StarlinkT's Lessons Learned: Past, Present and Future

Thomas P. Redick
tpredick@gjn.com

At the 9th Section Fall Meeting in St. Louis in October 2001, the Agricultural Management Committee sponsored a session entitled "Environmental Liability for Agricultural Biotechnology: The Nuances of Nuisance" featuring James Underwood of Akin, Gump, Strauss, Hauer & Feld, LLP in Dallas and Stephen Censky, CEO of the American Soybean Association (ASA). These speakers offered two insider's perspectives on the minefield of regulation and liability that the recall of Starlink™ corn has left in its wake.

Mr. Underwood provided a detailed summary of the events involved in agbiotech's biggest disaster to date - the recall of the Starlink™ corn sold by Aventis, the U.S. subsidiary of a French life sciences company. His presentation offered a chilling story of mistakes by regulators, seed sellers, and growers. In hindsight, the commingling of Starlink™ corn looks like the inevitable outcome of a system that lacked the necessary elements to accomplish the ambitious goal of segregated delivery and usage.

Stephen Censky filled in the past and future. His presentation told of the prelude to Starlink™ - when Aventis decided not to sell the Liberty Link™ soybean for fear of commingling an unapproved-in-EU variety. He also forecast a future featuring methods for preventing a nuisance from arising in the use of agricultural biotechnology. The ASA has exercised a leadership role in the promotion of standards for "identity preservation" in agricultural biotechnology and will continue to promote its identity preservation model as a means to equip the American food production system to prevent similar incidents in the future.

The Starlink™ Litigation: Background and Update
As counsel for some of the corn processors involved in the Starlink™ litigation, Mr. Underwood offered an insider's view of a billion-dollar debacle in progress. EPA approved Starlink™ corn for use in animal feed and ethanol (collectively "feed"), not for food. As a condition of this approval, Aventis had to promise to maintain an adequate identity preservation program to keep Starlink™ out of human food.

After Starlink™ corn was accidentally commingled with food (discovered by an activist testing taco shells), EPA imposed a "zero tolerance" standard for the recall. Both Mr. Underwood and Mr. Censky highlighted this zero tolerance decision as perhaps the most significant regulatory lesson from the Starlink™ experience. EPA had admitted that it made a mistake, as Mr. Underwood related, when it approved Starlink™ for "feed only" without ensuring that adequate identity preservation measures were established. This mistake was compounded by EPA's decision (issued from an independent scientific advisory panel during the throes of the recall of Starlink™) to impose a zero tolerance standard for the commingling of Starlink™. It was the combination of these twin decisions that created a billion-dollar debacle: The initial approval inadvertently opened the door to a "non-food" variety of corn, then the "zero tolerance" policy slammed it firmly shut and forced a massive recall of food. The result was a recall of Starlink™ corn that reportedly will cost in excess of one billion dollars and that may cost even more if new Starlink™ corn plants sprout and commingle with each growing season. EPA has decided not to grant more "split" approvals (i.e., if feed approval is granted, food approval must also be secured).

Regulators are still assessing the health risks of Starlink™ corn. Allegations abound, including one case of anaphylactic shock allegedly caused by Starlink™, which led to a wrongful death lawsuit pending in California. The federal oversight body for health issues, the Centers for Disease Control (CDC), investigated all reported cases of illness allegedly associated with Starlink™ and found no evidence suggesting a causal relationship. In many cases, CDC found no traces of Starlink™ in the foods that had allegedly caused the ailment or insufficient time following exposures for the Starlink™ to have caused an allergic reaction.

Consumers are suing in putative class actions pending in various courts (many are consolidated in Chicago under federal Multidistrict Litigation Rules) and some are suing for a refund of money spent on food tainted with Starlink™ corn. These cases will delve further into the health effects of Starlink™, while farmers address the economic impacts through nuisance cases.

Private Nuisance

For purposes of nuisance law, the drifting of Starlink™ pollen need never be shown to cause human injury. As Mr. Underwood explained, the law of nuisance is famed for flexibility, potentially covering everything under sun - even a cockroach baked in a pie. There are cases holding that "severe pecuniary loss" may give rise to a nuisance claim. See, e.g., Nebraska Innkeepers, Inc. v. Pittsburgh-Des Moines Corp., 345 N.W.2d 124, 129-30 (Iowa 1984). Thus, the economic impact of a biotech crop may support a private nuisance claim where a grower's use of an unapproved crop has caused economic harm to a neighbor's farming business.

In the Starlink™ litigation, farmer actions generally include a prayer for the recovery of the diminished value of the farmers' corn and injunctive relief. The injunctive relief sought can include, for example, an order "requiring abatement of the nuisance created by Aventis by requiring Aventis to decontaminate all soil, farming equipment, storage equipment, harvest equipment, transportation facilities, grain elevators, and non-Starlink[™ ] seed supplies to prevent future contamination for the 2001 growing season and beyond." William Furlong, Individually and on Behalf of All Others Similarly Situated v. Aventis CropScience USA Holding, Inc., 01-CV-17 (N.D. Iowa), Complaint at 61.

