Case: 4:21-cv-00839-SEP Doc. #: 1 Filed: 06/03/21 Page: 1 of 104 PageID #: 1
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`STATES DISTRICT COURT
`DISTRICT OF MINNESOTA
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`Plaintiff,
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`vs.
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`JSB FARMS, LLC, individually and on
`behalf of all others similarly situated,
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`BAYER CROPSCIENCE LP, BAYER
`CROPSCIENCE, INC., CORTEVA, INC.,
`PIONEER HI-BRED INTERNATIONAL,
`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.,
`GROWMARK FS, LLC, SIMPLOT AB
`RETAIL SUB, INC., AND TENKOZ, INC.,
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`Defendants.
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`Case No.
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`CLASS ACTION COMPLAINT
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`DEMAND FOR JURY TRIAL
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`Plaintiff JSB Farms, LLC by and through its undersigned counsel, brings this Complaint
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`on behalf of itself and all others similarly situated against Defendants Bayer CropScience LP,
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`Bayer CropScience, Inc., Corteva, Inc., Pioneer Hi-Bred International, Inc., Cargill Incorporated,
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`BASF Corporation, Syngenta Corporation, Winfield Solutions, LLC, Univar Solutions, Inc.,
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`Federated Co- Operatives Ltd., CHS Inc., Nutrien Ag Solutions Inc., Growmark Inc., Growmark
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`FS, LLC, Simplot AB Retail Sub, Inc., and Tenkoz, Inc. (together, “Defendants”) for violation of
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`federal antitrust laws, state antitrust laws, state unfair competition laws, consumer protection laws,
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`and unjust enrichment laws.
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`I.
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`INTRODUCTION
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`1.
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`This case is about the future of the farming industry in America. Over the last few
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`years, the cost of Crop Inputs – seeds and crop protection chemicals such as fungicides, herbicides,
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`and insecticides – has increased at a significantly faster rate than profits from farmers’ crop yields.
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`These cost increases are proving increasingly devastating to farmers, who are now the least
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`profitable level of the American food supply chain and are drowning in hundreds of billions of
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`dollars of operating debt that is forcing them into bankruptcy at a record pace, creating a crisis in
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`the agriculture community.
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`2.
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`Plaintiff’s action focuses on an unlawful agreement between the above-identified
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`Defendants to artificially increase and fix the price of Crop Inputs, ranging from seeds to crop
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`protection chemicals such as pesticides (e.g., herbicides, fungicides and insecticides) used by
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`farmers.
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`3.
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`4.
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`Defendants are manufacturers, wholesalers, and retailers of Crop Inputs.
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`Defendants BASF Corporation, Bayer CropScience, Inc., Corteva, Inc., Pioneer Hi-
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`Bred International, Inc., and Syngenta Corporation (the “Manufacturer Defendants”) are
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`manufacturers of Crop Inputs.
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`5.
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`Defendants Cargill Incorporated, Univar Solutions, Inc., and Winfield Solutions,
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`LLC (the “Wholesaler Defendants”) are wholesalers of Crop Inputs.
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`6.
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`Defendants CHS Inc., Federated Co-Operatives Ltd, Growmark Inc., Nutrien Ag
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`Solutions Inc., Simplot AB Retail Sub. Inc., and Tenkoz Inc. (the “Retailer Defendants”) are
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`retailers for Crop Inputs.
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`7.
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`Over the past three decades, a series of mergers and acquisitions created the “Big
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`Four” of the crop inputs industry: BASF, Bayer, Corteva and Syngenta—the named Manufacturer
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`Defendants in this action. Together these companies dominate the seed and crop protection
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`chemicals input markets. For example, in 2014-2015, these firms together controlled over 82%
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`and 76% of corn and soybean seed sales. Upon information and belief, Defendants’ share of these
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`markets has increased since then.
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`8.
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`The Manufacturer Defendants seek to channel purchases of their Crop Inputs
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`through either their own digital platforms or through traditional agricultural wholesale and
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`retailers, namely, the Wholesale and Retail Defendants, so that they can artificially increase the
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`prices of Crop Inputs.
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`9.
