Case 3:21-cv-00021 Document 1 Filed 01/08/21 Page 1 of 44 Page ID #1
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`UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF ILLINOIS
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`BARBARA PIPER, as Executrix of the Estate of
`MICHAEL PIPER, Deceased, on behalf of herself and
`all others similarly situated,
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`Plaintiff,
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`v.
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`BAYER CROPSCIENCE LP, BAYER
`CROPSCIENCE, INC., CORTEVA INC., CARGILL
`INCORPORATED, BASF CORPORATION,
`SYNGENTA CORPORATION, WINFIELD
`SOLUTIONS, LLC, UNIVAR SOLUTIONS, INC.,
`FEDERATED CO-OPERATIVES LTD., CHS INC.,
`NUTRIEN AG SOLUTIONS INC., GROWMARK
`INC., SIMPLOT AB RETAIL SUB, INC., AND
`TENKOZ INC.
`
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`Defendants.
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`Docket No. 3:21-cv-21
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`CLASS ACTION COMPLAINT
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`JURY TRIAL DEMANDED
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`Case 3:21-cv-00021 Document 1 Filed 01/08/21 Page 2 of 44 Page ID #2
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`TABLE OF CONTENTS
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`INTRODUCTION .......................................................................................................................... 1 
`JURISDICTION AND VENUE ..................................................................................................... 3 
`PARTIES ........................................................................................................................................ 3 
`A. Plaintiff .................................................................................................................................... 3 
`B. The Manufacturer Defendants ................................................................................................. 3 
`C. The Wholesaler Defendants .................................................................................................... 4 
`D. The Retailer Defendants .......................................................................................................... 5 
`SUBSTANTIVE ALLEGATIONS ................................................................................................ 6 
`TRADE AND COMMERCE ........................................................................................................ 14 
`THE RELEVANT MARKETS..................................................................................................... 14 
`ANTITRUST IMPACT ................................................................................................................ 14 
`ANTITRUST INJURY ................................................................................................................. 15 
`CLASS ACTION ALLEGATIONS ............................................................................................. 15 
`STANDING TO SEEK RELIEF .................................................................................................. 17 
`EQUITABLE TOLLING AND FRAUDULENT CONCEALMENT ......................................... 18 
`CLAIMS FOR RELIEF ................................................................................................................ 19 
`Count 1: Conspiracy to Restrain Trade in Violation of § 1 of the
`Sherman Act (15 U.S.C. § 1) ........................................................................................................ 19 
`Count 2: Arizona Uniform State Antitrust Act ............................................................................. 22 
`Count 3: California Cartwright Act .............................................................................................. 23 
`Count 4: Hawaii Antitrust Laws ................................................................................................... 24 
`Count 5: Illinois Antitrust Act ...................................................................................................... 24 
`Count 6: Iowa Competition Law ................................................................................................... 25 
`Count 7: Kansas Restraint of Trade Act ....................................................................................... 26 
`Count 8: Maine Monopoly & Profiteering Laws .......................................................................... 26 
`Count 9: Maryland Antitrust Laws ............................................................................................... 27 
`Count 10: Massachusetts Consumer Protection Laws .................................................................. 28 
`Count 11: Michigan Antitrust Reform Act ................................................................................... 28 
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`Case 3:21-cv-00021 Document 1 Filed 01/08/21 Page 3 of 44 Page ID #3
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`Count 12: Minnesota Antitrust Law of 1971 ................................................................................ 29 
`Count 13: Mississippi Antitrust Laws........................................................................................... 30 
`Count 14: Nebraska Junkin Act .................................................................................................... 30 
`Count 15: Nevada Unfair Trade Practices Act ............................................................................. 31 
`Count 16: New Hampshire Consumer Protection Act .................................................................. 32 
`Count 17: New Mexico Antitrust Act ........................................................................................... 32 
`Count 18: New York Donnelly Act .............................................................................................. 33 
`Count 19: North Carolina Antitrust Laws ..................................................................................... 34 
`Count 20: North Dakota Uniform State Antitrust Act .................................................................. 34 
`Count 21: Oregon Antitrust Law .................................................................................................. 35 
`Count 22: South Dakota Antitrust Laws ....................................................................................... 36 
`Count 23: Tennessee Trade Practices Act .................................................................................... 36 
`Count 24: Utah Antitrust Act ........................................................................................................ 37 
`Count 25: Vermont Consumer Protection Laws ........................................................................... 38 
`Count 26: Wisconsin Trade Regulations ...................................................................................... 38 
`PRAYER FOR RELIEF ............................................................................................................... 39 
`DEMAND FOR JURY TRIAL .................................................................................................... 40 
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`Case 3:21-cv-00021 Document 1 Filed 01/08/21 Page 4 of 44 Page ID #4
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`Plaintiff Barbara Piper, as Executrix of the Estate of Michael Piper, complains upon
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`knowledge as to herself and her own acts, and upon information and belief as to all other matters,
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`against Defendants for their violations of law from at least January 1, 2014, through the date on
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`which the effects of Defendants’ unlawful conduct ceased (“Class Period”) as follows:
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`INTRODUCTION
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`1.
