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UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
WINSTON-SALEM DIVISION
FEDERAL TRADE COMMISSION,
STATE OF CALIFORNIA, STATE OF
COLORADO, STATE OF ILLINOIS,
STATE OF INDIANA, STATE OF IOWA,
STATE OF MINNESOTA, STATE OF
NEBRASKA, STATE OF OREGON,
STATE OF TENNESSEE, STATE OF
TEXAS, STATE OF WASHINGTON, and
STATE OF WISCONSIN,
Plaintiffs,
v.
SYNGENTA CROP PROTECTION AG,
SYNGENTA CORPORATION,
SYNGENTA CROP PROTECTION, LLC,
and CORTEVA, INC.,
Case No. 1:22-cv-00828-TDS-JEP
PLAINTIFFS’ CONSOLIDATED
BRIEF IN OPPOSITION TO
DEFENDANTS’ MOTIONS FOR
SUMMARY JUDGMENT
[FILED UNDER SEAL]
Defendants.
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TABLE OF CONTENTS
Page
---
TABLE OF AUTHORITIES ............................................................................................... v
I.
NATURE OF THE MATTER ................................................................................. 1
II.
STATEMENT OF FACTS ....................................................................................... 7
A.
Legal Exclusivity: Patents and FIFRA .......................................................... 7
B.
The Six AIs .................................................................................................... 8
C.
Defendants Fear a Genericized Market with Lower Grower
Prices ............................................................................................................. 9
D.
1.
Generics Threatened Defendants’ Profits and Market
Shares ................................................................................................. 9
2.
Defendants Track and Monitor Generic Competition by
AI ...................................................................................................... 15
Defendants Use Loyalty Programs to “Erect Barriers to Entry”
that “Keep the Channel Locked Up” ........................................................... 18
1.
2.
The Traditional Distribution Channel Is the Most Efficient
Path to Market .................................................................................. 21
a.
The Traditional Channel Influences Grower
Product Selection .................................................................. 22
b.
The Traditional Channel Provides Unique Benefits
to Manufacturers ................................................................... 23
c.
Syngenta and Corteva Implement Their Loyalty
Programs with Substantially All of the Traditional
Channel ................................................................................. 24
Defendants’ Loyalty Programs Are Structured to Exclude
Generics ............................................................................................ 26
a.
High Loyalty Thresholds ...................................................... 26
b.
First-Dollar Payments ........................................................... 29
c.
“Sticky Money”: Defendants Share Monopoly
Profits with Distributors in Exchange for Exclusion ............ 30
d.
Program and Payment Structure: “Complex and
Risky” .................................................................................... 34
e.
Retaliation and Credible Penalties: Leaving
Loyalty “Would Be Suicide” ................................................ 40
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f.
Defendants Offer—and Take Away—Additional
Profit Opportunities Based On Loyalty ................................ 48
E.
Defendants’ Mesotrione and Metolachlor Supply Agreements .................. 50
F.
Defendants’ Loyalty Programs Have Foreclosed Generic
Competition For the AIs Included In Loyalty Programs ............................ 52
G.
Defendants’ Loyalty Programs Have Resulted in Higher Prices ................ 59
III.
QUESTIONS PRESENTED .................................................................................. 62
IV.
ARGUMENT ......................................................................................................... 63
A.
Summary Judgment Standard...................................................................... 63
B.
Elements of Plaintiffs’ Claims .................................................................... 64
C.
1.
Federal Claims.................................................................................. 64
2.
State Claims...................................................................................... 66
Defendants’ Conduct Should Be Analyzed Under the Rule of
Reason, Not Predatory Pricing Law ............................................................ 67
1.
2.
3.
The Rule of Reason Applies to Loyalty Rebate Programs
When Price Is Not the Predominant Mechanism of
Exclusion .......................................................................................... 68
a.
The Overwhelming Weight Of Authority,
Including New Fourth Circuit Precedent, Supports
Applying the Rule of Reason ................................................ 68
b.
Defendants Cite Inapposite Cases ......................................... 73
The Evidence Establishes that Price Is Not the
Predominant Mechanism of Exclusion ............................................ 75
a.
Defendants’ Exclusion of Generics Is Not
Achieved By Offering Lower Prices ..................................... 76
b.
The Loyalty Programs Have Structural Non-Price
Mechanisms of Exclusion ..................................................... 79
Each of the Five Non-Price Mechanisms of Exclusion
Identified by the Court at the Pleading Stage Is Amply
Supported by the Record .................................................................. 83
a.
Defendants’ Loyalty Programs Extend and Increase
Significant Barriers to Entry and Expansion......................... 84
b.
Distributors Are Also Incentivized to Comply with
Loyalty Programs Because They Fear Loss of
Supply ................................................................................... 92
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D.
Threats and Deferred Payments Have Long-Term
Effects ................................................................................... 95
d.
Corteva’s Program Shares Features with Bundling .............. 97
e.
Syngenta and Corteva’s Exclusive Supply
Agreements Enhance the Exclusionary Effect ...................... 99
Disputed Fact Issues Preclude Summary Judgment on the
Relevant Product Markets ......................................................................... 101
1.
The Existence of Broader Markets Is Immaterial To
Whether Single-AI Markets Are the Relevant Markets
Here ................................................................................................ 103
2.
