Bayer ordered to pay $136.8 mln in U.S. rice case

Mon Mar 21, 2011 1:09pm EDT

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By Martinne Geller

CHICAGO, March 21 (Reuters) - A unit of Germany's Bayer AG (BAYGn.DE) has been ordered by a court in Arkansas to pay $136.8 million to Riceland Foods over the contamination of U.S. long grain rice stocks with a genetically modified strain from Bayer that decimated exports more than four years ago.

The judgment, handed down by a jury in Stuttgart, Arkansas, includes $125 million in punitive damages to Riceland, a farmers cooperative.

Bayer said it is "disappointed" with the verdict and is considering its legal options. It said the punitive damages exceed what is permitted by Arkansas law and will therefore be limited to the statutory cap of $1 million.

The judgment also includes $16.9 million in compensatory damages, with Bayer CropScience accountable for 70 percent, or $11.8 million, according to the plaintiff's attorney.

"We believe it's the largest punitive award in Arkansas in any case," said attorney Barry Deacon with the Jonesboro, Arkansas law firm Barrett & Deacon.

The award follows several others in U.S. courts where the agricultural biotech firm has repeatedly been found negligent for allowing a strain of genetically modified long grain rice to contaminate U.S. supplies, leading importers like the European Union, to halt purchases.

A spokesman for Riceland did not immediately return a call seeking comment.

(Reporting by Martinne Geller; Editing by Marguerita Choy)

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