A federal jury ruled in favor of the plaintiff, Bader Farms, in Bader Farms, Inc v. Monsanto Co., awarding $15 million in actual damages on February 14, 2020 and an additional $250 million in punitive damages the following day for a total award of $265 million. The plaintiff had brought suit against Monsanto Company (“Monsanto”) and BASF Corporation (“BASF”) for dicamba damage allegedly caused to the plaintiff’s peach orchards during the 2015-2016 growing season and beyond. At trial, Bader Farms raised claims of negligent design/failure to warn, civil conspiracy, and joint venture. The jury ruled for the plaintiff on all counts. The outcome of this trial is likely to have an impact on other cases going forward, particularly the In re: Dicamba Herbicides Litigation which is scheduled for trial later this year and is raising several of the same claims as the plaintiffs in Bader Farms. Monsanto, now owned by Bayer, has already announced that it intends to appeal the verdict.
CIVIL CONSPIRACY IN BADER FARMS AND IN RE: DICAMBA
The plaintiff farmers in both Bader Farms, Inc. v. Monsanto Co., No. 1:16-cv-299 (E.D. Mo. 2019) and In re: Dicamba Herbicides Litigation, No. 1:18-md-02820 (E.D. Mo. 2019) have brought state law claims for civil conspiracy against the defendants Monsanto Company (“Monsanto”) and BASF Corporation (“BASF”). By filing claims of civil conspiracy, the plaintiffs are alleging that Monsanto and BASF worked together to create “fear-based demand” for their dicamba-based herbicides and Monsanto’s dicamba-resistant soybean and cotton seeds. In response, the defendants in both cases have argued that claims for civil conspiracy require an underlying tort, a civil wrong that causes harm or loss to the plaintiff, and that the plaintiffs in each case have failed to identify the underlying tort for the alleged conspiracy.
Although the defendants moved to dismiss the civil conspiracy claims in both cases, the court has decided to allow the claims to proceed to the trial stage in each litigation. The court issued its opinion on the motion to dismiss in In re: Dicamba several months before it gave its opinion in Bader Farms. After reading the court’s analysis in In re: Dicamba, the plaintiffs in Bader Farms clarified their civil conspiracy claims to help clear up some confusion the court expressed in its earlier opinion, and successfully argued that claim at trial.
IN: RE DICAMBA
The plaintiffs in In re: Dicamba asserted claims of civil conspiracy against Monsanto and BASF in the Crop Damage Class Action Master Complaint (“Crop Damage Master Complaint”). The claims were brought in Arkansas, Illinois, Kansas, Mississippi, Missouri, Nebraska, South Dakota, and Tennessee, but each claim made the same argument. Each count of civil conspiracy argued that the defendants had worked together to carry out an “unlawful, fraudulent, deceptive scheme and device to improperly market, sell, and expand sales and profits from the defective Xtend Crop System.” Monsanto and BASF both moved to dismiss the civil conspiracy claims, arguing that the plaintiffs had failed to allege an underlying intentional tort. According to the defendants, they could not be accused of conspiring to commit a wrongful activity if an intentional wrongful activity had not been identified. In response, the plaintiffs argued that all the states in which the plaintiffs had brought their civil conspiracy claims followed the Restatement (Second) of Torts § 876 which does not require an underlying intentional tort for a civil conspiracy claim. The court ultimately agreed with the plaintiffs and refused to dismiss the claims of civil conspiracy, but did highlight a confusing point in the plaintiffs’ argument.
The Restatement (Second) of Torts § 876 gives plaintiffs two ways to raise a claim of civil conspiracy. Section 876 (a) says that a party may be liable for civil conspiracy if they commit a tortious act together with another party. Meanwhile, § 876 (b) says that someone who “knows that the other’s conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other” may be liable for civil conspiracy. In other words, § 876 (b) says that a person may be liable for civil conspiracy if they have substantially assisted another person in carrying out activity that they know is wrong. This is also known as the aiding and abetting section.
