Coerced Settlements

Following investigations, Monsanto usually sends threatening letters via certified mail to farmers suspected of planting or selling saved patented seed. The letter typically requests that the farmer pay a specified sum of money to avoid legal proceedings. Under financial duress, many farmers who have been accused of patent infringement based on insubstantial evidence have decided to settle out of court rather than face an expensive and lengthy lawsuit. Given the aggressive nature of the letters farmers receive announcing Monsanto’s allegations, it is likely many farmers have been harassed or intimidated into settling out of court, innocent or not, in order to avoid paying substantial attorney fees. It has been reported that Monsanto’s investigators and attorneys boast regarding their courtroom success as a way to intimidate farmers into settling before the company engages in legal proceedings.

The most common threat farmers reported hearing was that Monsanto would “tie them up in court for years” if they chose not to settle. Gary Rinehart, the man investigators mistakenly pursued, recalls Monsanto’s arrogant approach to farmers: “When they [investigators] came up here, they were bragging to other farmers about all of the farmers they had put out of business.”

In addition to sending threatening letters to farmers, Monsanto also distributes letters listing the names of farmers prohibited from purchasing its products to thousands of seed dealers each year. These letters often pressure farmers who wish to retain this purchasing right into settling out of court, regardless of the legitimacy of the company’s investigation. “It’s easier to give in to them than it is to fight them,” said one farmer who is still restricted from using Monsanto’s products as a result of challenging the company’s claims in court.

Many of these settlements with Monsanto, it has been reported, contain strict provisions that afford Monsanto the right to test the farmer’s crops for a set period of time, typically five years. These provisions also require farmers to present documents within 24 hours of Monsanto’s request, purchase a specific quantity of the company’s products, and disclose names of other people who have saved the company’s seeds. The settlements are usually confidential. In 1999, The Washington Post reported that nearly half of the company’s 525 investigations had been settled. While this is the only publicly available source describing (pre-legal action) settlements resulting from farmer investigations, Monsanto claims that since 2000, it has settled for millions of dollars in total damages. Due to the confidential nature of these settlements, exact amounts farmers agree to pay Monsanto are not available; nevertheless, we do know that one farmer, Carlyle Price of North Carolina, settled for $1.5 million.

The company says it is not looking to profit from these settlements and claims the settlements go toward scholarships and other educational initiatives. A Monsanto spokesman, Brian Hurley, reported that any money the company wins is donated to the American Farm Bureau to pay for scholarships, but evidence shows that the company directs only $150,000 per year to the American Farm Bureau Foundation for Agriculture in the form of scholarships.

It is unknown where the remaining millions are directed. Some farmers agree to sign a settlement obligating them to purchase Monsanto’s products because the offered deal provides for a much smaller settlement fine. Clearly, this provision exemplifies Monsanto’s goal of binding farmers to its genetically engineered seeds and contracts. However, some farmers refuse to settle and subject themselves to paying both attorney fees and larger settlements in order to avoid making a commitment to Monsanto.

Those not willing to acquiesce to Monsanto’s demands enter the most aggressive stage of these pursuits—the lawsuit.

Lawsuits

After reviewing the research of the numerous lawsuits Monsanto has filed against American farmers, what follows is a summary of specific data compiled regarding these lawsuits.

1. Status of Lawsuits Filed Against U.S. Farmers

a. Monsanto has filed 90 lawsuits based upon purported violations of its technology agreement and its patents on genetically engineered seed technology.

b. These cases involve 147 farmers and 39 small businesses/farm companies.

2. Number of Active Lawsuits

a. As of December 2004, 19 of the 90 cases filed by Monsanto against farmers are on-going.

3. Lawsuits Filed by Geographic Location

a. Monsanto has sued farmers and small businesses/farm companies residing in 25 different states. Monsanto’s actions against American farmers have affected farmers nationwide. However, 46 of the lawsuits have been filed in Monsanto’s hometown jurisdiction of St. Louis, Mo. The forum selection clause contained in Monsanto’s technology agreement gives Monsanto this home field advantage.

b. Of the 46 cases filed in the Eastern District of Missouri, only two defendants were successfully able to remove their case to another jurisdiction.

4. Information on Judgments

In many cases, the final results of Monsanto’s lawsuits against farmers remain unknown as they have ended in confidential settlements that cannot be disclosed without risking further sanctions by the court. Farmers who breach this confidentiality stipulation risk the annulment of their settlement, and may face a fine that is considerably larger than their judgment.

Of those cases with publicly recorded monetary judgments, the data reveal a number of sizeable payments to Monsanto. In many cases, the figures indicated may be lower than the actual payments farmers have to make because they may not include expert witness fees, post judgment interest, plaintiff’s attorney fees, costs of testing fields, etc. For example, in Monsanto Co et al v.Thomason et al, which involved two plaintiffs, Monsanto Company and Delta Pine, the defendants had to pay $447,797.05 to Monsanto and $222,748.00 to Delta Pine in damages.

In addition, they also faced $279,741.00 in attorney fees to Monsanto, $57,469.13 in costs and advanced expenses, and $75,545.83 for testing fields, as well as additional attorney fees to Delta Pine to the tune of $82,281.75 and $5,801.00 in costs and advanced expenses.

Farmers issued monetary judgments are typically also issued permanent injunctions. Farmers with injunctions are forbidden from buying and/or selling Monsanto’s products.

The largest recorded judgment made in favor of Monsanto as a result of a farmer lawsuit is $3,052,800.00.

■ Total recorded judgments granted to Monsanto for these lawsuits amount to $15,253,602.82.

■ For cases with recorded judgments, farmers have paid a mean of $412,259.54.

■ The median settlement is $75,000.00 with a low of $5,595.00 and a high of $3,052,800.00.

5. Lack of Adequate Legal Defense Representation

Monsanto, a multi-billion dollar company, is pressing cases against farmers who operate on a comparatively thin profit margin and, thus, have far fewer legal resources.

Many farmers cannot afford legal representation and must fight Monsanto alone if sued by the company. Farmers who are sued by Monsanto and cannot afford legal representation face even higher expenses if they signed a technology agreement since they are forced to answer a complaint in the federal court in St. Louis, regardless of where their farm is located.

■ Nine defendants do not have attorneys of record listed, three are on record as representing themselves (Pro Se) and five had partial representation throughout the course of their lawsuit.

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