Drew L. Kershen Earl Sneed Centennial Professor of Law IEOSA at Whitetail, Idaho June 24, 2008 Copyright 2008, Drew L. Kershen – all rights reserved.

Drew L. KershenEarl Sneed Centennial Professor of LawIEOSA at Whitetail, IdahoJune 24, 2008Copyright 2008, Drew L. Kershen – all rights reserved

Patents Antitrust

Brief comments Liability

Some comments Environmental/Administrative

Focus Coexistence

Patents: two strands Company v

Company Patent validity Licensing

Company v Farmer Infringement Saved seed issue Monsanto Canada v.

Schmeiser

Antitrust: two strands Direct allegations of

actions in restrain of trade

price fixing Defense in

infringement cases Technology use

agreements Pricing in other

countries Unsuccessful

In re StarLink Corn Prods. Liab. Litig., 212 F. Supp.2d 828 (N.D. Ill. 2002) Corn approved for feed not food Physical intermingling – adulterated food EPA refused exemption or tolerance

Concerns about allergic reactions None confirmed Administrative failure

Settlement of $ 110 million; $ 2 billion total

Sample v. Monsanto, 283 F. Supp.2d 1088 (E.D. Mo. 2003) Unapproved in EU export market corn &

soybean traits – fully approved in the U.S. and other export markets

Claim for “pure” economic loss No proof of physical intermingling Did not reach issue: if physical

intermingling, is loss of an export market “damages” in law?

Hoffman & Beaudoin v. Monsanto Canada, 2005 SKQB 225, aff’d on appeal 2007 SKCA 47, leave for appeal dismissed Sup. Ct. Canada Loss of EU market; Loss of opportunity to grow

organic canola Broad range of common law (trespass, nuisance,

negligence) – dismissed Economic loss doctrine precludes claims One provincial environmental claim allowed Class action rejected – appeal on the class action

issue, case is now final

In re LL601 Rice litigation (2007) Approved field trials of transgenic rice Intermingled into seed supply – two varieties

14 month USDA investigation – undetermined Economic losses arising from

Disruptions to export market (EU, Mexico, Philippines) Loss of seed varieties

Still in preliminary, procedural stages; no substantive rulings

Strikingly similar to claims made in Sample v. Monsanto and Hoffman & Beaudoin v. Monstanto Canada

Environmental/Administrative

Foundation on Economic Trends v. Heckler, 756 F.2d 143 (D.C. Cir. 1985) Against NIH approval of “frost-minus” transgenic

bacteria National Environmental Protection Act (NEPA)

challenge Rigorous Environmental Assessment (EA) required for

this particular experiment – possible dispersion Refused request for Programmatic Environmental Impact

Statement (EIS) on all transgenic experiments Concurring Judge – the NIH had done three EAs but

should put them altogether so as to “not only ease lay concerns, but facilitate [judicial] review as well.”

Environmental/Administrative

Foundation on Economic Trends v. Block, 1986 WL 5156 (D.D.C. 1986) USDA basic research in

animal productivity NEPA – adverse impact of

genetic engineering and industrial agriculture

Judge Richey wrote, “NEPA requires predictions but not prophecy, and impact statements ought not to be modeled upon the works of Jules Vernes or H.G. Wells.”

Foundation on Economic Trends v. Johnson 661 F. Supp. 107 (D.D.C. 1986) Coordinated Framework for

Regulation of Biotechnology from Office of Science and Technology

NEPA and Administrative Procedures Act (APA)

Abstract speculation about what federal agencies may do in the future – no case or controversy

Environmental/Administrative

Foundation on Economic Trends v. Lyng, 680 F. Supp. 10 (D.D.C. 1988) USDA license for pseudorabies vaccine

containing genetically altered virus Virus-Serum-Toxin Act and NEPA USDA prepared EA, not EIS – not an

arbitrary and capricious major action

Environmental/Administrative

Stauber v. Shalala, 859 F. Supp. 1179 (W.D. Wisc. 1995) Recombinant bovine growth hormone (rBGH) FDA decision to allow and to not require label –

FDA prepared EA, not EIS – NEPA challenge Second look under NEPA after FDCA approval – not

required Laws “do not contemplate an independent

consideration of socioeconomic effects when there is no determination that the proposed agency activity will significantly effect the environment.”