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`The Manufacturer Defendants maintain a competitive advantage over the
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`Wholesale and Retail Defendants who are economically dependent upon large rebates from the
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`Manufacturer Defendants tied to sales goals. As a result, pushing the Manufacturer Defendants’
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`products is engrained into the traditional agricultural wholesale and retail business model, from
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`which all three defendant groups profit well.
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`10.
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`As the number of manufacturers shrank to the Big Four, as well as a limited number
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`of wholesalers and retailers, a lack of competition has left farmers with less affordable Crop Inputs.
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`11.
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`Leading to this growing-untenable situation for farmers, Defendants established a
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`secretive distribution process that keeps Crop Inputs prices inflated at supracompetitive levels. In
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`furtherance of their conspiracy, Defendants also denied farmers access to relevant market
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`information, including transparent pricing terms, that would allow comparison shopping and
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`better-informed purchasing decisions, as well as information about seed relabeling practices that
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`would enable farmers to know if they are buying newly developed seeds or identical seeds
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`repackaged under a new brand name and sold for a higher price.
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`12.
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`Beginning at least as early as 2014, new online Crop Inputs sales platforms offered
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`pricing comparison tools to allow farmers to view what other farmers were paying for the same
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`Crop Inputs, increasing price transparency. These online sales platforms, including Farmers
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`Business Network (“FBN”) and AgVend Inc., were successful and in high demand with farmers.
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`13.
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`Viewing this success and the ability of such online sales platforms to impact the
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`market position and price control of the traditional agricultural wholesale and retail distribution,
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`Defendants conspired and coordinated to boycott these online Crop Inputs sales platforms. For
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`example, the Manufacturer Defendants and Wholesaler Defendants agreed amongst themselves
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`not to sell Crop Inputs to FBN and enforced strict discipline on Retailer Defendants who failed to
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`comply with the boycott. Defendants Syngenta, Bayer, BASF, and Corteva used audits and
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`inspections of their authorized retailers to ensure that online Crop Inputs sales platforms were
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`unable to obtain Crop Inputs from their authorized retailers.
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`14.
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`Defendants’ boycott succeeded. As a result of Defendants’ anticompetitive
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`conduct, online Crop Inputs sales platforms, such as FBN and AgVend, were unable to purchase
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`Defendants’ Crop Inputs to sell them on their platforms. Because Defendants are the dominant
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`manufactures and sellers of Crop Inputs, this was a devastating blow to these sales platforms and
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`directly harmed farmers in taking away a lower cost option for purchasing these Crop Inputs.
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`15.
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`Given the structure of the Crop Inputs industry with the necessary relationships
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`between manufacturers, wholesalers, and retailers, an effective boycott of electronic platforms
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`would not have been feasible absent actual coordination and cooperation among Defendants.
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`Absent an agreement among themselves, Defendants’ actions were against their independent
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`economic self-interests.
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`16.
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`As a direct and proximate result of Defendants’ anticompetitive conduct,
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`Defendants’ have maintained supracompetitive prices for Crop Inputs by denying farmers access
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`to accurate pricing information and have injured farmers by forcing farmers to accept opaque price
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`increases that drastically outweigh any increase in crop yields or market prices.
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`17.
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`Defendants’ anticompetitive conduct is the subject of ongoing investigations by
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`both the Canadian Competition Bureau (“CCB”) and the United States Federal Trade Commission
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`(“FTC”).
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`18.
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`A Canadian federal court has found that there is sufficient evidence to require
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`Defendants to also produce records concerning their coordinated anticompetitive conduct in the
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`United States. Further, as reported by various news agencies, CCB officials have documents that
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`suggest a coordinated effort among the corporations to block FBN.
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`19.
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`In regard to the FTC investigation, at least one defendant, Corteva, has received a
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`subpoena directing it to submit documents to the FTC that are related to Crop Inputs “in order to
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`determine whether Corteva engaged in unfair methods of competition through anticompetitive
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`conduct.”
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`Plaintiff
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`II.
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`PARTIES
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`20.
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`Plaintiff JSB Farms, LLC is a Minnesota corporation and had its principal place of
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`busines in Minnesota at all relevant times. During the Class Period and while operating in
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`Minnesota, Plaintiff purchased one or more Crop Inputs, for its own use for its farming operation
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`and not for resale, that was manufactured or sold by one or more Defendants. Plaintiff suffered
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`injury as a result of Defendants’ conduct alleged herein.