Defendants Anticipated That Unfettered Generic Entry
Would Crater Prices, and Structured Their Loyalty
Programs to Address that Competition .......................................... 107
3.
Professor Hemphill’s Implementation of the HMT
Supports Plaintiffs’ Proposed Markets........................................... 112
4.
5.
E.
c.
a.
Professor Hemphill’s HMT is Reliable and
Robustly Supported ............................................................. 112
b.
Defendants’ Criticisms Fail ................................................ 116
The Brown Shoe Factors Confirm That Summary
Judgment Is Inappropriate Here ..................................................... 123
a.
Industry and Public Recognition ......................................... 124
b.
Peculiar Characteristics and Uses ....................................... 126
c.
Distinct Prices and Sensitivity to Price Changes ................ 131
d.
Other Brown Shoe Factors .................................................. 133
Defendants’ Switching Arguments At Most Raise
Disputed Issues of Fact That Must Be Tested At Trial .................. 134
Defendants’ Programs Have Probable Anticompetitive Effects ............... 138
1.
Defendants’ Loyalty Programs Have Resulted in
Substantial Foreclosure .................................................................. 140
a.
Defendants’ Loyalty Programs Cause Foreclosure
Far Above Thresholds Required by Case Law ................... 140
b.
Defendants Cannot Rebut Plaintiffs’ Prima Facie
Showing of Substantial Foreclosure ................................... 143
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c.
2.
Plaintiffs Have Robust Direct Evidence that Defendants’
Loyalty Arrangements Caused Anticompetitive Harm .................. 156
a.
Defendants’ Conduct Foreclosed Rivals and
Resulted in Higher Prices and Reduced Innovation ........... 157
b.
Defendants’ Loyalty Programs Caused Rival
Generic Manufacturers to Exit or Decline to Enter
AI Markets .......................................................................... 164
c.
Defendants’ Anticompetitive Intent Supports a
Finding of Competitive Harm ............................................. 167
d.
Defendants Misstate the Legal Standards
Governing Anticompetitive Effects .................................... 168
F.
Defendants Do Not Challenge the FTC’s Standalone Section 5
Claim ......................................................................................................... 171
G.
Defendants Do Not Address, and Are Thus Not Entitled to
Summary Judgment on, Plaintiffs’ Section 1 Claim as it Relates
to Defendants’ Mesotrione and Metolachlor Supply Agreements ............ 172
H.
Defendants Are Not Entitled to Summary Judgment on State
Claims ........................................................................................................ 174
I.
V.
Defendants’ Mesotrione Agreements Demonstrate
the Loyalty Programs’ Power to Foreclose Generic
Rivals................................................................................... 155
1.
Defendants Are Not Entitled to Summary Judgment on
California’s State Law Claims ....................................................... 174
2.
Defendants Are Not Entitled to Summary Judgment on
Indiana’s IDCSA Claims................................................................ 175
3.
Defendants Are Not Entitled to Summary Judgment on
Iowa’s Consumer Fraud Act Claims .............................................. 176
The Claims Against Syngenta Crop Protection AG and Syngenta
Corporation Must Proceed To Trial .......................................................... 177
CONCLUSION .................................................................................................... 182
iv
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TABLE OF AUTHORITIES
Page(s)
Cases
Advanced Health-Care Servs. v. Radford Cmty. Hosp.,
910 F.2d 139 (4th Cir. 1990) .................................................................................. 65
Aerotec Int’l, Inc. v. Honeywell Int’l, Inc.,
836 F.3d 1171 (9th Cir. 2016) ...................................................................... 150, 171
Alaska Elec. Pension Fund v. Bank of Am. Corp.,
306 F. Supp. 3d 610 (S.D.N.Y. 2018) .................................................................. 123
Allied Orthopedic Appliances Inc. v. Tyco Health Care Grp. LP,
592 F.3d 991 (9th Cir. 2010) ................................................................................ 149
American Motor Inns, Inc. v. Holiday Inns, Inc.,
521 F.2d 1230 (3d Cir. 1975) ............................................................................... 143
Ansell Inc. v. Schmid Lab’ys, Inc.,
757 F. Supp. 467 (D.N.J. 1991)............................................................................ 124
Arandell Corp. v. Centerpoint Energy Servs., Inc.,
900 F.3d 623 (9th Cir. 2018) ........................................................................ 177, 178
Arkansas ex rel. Griffin v. Syngenta Crop Prot. AG,
2025 WL 551660 (E.D. Ark. Feb. 19, 2025)................................................ 4, 71, 72
Aventis Env’t Sci. USA LP v. Scotts Co.,
383 F. Supp. 2d 488 (S.D.N.Y. 2005) .................................................................. 140
B & R Supermarket, Inc. v. Visa, Inc.,
2024 WL 4252031 (E.D.N.Y. Sept. 20, 2024) ..................................................... 118
Bank v. Huizar,
178 N.E.3d 326 (Ind. Ct. App. 2021) ................................................................... 176
Barr Labs., Inc. v. Abbott Labs.,
978 F.2d 98 (3d Cir. 1992) ..................................................................................... 91
Bepco, Inc. v. Allied-Signal, Inc.,
106 F. Supp. 2d 814 (M.D.N.C. 2000) ................................................................. 150
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Bonito Boats, Inc. v. Thunder Craft Boats, Inc.,
489 U.S. 141 (1989) ................................................................................................. 7
Bradburn Parent/Tchr. Store, Inc. v. 3M (Minnesota Mining & Mfg. Co.),
2000 WL 34003597 (E.D. Pa. July 25, 2003) ...................................................... 168
Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp.,
509 U.S. 209 (1993) ................................................................................... 67, 69, 70
