Summary of a Recent
Judicial
Development in
Biotechnology
Class Certification Order Reversed in
Suit Against Monsanto and Others
Gaby R. JabbourNational AgLaw Center Research Assistant
In an action brought by several farmers against the manufacturers and distributors of a genetically engineered cotton seed for fraud, violations of the Texas Deceptive Trade Practices Act, negligence, negligent misrepresentation, and usury, and seeking class certification, the Texas Court of Appeals has reversed a trial court's decision to certify the class action because there were arguable defenses peculiar to a subset of plaintiffs that destroyed the typicality requirement necessary to achieve class status. Monsanto Co. v. Davis, 97 S.W.3d 642, 642 (Tex. Ct. App. 2002).
In 1995, Monsanto Company ("Monsanto"), Delta and Pine Land Company, and D & M Partnership, defendants, sold a cotton seed known as Bollgard that was genetically engineered to produce an insect-fighting protein. See id. at 643-44. The defendants were manufacturers and distributors of Bollgard. See id. Monsanto claimed that "a cotton plant with the Bollgard gene would have the ability to fend off common and very destructive pests such as the tobacco budworm, the cotton bollworm, and the pink bollworm." See id. at 644.
In August, 1996, a group of Texas cotton farmers, plaintiffs, brought an action against the defendants alleging "fraud, violations of the Texas Deceptive Trade Practices Act, negligence, and negligent misrepresentation" because the Bollgard plant "did not perform according to Monsanto's representations." Id. In October, 1996, a separate national class action was filed in Louisiana "seeking recovery for similar claims relating to the 1996 growing season." Id. (citation omitted). In May, 1998, a settlement was reached in the Louisiana action, and a notice was sent to the potential class members, including the members of the present case. See id. The notice stated, in part, the following:
[T]he final judgment, whether favorable or not, will be binding upon all members of the Settlement Class who did not choose to opt out, and will extinguish all claims, rights and remedies which the Class Members might assert against the Defendants that are related to the subject matter of the Action.
Id. The class representatives in the present action opted out of the Louisiana class action. See id.
Subsequently, the plaintiffs in the present case sought class certification, and the trial court entered an order certifying the class. See id. at 643. The defendants appealed the trial court's decision to the Texas Court of Appeals, claiming "in fourteen points that the court erred in determining that Plaintiff's suit should be maintained as a class action." Id. at 643. They claimed in their fifth point that "the Plaintiffs fail to meet the prerequisite of typicality because their claims are not subject to the same defenses as those of the unnamed plaintiffs." Id. at 645. The court did not consider any of the defendants' other arguments because the issue of typicality was dispositive. See id. at 643.
The court explained that
to achieve class status, the proponent of the claim must first satisfy the four threshold requirements set forth in Rule of Civil Procedure 42(a): (1) numerosity (the class is so numerous that joinder is impracticable); (2) commonality (there are common questions of fact and law); (3) typicality (the representative's claims are typical of the class); and (4) adequacy of representation (the representative parties will protect the interests of the class).
Id. at 644-45 (citations omitted). It also explained that to achieve class status, "the class action must satisfy at least one of the four categories found in Rule 42(b)." Id. at 645 (citing Tex. R. Civ. P. 42(b) and Southwestern Refining Co., 22 S.W.3d 425, 433-34 (Tex. 2000) and Sun Coast Resources, 967 S.W.2d 525, 529 (Tex. Ct. App. 1998)).
The court stated that "[t]o be typical of the class, the named plaintiffs must possess the same interest and suffer the same injury as the rest of the class" and "their claims must arise from the same event or course of conduct giving rise to the claims of the other class members and must be based on the same legal theory." Id. at 646. It added, "[t]he presence of even an arguable defense peculiar to a subset of the putative class members destroys typicality." Id.
The court stated that the defendants "have presented arguable defenses which are peculiar to a subset of the Plaintiffs: res judicata, release, and accord and satisfaction." Id. It added that the unnamed plaintiffs in this class action, unlike the named plaintiffs, failed to opt out of the Louisiana class action and that the notice provided in conjunction with the Louisiana class action "may have the effect of precluding any and all future claims by the class members who participated (did not opt out) in that settlement." Id.
It stated that the representative class members are not subject to the same defenses as the unnamed class members because the named members opted out of the Louisiana suit. See id. "Therefore," the court concluded, "the representative class members cannot fulfill the requirement of typicality. Accordingly, the court abused its discretion by certifying the suit as a class action. We sustain the Defendants' fifth point. We reverse the class certification order and remand this cause for further proceedings." Id.
The case was decided on December 31, 2002; this summary was posted in June, 2003