Gilbert accepts jurisdiction of Swiss Syngenta AG

Steve Korris Dec. 1, 2011, 11:52am

BENTON – Stephen Tillery can sue Swiss owners of an American company that makes weed killer atrazine, U.S. District Judge Phil Gilbert decided on Nov. 23.

He denied a motion to dismiss Tillery's water contamination claims against holding company Syngenta AG, for lack of jurisdiction.

He found the board of North Carolina subsidiary Syngenta Crop Protection Inc. seldom meets and makes no decisions independent of Syngenta AG.

"SAG maintains that the subsidiary companies have the legal authority to take action on their own without higher approval, but the actual practice is that only after the higher level pre-approves an action does SCPI take it," Gilbert wrote.

"Similar restrictions exist in other areas including human resources, communications and public affairs, corporate structure or ownership, asset sales or acquisitions, key appointments to boards, committees and management positions, compensation packages and training for those appointments, finance and tax."

He wrote that Syngenta AG would need to approve settlement of Tillery's suit, "because its value likely exceeds $60 million."

Tillery wants Syngenta to pay for complete removal of atrazine from water supplies in Illinois, Indiana, Ohio, Iowa, Missouri and Kansas.

Although federal water regulators consider atrazine safe up to three parts per billion, Tillery claims it harms health at any concentration.

Tillery, who had previously filed similar suits against Syngenta Crop Protection in Madison County, filed the federal suit last year.

The federal suit, unlike the Madison County suits, named Syngenta AG as defendant.

Syngenta AG challenged Gilbert's jurisdiction, but he accepted it.

Gilbert wrote that "where a parent dominates the subsidiary, a court may have personal jurisdiction over a parent based on a subsidiary's contacts."

"The same is true where the subsidiary is acting solely as the parent's agent, and the parent is simply doing business through its subsidiary to shield itself from liability."

He wrote that Syngenta AG has no employees and that its only business is owning shares in Syngenta entities.

"SAG has organized its group of subsidiary companies, including SCPI, purposefully to limit the jurisdictions in which it is subject to court authority," Gilbert wrote.

"The SAG board meets five to six times a year, but the SCPI board rarely meets, either in person or by telephone."

He wrote that SCPI's board acts by unanimous consent on recommendations of global or regional managers.

He wrote that employees around the world share knowledge and ideas.

He wrote that global managers participate in employee performance reviews.

He wrote that all products bear the same Syngenta trademark and logo.

He wrote that the atrazine supply chain is controlled and coordinated globally.

He wrote that Syngenta AG's executive committee allocates atrazine to markets.

He wrote that SCPI could not stop manufacturing atrazine without approval.

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