Brown Shoe Co. v. United States,
370 U.S. 294 (1962) ........................................................................................ passim
Caruso Mgmt. Co. v. Int’l Council of Shopping Centers,
403 F. Supp. 3d 191 (S.D.N.Y. 2019) .................................................. 117, 121, 142
Chavez v. Whirlpool Corp.,
93 Cal.App.4th 363 (2001) ................................................................................... 174
Chuck's Feed & Seed Co. v. Ralston Purina Co.,
810 F.2d 1289 (4th Cir. 1987) .............................................................. 142, 171, 172
Concord Boat v. Brunswick Corp.,
207 F.3d 1039 (8th Cir. 2000) .......................................................................... 74, 91
Conwood Co., L.P. v. U.S. Tobacco Co.,
290 F.3d 768 (6th Cir. 2002) ........................................................................ 156, 168
DeSoto Cab Co., Inc. v. Uber Techs., Inc.,
2020 WL 10575294 (N.D. Cal. Mar. 25, 2020) ..................................................... 91
Dickson v. Microsoft Corp.,
309 F.3d 193 (4th Cir. 2002) ........................................................................ 172, 173
Duke Energy Carolinas, LLC v. NTE Carolinas II, LLC,
111 F.4th 337 (4th Cir. 2024) .......................................................................... passim
E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc.,
637 F.3d 435 (4th Cir. 2011) ................................................................................ 107
Eastman Kodak Co. v. Image Tech. Servs., Inc.,
504 U.S. 451 (1992) ..................................................................... 104, 109, 119, 136
Eisai, Inc. v. Sanofi Aventis U.S., LLC,
821 F.3d 394 (3d Cir. 2016) ............................................................................ passim
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Epic Games, Inc. v. Apple, Inc.,
67 F.4th 946 (9th Cir. 2023) ......................................................................... 119, 175
Epic Games, Inc. v. Apple, Inc.,
161 F.4th 1162 (9th Cir. 2025) ............................................................................. 174
FTC v. Brown Shoe Co.,
384 U.S. 316 (1966) ............................................................................................. 171
FTC v. IQVIA Holdings Inc.,
710 F. Supp. 3d 329 (S.D.N.Y. 2024) .................................................................. 105
FTC v. Meta Platforms, Inc.,
775 F. Supp. 3d 16 (D.D.C. 2024) ............................................................... 133, 136
FTC v. Meta Platforms, Inc.,
2025 WL 3458822 (D.D.C. Dec. 2, 2025) ........................................................... 136
FTC v. Motion Picture Advert. Serv. Co.,
344 U.S. 392 (1953) ..................................................................................... 153, 171
FTC v. Peabody Energy Corp.,
492 F. Supp. 3d 865 (E.D. Mo. 2020) .................................................................. 102
FTC v. Penn State Hershey Med. Ctr.,
838 F.3d 327 (3d Cir. 2016) ......................................................................... 116, 118
FTC v. RAG-Stiftung,
436 F. Supp. 3d 278 (D.D.C. 2020) ..................................................................... 117
FTC v. Sanford Health,
926 F.3d 959 (8th Cir. 2019) ........................................................................ 116, 118
FTC v. Shkreli,
581 F. Supp. 3d 579 (S.D.N.Y. 2022) .................................................................. 106
FTC v. Sperry & Hutchinson Co.,
405 U.S. 233 (1972) ............................................................................................. 176
FTC v. Staples, Inc.,
190 F. Supp. 3d 100 (D.D.C. 2016) ............................................................. 118, 120
FTC v. Surescripts, LLC,
665 F. Supp. 3d 14 (D.D.C. 2023) ................................................................. 84, 169
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FTC v. Syngenta Crop Protection AG,
No. 22-cv-828, Doc. 160 (M.D.N.C. 2024) .................................................... passim
FTC v. Tapestry, Inc.,
755 F. Supp. 3d 386 (S.D.N.Y. 2024) .......................................... 101, 103, 124, 126
FTC v. Tempur Sealy Int’l, Inc.,
768 F. Supp. 3d 787 (S.D. Tex. 2025).......................................................... 120, 133
Gasbi, LLC v. Sanders,
120 N.E.3d 614 (Ind. Ct. App. 2019) ........................................................... 175, 176
Geneva v. Barr Labs,
386 F.3d 485 (2d Cir. 2004) ......................................................................... 103, 134
Illumina, Inc. v. FTC,
88 F.4th 1036 (5th Cir. 2023) ............................................................................... 134
Impax Labs. v. FTC,
994 F.3d 484 (5th Cir. 2021) ................................................................................ 156
In re Aggrenox Antitrust Litig.,
199 F. Supp. 3d 662 (D. Conn. 2016) ................................................. 106, 109, 136
In re Cipro Cases I & II,
61 Cal.4th 116 (2015) ........................................................................................... 174
In re EpiPen Mktg., Sales Pracs. & Antitrust Litig.,
44 F4th 959 (10th Cir. 2022) .................................................................... 73, 74, 166
In re Google Play Store Antitrust Litig.,
147 F.4th 917 (9th Cir. 2025) ....................................................................... 109, 174
In re Loestrin 24 Fe Antitrust Litig.,
433 F. Supp. 3d 274 (D.R.I. 2019) ............................................................... 117, 142
In re Lorazepam & Clorazepate Antitrust Litig.,
467 F. Supp. 2d 74 (D.D.C. 2006) ....................................................................... 164
In re Nexium Antitrust Litig.,
968 F. Supp. 2d 367 (D. Mass. 2013)........................................................... 105, 106
In re Packaged Seafood Prods. Antitrust Litig.,
2022 WL 836951 (S.D. Cal. Mar. 21, 2022) ........................................................ 178
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In re Payment Card Interchange Fee & Merch. Disc. Antitrust Litig.,
714 F. Supp. 3d 65 (E.D.N.Y. 2024) ............................................................ 156, 170
