the Related Emerging Use, Risks, Bodily Injury, Property DamageEconomic Litigation and Insurance Issues

Richard S. Ranieri, EsquireDean C. Seman, Esquire

WhatAre GMOs?

• Apple• Argentine Canola• Bean• Carnation• Chicory• Cotton• Creeping Bentgrass• Eggplant• Eucalyptus• Flax• Maize• Melon• Papaya• Pentunia• Plum• Polish Canola• Poplar• Potato• Rice• Rose• Soybean• Squash• Sugar Beet• Sugarcane• Sweet Pepper• Tobacco• Tomato• Wheat

• Enviro Pig

• Spidey Goat

• Super Salmon

• Deflate Cows

• Sudden Death Mosquitoes

• Golden Sparkle Seahorses

• Male Tilapia

• Featherless Chickens

• Glow in the Dark Varieties

(fish, sheep, rabbits, cats, etc.)

Recent GMO Related Headlines

• GMO Crops Lead to Increased Use of Herbicides/Pesticides

• 9th Cir. vacated EPA approval of pesticide sulfoxalor due to danger to bee colonies

• French Appellate Court Upholds Verdict Finding Monsanto Liable for Poisoning Farmer

• Glow Meat On the Market Rubis – “Jelly Fish Lamb”

• FDA Approves AquaBounty Salmon

GMO LitigationDevelopments

• Two “Damage Types”, generally:• 1) Business Interruption or Property Damage Losses, or• 2) Property Damage/Bodily Injury for Product “Contact

Harm”

• Two “Legal Theory Types”, generally:• 1) GM Product Itself Harmful• 2) “Designed to Work With” Exposure to Known Toxin

Damages Type – Category 1

• Property Damages (Business Risk, Lost Profit , Traditional Trespass and Negligence (i.e. contamination product, handling, storage, transportation or end food manuf.)

• Pollen-drift, cross-contamination theories/claims widely known within agricultural community for many years, i.e Law on spread of undesirable weeds / crop loss, contamination neighboring property/crops and “dust” claims.

• Negligence or tort claims (PD) from GMO or damage to non-GMO/organic crops-treated same.

• Private nuisance (farmer/producers “reasonable use/enjoy use of farms infringed /damaged) GMO cross pollination/or “dust”.

• Strict, product liability claims (GMO “abnormally dangerous activity/unreasonably unsafe product”). No scientific/expert support, not viable yet.

• Some victories (both sides) given more recently-delineated GMO vs. “non-GMO cert.”/ “organic” farming/food product prod.

• Public Nuisance, Private Nuisance, Negligence per se (violation of Federal or State law), Negligence - dramatic drop in crop prices and/or ability to sell product, internationally, due to “product contamination” can bring large verdicts.

• Intentional /Negligent contamination and/or misrepresentation - “purity” (lack of GMO)• Breach of contract, lost profits, interference with contract/business relationship,

shareholder deriv. suits, etc.• Liberty Link (Rice Case), U.S. producers rice for export (EU China) products severely

restricted/banned due to GMO contamination - $150 million, $750 million, combined verdicts.

• Syngenta Litig. (Corn Vipterra) plunging corn prices, export corn rejected by China several class action lawsuits. 20% U.S. corn exported

• Grain exporters also joined Agibusiness Bunge North America - not approved for export to China = “false advertising”.

• No recognized claim for GMO product bodily injury or posed human health risk.

Damages Type – Category 2

• Focus on “best practices”: growers, transp., storage/distribution, food manufacturing, “sourcing” or purchasing raw materials/ingredients

• Food production “chain” risks: generic drift exposure, local pesticide trespass laws, wind/insect borne cross pollination, inadequate harvest handling practices, other potential contamination.

• Distance pollen likely to travel in area, % acreage (non-Bt corn / non-GMO crops) - delay resistance among target pests, prevent cross pollination during planting season neighboring fields, wind direction, physical buffers (wind breaks, hedge rows, contain/prevent contamination from pollen drift, deterrence what grown surrounding areas - organic/non-GMO or all GMO in the immediate “buffer areas”)

• More complex when not simply GMO crops, but EPA-registered pesticides crops (Bt corn) = regulated/controlled prod.

• Risk analysis/ Risk Management - potential negligence/related theories that can apply • (jellyfish/lamb, salmon/slime eel, brazil nut/ soybean, etc.) potential allergic reaction-people

with shellfish, nut allergies, other sensitivity, other undeterminable health risks (due to the ingestion of “new products”).