FDA had not acted arbitrarily and capriciously

Labeling/First Amendment

International Dairy Foods Ass’n v. Amestoy, 92 F.3d 67 (2nd Cir. 1996) Challenge by Monsanto of Vermont statute

requiring warning label on milk from cows treated with rBGH

Mandatory state label violates First Amendment – freedom from being forced to speak

No health or safety concerns – consumer fears (alleged) insufficient reason to support the law

Environmental/Administrative

Alliance for Bio-Integrity v. Shalala, 116 F. Supp.2d 166 (D.D.C. 2000) FDA policy on food improved by modern

biotechnology (genetically modified food) Presumption of substantial equivalence (GRAS) Use same procedures as for all other foods No label needed or allowed under FDCA statute

NEPA challenge – FDA did not prepare EA or EIS Ruled that NEPA does not apply to policy; applies

only to “major federal action” Process by which a food is made is not a “material

fact” for statutory requirements related to labeling

Environmental/Administrative

International Center for Technology Assessment v. Leavitt, 468 F. Supp.2d 200 (D.D.C. 2007) (actually third decision) FDA decision not to regulate transgenic

zebra fish for recreational aquariums – Glofish

NEPA and ESA challenges FDA policy (inaction) is not major action FDA did not act arbitrarily and capriciously

Environmental/Administrative

Center for Food Safety v. Johanns, 451 F. Supp.2d 1165 (D. Haw. 2006) APHIS permit to conduct field trials for genetically-

engineered pharmaceutical-producing plant varieties NEPA and ESA challenge – APHIS did not prepare either an

EA or an EIS Programmatic study of GEPPV Ruled that granting a permit is a major federal action

requiring EA or EIS for specific permits NEPA and ESA do not apply to GEPPV policy development –

APA applies as developed Declaratory relief – the permits had already expired

Court had ruled in an earlier judgment that the issues were not moot

Environmental/Administrative

International Center for Technology Assessment v. Johanns, 473 F. Supp.2d 9 (D.D.C. 2007) APHIS permits for field trials of RR creeping bent grass – test

completed in 2003 [Scotts Miracle-Gro Company has petition to deregulate (not

at issue in this case)] Plant Pest Act (noxious weed) and NEPA Remanded for noxious weed determination; species level,

not variety level, is appropriate Notification and acknowledgment -- Categorical exclusions,

but regulatory exceptions to the categorical exclusions Ruled APHIS acted arbitrarily and capriciously by not

explaining exceptions to field trial permits – permanent injunction as to permits for field trials until exceptions addressed that could lead to EA or EIS

Environmental/Administrative

Geertson Seed Farms v. Johanns, 2007 WL 518624 (N.D. Cal. 2007) APHIS used EA in determination of deregulation of

RR alfalfa NEPA challenge to EA Ruled APHIS acted arbitrarily and capriciously by

not considering in the EA Economic and social impacts, particularly organic

farming Cumulative effect of glyphosate-resistant weeds

Reversed deregulation; granted permanent injunction against future planting

On appeal

Environmental/Administrative

Center for Food Safety v. Connor, pleadings filed N.D. Calif. Jan. 23, 2008 RR sugar beets – 50% planted this year; estimate for 2009

of 90% in the field for processing Lawsuit is very similar to Geertson Seeds case about RR

alfalfa – same claims and same relief sought Focus not on fields, but on sugarbeet seed production –

claims related to seed purity of table beets and chard, particularly organic

Preliminary procedural stages Scheduling conference on August 8 Motions to Intervene by Forage Genetics, Monsanto, American

Sugarbeet Growers Ass’n, and other industry groups to support APHIS decision to deregulate

Coexistence

Scientific studies about pollen flow, volunteers, and seed purity

Willamette Valley Specialty Seed Crop Association

Zero tolerance Organic Standards Consumer demands Export Markets Boulder Colorado Coexistence guidelines

Coexistence

Good agronomic practices Neighborly attitudes Farmer choice

Review of the cases – Their meaning Their implications

Concluding Quotation

In 1985, Senior Circuit Judge MacKinnon wrote in a concurring opinion in the Heckler case :

“The Foundation’s conduct also has delayed this vital experiment … The use of delaying tactics by those who fear and oppose scientific progress is nothing new. It would, however, be a national catastrophe if the development of this promising new science of genetic engineering were crippled by the unconscionable delays that have been brought about by litigation using [NEPA] and other environmental legislation …” Foundation on Economic Trends v. Heckler, 756 F.2d 143, 161 (D.C. Cir. 1985)

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