In re Soc. Media Adolescent Addiction/Pers. Inj. Prods. Liab. Litig.,
753 F. Supp. 3d 849 (N.D. Cal. 2024).................................................................. 176
In re Suboxone (Buprenorphine Hydrochloride & Naloxone)
Antitrust Litig.,
622 F. Supp. 3d 22 (E.D. Pa. 2022).................................................................. 72, 98
In re Surescripts Antitrust Litigation,
608 F.Supp.3d 629 (N.D. Ill. 2022)............................................................ 69, 72, 89
In re Zetia (Ezetimibe) Antitrust Litig.,
2021 WL 6689718 (E.D. Va. Nov. 1, 2021) ................................................... passim
Insignia Sys., Inc. v. News Am. Mktg. In-Store, Inc.,
661 F. Supp. 2d 1039 (D. Minn. 2009) ................................................................ 119
Int’l Distribution Centers, Inc. v. Walsh Trucking Co.,
812 F.2d 786 (2d Cir. 1987) ................................................................................... 91
Intell. Ventures I LLC v. Cap. One Fin. Corp.,
2016 WL 160263 (D. Md. Jan. 14, 2016) ............................................................ 177
Intercollegiate Women’s Lacrosse Coaches Ass’n v. Corrigan Sports
Enters., Inc.,
694 F. Supp. 3d 625 (M.D.N.C. 2023) ................................................................... 63
It’s My Party, Inc. v. Live Nation, Inc.,
811 F. 3d 676 (4th Cir. 2016) ............................................................................... 110
Kolon Industries Inc. v. E.I. DuPont de Nemours & Co.,
748 F. 32 160 (4th Cir. 2014) ....................................................................... 150, 151
Kolon Industries Inc. v. E.I. DuPont de Nemours & Co.,
2012 WL 1155218 (E.D. Va. Apr. 5, 2012) ......................................................... 151
L. G. Balfour Co. v. FTC,
442 F.2d 1 (7th Cir. 1971) ............................................................................ 171, 172
Laumann v. Nat’l Hockey League,
56 F. Supp. 3d 280 (S.D.N.Y. 2014) .................................................................... 139
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Lenox MacLaren Surgical Corp. v. Medtronic, Inc.,
762 F.3d 1114 (10th Cir. 2014) .................................................................... 169, 177
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574 (1986) ............................................................................................... 78
McWane, Inc. v. FTC,
783 F.3d 814 (11th Cir. 2015) ......................................................................... passim
Meijer, Inc. v. Barr Pharms., Inc.,
572 F. Supp. 2d 38 (D.D.C. 2008) ....................................................................... 104
Menasha Corp. v. News America Marketing In-Store, Inc.,
354 F.3d 661 (7th Cir. 2004) ............................................................................... 119
Meredith Corp. v. Sesac, LLC,
1 F. Supp. 3d 180 (S.D.N.Y. 2014) ...................................................................... 102
Microbix Biosystems, Inc. v. Biowhittaker, Inc.,
172 F. Supp. 2d 680 (D. Md. 2000) ..................................................................... 173
Minn. Mining & Mfg. Co. v. Appleton Papers, Inc.,
35 F. Supp. 2d 1138 (D. Minn. 1999) ......................................................... 149, 154
Mylan Pharms. Inc. v. Sanofi-Aventis LLC,
2026 WL 201152 (W.D. Pa. Jan. 27, 2026) ........................................................... 67
New York ex rel. Schneiderman v. Actavis PLC,
787 F.3d 638 (2d Cir. 2015) ................................................................................. 143
NicSand Inc. v. 3M Co.,
507 F.3d 442 (6th Cir. 2007) .................................................................................. 73
Nobel Sci. Indus., Inc. v. Beckman Instruments, Inc.,
670 F. Supp. 1313 (D. Md. 1986) ........................................................................ 110
Ohio v. Am. Express Co.,
585 U.S. 529 (2018) ............................................................................. 138, 156, 170
Omega Env’t, Inc. v. Gilbarco, Inc.,
127 F.3d 1157 (9th Cir. 1997) .............................................................................. 146
Pepsico, Inc. v. Coca-Cola Co.,
315 F.3d 101 (2nd Cir. 2002) ............................................................................... 110
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Pfaff v. Wells Elecs., Inc.,
525 U.S. 55 (1998) ................................................................................................... 7
Reading International, Inc. v. Oaktree Capital Management, LLC,
317 F. Supp. 2d 301 (S.D.N.Y. 2003) .................................................................. 178
Rebel Oil Co., Inc., v. Atlantic Richfield Co.,
51 F.3d 1421 (9th Cir. 1995) ............................................................................ 89, 90
Reynolds Tobacco Co. v. Philip Morris Inc.,
199 F. Supp. 2d 362 (M.D.N.C. 2002) ................................................................... 91
Rightline, LLC v. FMC Corp.,
2025 WL 1550234 (E.D. Pa. 2025) ........................................................................ 72
Roland Mach. Co. v. Dresser Indus., Inc.,
749 F.2d 380 (7th Cir. 1984) ........................................................................ 153, 154
Roxul USA, Inc. v. Armstrong World Indus., Inc.,
2019 WL 1109868 (D. Del. Mar. 8, 2019) ........................................................... 145
Ruckelshaus v. Monsanto Co.,
467 U.S. 986 (1984) ................................................................................................. 8
Sandoz, Inc. v. United Therapeutics, Corp.,
2020 WL 697137 (D.N.J. Feb. 4, 2020) ............................................................... 120
Standard Oil Co. of California v. United States,
337 U.S. 293 (1949) ............................................................................................. 153
State ex rel. Miller v. Cutty’s Des Moines Camping Club, Inc.,
694 N.W.2d 518 (Iowa 2005) ............................................................................... 176
State v. TikTok, Inc.,
245 N.E.3d 681 (Ind. Ct. App. 2024) ................................................................... 175
Stiles v. Walmart, Inc.,
