Bayer CropScience LP v. Schafer
385 S.W.3d 822
| Ark. | 2011Background
- Rice farmers sued Bayer for economic damages from contamination of U.S. long-grain rice supply by Bayer's LibertyLink Rice, alleging negligent field-trial safeguards and cross-pollination risks.
- USDA detected LLRice 601 in Aug 2006 and LLRice 604 later; no regulatory approval existed for these strains at that time.
- Contamination led to widespread market disruption and reduced U.S. rice exports; substantial price effects were alleged.
- Circuit court held Arkansas Code 16-55-208 unconstitutional, denied summary judgment on economic-loss doctrine, and admitted expert Marsh’s damages testimony.
- Jury awarded compensatory damages to multiple plaintiffs and punitive damages totaling $42 million; Bayer appealed on multiple grounds.
- Court ultimately affirmed the circuit court’s judgment, including the unconstitutional ruling on 16-55-208, and rejected most challenges to damages and expert testimony, while noting the punitive-damages excessiveness issue was not preserved for review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Constitutionality of 16-55-208 | Bayer argues cap does not violate Art. 5, §32 | Farmers contend cap infringes constitutionally on damages limits | Statute unconstitutional under Art. 5, §32; affirmed circuit court judgment on this basis |
| Economic-loss doctrine applicability | Law should bar purely economic tort claims; doctrine applies | Doctrine does not bar recovery where physical harm to property occurred | Doctrine does not preclude here due to evidence of physical harm to lands, crops, and equipment; affirmed on this point without addressing negligence scope more broadly |
| Admissibility of Marsh damages testimony | Marsh’s methodology is standard econometric modeling and admissible | Marsh’s future-damages projection is speculative | Circuit court did not abuse its discretion; Marsh’s testimony admissible and cross-examination challenging weight rather than admissibility |
| Punitive damages submission to jury and excessiveness | Directed verdict should be granted or remittitur justified; damages excessive | Evidence supports punitive damages; excessiveness review proper | Directed verdict on intentional conduct denied; excessiveness review not preserved for appeal; Court affirms judgment on procedural grounds related to preservation |
Key Cases Cited
- Proctor v. Daniels, 2010 Ark. 206 (Ark. 2010) (presumptively constitutional; heavy burden on challengers)
- Clark v. Johnson Reg’l Med. Ctr., 2010 Ark. 115 (Ark. 2010) (statutory validity reviewed de novo; presumption of constitutionality)
- Cato v. Craighead Cnty. Circuit Court, 2009 Ark. 334 (Ark. 2009) (constitutional construction; read plain meaning; de novo review)
- Edwards v. Campbell, 2010 Ark. 398 (Ark. 2010) (constitutional interpretation standards; avoid defeat of clear text)
- First Nat’l Bank of DeWitt v. Cruthis, 360 Ark. 528 (Ark. 2005) (statutory meaning; constitutional constraints)
- Vogler v. O’Neal, 226 Ark. 1007 (Ark. 1956) (definitions of exemplary/punitive damages; purpose of punitive damages)
- Vickery v. Ballentine, 293 Ark. 54 (Ark. 1987) (punitive damages framework; relationship to compensatory damages)
- Holmes v. Hollingsworth, 234 Ark. 347 (Ark. 1961) (punitive damages standard; illustrative authority)
- Kroger Grocery & Baking Co. v. Reeves, 210 Ark. 178 (Ark. 1946) (relationship between compensatory and punitive damages; landmark)