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`The market for “Crop Inputs”—seeds and crop protection chemicals such as
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`fungicides, herbicides, and insecticides—used by American farmers, is one of the largest markets
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`in the world with annual sales in excess of $65 billion.
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`2.
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`This market is dominated by four major manufacturers—Defendants Bayer
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`CropScience Inc., Corteva Inc., Syngenta Corporation, and BASF Corporation (collectively, the
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`“Manufacturer Defendants”)—whose products reach the market through large wholesalers—
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`Defendants Cargill Incorporated, Winfield Solutions, LLC, Univar Solutions, Inc. (the
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`“Wholesaler Defendants”)—that control the distribution of Crop Inputs to farmers as well as
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`retailers, including Defendants CHS Inc., Nutrien Ag Solutions Inc., Growmark Inc., Simplot AB
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`Retail Sub, Inc., Tenkoz Inc., and Federated Co-operatives Limited (the “Retailer Defendants”).
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`3.
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`The existing distribution process maintains supracompetitive Crop Input prices by
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`denying farmers accurate product information, including pricing information, which would allow
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`them to make better-informed purchasing decisions. As a result, the average price American
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`farmers pay for Crop Inputs is increasing at a rate that dramatically outpaces yields—for example,
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`over the last 20 years, the price of seed corn rose 300%, while corn yields increased only 33% to
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`35%. This disparity is proving increasingly devastating to farmers, who are now the least profitable
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`level of the American food supply chain and are drowning in hundreds of billions of dollars of
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`operating debt that is forcing them into bankruptcy at a record pace.
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`Case 3:21-cv-00021 Document 1 Filed 01/08/21 Page 5 of 44 Page ID #5
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`4.
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`Recognizing these inefficiencies, several electronic Crop Input sales platforms
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`launched between 2016 and 2017. These platforms aimed to provide a cheaper, more transparent
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`way for farmers to buy Crop Inputs by selling products acquired from the Manufacturer
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`Defendants directly to farmers, circumventing the opaque, convoluted distribution system. For
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`example, Farmers Business Network (“FBN”) and AgVend Inc., two leading electronic sales
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`platforms, were extremely popular with farmers upon launch, and both successfully raised millions
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`of dollars from leading venture capital firms to build out capacity to meet that demand.
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`5.
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`These new platforms threatened the Defendants’ dominant market position and
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`control over Crop Input pricing. As a result, rather than compete fairly with these new electronic
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`platforms, Defendants conspired to block the platforms’ access to Crop Inputs by engaging in a
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`group boycott. The Manufacturer and Wholesaler Defendants repeatedly blocked FBN’s access to
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`Crop Inputs by agreeing amongst themselves not to sell FBN products, even though doing so
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`would have opened a significant new sales channel for any individual wholesaler or manufacturer
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`acting independently and in their unilateral best economic interest.
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`6.
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`When FBN attempted to circumvent this unlawful boycott by purchasing an
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`established retailer with existing supply agreements, the Manufacturer Defendants canceled those
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`contracts, starving FBN’s platform out of business by ensuring that FBN could not acquire the
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`Crop Inputs it needed to operate. Other platforms, including AgVend, faced a similar fate, as
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`Defendants also refused to supply them with Crop Inputs.
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`7.
