1. Coexistence and Legal Liability for USDA-AC21 December 14, 2006 Drew L. Kershen Earl Sneed Centennial Professor of Law University of Oklahoma Copyright 2006 Drew L. Kershen, all rights reserved

2. Adventitious Presence Unintended presence of something other than the desired crop Unintended presence of something other than the desired crop Weed seeds, seeds from other crops, chemicals, dirt, dust, insects, foreign materials (e.g. plastic, wood) Weed seeds, seeds from other crops, chemicals, dirt, dust, insects, foreign materials (e.g. plastic, wood) In context of chemicals, spray drift of pesticides, herbicides, fumigants, and fertilizers In context of chemicals, spray drift of pesticides, herbicides, fumigants, and fertilizers In context of transgenic crops, presence of transgenic materials (seed, parts, pollen) In context of transgenic crops, presence of transgenic materials (seed, parts, pollen) Historical and Wide-Spread Historical and Wide-Spread Assoc. of American Pesticide Control Officials (AAPCO) Assoc. of American Pesticide Control Officials (AAPCO) Assoc. of Official Seed Certifying Agencies (AOSCA) Assoc. of Official Seed Certifying Agencies (AOSCA)

3. Coexistence Three themes Three themes Good Husbandry Good Husbandry Good agronomic practices; best management practices Good agronomic practices; best management practices Appropriate technology Appropriate technology Equipment – proper maintenance and use Equipment – proper maintenance and use Neighborly cooperation Neighborly cooperation Communication Communication Friendly attitude – understanding, tolerance Friendly attitude – understanding, tolerance Apology and prompt response Apology and prompt response Farmer Choice: conventional, organic, or transgenic Farmer Choice: conventional, organic, or transgenic Coexistence issues are not unique to biotech crops Coexistence issues are not unique to biotech crops

4. Coexistence Spray Drift – 1999 AAPCO study Spray Drift – 1999 AAPCO study 1996-1998 1996-1998 7595 complaints 7595 complaints 2518 regulatory/enforcement action 2518 regulatory/enforcement action Written warnings equals 57% of actions Written warnings equals 57% of actions Administrative Penalty equals 28.5% of actions Administrative Penalty equals 28.5% of actions Civil Penalty (court imposed) equals 2.1% of actions Civil Penalty (court imposed) equals 2.1% of actions All other administrative actions equal 12.4% of actions All other administrative actions equal 12.4% of actions Agriculture is largest source of complaints Agriculture is largest source of complaints Miniscule number of neighbor v neighbor lawsuits Miniscule number of neighbor v neighbor lawsuits Since 1946, about 71 reported cases (i.e. published judicial opinions) = 1.18 cases per year over the past 60 years Since 1946, about 71 reported cases (i.e. published judicial opinions) = 1.18 cases per year over the past 60 years

5. Coexistence On-going non-biotech coexistence disputes On-going non-biotech coexistence disputes California – seedless v seeded mandarin groves California – seedless v seeded mandarin groves Oregon – brassica seed growers v canola growers Oregon – brassica seed growers v canola growers Recent spray drift case Recent spray drift case Minnesota -- Foraging bees onto timberland Minnesota -- Foraging bees onto timberland Anderson v. State Dept. of Natural Resources, 693 N.W.2d 181 (Minn. 2005) Anderson v. State Dept. of Natural Resources, 693 N.W.2d 181 (Minn. 2005) Klass, Bees, Trees, Preemption, and Nuisance: A New Path to Resolving Pesticide Land Use Disputes, 32 Ecology L. Q. 763 (2005) Klass, Bees, Trees, Preemption, and Nuisance: A New Path to Resolving Pesticide Land Use Disputes, 32 Ecology L. Q. 763 (2005) Note, 39 Hamline L. Rev 338 (2006); Note, 32 Wm. Mitchell L. Rev. 1489 (2006). Note, 39 Hamline L. Rev 338 (2006); Note, 32 Wm. Mitchell L. Rev. 1489 (2006).