639 F. Supp. 3d 1029 (E.D. Cal. 2022) ................................................................ 119
Syngenta Crop Prot., LLC v. Willowood Azoxystrobin, LLC,
267 F. Supp. 3d 649 (M.D.N.C. 2017) ..................................................... 86, 90, 121
Tampa Elec. Co. v. Nashville Coal Co.,
365 U.S. 320 (1961) ........................................................................................ passim
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Times-Picayune Pub. Co. v. United States,
345 U.S. 594 (1953) ............................................................................................. 104
Todd v. Exxon Corp.,
275 F.3d 191 (2d Cir. 2001) ................................................................................. 124
United States v. Aetna Inc.,
240 F. Supp. 3d 1 (D.D.C. 2017) ......................................................................... 105
United States v. Alum. Co. of Am.,
377 U.S. 271 (1964) ............................................................................................. 105
United States v. Am. Express Co.,
838 F.3d 179 (2d Cir. 2016) ................................................................................. 115
United States v. Bazaarvoice, Inc.,
2014 WL 203966 (N.D. Cal. Jan. 8, 2014) .......................................................... 118
United States v. Bertelsmann SE & Co.,
646 F. Supp. 3d 1 (D.D.C. 2022) ......................................................................... 105
United States v. Black & Decker Mfg. Co.,
430 F. Supp. 729 (D. Md. 1976) ............................................................................ 87
United States v. Dentsply Intern. Inc.,
399 F.3d 181 (3d Cir. 2005) ............................................................................ passim
United States v. Google LLC,
747 F. Supp. 3d 1 (D.D.C. 2024) ................................................... 87, 150, 152, 170
United States v. Google LLC,
778 F. Supp. 3d 797 (E.D. Va. 2025) ............................................................. 84, 169
United States v. Google LLC,
687 F. Supp. 3d 48 (D.D.C. 2023) ....................................................................... 170
United States v. H & R Block, Inc.,
833 F. Supp. 2d 36 (D.D.C. 2011) ............................................................... 102, 118
United States v. Leavis,
853 F.2d 215 (4th Cir. 1988) ................................................................................ 177
United States v. Microsoft Corp.,
253 F.3d 34 (D.C. Cir. 2001) .......................................................................... passim
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United States v. Socony-Vacuum Oil Co.,
310 U.S. 150 (1940) ............................................................................................. 173
United States v. United States Sugar Corp.,
73 F. 4th 197 (3d Cir. 2023) ......................................................................... 117, 134
United States v. Visa, Inc.,
788 F. Supp. 3d 585 (S.D.N.Y. 2025) .................................................................. 123
Valuepest.com of Charlotte, Inc. v. Bayer Corp.,
561 F.3d 282 (4th Cir. 2009) .................................................................................. 65
Virgin Atl. Airways Ltd. v. Brit. Airways PLC,
257 F.3d 256 (2d Cir. 2001) ................................................................................... 74
White v. City of Greensboro,
608 F. Supp. 3d 248 (M.D.N.C. 2022) ............................................................. 63, 64
ZF Meritor, LLC v. Eaton Corp.,
696 F.3d 254 (3d Cir. 2012) ............................................................................ passim
Zinner v. Olenych,
108 F. Supp. 3d 369 (E.D. Va. 2015) ................................................................... 172
Statutes
15 U.S.C. § 1 .............................................................................................................. passim
15 U.S.C. § 2 .............................................................................................................. passim
15 U.S.C. § 14 ............................................................................................................ passim
15 U.S.C. § 45 ............................................................................................................ passim
35 U.S.C. § 154(a)(2) .......................................................................................................... 7
7 U.S.C. § 136a(c)(1)(F)(i) .................................................................................................. 7
7 U.S.C. § 136a(c)(1)(F)(ii) ................................................................................................. 7
7 U.S.C. § 136a(c)(1)(F)(iii).............................................................................................. 86
California’s Cartwright Act ............................................................................................. 174
California’s Unfair Competition Law ..................................................................... 174, 175
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Ind. Code § 24-5-0.5-1(a) ................................................................................................ 175
Ind. Code § 24-5-0.5-3 ...................................................................................................... 66
Iowa Code § 714.16 ................................................................................................... 66, 176
Rules
Fed. R. Civ. P. 56........................................................................................................... 3, 63
Other Authorities
Areeda & Hovenkamp, ANTITRUST LAW (2025) ................................................ 64, 69, 171
Areeda & Hovenkamp, ANTITRUST LAW (2011) ................................................ 68, 88, 157
Areeda & Hovenkamp, ANTITRUST LAW (1996) ............................................................ 170
Carl Shapiro, The 2010 Horizontal Merger Guidelines: From Hedgehog to
Fox in Forty Years, 77 ANTITRUST L.J. 49 (2010)............................................... 119
Restatement (Third) of Agency § 7.03(1)(a) ................................................................... 178
xiv
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I.