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`As a result of Defendants’ misconduct, farmers remain trapped in an inefficient,
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`opaque Crop Input market that eliminates their profits and destroys their livelihoods. Plaintiff and
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`the Classes bring this antitrust suit to redress that misconduct and ensure that future generations of
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`farmers do not suffer the same fate.
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`Case 3:21-cv-00021 Document 1 Filed 01/08/21 Page 6 of 44 Page ID #6
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`JURISDICTION AND VENUE
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`8.
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`This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §§
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`1331 & 1337(a) and Sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15(a) & 26. This Court
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`also has jurisdiction under 28 U.S.C. § 1332 because the amount in controversy for the Class
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`exceeds $5,000,000 and members of the Class are citizens of a different state than Defendants.
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`9.
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`Venue is proper in this District pursuant to Sections 4, 12, & 16 of the Clayton Act,
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`15 U.S.C. § 15(a), and 28 U.S.C. § 1391(b), (c), and (d). One or more Defendants resided,
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`transacted business, were found, or had agents in this District, and a substantial portion of the
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`affected interstate trade and commerce described in this Complaint was carried out in this District.
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`PARTIES
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`10.
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`Barbara Piper is the Executrix of the Estate of Michael Piper, deceased. Barbara
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`Piper is, and Michael Piper was, a citizen of the state of Illinois and resident of Jefferson County,
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`Illinois. Michael Piper purchased Liberty Herbicide at supracompetitive prices from Gateway
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`FS, Inc. Gateway FS, Inc. is a member-owner of the GROWMARK, Inc. cooperative.
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`11.
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`Bayer AG is a multinational pharmaceutical, chemical, and agriculture company. It
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`organizes itself into four divisions, each with its own management and corporate organization.
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`Legal entities within each division work together, follow a common strategy, and report up to the
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`same level of management.
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`12.
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`Defendant Bayer CropScience Inc. is a wholly-owned subsidiary of Bayer AG
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`headquartered in St. Louis, Missouri and incorporated in New York that develops, manufactures,
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`and sells Crop Inputs in the United States.
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`Case 3:21-cv-00021 Document 1 Filed 01/08/21 Page 7 of 44 Page ID #7
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`13.
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`Defendant Bayer CropScience LP is a wholly-owned subsidiary of Bayer AG
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`headquartered in Research Triangle Park, North Carolina, and is a crop science company that sells
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`Crop Inputs in the United States.
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`14.
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`Bayer CropScience Inc. and Bayer CropScience LP both operate as part of the
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`Bayer Group’s Crop Science division.
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`15.
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`Defendant Corteva Inc. is a domestic corporation headquartered in Wilmington,
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`Delaware, that develops, manufactures, and sells Crop Inputs in the United States.
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`16.
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`Defendant BASF Corporation is headquartered in Florham Park, New Jersey, and
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`is the principal U.S.-based operating entity and largest subsidiary of BASF SE, a multinational
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`pharmaceutical, seed, and chemical company. BASF develops, manufactures, and sells Crop
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`Inputs in the United States.
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`17.
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`Defendant Syngenta Corporation is the main U.S.-based operating subsidiary of
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`Syngenta AG, and is headquartered in Wilmington, Delaware. Syngenta develops, manufactures,
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`and sells Crop Inputs in the United States.
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`C. The Wholesaler Defendants
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`18.
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`Defendant Cargill, Inc. is a domestic corporation headquartered in Minnetonka,
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`Minnesota. Cargill owns and operates a wholesaler AgResource Division, which distributes Crop
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`Inputs to Cargill’s retail network and to retailers. Cargill’s AgResource Division maintains
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`contracts with each of Bayer, Corteva, BASF, and Syngenta entitling it to purchase and distribute
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`branded Crop Inputs and entitling it to special rebates.
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`19.
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`Defendant Winfield Solutions, LLC (“Winfield United”) is a domestic corporation
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`headquartered in Arden Hills, Minnesota and incorporated in Delaware. Winfield United is a Crop
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`Input wholesaler. It maintains contracts with each of Bayer, Corteva, BASF, and Syngenta
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`Case 3:21-cv-00021 Document 1 Filed 01/08/21 Page 8 of 44 Page ID #8
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`authorizing it to purchase and distribute branded Crop Inputs and entitling it to special rebates.
