December, 1999
headlines and summaries

Return to December article index

Anti-GM crusader says U.S. could join lawsuit

December 15
Reuters Business Report

PARIS - The environmental activist whose group backed a class action lawsuit filed against Monsanto Co said on Wednesday he would not rule out the U.S. government joining the suit as a plaintiff.

Jeremy Rifkin, head of the Foundation on Economic Trends, compared the lawsuit filed on Tuesday against Monsanto to the U.S. government's anti-trust case against software giant Microsoft or the case against the tobacco industry brought by U.S. attorneys general.

"There are many instances in new, controversial areas of law where issues are first raised by the private sector. That does not mean the Justice Department could not join (the lawsuit at a later date)," Rifkin said at a news conference here.

"Let me just say it would not surprise me if this (lawsuit) were broadened," he added.

However, Rifkin declined to comment on whether the plaintiffs had spoken with the Justice Department about its joining the lawsuit, and referred all such questions to the lawyers handling the case in Washington. The lawsuit, which was brought at Rifkin's urging and which names a group of Iowa, Indiana and French farmers as plaintiffs, accuses Monsanto of rushing genetically altered seeds to market without first ensuring they were safe for consumers and the environment.

Anti-competitive practices claimed

The complaint also accuses the life sciences giant of violating anti-trust law, saying its patented genes had given it too much control over how staple crops are used.

Monsanto denied the charges and said it would fight the lawsuit.

"Monsanto has created a global cartel in which it is the hub and other companies are the spokes," Rifkin said.

"Through various anti-competitive practices, it seeks to control world production of agriculture and food, with particular concentration on power over seeds," he said.

Also named in the court case as alleged co-conspirators were Novartis AG, DuPont Co, Dow Chemical Co, and AstraZeneca Plc. Lawyers for the farmers said the companies were not formally charged as defendants in the case, but could be added to the lawsuit in the future.

Rifkin noted that Monsanto and others were trying to alter age-old agricultural practices by making farmers license the genetic material inside its seeds and preventing them from using the seeds for future crops without first paying for them.

"What this means is that if the companies get their way, no farmer in the world will ever own a seed again. If that doesn't hold implications for anti-trust law in the world of agriculture, then I don't know what does," he said.

Rifkin said he hoped the lawsuit would alter the debate over genetically modified foods, which until recently had centered on international trade and regulatory questions involving federal agencies.

"We think this will refocus the spotlight on giant global companies and the power they are exerting over food, farming and cultural sovereignty," he said.

Europe: Greens welcome Monsanto suit, may be widened

December 15
Reuters

Brussels -- European green groups on Wednesday welcomed a U.S. lawsuit against life sciences firm Monsanto Co, as one of the plaintiffs said he would not rule out the U.S. government supporting the action.

The case marks the first global legal challenge to the spread of GM crops and aims to stop industry leader Monsanto adding genes to give soybeans, corn and other plants resistance to pests and herbicides, without first carrying out more rigorous testing.

The environmental lobby Greenpeace, which has led opposition to the development of GM seeds, said it was time for independent research into possible negative ecological and health effects of GMOs.

"(The farmersš) claim that the products are not tested properly is valid in our opinion and is what wešve been saying all the time," said Mika Railo, a Greenpeace spokesman in Amsterdam. "The test results are based on company data, their own test results, and therešs no independent study."

On Tuesday a group of U.S. farmers, French organic farmer Patrick de Kochko plus the U.S.-based Foundation on Economic Trends and the National Farm Coalition filed a suit against Monsanto in federal court in Washington.

They alleged the company introduced genetically modified crops without first ensuring they were safe for consumers and the environment. 

They said Monsanto had formed a worldwide cartel to control the patents and sale of altered seeds. Named in the lawsuit as alleged 'co-conspirators' were Novartis AG, DuPont Co, AstraZeneca Plc and Dow Chemical Co. 

Monsanto denied the charges and said it would fight the lawsuit, which it called baseless, while Anglo-Swedish drugs group AstraZeneca Plc said it was surprised to be included as a co-conspirator.

"We are surprised to be included in this action and we will defend ourselves," ZENECA Agrochemicals external relations manager Ian Weatherhead told Reuters.

Swiss group Novartis AG said it was taking no position on the suit. Monsanto shares bucked a rising U.S. market in early trade, sagging 1-7/16ths in early trade, while AstraZeneca and Novartis closed down more than their respective indices.

Rifkin says U.S. government may join case

Jeremy Rifkin, head of the Foundation on Economic Trends, on Wednesday compared the lawsuit to the U.S. governmentšs anti-trust case against software giant Microsoft Corp.

"There are many instances in new, controversial areas of law where issues are first raised by the private sector. That does not mean the Justice Department could not join (the lawsuit at a later date)," Rifkin told a Paris news conference.