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`Manufacturer Defendants
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`21.
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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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`22.
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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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`23.
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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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`24.
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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. Defendants Bayer CropScience Inc. and Bayer CropScience
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`LP are collectively referred to as “Bayer.”
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`25.
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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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`26.
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`Defendant Pioneer Hi-Bred International, Inc.,
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`is an Iowa corporation
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`headquartered in Johnston, Iowa, that develops, manufactures, and sells Crop Inputs in the United
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`States. Pioneer is a wholly-owned subsidiary of Corteva. Corteva Incorporated is a Delaware
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`corporation headquartered in Wilmington, Delaware, that develops, manufactures, and sells Crop
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`Inputs in the United States.
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`27.
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`Defendant BASF Corporation (“BASF”) is headquartered in Florham Park, New
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`Jersey, and is the principal U.S.-based operating entity and largest subsidiary of BASF SE, a
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`multinational pharmaceutical, seed, and chemical company. BASF develops, manufactures, and
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`sells Crop Inputs in the United States.
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`28.
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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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`Wholesaler Defendants
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`29.
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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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`30.
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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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`Inputs wholesaler. It maintains contracts with each of Bayer, Corteva, BASF, and Syngenta
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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 Inputs retailer that operates as a cooperative owned by its
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`members, which are 650 Crop Inputs retail businesses operating 2,800 retail locations throughout
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`the United States and parts of Canada.
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`31.
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`Defendant Univar Solutions, Inc. (“Univar”) is a Crop Inputs wholesaler. Univar
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`maintains contracts with each of Bayer, Corteva, BASF, and Syngenta authorizing it to purchase
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`and 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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`Retailer Defendants
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`32.
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`Defendant CHS Inc. (“CHS”) is one of the largest Crop Inputs wholesalers in the
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`United States. Like many large wholesalers, it also operates retail networks bearing the CHS brand
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`around the country that sell Crop Inputs from brick and mortar stores. CHS Inc. is incorporated
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`and headquartered in the state of Minnesota.
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`33.
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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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`34.
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`Defendant Nutrien Ag Solutions, Inc. is both a Crop Inputs wholesaler and the
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`largest Crop Inputs 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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`35.
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`Defendant GROWMARK, Inc. d/b/a Farm Supply or FS, is a large Crop Inputs
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`retailer headquartered in Illinois, with brick and mortar locations throughout the Midwestern
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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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`36.
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`Defendant Tenkoz Inc. is one of the largest Crop Inputs retailers in the United
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`States. Tenkoz purchases and sells 25% of all crop protection chemicals sold in the United States
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`annually through 550 retail locations and 70 wholesale locations around the country. Tenkoz is
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`incorporated and headquartered in Georgia. Tenkoz maintains 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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`37.
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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 Inputs 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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`38.
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`Defendant Federated Co-operatives Ltd. is a large Crop Inputs 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 Inputs market.
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`III.
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`JURISDICTION AND VENUE
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`39.
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`Plaintiff brings this action on behalf of the Classes under 18 U.S.C. § 1962(c) (the
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`Racketeer Influenced and Corrupt Organizations Act (Civil RICO)) to recover actual and
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`compensatory damages as well as three times actual damages, costs, and reasonable attorneys’ fees
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`pursuant to 18 U.S.C. § 1964(a) and (c). Plaintiff also bring this action under Section 16 of the
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`Clayton Act (15 U.S.C. § 26) to secure injunctive relief against Defendants for violating Section
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`1 of the Sherman Act (15 U.S.C. § 1), and to recover actual and compensatory damages, treble
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`damages, interest, costs, and attorneys’ fees for the injury caused by Defendants’ conduct. Plaintiff
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`also asserts state law class claims on behalf of the Classes to recover actual and/or compensatory
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`damages, double and treble damages as permitted, pre- and post-judgment interest, costs, and
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`attorneys’ fees for the injury caused by Defendants’ conduct.
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`40.