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`Winfield United is also a major Crop Input retailer that operates as a cooperative owned by its
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`members, which are 650 Crop Input retail businesses operating 2,800 retail locations throughout
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`the United States and parts of Canada.
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`20.
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`Defendant Univar Solutions, Inc. is a Crop Input wholesaler. Univar maintains
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`contracts with each of Bayer, Corteva, BASF, and Syngenta authorizing it to purchase and
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`distribute branded Crop Inputs and entitling it to special rebates. Univar Solutions, Inc. is a
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`domestic corporation headquartered in Illinois and incorporated in Delaware.
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`D. The Retailer Defendants
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`21.
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`Defendant CHS Inc. is one of the largest crop input wholesalers in the United
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`States. Like many large wholesalers, it also operates retail networks bearing the CHS brand around
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`the country that sell Crop Inputs from brick and mortar stores. CHS Inc. is incorporated and
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`headquartered in the state of Minnesota.
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`22.
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`CHS and the retail networks it operates maintain contracts with each of Bayer,
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`Corteva, BASF, and Syngenta authorizing it to purchase and distribute Crop Inputs and entitling
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`it to special rebates.
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`23.
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`Defendant Nutrien Ag Solutions, Inc. is both a Crop Input wholesaler and the
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`largest Crop Input retailer in the United States. It sells Crop Inputs to farmers throughout the
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`country and maintains contracts with each of Bayer, Corteva, BASF, and Syngenta authorizing it
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`to purchase and distribute Crop Inputs and entitling it to special rebates. Nutrien Ag Solutions, Inc.
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`is incorporated in Delaware and has its principal place of business in Colorado.
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`24.
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`Defendant GROWMARK, Inc. d/b/a Farm Supply or FS, is a large Crop Input
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`retailer headquartered in Illinois, with brick and mortar locations throughout the Midwestern
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`Case 3:21-cv-00021 Document 1 Filed 01/08/21 Page 9 of 44 Page ID #9
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`United States. Growmark is incorporated in Delaware. Growmark maintains contracts with each
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`of Bayer, Corteva, BASF, and Syngenta authorizing it to purchase and distribute Crop Inputs, and
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`entitling it to special rebates.
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`25.
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`Defendant Tenkoz Inc. is one of the largest Crop Input retailers in the United States.
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`Tenkoz purchases and sells 25% of all crop protection chemicals sold in the United States annually
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`through 550 retail locations and 70 wholesale locations around the country. Tenkoz is incorporated
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`and headquartered in Georgia. Tenkoz maintains contracts with each of Bayer, Corteva, BASF,
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`and Syngenta authorizing it to purchase and distribute Crop Inputs and entitling it to special
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`rebates.
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`26.
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`Defendant Simplot AB Retail Sub, Inc. f/k/a Pinnacle Agriculture Distribution, Inc.
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`is a large Crop Input wholesaler and retailer that operates 135 retail locations across 27 states.
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`Simplot is headquartered and incorporated in Mississippi. Simplot maintains contracts with each
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`of Bayer, Corteva, BASF, and Syngenta authorizing it to purchase and distribute Crop Inputs and
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`entitling it to special rebates.
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`27.
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`Defendant Federated Co-operatives Ltd. is a large Crop Input retailer. It maintains
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`contracts with each of Bayer, Corteva, BASF, and Syngenta authorizing it to purchase and
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`distribute Crop Inputs and entitling it to special rebates. Federated is under investigation by the
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`Canadian Competition Bureau for engaging in coordinated anticompetitive practices designed to
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`exclude competition in the Crop Input market.
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` SUBSTANTIVE ALLEGATIONS
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`28.
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`Farmers in the United States are facing an existential crisis, with operating expenses
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`skyrocketing while yields remain stagnant. For example, between 1995 and 2011, the cost of
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`growing soybeans and corn—the two most planted field crops in the United States—increased by
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`Case 3:21-cv-00021 Document 1 Filed 01/08/21 Page 10 of 44 Page ID #10
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`325% and 291%, respectively, but yields for those same crops rose by only 18.9% and 29.7%,
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`respectively. In a 2018 survey, a staggering 80% of farmers reported that their costs had only
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`continued to increase. As a result, farmers cannot pay their outstanding operating debts—estimated
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`at well over $400 billion in 2019—and the rate of farm bankruptcies has accelerated, with declared
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`farm bankruptcies increasing by 24% from 2018 to 2019, the biggest yearly increase since the
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`Great Recession.