The "right to farm" statutes in existence in all 50 states are often narrowly construed as covering only existing farm uses that cause odor or annoyances. See Farmland Information Library's State Farmland Protection Database, State Farmland Protection Statutes, at <http://www.farmlandinfo.org/fic/laws>. Thus, negligent farming (e.g., growing an unapproved crop variety too close to a neighbor's similar crops) could lead to nuisance liability despite the existence of these laws. The 660-foot separation distance for Starlink™ - a buffer zone established by EPA to prevent pollen drift - sets a standard for reasonable behavior. Failure to maintain that buffer zone could establish negligence, even if the negligence was exacerbated by a particularly ambitious group of pollinating bees. Substantial economic harm might also merit an exception to "right to farm" protection, as courts might declare that the statute otherwise would effect an unconstitutional "taking" of the neighbor's property. Bormann v. Board of Supervisors, 584 N.W.2d 309, 29 ELR 20235 (Iowa 1998).

For the defendant, there may be a viable defense under the "economic loss" doctrine, which many courts use to limit damages for economic loss arising in a chain of contractual commerce. The issue will turn on whether farmers are more like businessmen hurt by the decline in tourism following an oil spill (no nuisance recovery) or fishermen whose livelihood was hurt by the same oil spill (allowed to pursue nuisance claim). See Burgess v. M/V Tamano, 370 F. Supp. 247 (D.C. Me. 1973). See also Pruitt v. Allied Chemical Corp., 523 F. Supp. 975 (E.D. Va. 1981) (similarly holding that area restaurateurs and marina owners suffering economic harm could not sue a polluter under a nuisance theory, while local fishermen could). Similarly, even if the third-party grower might have a claim for harm, the less direct economic harm to downstream buyers of an unapproved variety might not be recoverable.

Public Nuisance

Given the magnitude of the economic harm that can arise from the commingling of an unapproved variety, an attorney general seeking to apply public nuisance law may have little difficulty persuading a sympathetic state or federal court judge to find a public nuisance. Given the added element of inadequate disclosure to farmers that may be present, the consumer fraud statutes of many states might also be invoked. Where no consumer fraud statute is on the books, the law of nuisance may adapt to allow a fraud in progress (if against a large enough group) to constitute a public nuisance.

Improving Communication with Growers
As CEO of ASA, Stephen Censky provided "the story before the story" of Starlink™ and also offered a glimpse of a more cautious future.

Before Starlink™: The Aventis Decision Not to Market Liberty Link™

Mr. Censky provided insight into Aventis' commendable conduct leading up to the Starlink™ debacle. At ASA's request, Aventis agreed not to market a soybean that might have caused an economic cataclysm by commingling with export markets.
ASA realized in late 1997 that the presence in an export shipment of a biotech variety that has full approval in the United States but lacks approval by the importing country could cause major export disruptions, including to the European Union (EU) - the soybean industry's largest export market. To prevent commingling of unapproved-in-EU varieties of biotech soybeans, ASA called upon 11 biotech seed companies to refrain from marketing any new variety of biotech soybean that lacked approval in major overseas markets, in particular the lucrative EU market, without a comprehensive identity preservation plan.

Aventis disregarded this request at first, proceeding with plans to market the Liberty Link™ soybean (which had no approval for export to the EU after harvest). ASA entered into several months of negotiations to educate Aventis (its corporate predecessor AgrEvo USA) about the potential risk of movement of seeds between fields (a potential private nuisance) in planting and harvesting equipment and post-harvest commingling in the soybean export market (a potential public nuisance). ASA asked Aventis to follow a detailed identity preservation system, including a high premium for growers, dedicated domestic facilities to divert the unapproved biotech soybeans away from export channels, and an assumption of liability for any nuisances or other liability that growers and Aventis might jointly cause.

Ultimately, Aventis chose not to market the Liberty Link™ soybean, announcing in press releases that it was serving the public interest by acting to protect export markets. ASA agreed in its own public statements that Aventis had acted responsibly and commended Aventis for its discretion. The business press reported that Aventis had invested millions of dollars in developing the Liberty Link™ soybean, which it has now all but abandoned.

After Starlink™: Propagating Identity Preservation

Mr. Censky also provided suggestions about the future course of agricultural biotechnology, suggesting that everyone benefit from the lessons of Starlink™. The most important lesson is the need for communication of an effective identity preservation program to avoid unintentional commingling and thereby protect both seed companies and growers from nuisance liability.

The lessons from Starlink™ for biotech companies are clear. As a practical matter, they must assume responsibility for predicting and preventing these cataclysms, because they will be the presumptive "deep pocket" defendant called upon to pay for the billion dollar mistake - even where the harm is due in part (even in large part) to a few careless growers. Biotech companies therefore must effectively communicate the risks of commingling and implement measures to prevent it.

EPA's decision not to grant more "split" approvals for food and feed will not resolve all commingling concerns, since some varieties of biotech crops enter the market without EPA or FDA oversight, and with minimal USDA oversight. There are industrial and pharmaceutical applications of agricultural biotechnology that require identity preservation methodologies such as that developed by ASA. Adapting these methodologies to other biotech crops would prove useful as these products enter the marketplace.