De Kochko told Reuters he had joined the case because he believes a unit of Monsanto sold him soybeans containing GM material, which then contaminated his crop and made it difficult to market his soybeans.

But while some European farming groups welcomed the court challenge, others cautioned that the situation in Europe was wholly different from that in the United States, where GM seeds have gained greater acceptance and are in more widespread use.

The German Bauernverband farm union said it did not share its U.S. counterparts' problems with Monsanto as there were too many seed suppliers active in Europe for one company to become as dominant as Monsanto had in the United States.

Lawyers in Brussels said they would not be surprised if similar lawsuits were being readied in Europe.

They stressed that the different legal situation would not allow farm or environmental groups to take on Monsanto in Europešs top court. A challenge was more likely through national courts, they said.

The European Commission, the EUšs competition watchdog, said it was not aware of having received any request to investigate alleged anti-trust violations by biotechnology firms.

Monsanto sued over use of biotechnology in developing seeds

December 15
New York Times

Some of the nation's most prominent antitrust lawyers filed a class-action lawsuit against the Monsanto Company Tuesday, accusing it of rushing genetically engineered seeds to the marketplace without properly testing them for safety and of forming an international cartel that conspired to control the world's market in corn and soybean seeds.

The lawsuit, which was filed in Federal District Court in Washington on behalf of six farmers, is the latest skirmish in the debate over the use of bioengineered seeds, which are popular among American farmers but troubling to consumers in Europe and environmental groups who contend that they are potentially dangerous to humans and the environment.

The suit, which contends that Monsanto is at the hub of an international conspiracy to control a large part of the world's seed supply, was brought on behalf of a coalition of small farmers and farm groups that accused Monsanto of giving farmers false and fraudulent guarantees about the safety and marketability of a new breed of bio-engineered seeds. But some of the nation's largest farm groups criticized the suit, saying that American farmers have largely benefited from new technologies in the seed market, which have reduced the use of herbicides and pesticides and increased crop yields.

Monsanto denounced the suit, arguing that its biotechnology products were safe and that they had been approved by United States regulators. The company, which is based in St. Louis, also denied that it engaged in any anti-competitive practices.

"We are extremely disappointed that the plaintiffs have filed a lawsuit without merit," said David Snively, an assistant general counsel at Monsanto, which is one of the world's largest agricultural seed and chemical companies. "We have complied with every part of the law and now we're dealing with lawyers who don't care about science and are trying to make a political statement."

The real force behind the suit is a coalition of environmental groups, including Greenpeace, that are serving as advisers in the case. The initiator of the lawsuit is Jeremy Rifkin, the environmental activist who has repeatedly criticized biotech crops as potentially dangerous and likely to lead to "genetic pollution" and the creation of "superweeds" that could drastically alter the environment.

Rifkin, a longtime critic of Monsanto, said Tuesday that about a year ago he hired what he called a "Dream Team of the Green movement" -- a group of antitrust lawyers from 10 firms who are now using words reminiscent of the Justice Department's case against Microsoft, such as contentions that Monsanto has gained monopoly status through the use of bully tactics, intimidation, deceptive business practices and restrictive technology deals with small farmers.

Heading the case is Michael D. Hausfeld, the Washington lawyer who is best known for defending Alaskan natives in the Exxon Valdez oil spill, and more recently helping win a $1.1 billion price-fixing settlement against the world's largest vitamin makers. Mr. Hausfeld is also representing victims forced by Nazis to work during World War II.

Also considering a lead role in the suit is David Boies, the New York lawyer who is leading the Justice Department's prosecution of Microsoft. Mr. Boies was a lead lawyer in the class-action suit against the vitamin makers and is said to be interested in the case because of concerns about farmers.

"This is the beginning of a new chapter in the debate over genetically modified foods," Rifkin said at a news conference yesterday in Washington.

In filing the suit in Federal court, Hausfeld said that he was seeking class-action status for the case. Nine other companies, including DuPont and Novartis, were named as co-conspirators.

The lawsuit contends that since 1996 Monsanto has been using its influence in the agriculture market to gain control over the corn and soybean markets and to prepare for the widespread introduction of genetically modified seeds.

The lawsuit contends that as a leader in the field of agricultural biotechnology, Monsanto initiated an effort to neutralize competition through licensing agreements with its competitors and the misuse of intellectual property rights.

The company, which spent more than $8 billion to acquire large seed companies in the last few years, also conspired with other large seed companies to inflate prices and force small farmers to pay excessive "technology fees" and agree to restrictive planting contracts that sometimes forced them to buy package deals of Monsanto products, according to the suit.

In the news conference in Washington, Hausfeld also said there was a significant amount of uncertainty about whether genetically modified seeds were safe, and that farm exports were being harmed by growing scientific and political concerns that have arisen despite Monsanto's claims that the products are safe.

