Covington, TENNESSEE, June 6, 2004 -- CropChoice news -- Greg Little,
The Covington Leader: A federal court case
against a Covington farmer is taking even more twists
and turns. The case is Monsanto Company of St. Louis
versus Kem Ralph, who does have a judgment outstanding
However, lawyers representing Ralph said the case is
being appealed and are trying to stop the company from
executing a notice to begin the procedure of collecting
nearly $3 million.
Monsanto won a case against Ralph and was awarded $2.9
million for patent infringement. The judge in the case,
Rodney Sippel, also handed out a judgment of $2.7 million
under the liquidated damages clause of the Monsanto
Just last week, Monsanto executed Rule 69, which is
seeking to get depositions from Ralph about his assets,
which would set in motion the collection process. It
would also likely bankrupt Ralph and his family farm
would be lost.
The Rule 69 motion was filed in Tipton, Haywood and
Shelby counties. Ralph owns land in all three counties.
"We're going to be digging our boots deep into
the dirt of the Ralph Brothers farm," said Memphis
lawyer Marc Schatten, who is representing Ralph in the
proceedings now taking place in Tennessee. An email
response from Monsanto was received by The Covington
Leader on Tuesday afternoon regarding several aspects
of this case.
Concerning why they are now beginning the process,
following was the response:
"We have two judgments in the Ralph matter. The
procedure to collect on the first Ralph judgment has
been ongoing for more than a year. We started collecting
on the $105,000 in sanctions that we were awarded in
attorneys' fees late in 2002."
The response came from Julie R. Doane, manager of public
affairs for Monsanto.
The filing by Monsanto is requesting a deposition be
taken this Thursday, but Schatten says that's not going
In fact, Schatten said on April 30, they are going to
file a series of motions on behalf of the Covington
farmer, claiming an injustice was done and nothing should
happen until the United States Court of Appeals in Washington,
D.C., makes a decision. Schatten said there will be
two attacks coming from the filings.
The first, he said, is procedural.
"What Monsanto is doing now is improper,"
said Schatten. "The proper procedure is to wait
for the appeal to conclude and that is the only time
they should be issuing a Rule 69 deposition notice."
The second tactic, he said, is substantive.
The heart of the matter
"That runs to the heart of the suit," said
Citizens are given constitutional rights of due process
and the right to a fair trial. Our position is his rights
were trampled upon."
He said another part of their plan is to argue that
Ralph was "never provided" the opportunity
to provide a defense and answer allegations against
him. They claim the judge would not allow necessary
evidence and testimony to make that happen. For example,
they claim the contract with Monsanto, from which the
judgment was based, was not signed by Ralph.
Schatten said there are handwriting experts which can
prove it is a forgery.
Lawyer Jimmy Robertson of Jackson, Miss., who represented
Ralph in the federal suit, agreed, saying the judge
should have allowed that to take place.
Robertson also said there is another lawsuit in the
Southern District of Illinois which addresses that very
"Monsanto doesn't like to talk about a suit against
it...where farmers are charging that Monsanto has been
using forged technology agreements on a broad scale,"
Doane of Monsanto said that the company "prevailed
at the trial of the Stratemeyer case and was awarded
its damages from a soybean grower found to have infringed
"The defendant in that case filed a counterclaim
alleging that someone signed his name to a Technology
Agreement without his permission. However, at the trial
of Monsanto's patent infringement case against the grower,
the jury specifically found that neither Monsanto nor
its agents signed the grower's name to the agreement."
She further stated that Monsanto "expects it will
prevail in the case alleging forgeries, particularly
in light of the jury's finding that neither Monsanto
nor its agents signed that grower's name to the agreement."
Robertson also claims that Judge Sippel may be biased
in the matter, noting the judge worked for the law firm
representing Monsanto prior to taking his seat on the
bench. In fact, he argued that before the judge last
month, but the judge denied the motion, saying he did
not work directly on any action on behalf of Monsanto.
In a faxed replay to The Covington Leader last month,
Sippel said he could not comment about an ongoing case
and said the lawyers have a right to appeal his ruling
about conflict of interest. It has not yet been decided
whether Robertson will appeal that ruling to the U.S.
Court of Appeals.
The Monsanto spokesman said that doesn't matter.