Legal Theory Type – Category 1

Legal Theory Type – Category 2

• Herbicide/pesticide exposure thus far mostly defense victories, Daubert or Summary Judgement type motions (as yet no scientific evidence on exposure & causal relation to B.I.)

• Not GMO product itself, herbicide “companion product” (analogy to asbestos “bare metal” - liable despite product not contain asbestos, but specifically designed in conjunction with asbestos containing product

• U.S. and International claims products designed work with /withstand large dosages (pesticide/herbicide - well known risks) expert opinion support?

• 3/15, World Health Org. (WHO) classified Glyphosate “probably carcinogenic to humans” (studies link Glyphosate and Non-Hodgkin Lymphoma).

• 6/15, WHO classified 2,4-D as “possibly carcinogenic to humans”

Glyphosate/Pesticide Litigation

• Arias v. Dyn Corp., 752 F.3d 1011 (D.C. Cir. 2014) consol. case approx. 2000 Ecuadorians B.I. herbicide spraying eradicate drug farms, negli. and other tort claims-chronic / acute BI & med. monitoring

• Jackson v. Syngenta Crop Protection, No. 12-581, 2013 U.S. Dist. LEXIS 92065 (M.D. La.) occup. Exp. Glyphosate “dust” (not prevent P’s exposure or warn, child born with develop., respir. defects.

• Alcala v. Monsanto, No. C-08-4828, 2014 U.S. Dist. Lexis 147082 (N.D.Cal.) agri. worker occup. Exp. “Round Up products” spraying crops, resp. probs. , nervous sys. disorders, chronic fatigue, fibromyalgia, gastritis, ultimately P’s claim solely respiratory problems.

• Blackshear v. Syngenta Crop Protection, 2014 N.J. Super. Unpub. Lexis 2394, pesticide worker (licensed exterminator) wrongful death against ER and pesticide manuf. “reckless indiff.” to EE safety, SJ (failure sufficient PPE when “known cancer hazards” insuff. for “reckless indifference” to defeat WC exclusivity)

• Aana v. Pioneer Hi-Bred International, Inc., 2014 U.S. Dist. LEXIS 156246 (recon. den.), Hawaii consolidated case, surrounding residents against GMO growers - pesticides caused P.D. & endangered health. Evidentiary motion precluded expert on health and environmental issues, P’s alleged environ. effects “very general in nature.”

• $500,000+ to 15 P’s for “red dust” – PD, loss of enjoy. and emo. Dist. – not physical effects (based on sq. ft. of homes).

Insurance for GMO Liability Claims under the CGL Policy

1. Contamination claims arising out of use of GMO products.a. Is it “property damage”?b. What is the “trigger” of coverage?c. Is it an “occurrence”?d. Number of “occurrences”e. Does the “pollution exclusion” apply?“Pollutants” means any solid, liquid, gaseous or thermal irritant or

contaminant including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.

Some carriers have modified the definition to include genetically engineered materials. See Bechtel Petroleum Operations, Inc. v. Cont’l Ins. Co., 2006 Cal. App. Unpub. LEXIS 1896 (Cal. 2nd Dist. 2006).

Riceland Foods, Inc. v. Liberty Mut. Ins. Co., 2011 U.S.Dist. LEXIS 61381 (E.D.Ark. 2011)

• Insured agricultural cooperative named as a defendant in suits brought by rice growers and distributors alleging contamination of commercial rice supply by GM rice.

• The insurance policy included an exclusion for property damage caused by cross-pollination, mis-labeling or mis-packaging. The insurer argued that the exclusion applied to eliminate the duty to defend the grower suits. The court disagreed, noting that the complaints alleged not only that the loss was caused by cross-pollination but also by the physical mixing of the GM rice with conventional rice during harvesting, storage and transport.

• The distributor plaintiffs were European companies that purchased rice from various suppliers and distributed it to European customers who will not accept GM rice. The insurer argued that the policy’s exclusion for property damage caused in whole or in part by mis-delivery, mis-packaging or mis-labeling applied. The court disagreed, finding that the complaints sought damages for breach of contract, breach of warranties, negligence, nuisance, strict liability, fraud, deceptive trade practices.

• The insurer also argued it owed no coverage for certain suits that alleged loss of profits due to the drop in rice prices, contending that these suits did not allege “property damage”. The Court observed that lost profits resulting from physical injury to or loss of use of tangible property are a measure of property damage.

For any questions, concerns or requests for additional information or advice,

please contact:

Richard S. Ranieri, Esq. Dean C. Seman, Esq. rranieri@wglaw.com dseman@wglaw.com 973-242-2230 215-825-7223