Several farm groups, however, defended Monsanto and its use of biotechnology. "Soybean farmers strongly support the technology," said Bob Callanan, a spokesman for the American Soybean Association in St. Louis. "They see it as a trend; they're using safer chemicals and less chemicals. We also believe in the regulatory process."

Callanan said that biotech seeds are now used on about 40 million acres in the United States, up from about 8 million acres in 1997.

"Monsanto is being singled out because they're the only one with the Roundup Ready soybean product in the market," he said referring to the company's genetically engineered seeds. "It's not their fault there aren't competitors."

Wall Street analysts, who have been consistently behind the company's move into biotechnology, also defended Monsanto. "This is a very different situation from Microsoft making every computer company pay for Windows," said Nicholas Redfield, an analyst at Banc One Investment Advisors. "On some of its products, Monsanto has a monopoly but it's a legal monopoly; they have the patent."

Robert B. Shapiro, the chief executive at Monsanto, said in an interview yesterday that one reason the case might have been centered on Monsanto alone, rather than the entire agricultural biotechnology industry, which was the initial plan, was simple: "Public relations," he said.

Monsanto, which has been under fire here and in Europe over its development of biotechnology products, has been attacked for trying to "play God" with the world's food supply. Advocates of biotechnology say a "hysterical" campaign has been waged against the company in recent months, putting pressure on its stock price, which fell 25 cents Tuesday, to $41.875.

But Hausfeld said Monsanto aimed to control not just the seed market, but the world's food chain, even the water rights in some countries. He said related lawsuits were planned outside the United States.

Farmers' suit says Monsanto broke antitrust laws

December 15
St. Louis Post-Dispatch

WASHINGTON - The debate over genetic engineering moved Tuesday from the streets to the courts, where a suit accused Monsanto of breaking antitrust laws and selling modified crops with too little testing.

A class-action suit filed in U.S. District Court in the District of Columbia seeks unspecified damages from Monsanto Co., of St. Louis, on behalf of farmers in Iowa, Indiana and one farmer as far away as France.

The suit, relying on novel legal arguments, also seeks to develop international safety standards for genetically modified foods.

It was prepared by a battery of lawyers from 11 law firms around the country, some of whom have been involved in high-profile cases against Exxon, Texaco and other major corporations.

The suit was initiated by the Foundation on Economic Trends, which is led by longtime genetic engineering critic Jeremy Rifkin; and by the National Family Farm Coalition. Bill Christison, of Chillicothe, Mo., president of the farm group, asserted that "farmers have been sold a bill of goods" by Monsanto.

Bill Christison, of Chillicothe, Mo., president of the farm group, asserted that "farmers have been sold a bill of goods" by Monsanto.

Monsanto is the only defendant in the suit. "Co-conspirators" include leaders in the life-science industry and prominent seed companies: Novartis International; DuPont; Dow Chemical Co.; Pioneer Hi-Bred; Mycogen Corp.; Astrazeneca; Delta and Pine Land Co.; Garst Seed Co.; and Agripro Seeds Inc.

Monsanto disputed all of the allegations. David Snively, a Monsanto lawyer, declared the suit frivolous and said he was confident that Monsanto would succeed in getting it dismissed.

"We would hope that this suit helps to push this debate where it needs to be, which is not in the courtroom but in front of the FDA (Food and Drug Administration) and other places where science can really be dealt with," he said.

The suit represented a shift in tactics by biotechnology critics, who recently have adopted the European practice of pressing their case in the streets. On Monday, more than 1,000 demonstrators rallied in Oakland, Calif., outside a federal building where the food and drug agency was conducting a hearing on genetically modified foods.

Two weeks ago, thousands of people converged on a World Trade Organization gathering in Seattle to protest a host of issues, among them their concerns about genetically modified foods. The protests were part of the reason the trade organization talks collapsed.

Rifkin, who has fought since the mid-1980s to slow biotechnology's advance, trumpeted the suit as "the beginning of a new chapter in the debate around genetic foods."

Highlighting the suit's antitrust allegations, Rifkin likened the recent mergers and acquisitions by Monsanto and its rivals to the beginning of this century when Standard Oil gained control of much of the oil market.

Rifkin said he hopes the legal action will shift the spotlight away from regulatory and trade issues affecting biotechnology to broader public policy questions surrounding consolidation of power in the food industry.

"My feeling here is that we're on the cusp of another historic moment. We are making the shift from fossil fuels to genetic commerce. And as we move into the biotech century, we run the risk of a new danger, and that is Monsanto and other life-science companies developing cartels to increasingly dominate and influence the most important resource of all, genes, and the seeds on which all of us rely for our food," Rifkin said, speaking by telephone from France.