"Any appeal of Judge Sippel's ruling will have
no impact on the ongoing collection efforts," said
Doane. "Monsanto is very confident that Judge Sippel's
ruling will be upheld if appealed. The law is very clear
that Judge Sippel's ruling is correct and his actions
Paying the price
Robertson said Ralph has been ordered to pay $2.9 million
to Monsanto for using its Roundup Ready and Bollgard
traits, when the cost at the farm supply store would
have been $145,159.
Ralph admitted in court that instead of saving the
seeds and returning them to Monsanto, which was in the
agreement, that he gave them to other farmers and also
burned about 700 bags of seeds. The court found he destroyed
evidence when that took place.
Another major issue in the case came just two weeks
ago from the U.S. Court of Appeals when Mississippi
farmer Homan McFarling had his judgment reduced dramatically
in a case which is very similar to the one against Ralph.
In that case, the three appeals court judges ruled
that the summary judgment against McFarling on the breach-of-contract
claim would be for the liability only.
And in what Ralph's lawyers view as a major breakthrough,
a multiplier factor of 120 times in the Monsanto contract
was ruled invalid by the judges.
"... we vacate the district court¹s damages
award because we hold that under Missouri law the provision
in the Technology Agreement applying a 120 multiplier
to the technology fee is an unenforceable and invalid
That, says Robertson, is critical.
"That should mean the $2.9 million judgment is
certain to be vacated," said Robertson. However,
Robertson also said just because that is a "highly
likely" outcome in Ralph's case, it doesn't mean
the appeal will be expedited. He said it will likely
have to run its normal course, meaning a decision isn't
likely to be handed down until 2005.
Schatten compared the award to a car dealership. "If
a car dealer sold a lemon, the proper remedy would be
to get a new car," said Schatten. "The party
should not get the entire dealership."
But Monsanto says the McFarling case should not have
a bearing on the case against Ralph.
"The McFarling opinion does not affect Monsanto's
ability to collect these patent damages from the Ralph
defendants," said Doane. "Because under the
law, Monsanto is limited to collecting its contract
damages or its patent damages but it cannot collect
both, Monsanto is collecting the patent damages from
the Ralph defendants."
She went on to say that in addition to the "liquidated
damage award (the only part of the Ralph judgment affected
by the McFarling ruling), Monsanto was awarded approximately
$350,000 in other contract damages.
"The McFarling decision does not impact this $350,000
award. More importantly, the jury award at the Ralph
trial resulted in Monsanto receiving $2,410,206 in patent
damages and more than $500,000 in interest, attorney
fees and costs."p>
More twists and turns
Robertson said there is another ironic twist to this
case. He found it very ironic that Monsanto "has
waited nine months" to start the collection procedure
but then moves ahead just as planting season has arrived
in West Tennessee.
"Crop lenders don't like to lend money to farmers
with big judgments against them," he said. "Kem
is having to scramble as best he can." Robertson
characterized Ralph's situation as being "between
a rock and a hard place."
He said Monsanto has started the process to collect
the funds "for more money than Kem can possibly
pay. Kem can't begin to make a bond to stop enforcement
of the judgment. He can't get a crop loan because the
judgment is on his credit record.
"It doesn't matter that he's always repaid his
loans in full at the end of every crop year in the past.
His legal battles with Monsanto have cost him an arm
and a leg, and his legal bills are mounting. And Monsanto
is making serious noise about taking everything."
Monsanto's spokesman pointed to the failure to secure
a bond as a reason the company is now proceeding.
"Because the defendants have not taken the appropriate
steps to stay enforcement of the judgment (put it on
hold with the use of a bonding firm), it is appropriate
for Monsanto, as the holder of a valid judgment, to
execute that judgment," said Doane. "We are
confident that the judgment will be affirmed as to our
patent infringement jury award."
Home field advantage?
Schatten said he thinks it is positive the case is
now back in West Tennessee, where he and Robertson believed
it belonged all along. In the Monsanto contract, there
is a stipulation that cases must be tried in the federal
circuit court in St. Louis, the home of Monsanto.
"Being in St. Louis gives Monsanto an unfair advantage,"
said Robertson. "Imagine how the rest of the National
League would feel if the Cardinals got to play all 162
games in Busch Stadium."
"We're very relieved the litigation has moved
to Tennessee," said Schatten. He said although
there are three separate venues in the three counties,
it is his understanding the proceedings will likely
take place in Shelby County's court system.