NATURE OF THE MATTER
Millions of farmers (or “growers,” as they are frequently called in the industry)
rely on crop protection products like insecticides, herbicides, and fungicides to costeffectively protect America’s food supply from pests. Defendants Syngenta and Corteva
are two of the largest crop protection product (or agricultural “pesticide”) manufacturers
in the United States, each selling billions of dollars of these products every year. But
growers pay far more than they should because Defendants have each engaged in a
scheme to exclude lower-price generic competitors from the market.
Congress created a system to govern the development, manufacture, and sale of
crop protection products. This regime combines patent protection and “exclusive use”
provisions that richly reward companies like Defendants—“branded” manufacturers that
innovate and develop new Active Ingredients (“AIs”)—with 20 years or more of
protection from generic AI competition. But that lawful monopoly does not last forever.
After the exclusivity period expires, Congress encourages other companies to produce
and sell generic versions of those AIs, introducing price competition and consumer
choice. As Defendants repeatedly concede in their documents, growers choose the
cheaper generic products when they are available; “[o]nce the market starts to see an
increase in generics, it is almost impossible to stop”; and generic entry leads “to a vicious
cycle of downward price pressure” for all products containing that AI—generic and
branded alike.
Defendants have no desire to compete on the merits with generic manufacturers
because lowering price would mean losing margin, revenue, and profits. Instead, they
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developed loyalty programs designed to “make it difficult for [generics] to enter” the
market, “keep the channel locked up,” and “block[] generic[s]” in the post-patent period.
Defendants designed their loyalty programs to most effectively achieve their mission to
“keep generics below critical volumes” and “Maintain price premium.” Defendants admit
internally that, without these loyalty programs, their “margins would likely drop
precipitously.”
Understanding the critical importance of the traditional distribution channel,
Defendants “handcuff” nearly every distributor with their market-wide exclusive dealing
arrangements. Distributors must strictly limit their yearly sourcing of generic product
(sometimes to as low as 1%) which “keep[s] generics below critical volumes.” Compliant
distributors benefit from favorable supply terms and year-end, large lump-sum payments
that they retain in significant part. Non-compliant distributors risk loss of access to
Defendants’ dominant products on competitive terms, or even loss of supply altogether,
which one distributor described as “suicide.”
As a result, distributors overwhelmingly comply with Defendants’ loyalty
programs, forcing generic manufacturers to compete only in the narrow band of “open
space” permitted under the programs or via alternative, less efficient routes to market.
The effect is to suppress and delay generic entry and expansion, sustain supracompetitive
prices, and harm growers nationwide.
An extensive evidentiary record bears out the facts of this case. It includes
documents, data, and testimony from Defendants, distributors, and generic
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manufacturers, as well as rigorous expert analysis grounded in the factual record and
sound economic theory.
Faced with this evidentiary record, at summary judgment Defendants retreat to
formalistic legal arguments and import their own facts and their own spin into the actual
record. But recycling the same rejected theories they advanced at the motion-to-dismiss
stage is no more successful at summary judgment than it was before. And Defendants’
attempts to whitewash their own conduct and rewrite their own documents simply injects
pages-upon-pages of disputed facts into the record. None of this meets the Rule 56
standard.
First, Defendants renew their argument that the price-cost test, and not the rule of
reason, should apply to Plaintiffs’ exclusive dealing claims. But no matter how
Defendants try to recast their programs, the evidence is clear that these programs are not
simply winning business by offering a low price to distributors. Even accounting for
Defendants’ loyalty payments, generics remain cheaper. Rather, the evidence in the
record establishes that the structure of the loyalty program, and in particular the sharebased exclusivity condition linked to loyalty payments and product access, is the
mechanism of exclusion of generics, not low prices. There is compelling evidence of all
of the “non-price” mechanisms of exclusion identified by this Court at the pleading stage,
including coercion and retaliation of distributors that Defendants claim never happened.