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`This Court has subject matter jurisdiction under 18 U.S.C. § 1964(c), 28 U.S.C. §§
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`1331, 1337, and Sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15(a) and 26. This Court also
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`has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. §§ 1332(d) and 1367,
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`in that: (i) this is a class action in which the matter or controversy exceeds the sum of $5,000,000,
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`exclusive of interest and costs, and in which some members of the proposed Classes are citizens
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`of a state different from some defendants; and (ii) Plaintiff’s state law claims form part of the same
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`case or controversy as their federal claims under Article III of the United States Constitution.
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`41.
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`Venue is proper in this Court pursuant to Sections 4, 12, and 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), because one or more Defendants resided
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`or transacted business in this District, is licensed to do business or is doing business in this District,
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`and because a substantial portion of the affected interstate commerce described herein was carried
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`out in this District.
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`42.
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`This Court has personal jurisdiction over each Defendant because, inter alia, each
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`Defendant: (a) transacted business throughout the United States, including in this District; (b)
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`manufactured, shipped, sold, and/or delivered substantial quantities of Crop Inputs throughout the
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`United States, including this District; (c) had substantial contacts with the United States, including
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`this District; and/or engaged (d) in an antitrust conspiracy that was directed at and had a direct,
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`foreseeable, and intended effect of causing injury to the business or property of persons residing
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`in, located in, or doing business throughout the United States, including this District.
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`43.
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`The activities of Defendants and all co-conspirators, as described herein, were
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`within the flow of, were intended to, and did have direct, substantial, and reasonably foreseeable
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`effects on the foreign and interstate commerce of the United States.
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`IV.
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`TRADE AND COMMERCE
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`44.
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`During the Class Period, each Defendant sold Crop Inputs in the United States in a
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`continuous and uninterrupted flow of interstate commerce and foreign commerce, including
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`through and into this judicial District.
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`45.
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`During the Class Period, Defendants collectively controlled a majority of the
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`market for Crop Inputs in the United States.
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`46.
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`Defendants’ business activities substantially affected interstate trade and commerce
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`in the United States and caused injury in the United States.
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`V.
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`RELEVANT MARKETS
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`47.
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`The relevant market for this action involves Crop Inputs in the United States,
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`including the manufacture of Crop Inputs, the wholesale market for Crop Inputs, and the retail
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`sales market for Crop Inputs.
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`48.
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`The Relevant geographic market is the United States.
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`VI.
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`FACTUAL ALLEGATIONS
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`49.
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`Farmers in the United States are experiencing drastically increasing operating
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`expenses while revenue and profits from their crop yields remain stagnant. For example, between
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`1995 and 2011, the cost of growing soybeans and corn tripled while yields for those same crops
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`rose by only 18.9% and 29.7%, respectively.
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`50.
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`This trend has continued in recent years. One study found that seed, fertilizer, and
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`pesticide costs were 32% of crop revenue between 1990 and 2006, increased to 36% of revenue
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`between 2006 and 2015, but soared to 48% of crop revenue in 2015.
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`51.
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`In a 2018 survey, 80% of farmers reported that their costs had only continued to
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`increase. As a result, farmers cannot pay their outstanding operating debts—estimated at well over
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`$400 billion in 2019—and the rate of farm bankruptcies has accelerated, with declared farm
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`bankruptcies increasing by 24% from 2018 to 2019, the biggest yearly increase since the Great
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`Recession.
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`52.
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`The rate of cost increases of Crop Inputs was not caused by a rise in demand
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`resulting from an increase in the amount of farmland or the number of farms, which has actually
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`decreased during the Class Period.1 Instead, the increases are a result of unjustifiably inflated,
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`supracompetitive prices due to Defendants’ anticompetitive conduct, including the Defendants’
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`group boycott of online sales platforms such as FBN and AgVend.
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`53.
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`The market for Crop Inputs is structured to be secretive and opaque to obscure
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`pricing data and product information that farmers need to make informed purchasing decisions
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`about Crop Inputs. Because farmers lack the objective information and data needed to evaluate
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`their purchases, farmers are forced to pay higher prices for Crop Inputs than they would in a
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`competitive market. On top of this, farmers are unable to buy Crop Inputs without paying for the
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`unnecessary overhead of brick-and-mortar retailers such as that provided by the Wholesaler and
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`Retailer Defendants.
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`54.