The 62-page suit reads like a laundry list of complaints that have emerged about the fast-growing industry of genetically modified food. In the United States this year, about 70 million acres of cropland were sowed with seeds that were genetically altered for production ease and insect control.

In the United States and abroad, some of the skeptics who worry little or not at all about safety are nonetheless concerned about potential abuses if a handful of companies establish domination along the food chain. The suit accuses Monsanto of establishing "a cartel, through which it has attempted to monopolize the GM (genetically modified) corn and soybean markets . . . and has conspired to fix the prices."

The suit refers to Monsanto as the "hub" of the biotechnology industry and other companies as its "spokes." As the lawyers for the plaintiffs see it, Monsanto enforces a monopoly by collecting technology fees from farmers and licensing fees from companies that lease its genetic technologies.

Snively, the Monsanto lawyer, dismissed that reasoning. He noted that although Monsanto has more than 200 licensing agreements with other companies, those companies are free to set their own prices. "This is a pretty open market, and there are other companies that compete with us," he said.

The suit contends that there is a "substantial uncertainty at this time as to whether (genetically modified) seeds are safe for human health and the environment."

Michael Hausfeld, one of the Washington lawyers who helped draft the lawsuit, said that a goal of the suit is to force globally standardized safety testing before modified seeds can be sold.

"There will be a standard which will be developed during the course of the litigation so there would be an international measure for safety both from a public health and environmental" standpoint, he said.

Asked which international government would enforce such a standard, Hausfeld replied, "Any one that was appropriate to do so. In the U.S., the FDA or any other appropriate agency."

Monsanto's Snively observed that genetically modified food on grocery shelves has already passed safety tests of the Food and Drug Administration, the Environmental Protection Agency and the Agriculture Department. "Lawyers should not be playing with the future of these businesspeople and these consumers. They should leave it to people who practice science and regulation," he said.

FDA plan jeopardizes food biotech

December 13
San Francisco Chronicle column by Henry Miller, former director of the FDA's office of Biotechnology

ONE REGULATORY success story at the FDA during the past decade has been its official policy toward gene- spliced foods. The Food and Drug Administration treats gene-spliced and other foods the same, requiring labeling only to indicate safety concerns. This approach has been widely applauded as regulation that makes sense, protects consumers and permits innovation.

However, under pressure from anti-technology activists and their champion, Vice President Al Gore, the agency has begun the process of making regulation so stringent that it will strangle the technology.

The FDA has announced a series of meetings around the country, at which ``the public will be informed about current FDA policy for assuring the safety of bioengineered foods (and) be asked whether this policy should be modified'' -- a thinly-veiled invitation for anti-biotech activists to demand more stringent regulation. The last one is today in Oakland.

Most biotech foods in the United States are now regulated under the FDA's 1992 policy on products from ``new plant varieties,'' which applies irrespective of whether the plant arose by gene-splicing or conventional genetic-engineering methods. It defines certain potentially hazardous characteristics of new foods that, if present, would require greater scrutiny by the agency.

The FDA's current approach to labeling was upheld indirectly by a federal appeals court, which found in a pivotal 1996 decision regarding a Vermont state law on dairy products that food labeling cannot be compelled just because some consumers wish to have the information. In overturning the law, the appeals court found that such regulation violates the constitutional right of commercial free speech.

Even if they weren't unconstitutional, mandatory labels for gene-spliced foods would still be a bad idea. They would convey irrelevant information and imply incorrectly that the buyer needs to be warned of unspecified dangers. Mandatory labeling could spell the end of gene-splicing widely applied to food production meaning the only products that would remain cost-effective would be those that could command high prices and be targeted at affluent consumers.

Scientists are virtually unanimous that modern techniques of genetic engineering are essentially the same as the kinds of genetic modification that have long been used to enhance plants, microorganisms and animals for food. The main difference is that the newer techniques are more precise and predictable -- and the products are, therefore, even safer than the genetically improved foods such as seedless grapes, tangelos and nectarines.

The European Union introduced mandatory labeling of gene-spliced foods more than a year ago. Now, because of the labeling law, there's hardly any choice at all. Britain's new law sparked a stampede by manufacturers, retailers and restaurant chains to rid their products of all genetically modified ingredients so they wouldn't have to introduce new ``warning'' labels and risk losing sales.

If large numbers of people really want to avoid gene-spliced food, niche markets will arise -- assuming that consumers are willing to pay a premium for foods certified to be ``gene-splicing free,'' as consumers do now for kosher, halal and organic products. But these certifications are offered without the mandate of government.

The existing FDA policy toward gene-spliced and other novel foods has worked admirably, resulting in unprecedented choice for all.

Henry I. Miller is a fellow at the Hoover Institution and the author of ``Policy Controversy in Biotechnology: An Insider's View.'' He is the former director of the FDA's Office of Biotechnology.