The overseas regulatory environment is not making life any easier for identity preservation, as more nations impose their own requirements of premarket approval (often with "zero tolerance" and even criminal standards for commingling). Despite enormous potential benefits for both food safety and environmental protection that biotech crops offer, governments overseas have turned regulatory approval into a quagmire that few biotech companies can effectively navigate. Until approval is granted, "zero tolerance" applies.

To maintain identity preservation at the level required for "zero tolerance" of unapproved DNA molecules (a level now regrettably endorsed, for Starlink™, by EPA), strict measures are required. The ASA has overseen development of identity preservation methodologies that can be adapted to crops other than soybeans. The main features include: (1) securing approval in major markets such as Japan, the EU and other large trading partners for particular grains,
(2) controls to ensure "identity preservation,"
(3) documented chains of delivery, and
(4) compliance with stewardship plans developed by seed companies and growers, who can work together to develop standards for particular grains (like the 11 point plan that the ASA has developed for soybeans).

There is an immediate need for standards for identity preservation for varieties of biotech crops that lack overseas approvals in major export markets, as well as for the few varieties of industrial and pharmaceutical crop production systems that are entering the marketplace. The latter, in particular, appear to present a risk of repeating the food commingling mishap that led to the Starlink™ recall.

If companies and growers fail in their joint stewardship efforts, growers involved in the program may end up on the receiving end of nuisance lawsuits. This will inevitably lead to third-party claims by growers against the seed company. See Selma Pressure Treating v. Osmose Wood Preserving Co., 221 Cal. App. 3d 1601 (1990) (chemical spill led to comparative fault claim for chemical supplier's failure to warn of risks of improper disposal).

Biotech Company Stewardship
Although our planned speaker from Monsanto was ill and unable to appear or present a paper, he has provided information on Monsanto's stewardship program for the new varieties of unapproved-in-EU corn that are being marketed. The Monsanto program for grower stewardship in the Roundup Ready™ corn program demonstrates one biotech company's stewardship plan in the post-Starlink™ era. This program includes instructions on "channeling" requirements to avoid commingling with corn bound for export (in particular sources for corn gluten, which still flows to the EU). Growers are encouraged to "know before you grow" so as to avoid commingling.

Monsanto has pledged to maintain identity preservation and commercialize commodity crops only with "full food and feed approvals in both the United States and Japan" (Europe is not approving any biotech crops these days). Monsanto's website states that: "Monsanto is working directly with seed companies, growers and grain handlers to provide a comprehensive program to channel Roundup Ready corn away from grain handlers and processing plants that send products to Europe. Roundup Ready corn is available in all areas of the United States, to any growers who agree to follow the channeling program." For commingling risks, Monsanto's form provided to growers contains the following notice:

HARVESTED GRAIN ADVISORY: Grain/commodities harvested from Roundup Ready® Corn…is approved for U.S. food and feed use, but not yet approved in certain export markets where approval is not likely to be received before the end of 2001. As a result, the grower is restricted from introducing such grain/commodities into channels of trade where the potential for export to such markets exists. The grower must channel such grain/commodities for feeding on farm, use in domestic feed lots or other uses in domestic markets only. Growers should refer to page 27 of Monsanto's Technology Use Guide for information on crop stewardship regarding the potential movement of pollen to neighboring crops.

Instructions for Growers Intending to Plant Roundup Ready Corn or Roundup Ready Corn with Yieldgard Stacked (Monsanto Company 004-01-0006), copy on file with author.

Monsanto's Roundup Ready™ wheat is coming to the end of the required field trials, and Monsanto is preparing for its commercial launch. At the same time, many wheat growers and bakers appear to be preparing to take their own steps to control the release. The legislatures or attorneys general of states with significant wheat exports may be called upon to take steps to exclude Roundup Ready™ wheat or to dictate conditions of use for growers above and beyond those required by the Monsanto product stewardship program. The National Conference of State Legislators has commenced a program at the committee level to address the threats to export.

The success or failure of channeling programs for Roundup Ready™ corn will provide lessons to help Monsanto and other companies with products emerging from development as they move toward a future where high-premium output traits are grown without unintended commingling in food supplies.

Conclusion
The Starlink™ litigation has sensitized many growers, and alerted many attorneys, to the risks posed by commingling of unapproved varieties of biotech crops. The lessons of Starlink™ will continue to be gathered and shared in this newsletter as the litigation unfolds, and as new varieties of unapproved or partially approved biotech crops enter the marketplace. As Mr. Censky pointed out, the next Starlink™ may be waiting in the wings in the form of unapproved-in-EU or unapproved-for-food varieties of genetically enhanced crops.

Both of our speakers agreed that biotechnology already provides beneficial enhancements to food safety and environmental protection and that it offers enormous potential to industrial and medical applications (using agriculture as a low cost production system). The question that lingers in the aftermath of Starlink™ is simple to ask, but incredibly difficult to answer: Is it possible to deliver the benefits of biotechnology to a world with "zero tolerance" for commingling of crops that lack global regulatory approval? The "zero tolerance" left in the wake of Starlink™ may set a standard that is impossible to meet.