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`The Manufacturer Defendants, who develop and produce between 75% to 90% of
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`the most popular name brand Crop Inputs, guard their product prices from consumers. The
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`Manufacturer Defendants allow their products to be sold only by wholesalers, including the
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`Wholesaler Defendants; retailers owned or operated by the manufacturer; and licensed “authorized
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`retailers,” such as the Retailer Defendants.
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`55.
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`The contracts granting “authorized retailer” licenses contain confidentiality
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`provisions that prohibit authorized retailers from disclosing the manufacturers’ prices or any
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`incentives, rebates, or commissions offered by the manufacturers to the authorized retailers.
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`56. Manufacturers also engage in the practice of “seed relabeling,” which repackages
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`seeds that are already on the market under a new brand name so that they can be sold at a higher
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`1 See, e.g., U.S. Dept. of Ag. webpage “Farming and Farm Income” from https://www.ers.usda.gov/data-products/ag-
`and-food-statistics-charting-the-essentials/farming-and-farm-income/ (last visited March 1, 2021) and American
`Farmland Trust webpage “New Census of Agriculture Shows Decline in Number of America’s Farms, Farmers, and
`https://farmland.org/new-census-of-agriculture-shows-decline-in-number-of-americas-farms-
`Farmland”
`from
`farmers-and-farmland/ (last visited March 1, 2021).
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`price. This practice takes further advantage of farmers’ lack of access to objective performance
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`and pricing data, and can cause farmers to overpay for seed that could have been purchased for
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`less from a different brand and/or to have less genetic diversity in seeds across their farms than
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`they anticipated.
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`57.
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`At the retail level, pricing is similarly opaque and obscured. Wholesalers’ contracts
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`with authorized retailers contain confidentiality provisions, prohibiting retailers from disclosing
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`the price paid to the wholesaler for Crop Inputs or the price at which retailers sell those exact same
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`Crop Inputs to other farmers. In addition, retailers sell Crop Inputs bundled together with related
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`services, such as spraying or applying chemicals, to make it more difficult for farmers to ascertain
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`the cost of any individual Crop Inputs or bundled service.
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`58.
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`The first online sales platforms for Crop Inputs launched in 2014, with the goal of
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`modernizing the market, increasing price transparency, lowering prices, and providing farmers
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`access to Crop Inputs directly from the Manufacturer Defendants. These online marketplaces were
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`designed to avoid the existing opaque and inefficient distribution system established and
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`maintained by Wholesaler and Retailer Defendants.
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`59.
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`Initially, online Crop Inputs sales platforms were successful. For example, more
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`than 12,000 farmers signed up for FBN’s service that provided objective performance data on Crop
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`Inputs, and 6,000 farmers signed up for FBN’s electronic sales platform.
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`60. Wholesaler and Retailer Defendants recognized the threat posed by these online
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`sales platforms to their market position and profit margins. A report published by CoBank, a
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`cooperative partly owned by Crop Inputs retailers and a major lender to grain cooperatives,
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`explained that price transparency would enable farmers to negotiate with Crop Inputs retailers and
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`decrease the Wholesaler and Retailer Defendants’ profit margins:
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`Despite relatively low sales, e-commerce companies pose a threat to brick-and-
`mortar ag retailers in two ways. First, any new competitor will erode sales and
`margins to some degree and second, e-commerce sites increase transparency for
`product prices.
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`61.
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`These online sales platforms would provide farmers with several sources of easily-
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`accessed product price information. Farmers could then leverage that information in negotiations
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`with local brick-and-mortar retailers. Traditional ag retailers that bundle products and services
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`together into a single price would lose customers to e-commerce sites that allowed customers to
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`purchase only the product. The e-commerce channel allows cost-sensitive farmers to eliminate
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`unwanted service costs like custom application and product warranties.
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`62.
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`Defendants recognized the threat imposed by these online sales’ platforms and took
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`steps to eliminate that threat.
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`63.
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`In 2016, Defendant Bayer formed an internal task force to study the long-term
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`competitive impact of FBN’s online platform.
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`64.
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`Defendant CHS, upon learning of FBN’s online buying platform launch in 2016,
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`sent a letter to farmers discouraging them from using FBN by falsely claiming that although FBN
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`would be able to offer the same products at lower costs, “FBN just does it with little overhead and
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`without returning any profits to you the farmer, while lining the pockets of investors and big data
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`companies like Google.”