6. Coexistence Transgenic Crops Transgenic Crops Pollen Drift depends on species Pollen Drift depends on species Corn – 20-30 meters means AP below 0.9% EU label Corn – 20-30 meters means AP below 0.9% EU label Corn – 50-60 meters means AP below EU proposed seed standards of either 0.3% or 0.5% Corn – 50-60 meters means AP below EU proposed seed standards of either 0.3% or 0.5% Other crops similar – distance, buffer rows, offset planting Other crops similar – distance, buffer rows, offset planting As of July 2006, I know of only one lawsuit of farmer v farmer (Germany, unsuccessful); none in US and Canada As of July 2006, I know of only one lawsuit of farmer v farmer (Germany, unsuccessful); none in US and Canada One successful lawsuit (StarLink) against the seed developer for an unapproved crop One successful lawsuit (StarLink) against the seed developer for an unapproved crop Other lawsuits against seed developers have not been successful – Sample v. Monsanto (U.S.); Hoffman v. Monsanto Canada (Can.) [on appeal] Other lawsuits against seed developers have not been successful – Sample v. Monsanto (U.S.); Hoffman v. Monsanto Canada (Can.) [on appeal] High compliance by farmers with management programs High compliance by farmers with management programs

9. Coexistence: Conclusion Zero tolerance is not achievable without a ban on chemical or transgenic agriculture. Zero tolerance is not achievable without a ban on chemical or transgenic agriculture. By following reasonable agronomic practices, conventional, organic, and transgenic agriculture can easily coexist. By following reasonable agronomic practices, conventional, organic, and transgenic agriculture can easily coexist. Stricter standards than those established by law should be contractual obligations voluntarily accepted by farmer and processor Stricter standards than those established by law should be contractual obligations voluntarily accepted by farmer and processor

10. Legal Liability Issues: Markets and Exports Bayer Crop Science and LLRice601 Bayer Crop Science and LLRice601 Geeridge Farm, Inc. and Kenneth Bell – class action Geeridge Farm, Inc. and Kenneth Bell – class action “Given the structure and operation of the U.S. grain production and handling system, Bayer’s testing, growing, storing, transporting, and disposing of LLRice601 was improper.” Pure Economic Loss (i.e. market fluctuation; loss of export market) Pure Economic Loss (i.e. market fluctuation; loss of export market) Without physical damage, pure economic loss is not compensable under American, Canadian, and most law Without physical damage, pure economic loss is not compensable under American, Canadian, and most law Damages too legally remote, indirect, speculative, and/or the result of stigma Damages too legally remote, indirect, speculative, and/or the result of stigma LLRice601 is now an approved commodity in US LLRice601 is now an approved commodity in US

11. Legal Issues: Organic Certification and Spray Drift Residue testing “when there is reason to believe that … products … to be sold or labeled as organically produced may have come into contact with prohibited substances … The cost of such testing will be borne by the applicable certifying agent and is considered a cost of doing business.” NOP Final Rules at p. 311, www.ams.usda/gov/nop/NOP/standards Residue testing “when there is reason to believe that … products … to be sold or labeled as organically produced may have come into contact with prohibited substances … The cost of such testing will be borne by the applicable certifying agent and is considered a cost of doing business.” NOP Final Rules at p. 311, www.ams.usda/gov/nop/NOP/standards www.ams.usda/gov/nop/NOP/standards

12. Legal Issues: Organic Certification and Spray Drift “[C]ommenters recommended that the NOP incorporate the National Organic Standards Board’s (NOSB) recommendation and current industry practice of using 5 percent of the EPA tolerances as a maximum level of pesticide residue on organic agricultural products. Commenters argued that using 5 percent of the EPA tolerance provides a sense of confidence to the consumers of organic agricultural products.” NOP Final Rules at pp. 320, www.ams.usda/gov/nop/NOP/standards “[C]ommenters recommended that the NOP incorporate the National Organic Standards Board’s (NOSB) recommendation and current industry practice of using 5 percent of the EPA tolerances as a maximum level of pesticide residue on organic agricultural products. Commenters argued that using 5 percent of the EPA tolerance provides a sense of confidence to the consumers of organic agricultural products.” NOP Final Rules at pp. 320, www.ams.usda/gov/nop/NOP/standards www.ams.usda/gov/nop/NOP/standards