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`29.
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`This steady cost increase is not attributable to escalating research and development
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`expenditures, which have decreased considerably over the past several years. Rather, it is the result
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`of massive, unjustifiable disparities in the prices farmers pay for Crop Inputs—the seeds and
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`chemicals such as fertilizer, insecticide, and herbicide used to produce a crop—which can vary by
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`as much as 60% within a single geographic region, and the supracompetitive prices paid by farmers
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`as a result of Defendants’ group boycott of electronic distribution platforms.
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`30.
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`For example, a survey conducted of farmers nationally showed that the price per
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`gallon farmers paid for Bayer AG’s popular herbicide Roundup PowerMAX varied by as much as
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`270% from between $31.08 per gallon to $11.23 per gallon, even though in each instance the
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`famers acquired the same product. The same is true of seeds, with some farmers paying $21.87
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`more per acre for seeds than other farmers pay for the exact same product.
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`31.
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`These price disparities persist—and wreak financial havoc on America’s farmers—
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`by Defendants’ design. The Crop Input market is structured, from top to bottom, to maximize
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`opacity and deny farmers access to the objective pricing data and product information they need
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`to make informed decisions about the Crop Inputs they buy. Farmers, through no fault of their
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`own, are unwittingly paying more for Crop Inputs than they would in a truly competitive market.
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`Farmers lack the objective information and data needed to gauge whether their investments are
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`Case 3:21-cv-00021 Document 1 Filed 01/08/21 Page 11 of 44 Page ID #11
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`worthwhile, as well as any ability to purchase Crop Inputs without paying unnecessary overhead
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`to brick-and-mortar retailers.
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`32.
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`This opacity begins at the very top of the Crop Input market, where the
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`Manufacturer Defendants who develop and produce between 75% and 90% of the most popular
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`Crop Inputs closely guard their product prices.
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`33.
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`Then, to maintain that secrecy, Manufacturer Defendants allow only wholesalers,
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`including the Wholesaler Defendants, retailers the manufacturers own or operate, and retailers
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`such as the Retailer Defendants that are licensed “authorized retailers,” to sell the Manufacturer
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`Defendants’ Crop Inputs.
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`34.
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`The contracts granting “authorized retailer” licenses contain strict confidentiality
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`provisions that require authorized retailers to keep confidential the manufacturers’ prices, as well
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`as any incentives, rebates, and commissions offered by the manufacturers to their authorized
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`retailers. Those contracts also require so-called “zone pricing,” under which identical products are
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`sold at different prices depending on a farmer’s location, which must also be kept strictly
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`confidential. Zone pricing reflects historical practice (first introduced by Defendant Bayer in the
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`1990s) rather than any legitimate justifications for disparate pricing.
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`35. Manufacturers also use a tactic known as “seed relabeling” to capitalize on farmers’
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`lack of objective performance data. Seed relabeling is the practice of taking seeds that have been
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`on the market under a given brand name for some time and repackaging the seeds under a new
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`brand name so that they can be sold at a new, higher price, even though the seeds are the same.
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`36.
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`Pricing is no more transparent at the retail level. To the contrary, wholesalers’
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`contracts with authorized retailers also contain strict confidentiality provisions. Retailers cannot
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`disclose the price paid to the wholesaler for its Crop Inputs or the price at which retailers sell those
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`Case 3:21-cv-00021 Document 1 Filed 01/08/21 Page 12 of 44 Page ID #12
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`Crop Inputs to other farmers. To further muddy the market waters, retailers sell Crop Inputs and
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`related services (e.g., spraying or applying chemicals) in bundles, making it difficult—if not
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`impossible—for farmers to discern the price they are being charged for any individual Crop Input
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`or service.
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`37.
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`Recognizing the inefficiency of such an opaque Crop Input market, electronic Crop
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`Input sales platforms began emerging by 2016 with the goal of modernizing the market by, among
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`other things, providing farmers with transparent pricing and access to Crop Inputs direct from the
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`Manufacturer Defendants, avoiding the opaque distribution system controlled by the Wholesaler
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`and Retailer Defendants.
