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BASF Scores New Trial Over $60 Million Dicamba Damages Award (1)

July 7, 2022, 4:18 PMUpdated: July 7, 2022, 5:45 PM

Monsanto Co. and BASF Corp. are liable for the herbicide dicamba’s damage to a farmer’s peach orchards, the Eighth Circuit said Thursday, but it tossed a $60 million award and called for a new trial to separately assess what punitive damages each company owes.

The evidence “establishes different degrees of culpability between the co-conspirators,” according to the US Court of Appeals for the Eighth Circuit. Therefore, the lower court should’ve told the jury to “separately assess punitive damages against Monsanto and BASF,” the appeals court said.

Bader Farms Inc. said in its lawsuit that its orchards were damaged by dicamba drift between 2015 and 2019. Monsanto sells Xtend cotton and soybean seeds, which are modified to tolerate dicamba and glyphosate, according to court filings. The company also sells XtendiMax, a herbicide that contains dicamba.

The jury originally awarded the plaintiff $250 million in punitive damages, but the companies successfully convinced a judge to reduce it to $60 million in November 2020.

Monsanto and BASF argued Bader failed to prove causation. The companies told the appeals court that third-party farmers “broke the chain of proximate causation” by using dicamba herbicides illegally and against official instructions.

Monsanto had direct relationships with the third-party farmers, and it “exercised some degree of control over their acts,” the court said. Also, the farmers couldn’t receive the benefit of using a dicamba-tolerant seed without misusing the pesticide, according to the ruling.

The lower court “properly refused to find intervening cause,” the appeals court said.

No Joint Venture

The companies argued that a separate $15 million compensatory damages award was based on the wrong legal standard and lacked evidence to support the fine. But the lower court properly told the jury to measure compensatory damages by lost profits instead of land value, according to the ruling, which rejected the companies’ claims that the estimate was “impermissibly speculative.”

However, Bader’s argument that the two companies formed a joint venture fails because BASF lacked equal control over the direction of the enterprise, the court said. The company didn’t manage when or how to release the dicamba-tolerant seed, and had no oversight over farmers who planted the seed, according to the ruling.

If the companies formed a joint venture, then BASF could be held jointly and severally liable for punitive damages based on Monsanto’s actions, the court said. But they didn’t, so punitive damages must be assessed separately, Judge Duane Benton wrote. Benton was joined by Chief Judge Lavenski R. Smith and Judge Jane Kelly.

“While we have great sympathy for any grower who suffers a crop loss, we continue to believe Bader Farms’ claims lack merit, and that any crop loss Bader Farms experienced is unconnected to Monsanto or its products,” Bayer AG said in a statement Thursday.

The company also said it “stands strongly behind the safety and utility of our XtendiMax herbicide, which is a valuable tool, especially right now when growers need access to a variety of safe and effective crop protection tools to meet global food security needs.”

Randles & Splittgerber LLP and Davis George Mook LLC represented Bader Farms Inc.

Faegre Drinker Biddle & Reath LLP and Hogan Lovells US LLP represented BASF. Thompson Coburn LLP, Bryan Cave Leighton Paisner LLP, and Sidley Austin LLP represented Monsanto.

The case is Bader Farms Inc. v. Monsanto Co., 8th Cir., No. 20-03663, 7/7/22.

(Adds comment from Bayer beginning in 10th paragraph.)

To contact the reporter on this story: Maya Earls in Washington at mearls@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Brian Flood at bflood@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com