13. Legal Issues: Organic Certification & Pollen Drift Adventitious presence does not affect organic certification for organic farms or organic products. Adventitious presence does not affect organic certification for organic farms or organic products. NOP Final Rules at pp. 33-35, www.ams.usda/gov/nop/NOP/standards NOP Final Rules at pp. 33-35, www.ams.usda/gov/nop/NOP/standards www.ams.usda/gov/nop/NOP/standards “The presence of a detectable residue of a product of excluded methods alone does not necessarily constitute a violation of this regulation. As long as an organic operation has not used excluded methods and takes reasonable steps to avoid contact with … excluded methods … the unintentional presence of … excluded methods should not affect the status of an organic product or operation.” “The presence of a detectable residue of a product of excluded methods alone does not necessarily constitute a violation of this regulation. As long as an organic operation has not used excluded methods and takes reasonable steps to avoid contact with … excluded methods … the unintentional presence of … excluded methods should not affect the status of an organic product or operation.”

14. Legal Issues: Organic certification and biotech crops Organic Farming Research Foundation, 4 th National Organic Farmer’s Survey (2002) Organic Farming Research Foundation, 4 th National Organic Farmer’s Survey (2002) 92% (938 respondents) had no direct costs related to transgenic crops 92% (938 respondents) had no direct costs related to transgenic crops 4% had payments for testing seeds and inputs. Probably not an additional cost because organic producers must take precautions to assure the use of organic seed and inputs. 4% had payments for testing seeds and inputs. Probably not an additional cost because organic producers must take precautions to assure the use of organic seed and inputs. 2% (19 respondents) reported positive tests for transgenic materials – assuredly trace amounts 2% (19 respondents) reported positive tests for transgenic materials – assuredly trace amounts 4% claimed some type of market loss – assuredly voluntarily accepted contract risk through product specifications 4% claimed some type of market loss – assuredly voluntarily accepted contract risk through product specifications

15. Law Suits and Legal Theories: Likelihood of recovery Adventitious Presence alone almost assuredly not a compensable claim – de minimis spray drift or commingling unavoidable Adventitious Presence alone almost assuredly not a compensable claim – de minimis spray drift or commingling unavoidable Must prove adverse effect (i.e. significant damages) – unlikely on most fact patterns Must prove adverse effect (i.e. significant damages) – unlikely on most fact patterns Spray drift more likely to cause significant damages than transgenic crops Spray drift more likely to cause significant damages than transgenic crops Must identify the responsible party Must identify the responsible party

16. Law Suits and Legal Theories: Likelihood of success Strict Liability – ultra-hazardous activity Strict Liability – ultra-hazardous activity Some states use strict liability for spray drift (aerial) Some states use strict liability for spray drift (aerial) Unlikely for approved transgenic crops Unlikely for approved transgenic crops Negligence – failure to use reasonable care Negligence – failure to use reasonable care Most states use negligence for spray drift Most states use negligence for spray drift Possible for transgenic crops Possible for transgenic crops Not a new or different obligation for farmers Not a new or different obligation for farmers Trespass – unlikely damage; pollen like bees? Trespass – unlikely damage; pollen like bees? Nuisance Nuisance Courts will insist on reasonable accommodation Courts will insist on reasonable accommodation Courts will not protect unique sensitivities Courts will not protect unique sensitivities

17. Legal Issues: Contractual Obligations Depending on the contract specifications, adventitious presence can affect premiums and market access for both conventional and organic producers. Depending on the contract specifications, adventitious presence can affect premiums and market access for both conventional and organic producers. IFOAM guidelines on transgenic crops IFOAM guidelines on transgenic crops “Organic certification shall not imply it is a ‘GE-free’ certification. Rather it shall be presented as guaranteeing ‘production without GE/GMOs’. As there is no guarantee that organic products are 100% free … Organic producers and associations shall actively inform the consumers of this fact to insure fair marketing claims and to avoid future debates about consumer deception.” “Organic certification shall not imply it is a ‘GE-free’ certification. Rather it shall be presented as guaranteeing ‘production without GE/GMOs’. As there is no guarantee that organic products are 100% free … Organic producers and associations shall actively inform the consumers of this fact to insure fair marketing claims and to avoid future debates about consumer deception.” Farmers must pay attention to their contractual obligations Farmers must pay attention to their contractual obligations Farmers must know the contract specifications Farmers must know the contract specifications Farmers should not make promises that they cannot control Farmers should not make promises that they cannot control