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`65.
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`The Retailer Defendants and the Wholesaler Defendants knew that retaining their
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`market positions and profit margins depended on excluding online sales platforms from the market,
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`so they conspired to eliminate the platforms’ product supply. To do so, the Retailer and Wholesaler
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`Defendants pressured the Manufacturer Defendants—who rely on the Wholesaler and Retailer
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`Defendants to recommend and sell their products to farmers—to cut off FBN’s supply of Crop
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`Inputs.
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`66.
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`The Manufacturer Defendants complied with the demands of the Wholesaler and
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`Retailer Defendants to cut off FBN’s supply, and Defendants initiated a joint boycott of online
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`sales platforms, including FBN. When FBN attempted to purchase Crop Inputs from the
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`Manufacturer and Wholesaler Defendants, they all refused and offered only pretextual excuses for
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`their refusal.
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`67.
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`For example, when Syngenta’s Head of Crop Protection Sales in the United States
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`found out that a small number of branded Crop Inputs had been sold on online platforms in
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`violation of Defendants’ boycott, he falsely claimed that online platforms would deliver counterfeit
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`products and that, “[w]hen online entities acquire products from sources other than authorized
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`dealers or contracted distributors, you’d better question and be concerned about the quality.”
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`68.
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`To ensure the success of Defendants’ boycott, Defendants imposed strict penalties
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`on retailers who failed to comply with the boycott. For example, Syngenta initiated an audit of its
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`authorized retailers after learning that some retailers had sold Crop Inputs product to FBN despite
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`the boycott in order to identify and punish the retailers who made those sales to FBN.
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`69.
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`Defendants Bayer, BASF, and Corteva inserted mandatory language into their form
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`contracts with authorized retailers that permitted audits of authorized retailers’ books and records
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`and on-site inspections at any time. Defendants Bayer, BASF, and Corteva used these contractual
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`provisions to ensure that online sales platforms could not purchase branded Crop Inputs from an
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`authorized retailer.
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`70.
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`Defendants also utilized trade associations in their attack on online sales platforms.
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`CropLife America (“CropLife”) is a trade association made up of major Crop Inputs
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`manufacturers, wholesalers, and retailers, and serves as an ideal vehicle for collusion. CropLife
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`America’s board of directors is chaired by an executive from one of the Manufacturer Defendants,
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`currently Paul Rea from BASF and previously Suzanne Wasson from Corteva. For the 2016-19
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`term, CropLife America’s board of directors included executives from Defendants Bayer, CHS,
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`Growmark, Tenkoz, and Simplot. There is not a single representative for farmers or farmer groups
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`on CropLife America’s board of directors, despite CropLife America’s mission to “help ensure
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`growers and consumers have the technologies they need to protect crops, communities, and
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`ecosystems from the threat of pests, weeds, and diseases in an environmentally sustainable way.”
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`71.
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`CropLife America’s trade publication, “CropLife Magazine,” repeated the concerns
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`expressed by CoBank about the alleged threat posed by online Crop Inputs sales platforms to Crop
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`Inputs retailers’ business. CropLife Magazine stated it was “concerned that the retailer could be
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`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 known
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`as ‘price transparency,’” stating that “[g]rowers were not really as interested in buying and selling
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`and storing product as they were in printing price lists off the Internet and waving them in their
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`retailer’s faces. Already low margins were about to race to the bottom.”
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`72.
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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 online sales 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 business during 2017 by cutting into their already slim margins on various
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`products.”
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`73.
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`The impact of Defendants’ boycott extended past branded product to generic
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`products (i.e., Crop Inputs sold by non-Defendant manufacturers after the Manufacturer
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`Defendants’ patents expire). In a 2018 Forbes article, the CEO of a generic chemical products
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`company stated it was wary of supplying FBN because it could anger existing sales channels, and
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`that “[i]n an ideal world, if I could flip the switch and sell to these guys, I would do it in a
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`heartbeat.”2
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`74.
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`During the class period, FBN also purchased Yorkton Distributors (“Yorkton”), a
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`Canada-based retailer with longstanding supply agreem