In considering whether to dismiss the claims for civil conspiracy the plaintiffs in In re: Dicamba brought against Monsanto and BASF, the court noted that the plaintiffs were not entirely clear which torts claims would serve as the underlying wrongful conduct, or which section of the Restatement they were raising their civil conspiracy claims under. However, the court allowed the claim to go forward because it felt that the plaintiffs had likely made a sufficient argument under at least one of the Restatement sections, but asked for further clarification on the issue. Essentially, the court allowed the civil conspiracy claims raised in In re: Dicamba to proceed to the trial stage because it did not have enough information to determine whether the claims should be dismissed before trial.
The plaintiffs in Bader Farms did not include civil conspiracy in their original complaint against Monsanto, but raised it later in amended complaints against both Monsanto and BASF. The most recently amended complaint, known as the Third Amended Complaint, filed by Bader Farms before trial brought two counts of civil conspiracy against Monsanto and BASF: (1) concerted action by agreement, and (2) aiding and abetting. This was done in response to the ruling in In re: Dicamba which asked for greater clarification over which section of the Restatement (Second) of Torts § 876 the civil conspiracy claims were being brought under. The plaintiffs in Bader Farms decided to pursue both.
Under the first count of conspiracy, concerted action by agreement, Bader Farms argued that the defendants “carried out their conspiracy by engaging in their negligent and intentionally tortious acts in concert with one another pursuant to their joint agreements to develop and commercialize the Xtend Crop System.” Meanwhile, under the second count of conspiracy, aiding and abetting, Bader Farms accused the defendants of carrying out their conspiracy by “aiding and abetting each other’s negligent and intentionally tortious conduct in in furtherance of their joint plan to develop and commercialize the Xtend Crop System.” Essentially, the plaintiffs argued under the first count that Monsanto and BASF agreed to engage in negligent and tortious behavior together to sell the Xtend Crop System, while under the second count the plaintiffs argued that Monsanto and BASF each assisted the other in carrying out wrongful activity. Both companies moved for dismissal of each count.
The court began its analysis of the Bader Farms civil conspiracy claims by noting that the main difference between the two counts was that the first involves an agreement to engage in a wrongful activity, while the second focuses on whether a party knowingly gave “substantial assistance” to someone who engaged in wrongful conduct. With that distinction clarified, the court went on to uphold the count of concerted action by agreement, but dismissed the count of aiding and abetting.
In moving to dismiss the first count of conspiracy, the defendants argued that the claim required an underlying intentional tort, which the plaintiffs had failed to identify. The court was not persuaded by this argument, noting that the elements of conspiracy under Missouri state law, the state where the court is located, did not require an underlying intentional tort. While the court acknowledged that two parties cannot conspire to act negligently, it pointed out that the conspiracy alleged by Bader Farms was the intentional act of creating an “ecological disaster” to boost the defendants’ profits, not negligence. Accordingly, the court allowed the first count of conspiracy to proceed to the trial stage of litigation. With respect to the second claim of conspiracy, aiding and abetting, the defendants argued that such a claim was not recognized by Missouri courts. The court agreed, stating that only one Missouri court of appeals case had ever approved the cause of aiding and abetting for conspiracy. Accordingly, the court dismissed the claim.
At trial, Bader Farms successfully argued the count of conspiracy under the theory of concerted action by agreement. The jury was persuaded by the argument that Monsanto and BASF carried out a conspiracy by agreeing to engage in wrongful behavior in order to develop and market their dicamba-resistant seeds and dicamba-based herbicides.
In light of the recent jury verdict finding for Bader Farms on the claim of civil conspiracy, the plaintiffs in In re: Dicamba are likely to argue that Monsanto and BASF committed a civil conspiracy by agreeing to engage in wrongful activity. It is less likely that the In re: Dicamba plaintiffs will pursue a civil conspiracy claim for aiding and abetting because the court dismissed the aiding and abetting claim in the Bader Farms case. Ultimately, the claims for civil conspiracy in each case are important because they consider whether the defendants intended to engage in wrongful activity to increase their sales.
To read the Crop Damage Master Complaint, click here.
To read the complaint in Bader Farms, click here.
To read the court’s opinion on motions to dismiss in In re: Dicamba, click here.
To read the court’s opinion on motions to dismiss in Bader Farms, click here.
To read all of the blog posts in this series, click here.