18. References D. Kershen & A. McHughen, Adventitious Presence: Inadvertent Commingling and Coexistence Among Farming Methods, CAST Commentary QTA2005-1 (July 2005). D. Kershen & A. McHughen, Adventitious Presence: Inadvertent Commingling and Coexistence Among Farming Methods, CAST Commentary QTA2005-1 (July 2005). W. Weber & T. Bringezu, Test of coexistence under German field conditions – results from the “Erprobungsanblau” 2004 with Bt-maize, Proc. 2nd Int’l Conf. on Co-Existence between GM and non-GM based agricultural supply chains 327, 329 (Montpellier, Nov 2005) W. Weber & T. Bringezu, Test of coexistence under German field conditions – results from the “Erprobungsanblau” 2004 with Bt-maize, Proc. 2nd Int’l Conf. on Co-Existence between GM and non-GM based agricultural supply chains 327, 329 (Montpellier, Nov 2005) Davide Ederle, Agricultural Biotechnologist, Italy provided the photos of pollen flow between yellow corn and colored corn. Davide Ederle, Agricultural Biotechnologist, Italy provided the photos of pollen flow between yellow corn and colored corn.

19. References Anon, Co-existence at 20 meters claims study, Cedab Agrobiotechnologie (Cremona, Italy, Jan. 27, 2006) (press release about the Ederle et al. study) Anon, Co-existence at 20 meters claims study, Cedab Agrobiotechnologie (Cremona, Italy, Jan. 27, 2006) (press release about the Ederle et al. study) International Federation of Organic Agricultural Movements (IFOAM), Position on Genetic Engineering and Genetically Modified Organisms (adopted by IFOAM World Board, Canada, May 2002), www.ifoam.com International Federation of Organic Agricultural Movements (IFOAM), Position on Genetic Engineering and Genetically Modified Organisms (adopted by IFOAM World Board, Canada, May 2002), www.ifoam.comwww.ifoam.com

20. References R. Blomquist, Applying Pesticides: Towards Reconceptualizing Liability to Neighbors for Crop, Livestock, and Personal Damages from Agricultural Chemical Drift, 48 OKLA. L. Rev. 393-416 (1995) R. Blomquist, Applying Pesticides: Towards Reconceptualizing Liability to Neighbors for Crop, Livestock, and Personal Damages from Agricultural Chemical Drift, 48 OKLA. L. Rev. 393-416 (1995) D. Kershen, Legal Liability Issues in Agricultural Biotechnology, National AgLaw Center Publications, http://www.nationalaglawcenter.org/assets/article_kershen_bio tech.pdf D. Kershen, Legal Liability Issues in Agricultural Biotechnology, National AgLaw Center Publications, http://www.nationalaglawcenter.org/assets/article_kershen_bio tech.pdf http://www.nationalaglawcenter.org/assets/article_kershen_bio tech.pdf http://www.nationalaglawcenter.org/assets/article_kershen_bio tech.pdf S. Smyth & D. Kershen, Agricultural Biotechnology: Legal Liability Regimes from Comparative and International Perspectives, Global Jurist Advances, Vol. 6 (2006) No. 2, Article 3, http://www.bepress.com/gj/advances/vol6/iss2/art3 S. Smyth & D. Kershen, Agricultural Biotechnology: Legal Liability Regimes from Comparative and International Perspectives, Global Jurist Advances, Vol. 6 (2006) No. 2, Article 3, http://www.bepress.com/gj/advances/vol6/iss2/art3http://www.bepress.com/gj/advances/vol6/iss2/art3

21. Thank you. I look forward to answering questions. I will be available after adjournment for questions.