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`38.
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`At first, those efforts showed extraordinary promise, as farmers gravitated en masse
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`toward these electronic platforms in search of better, fairer prices for Crop Inputs. For example,
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`more than 12,000 farmers signed up for FBN’s service that provides objective performance data
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`on Crop Inputs, while 6,000 farmers signed up for FBN’s electronic platform that was designed to
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`sell Crop Inputs online.
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`39.
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`This success drew negative attention from the Defendant wholesalers and retailers,
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`who recognized that these new entrants threatened their traditional role in the Crop Input market
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`and, more importantly, threatened their profit margins. As a report published by CoBank, a
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`cooperative partly owned by Crop Input retailers and a major lender to grain cooperatives,
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`explained, “Despite relatively low sales, e-commerce companies pose a threat to brick-and-
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`mortar ag retailers in two ways. First, any new competitor will erode sales and margins to some
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`degree and second, e-commerce sites increase transparency for product prices.” That price
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`transparency would allow farmers to negotiate with Crop Input retailers, thus eating into their
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`margins.
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`Case 3:21-cv-00021 Document 1 Filed 01/08/21 Page 13 of 44 Page ID #13
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`40.
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`Upon learning about FBN’s entry into the market in 2016, CHS Inc. officials
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`distributed a letter to farmers attempting to discourage them from using FBN, falsely claiming
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`that, while an electronic platform like FBN would be able to offer the same products at cheaper
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`prices, “FBN just does it with little overhead and without returning any profits to you the farmer,
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`while lining the pockets of investors and big data companies like Google.”
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`41.
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`CropLife America is a trade association that comprises major Crop Input
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`manufacturers, wholesalers, and retailers. Its Board of Directors is chaired by an executive from
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`one of the Manufacturer Defendants—currently BASF’s Paul Rea, and previously Corteva’s
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`Suzanne Wasson. For the 2016 to 2019 term, CropLife’s Board of Directors also included
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`executives from Defendants Bayer, CHS, Growmark, Tenkoz, and Simplot. Although CropLife
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`America’s long-time CEO claims that “the work of our Board of Directors is imperative to making
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`sure that farmers have access to crop protection technology today and in the future,” there is not a
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`single representative from farming groups on CropLife America’s Board of Directors. Instead, the
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`Board of Directors comprises exclusively representatives from large Crop Input manufacturers,
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`distributors, and retailers, making it an ideal vehicle for collusion.
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`42.
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`CropLife America also operates CropLife Magazine, a trade publication that
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`echoed CoBank’s sentiments and wrote repeatedly about the danger electronic platforms posed to
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`Crop Input retailers’ business model. CropLife stated that it was “concerned that the retailer could
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`be disintermediated—i.e., that electronic platforms would ‘cut out the middle man’—allowing
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`growers to find product conveniently and at a lower market price,” and decried “the devil
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`known as ‘price transparency,’” commenting that “[g]rowers were not really as interested in
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`buying and selling and storing product as they were in printing price lists off the Internet and
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`waving them in their retailer’s faces. Already low margins were about to race to the bottom.”
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`Case 3:21-cv-00021 Document 1 Filed 01/08/21 Page 14 of 44 Page ID #14
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`43.
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`CropLife’s PACE Advisory Council—a committee composed of the “heads of
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`major ag retailers, market suppliers, equipment makers, and other agricultural analysts”—clearly
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`identified the threat posed by electronic platforms to retailers and wholesalers at its 2017 annual
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`meeting. CropLife’s coverage of the event reported that “three letters . . . continually cropped up
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`no matter what the topic of conversation happened to be – FBN (Farmers Business Network). To
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`say that all things related to FBN and its business practices dominated much of the day-long event
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`would be a gross understatement. Several members of the PACE Council described how FBN had
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`negatively affected their businesses during 2017 by cutting into their already slim margins
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`on various products.”
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`44.
