A four-year-old legal dispute between farmers and Syngenta Seeds over genetically modified corn seeds seemed like it was over when a $1.5 billion settlement was announced last September.
But now some farmers who stand to gain from the agreement are suing their former attorneys, claiming the lawyers charged excessive fees of up to 40 percent of individual compensation.
The lawsuit filed this week in U.S. District Court in Minneapolis seeks to become certified as a class-action case that could benefit about 60,000 corn growers — including 9,000 in Minnesota — who were represented by dozens of attorneys in individual lawsuits under the direction of a Texas law firm.
Minneapolis attorney Douglas Nill charged in the complaint that previous attorneys for the farmers were part of a massive fee fraud scheme, and that they at all times "placed their self-dealing financial interests above farmers' interests."
Mikal Watts, one of the lead attorneys representing the corn growers initially, called the Nill lawsuit full of "false accusations" and "worth less than the $400 it took for this single lawyer to file it."
In a statement, Watts said the lawsuit is "merely a collateral attack on a settlement by one lawyer who has done nil on this case."
Watts said his firm has spent tens of millions of dollars and invested tens of thousands of hours over the past four years with other "fine law firms across the Corn Belt," and that "every bit of work in this case has been done ethically, following consultations with ethics experts in various states."
The original dispute centered on Minnetonka-based Syngenta Seeds Inc. and its Swiss-based parent company. Syngenta launched Viptera corn in 2010 for planting in 2011, and Duracade corn in 2013 for planting in 2014. The GMO seeds were approved by U.S. regulators, but not by China for import. Syngenta was acquired by ChemChina last year.
Chinese port officials began turning away U.S. corn shipments that had any traces of Viptera beginning in late 2013 and Duracade in 2014, resulting in millions of tons of lost sales during the next three years and causing the overall price of corn to plummet.
Farmers claimed financial losses estimated as much as $1.90 per bushel with overall damage of $6 billion or more. They filed waves of lawsuits against Syngenta in both class-action and individual cases, and in both federal and state courts. Eventually nearly all of the cases were consolidated and handled by a federal judge in Kansas, and Syngenta agreed to a global settlement of $1.5 billion last September.
Two weeks ago, a federal judge approved a preliminary plan that will allow most of the 600,000 corn farmers across the country, as well as some grain handling and ethanol production firms, to file compensation claims. The process is expected to launch in mid-May with a five-month window for filing, and payments likely to be received next year.
Compensation will depend on many factors, Nill said, but certainly could be in the tens of thousands of dollars for many producers.
The problem, Nill said, is that the 60,000 farmers represented by Watts and other attorneys in individual lawsuits were not informed that they were covered by the national combined class-action cases where attorney fees, typically 10 to 12 percent in large cases, are decided by the presiding judge.
Instead, Nill said, the attorneys who urged farmers to file individual lawsuits with 40 percent contingent fee retainer contracts now intend to "double-dip" by adding their fees on top of fees provided to the class-action attorneys in the national case.
Farmers were deceptively solicited to file individual claims in the first place, Nill said in the complaint, and then "secretly excluded, without their knowledge and consent, from participating in class actions against Syngenta" in the multidistrict litigation in Kansas.
"Farmers have been deprived of the opportunity to make an informed decision as to whether to pursue an individual claim or a class action claim without representation by defendants, thereby subjecting farmers to defendants' fraudulent scheme to extract unreasonable fees," the complaint said.
Nill is asking that the retainer contracts in the individual lawsuits be voided because of dishonest representations and omissions and conduct. He also claims that the attorneys violated Minnesota rules for professional conduct for lawyers that included false advertising, failure to communicate honestly with clients about litigation options, breach of fiduciary duties, unreasonable fees, undisclosed fee agreements and misconduct.