No. 03 C 4385, MDL No. 1403 Page 4

to the claims for estoppel. In order to show promissory estoppel, plaintiff must prove that
defendants made a promise of some future behavior, intending for plaintiff to rely on it, and
that plaintiff did so to its detriment. Berryman y. Kmoch, 559 P. 2d 790, 794 (Kan. 1977).
Equitable estoppel occurs when, instead of a promise of future activity, defendants make a
false statement of material fact that plaintiff relies on. Gillespie vy. Seymour, 823 P. 2d 782,
788-89 (Kan. 1991).

Plaintiff can show no such reliance on any promise or representation by defendants.
Defendants did not institute the programs or sign the agreement until 2001, after the discovery
of Cry9C in food products. AgraMarke has been selling IP grain to ConAgra since 1999. It
would therefore have been impossible to rely on statements made by Aventis/SLLI in deciding
to sell the IP corn. The only action by plaintiff after the public notice of the claims procedure
was to actually file the claim. Plaintiff cannot demonstrate how this act constituted
detrimental reliance when the only alleged loss occurred when the corn was rejected.

Likewise, plaintiff fails to demonstrate the existence of a valid agreement with
Ayentis/SLLI. The public notice of intent to cover validly submitted claims was nothing more
than an invitation to contract. Such an invitation is not binding on the parties unless it
contains all material terms and conditions, which are clearly lacking here. Weil and Associates

y. Urban Renewal Agency of Wichita, 479 P, 2d 875, 883 (Kan. 1971). There is no indication

that defendants ever agreed to cover plaintiff for any loss. The only existing contractual
agreement is that between Aventis/SLLI and the state governments.

Plaintiff may, however, be able to recover pursuant to this agreement. A third party
beneficiary to a contract may enforce the contract if the actual parties to the agreement

intended that the third party directly benefit. Fasse y. Lower Heating and Air Conditioning,



No. 03 C 4385, MDL No. 1403 Page3

moving party is entitled to judgment as a matter of law will we grant the motion. Celotex

Corp. v Catrett, 477 U.S. 317, 322-23 (1986); Bennett v. Roberts, 295 F.3d 687, 694 (7" Cir.
2002).

We begin by discussing the choice of law. Because this case was transferred here from
Minnesota pursuant to multi-district litigation, we use Minnesota’s choice of law rules. See
Van Dusen v. Barrack, 376 U.S. 612, 639 (1964). Those rules require us to look at five factors
when deciding which law to apply: (1) the predictability of results; (2) the maintenance of
interstate order; (3) simplification of the judicial task; (4) advancement of the forum state’s

interest; and (5) the better rule of law. Jepson v. Gen Cas. Co. of Wisconsin, 513 N.W.2d 467,

470 (Minn. 1994). There are three potential choices: Minnesota — the forum state, North
Carolina — where Aventis and SLLI are based and where the claims office for elevators and
grain handlers is located, and Kansas — where AgraMarke is organized. Other than being the
original forum, Minnesota has no material interest in this action and the parties had no reason
to believe that Minnesota law would govern a dispute. While North Carolina and Kansas both
have significant ties to the parties, Kansas law is the better choice because the Kansas attorney
general (unlike the North Carolina attorney general) was a party to the agreement signed by
Aventis/SLLI. Kansas therefore has a strong governmental interest in the resolution of claims
related to StarLink corn and the parties should have anticipated that any dispute would
implicate Kansas law.’

Plaintiff alleges three potential grounds for recovery based on defendants’ failure to

cover the claim: breach of contract, promissory estoppel, and equitable estoppel. We first turn

lWe note that, while there are significant differences in the law of the various states in this area, we
do not believe that these differences would be outcome-determinative.


No. 03 C 4385, MDL No. 1403 Page 5

Inc., 736 P. 2d 930, 932 (Kan. 1997). It is not necessary that the contracting parties intended
for the third party to be the sole beneficiary. Jd. While the contract states that the parties
involved were Aventis and the state attorneys general creating obligations enforceable by the
states, it also indicates that the purpose of the contract was to mitigate potential} losses suffered
by grain handlers and elevators. Thus, it is certainly possible that plaintiff is entitled to
enforce the agreement as a third party beneficiary.

Defendants deny that the agreement with the attorneys general created binding
contracts with the third parties. Plaintiff, on the other hand, argues that defendants have
essentially no discretion in deciding whether to cover losses suffered by grain handlers. The
truth is somewhere in between. By executing the agreement, defendants made a binding
promise to cover losses caused by the corn, which may be enforced by the attorneys general,
but it appears that the objections can also be enforced by third parties who are improperly
refused payment. In doing so, they did not waive their right to review the claim submissions
to ensure their validity. Defendants contend that any losses in this case were caused solely by
plaintiffs own failure to test the corn and that losses of this nature are not covered by the
agreement. Questions of fact remain as to whether this contention is correct or whether
plaintiffs should be reimbursed. Summary judgment is therefore improper.

CONCLUSION
For the foregoing reasons, defendants’ motion for summary judgmentis granted in part

and denied in part; plaintiff’s motion for summary judgment is denied.