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`The Retailer Defendants and the Wholesaler Defendants knew that retention of their
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`market positions and profit margins depended on the exclusion of electronic platforms from the
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`market, so they conspired to cut off the platforms’ product supply. To achieve this end, the Retailer
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`and Wholesaler Defendants pressured the Manufacturer Defendants, which rely on the Retailer
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`and Wholesaler Defendants to recommend and sell their products to farmers, to refuse to supply
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`FBN.
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`45.
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`Bayer secretly formed an internal task force in 2016 specifically to study the long-
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`term competitive impact of FBN’s electronic platform.
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`46.
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`The Manufacturer Defendants complied with this demand and initiated a joint
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`boycott of electronic platforms including FBN, the target of CropLife’s report. As a result, when
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`FBN reached out to the Manufacturer and Wholesaler Defendants for Crop Inputs, they all refused
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`to supply FBN, offering only pretextual excuses for doing so. For example, Syngenta’s Head of
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`Crop Protection Sales in the United States learned that a small number of branded Crop Inputs had
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`been sold on electronic platforms in violation of Defendants’ boycott. He falsely claimed that
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`Case 3:21-cv-00021 Document 1 Filed 01/08/21 Page 15 of 44 Page ID #15
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`electronic platforms would deliver counterfeit products and that, “[w]hen online entities acquire
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`products from sources other than authorized dealers or contracted distributors, you’d better
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`question and be concerned about the quality.”
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`47.
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`To ensure that this boycott was successful, Defendants imposed strict penalties on
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`retailers who failed to fall in line. For example, in 2018, after learning that some retailers had sold
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`product to FBN despite the boycott, Syngenta initiated an audit of its authorized retailers to identify
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`and punish the retailers who had made those sales.
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`48.
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`Bayer, BASF, and Corteva similarly include mandatory language in their form
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`contracts with authorized retailers that allows them to audit authorized retailers’ books and records
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`and perform on-site inspections at any time. Bayer, BASF, and Corteva used these provisions to
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`ensure that electronic platforms could not secure branded Crop Inputs by buying from an
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`authorized retailer.
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`49.
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`This backlash even extended to generic products (i.e. Crop Inputs that no longer
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`retain patent protection). In a recent Forbes article, one CEO of a generic chemical products
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`company stated it was waiting to supply to FBN because it was “wary of angering their existing
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`sales channels [i.e., wholesalers and retailers].” That CEO confirmed that “[i]n an ideal world, if I
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`could flip the switch and sell to these guys, I would do it in a heartbeat.”
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`50.
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`FBN attempted to neutralize this boycott by purchasing Yorkton, a Canada-based
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`retailer with decades-old supply agreements with Defendants Bayer, Syngenta, BASF, Corteva,
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`and Winfield United. These agreements—if honored—would have provided FBN with Crop Input
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`inventory to sell to American farmers. Instead, the Wholesaler and Retailer Defendants threatened
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`to retaliate against the Manufacturer Defendants if they continued supplying Crop Inputs to
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`Yorkton. Faced with threats of retaliation from wholesalers and retailers, the Manufacturer
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`Case 3:21-cv-00021 Document 1 Filed 01/08/21 Page 16 of 44 Page ID #16
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`Defendants agreed to boycott Yorkton and abruptly canceled their longstanding supply contracts
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`within a few months of its March 2018 acquisition by FBN.
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`51.
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`This boycott was successful. FBN, starved of Crop Inputs, has begun developing
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`its own products that it can sell to farmers via its electronic platform.
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`52.
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`Defendants’ boycott was not limited to FBN. They also refused to supply AgVend.
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`Lacking supply, AgVend shut down its platform in favor of establishing web-based storefronts for
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`traditional brick-and-mortar retailers, essentially migrating the existing broken market structure
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`online.
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`53.
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`As a result of the Retailer, Wholesaler, and Manufacturer Defendants’ coordinated
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`actions, farmers were deprived of the opportunity to purchase Crop Inputs at transparent, lower
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`prices from electronic platforms. Instead, they were forced to continue paying artificially high
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`prices for Crop Inputs purchased from local retailers subject to Defendants’ confidentiality
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`requirements.
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`54.
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`The downfall of FBN and AgVend drew the attention of Canada’s Competition
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`Bureau (“CCB”), which is formally investigating Defendants for collusion under Section 10 of the
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`Competition Act Canada (R.S.C., 1985, c. C-34). The inquiry is