Minneapolis, Minnesota
August 20, 2008
Source:
Farm Law
After more than a decade in
litigation, which included two U.S. Supreme Court appearances
and five trips the Minnesota Supreme Court, Minnesota farmers
will finally receive payments from a class action lawsuit
brought against BASF Corporation in 1997 for fraudulent
marketing practices.
Following a prolonged appeals process and an exhaustive claim
validation period, payments totaling $32 million are being
mailed to more than 1,137 claimants nationwide. There are 647
approved claimants in Minnesota with a combined payout exceeding
$17 million.
With claims allocated as a pro rata share of gallons of BASF’s
Poast herbicide purchased by individual claimants during the
1992-96 claim period, the majority of farmers will receive
checks for thousands of dollars. A small number of farmers,
including one in Minnesota, will receive payments exceeding
$450,000.
“This is an enormously successful national class action that
rectifies a fraudulent market segmentation scheme,” said Douglas
J. Nill of Minneapolis, the lead attorney for the farmers. “From
their own admission, such marketing practices were common within
the industry. For 10 years we fought a ‘David and Goliath’
battle with the chemical industry. The disbursement of the money
judgment is a warning bell to the chemical industry that they
cannot market and price herbicides using fraud and
intimidation.”
Led by 11 Midwest farmers, the class action lawsuit was filed in
Norman County (Minn.) District Court in December of 1997. In
Peterson v. BASF Corporation, the farmers alleged that the
multi-national chemical company defrauded sugar beet, sunflower
and other specialty crop growers by marketing the same herbicide
as different products at different prices, in violation of state
consumer protection statutes.
In 2001 a jury determined that BASF defrauded thousands of
farmers by marketing the same herbicide as different products at
different prices as a system of deceit to extract inflated
prices for the same herbicide from minor crop farmers. Based on
the verdict, farmers were awarded $52 million with interest and
fees.
“This case has had a profound impact on my life as well as those
of the farmers involved,” said Nill. “It is a great satisfaction
to know that the checks are finally getting into the hands of
farmers.”
In the end, the case amounted to a money judgment and interest
totaling approximately $62 million.
About Peterson v. BASF Corporation
BASF originally registered a herbicide called Poast with the
Environmental Protection Agency (EPA) in the 1980s to treat
major and minor crops. At that time, Poast had little
competition in the marketplace. As competition increased in the
lucrative major crop market, BASF issued a new herbicide, which
was virtually the twin of Poast, called Poast Plus. Though the
EPA approved Poast Plus for the same major and minor crops as
Poast, BASF marketed its new herbicide for use on just four
major crops and sold it at a cheaper price.
Both herbicides contain the same active ingredient in different
concentrations, but when mixed according to the packaging, the
mixture resulted in the same amount of active ingredient per
acre. BASF labeled the products differently, omitting certain
EPA-approved crops from listings on the new label, so minor-crop
farmers would have to pay more per acre for Poast, even though
the EPA actually approved both herbicides as safe for the same
crops.
In 1992, BASF began a marketing campaign based on false
advertisement of Poast and Poast Plus and warning farmers of the
dangers associated with using herbicides on crops not listed on
the product labels (even though EPA had approved such uses as
safe). Further, BASF perpetuated the deception by turning in its
own dealers and farmers for prosecution if they were found using
the herbicides on off-label crops.
About Douglas J. Nill
Doug Nill is a litigator representing farmers in injury and
business disputes, consumer class actions, and appellate
practice. Licensed to practice law in Minnesota, Nill is
associates with experienced lawyers throughout the United States
to help people across the country. Raised on a North Dakota
ranch, Nill was recognized in 2001 and 2002 by a national farm
advocacy group as "one of the nation's best attorneys"
representing farmers in complex business litigation. Nill has
been recognized as a Minnesota “Super Lawyer” and in 2006 was
recognized as an Attorney of the Year in Minnesota. Nill has an
undergraduate Bachelor of Science degree in Agricultural
Economics from North Dakota State University and served as the
editor of Farm and Ranch Guide, a farm business magazine
distributed in five mid-western states. Following studies at
Hamline University School of Law in St. Paul, Minnesota, Nill
served a judicial clerkship with the Honorable Donald E.
O'Brien, Chief U.S. District Court Judge for the Northern
District of Iowa, based in Sioux City, Iowa.
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