Aeriee &. Mero

ay JAMES B, MORAN
ior Judge, U. S. District Court

Mared, 18,2004.


tau, Minute Qeder Form (06/97)

United States District Court, Northern District of Illinois

Name of Assigned Judge
or Magistrate Judge

James B. Moran

Sitting Judge if Other
than Assigned Judge

CASE NUMBER 03 C 4385 DATE 3/15/2004
CASE AGRA MARKEE, INC. vs. AVENTIS CROPSCIENCE USA LP
TITLE
[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented.}
MEMORANDUM OPINION AND ORDER
DOCKET ENTRY:
ql) ia} Filed motion of [ use listing in “Motion” box above.]
(2) Qo Brief in support of motion due
Bg) a Answer brief to motion due, . Reply to answer brief due
(4) Oo Ruling/Hearing on set for at
(5) Oo Status hearing[held/continued to] [set for/re-set for] on set for at
(6) Q Pretrial conference[held/continued to] [set for/re-set for] on set for at.
(7) Qo Trial[set for/re-set for] on at
(8) Oo [BenchyJury trial] [Hearing] held/continuedto____at
(9) Q This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OFRCP4(m) (Local Rule 41.1 CIFRCP41(a)(1) [ FRCP41(a)(2).
qo) «=f [Other docket entry] Enter Memorandum Opinion And Order. Defendants’ motion for summary
judgment is granted in part and denied in part, and plaintiff's motion for summary judgment is denied.
ai) ff {For further detail see order attached to the original minute order.]
No notices required, advised in open court.
No notices required. umber ot nies
Notices mailed by judge’s staff.
Notified counsel by telephone. MAR,.1,,6.,2004
wv | Docketing to mail notices. GA
Mail AO 450 form. docketing deputy ints
Copy to judge/magistrate judge.

courtroom
deputy’s
initials

LG

Date/time received in

central Clerk's Office.» nailing deputy iita's

yb ey



IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
IN RE STaRLINK CORN PRODUCTS )
LIABILITY LITIGATION ) MDL No. 1403
_)
This document is applicable to: ) D
) FGM creo,
AGRA MARKE, INC., ) Oot ED
Plaintiff, ) MAR 1 2004
)
vs. ) No. 03 C 4385
)
AVENTIS CROPSCIENCE USA LP, and )
STARLINK Logistics, Inc., )
Defendants. )

MEMORANDUM OPINION AND ORDER

Plaintiff AgraMarke, Inc. brought this action against defendants Aventis CropScience
USA LP (Aventis) and StarLink Logistics Inc. (SLLI) alleging breach of contract and,
alternatively, promissory estoppel or equitable estoppel. Defendants filed a motion seeking
summary judgment as to all counts and plaintiff responded by filing a cross-motion for
summary judgment. For the following reasons, defendants’ motion is granted in part and
denied in part, and plaintiff’s motion is denied.

BACKGROUND

StarLinkTM corn is corn that has been genetically modified to produce the protein
Cry9C, which protects it from the European corn borer and other insects. Cry9C is registered
by the Environmental Protection Agency pursuant to the Federal Insecticide and Rodenticide
Act (FIFRA). Cry9C’s FIFRA registration permits StarLink corn to be used for animal feed
or industrial uses, but not for human food.

On September 18, 2000, the media reported that Cry9C DNA had been detected in taco

O?



No. 03 C 4385, MDL No. 1403 Page 2

shells produced for human consumption. Other detections of Cry9C in food followed, Aventis
subsequently developed the StarLink Enhanced Stewardship Program to direct StarLink corn
to proper destinations. It also developed the Elevator Program, designed to resolve claims filed
by elevators on an individual basis, with the goal of minimizing the financial harm to elevators
resulting from inadvertent contact with StarLink corn. On January 22,2001, Aventis entered
into an agreement with the attorneys general of 17 states, incorporating the Enhanced
Stewardship Program and the Elevator Program. Aventis made the terms and conditions of
this agreement available to the public on its web site. In June 2002, SLLI assumed the
management of the programs and is currently responsible for the payment of claims.

AgraMarkeis an agricultural cooperative that markets “Identity Preserved”(IP) grains
produced by its members. AgraMarke has in place a number of requirements that must be
met by all suppliers from which it buys and sells, including the requirement that members
supply only corn which has not been genetically modified. In 1999 and again in 2000,
AgraMarke entered into purchase agreements with ConAgra Corn Processing to provide IP
corn to ConAgra. ConAgra then sold corn products to Meiji Seika Kaisha, a Japanese
company. In March 2001, Meiji Seika Kaisha rejected a shipment after discovering the
presence of Cry9C in some corn. In November 2001, AgraMarke submitted a claim to SLLI
in the amount of $946,918.45, the alleged loss caused by the rejection of the corn products
containing Cry9C.

DISCUSSION
Our function in ruling on a motion for summary judgment is merely to determine if

there is a genuine issue of material fact for trial. Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 249 (1986). Only if the evidence on file shows that no such issue exists and that the