That factual record must be viewed in light of the Fourth Circuit’s recent and
binding decision in Duke Energy Carolinas, LLC v. NTE Carolinas II, LLC, which
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reversed a grant of summary judgment and held that the trial court improperly applied the
price-cost test at summary judgment in light of evidence that the structure of the
defendant’s scheme (and not its pricing component) was the predominant means of
exclusion. 111 F.4th 337 (4th Cir. 2024), cert. denied, 2026 WL 79821 (U.S. Jan. 12,
2026). Defendants also do not mention that since this Court issued its order denying their
motions to dismiss, the district court in Arkansas hearing the state of Arkansas’s
challenge to these very programs held that the claims should be assessed under the rule of
reason, not the price-cost test, because the plaintiff “does not allege that low pricing was
the means defendants used to exclude competition.” Arkansas ex rel. Griffin v. Syngenta
Crop Prot. AG, 2025 WL 551660, at *9–10 (E.D. Ark. Feb. 19, 2025). The weight of the
case law already overwhelmingly supported the application of the rule of reason to assess
Defendants’ loyalty programs; these latest cases should put the question to rest.
Next, Defendants charge that Plaintiffs’ market definition is too narrow and
“gerrymandered” also fails. These single-AI markets come directly from Defendants’
own business plans. Their post-patent (“generic defense”) strategies are built on the
premise that their branded products compete most closely with generic equivalents.
Defendants’ documents show that they fear the downward price impact of generic entry,
and that even the limited generic entry they permit results in observable price effects. The
stated objective of their loyalty programs in essence describes the hypothetical
monopolist test that defines an antitrust market: they aim to exclude same-AI competition
and thereby sustain high prices and profits for their products that contain that AI. And
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Defendants’ internal documents confirm the distinctive uses and characteristics of the
individual AIs in question.
Defendants largely ignore this evidence and instead claim that there exist larger
markets consisting of multiple AIs that broadly substitute for each other. Even if such
markets exist (Defendants and their experts have not formally defined them), that does
not negate the existence of narrower single-AI markets consisting of closer substitutes.
And Defendants’ error is compounded by the fact that the supposed substitutability
between AIs is distorted by the very loyalty programs Plaintiffs challenge. Where, as
here, anticompetitive conduct in a market elevates prices and excludes lower-priced
alternatives, the observed levels of substitution to products outside the market will be
artificially inflated.
Market definition is a question of fact, and Plaintiffs have marshalled extensive
factual evidence showing that branded products compete more closely with their generic
equivalents than with products containing other AIs. Defendants cannot possibly show on
this record that, despite extensive record evidence of Defendants’ extraordinary efforts to
shield themselves from same-AI competition, there is no sufficient basis on which a trier
of fact could adopt Plaintiffs’ single-AI market definitions.
Finally, Plaintiffs have shown harm to competition because Defendants’ programs
substantially foreclose generics and result in higher prices, reduced output and reduced
innovation in each market. Defendants claim that generic rivals are not completely
excluded by the loyalty programs and have entered, causing some price declines. But the
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antitrust laws do not require total exclusion; competitive harm arises when rival entry or
expansion into a monopolized market is lessened or slowed and/or the rivals are forced
into less efficient distribution. Here, the record shows that Defendants’ loyalty programs
foreclose generics from the most efficient distribution channel and have harmed
competition relative to a but-for world without Defendants’ loyalty programs. Defendants
designed their programs to impede their generics rivals—inducing the most efficient
distributors to significantly limit their purchases—and these programs have been
extraordinarily successful.
Defendants’ programs function in just this manner, permitting limited generic
entry and tolerating some price declines while preventing the robust entry, expansion, and
price competition that would occur absent these restraints. Again, Defendants have at best
identified a material dispute over whether Defendants have harmed competition relative
to the but-for world—a question for trial.
Defendants have used their “loyalty” programs to subvert competition and
innovation for crop protection products for long enough. American growers are entitled
to a choice of products and to the benefits of generic competition. This Court should deny
Defendants’ motions for summary judgment and proceed to trial.
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II.
STATEMENT OF FACTS1
A.
Legal Exclusivity: Patents and FIFRA
Congress has designed a statutory scheme that provides crop protection product
manufacturers robust incentives to innovate while also carefully protecting lower-priced
generic companies’ ability to enter and compete. Manufacturers who develop “new and
useful” AIs can obtain patents granting the AI developer exclusive rights to use that AI
for twenty years. 35 U.S.C. § 154(a)(2). Additionally, the Federal Insecticide, Fungicide,
and Rodenticide Act (FIFRA), provides applicants that register pesticides with new AIs
“exclusive use” of data used to support registration. FIFRA § 3(c)(1)(F)(i), 7 U.S.C.
§ 136a(c)(1)(F)(i). FIFRA’s exclusive-use protection lasts ten years and can be extended.
FIFRA § 3(c)(1)(F)(ii), 7 U.S.C. § 136a(c)(1)(F)(ii).
Ultimately, however, patent and FIFRA rights expire so that generic
manufacturers can copy new AIs. The limited exclusivity period granted under patent law
reflects Congress’s intentional decision to “careful[ly] balance the need to promote
innovation and the recognition that imitation . . . [is] necessary to invention itself and the
very lifeblood of a competitive economy.” Bonito Boats, Inc. v. Thunder Craft Boats,
Inc., 489 U.S. 141, 146 (1989); see also Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 63 (1998)
(similar).
Exhibit citations are typically to the last three digits of the Bates number or, if it does
not contain a page-specific Bates number, to a relevant pin-cite, such as “slide,” “tab,” or
deposition page-and-line range.
1
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FIFRA recognizes the same tradeoff. Congress intended to “eliminate costly
duplication of research and streamline the registration process,” to “mak[e] new end-use
products available to consumers more quickly” and “eliminate a significant barrier to
entry into the pesticide market, thereby allowing greater competition among producers of
end-use products” Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1014–15 (1984) (citation
omitted).
B.
The Six AIs
Defendants patented the six AIs that are directly at issue in this case: azoxystrobin,
mesotrione, and metolachlor (Syngenta); and rimsulfuron, oxamyl, and acetochlor
(Corteva). Legal exclusivity for each of the AIs expired in 2014 or earlier.2
As of 2023, Corteva holds
for oxamyl; and
I % market share for rimsulfuron; I % market share
I % market share for acetochlor.
3
2
Ex. 1 (Hemphill Initial Rep.) Fig. 5.
3
Ex. 1 Fig. 19.
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As of 2023, Syngenta holds over . market share for azoxyst:robin,.
market
share for mesotrione, and. mru·ket share for metolachlor. 4
C.
Defendants Fear a Genericized Market with Lower Grower Prices
1.
Generics Threatened Defendants' Profits and Market Shares
Defendants long ago recognized that their AI portfolio faced serious threats from
potential generic entry. In 2001 , Syngenta wained of an
Syngenta was
6
Among the most vulnerable: metolachlor, with over
in net sales, mesot:rione (roughly ~
(neru-Iy
4
net sales), and azoxystrobin
sales).7 Syngenta looked to past examples of genericized Als like
Ex. 1 Fig. 18.
s Ex. 25 at slide 2.
Ex. 26 at slides.5 11. That prop01tion has since increased. Ex. 27 at slide 2 (off-patent
sales growing to
in 2013).
6
7
Ex. 26 at slides 5, 11 .
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as cautionary tales.8 Syngenta later
learned that after
came off patent in 2007,
9
A top
concern for Syngenta’s was that, as AIs came off patent, generics would drive the same
for azoxystrobin, mesotrione, and metolachlor.10
Syngenta sought to avoid a world where generics competed robustly, because a
“genericised market” would lead to
-
11
Its 2002
sought to maintain monopoly shares, with a
stated objective
12
Maintaining share was important because—according to the Syngenta executive
responsible for the 2002 presentation—“
13
This theme persists over time; in 2015, Syngenta asked its
employees to
.
8
Ex. 28 at slide 60.
9
Ex. 29 at -333; see also Ex. 28 at Slide 30.
Ex. 30 at slide 5 & notes (azoxystrobin and mesotrione); see Ex. 227 at slide 6 (similar
re: metolachlor).
10
11
Ex. 28 at slide 59.
12
Ex. 26 at CX2835-016.
13
Ex. 32 at 162:17–165:8.
10
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14
To defeat generic competition, Syngenta needed to secure the cooperation and
, with the
loyalty of distributors of crop protection products
15 Put differently: it needed to answer
16 Syngenta recognized that there was
"greater opportunity" in the U.S. than elsewhere to
17
Syngenta viewed
18 The "Distribution Strategy" that Syngenta
decided on:
14 Ex. 33 at-357, -359; Ex. 34 at CX2100-080; see also Ex. 305 at slide 17
15 Ex. 28 at slide 55.
16 Ex. 34 at CX2 100-086.
11 Ex. 35 at slide 14.
18 Ex. 35 at slide 15. "Farmgate price" is an industry term meaning the price a grower
pays.
11
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-
19
Syngenta presented its plan to distributors .
. . Syngenta wain ed against price wars:
Corteva was similarly concerned about generic pressure. As a former Corteva
president testified, with patent-protected Al s, Corteva is "typically the only one selling
that product and [] can determine the pricing. As products are off patent, there's a lot
more competition in the market, and there's downward pressure on pricing."24 A 2010
presentation by Corteva' s predecessor Dow warned:
19 Ex. 36 at slide 17.
20 Ex. 37 at slide 2.
21 Ex. 37 at slide 3.
22 Ex. 37 at slide 5.
23 Ex. 37 at slide 6.
24 Ex. 38 at 35:4-12; see also Ex. 40 (Van Vooren (Corteva)) at 185:23-186:7 ("In my
experience over 42 and a half years, pretty much every time a generic would come into a
market, price would erode, go down call it, go down, and the brand's volume would go
down, both.").
12
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25
Corteva’s
internal documents show specific concern about generics pressuring acetochlor,
rimsulfuron, and oxamyl prices.26 As one Corteva employee lamented, referring to selling
post-patent AIs: “It isn’t fun to manage a slowly sinking ship.”27
Corteva employees explained their goal:
28
-
29
By limiting generic volume, Corteva could
During the formation of Corteva, the company stated its loyalty program
in the face of generic
objective:
competition.30
Each Defendant adopted a strategy that would, in Syngenta’s words,
31
25
-
The strategy would
Ex. 41 at slide 16.
Ex. 42 at slide 41 (acetochlor); Ex. 43 at slide 3 (rimsulfuron); Ex. 44 at slide 23
(oxamyl).
26
27
Ex. 45 at -058.
28
Ex. 46 at -899–900.
29
Ex. 46 at -899–900.
30
Ex. 294 at slide 82.
31
Ex. 34 at CX2100-086.
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34·
As C01t eva put it, the "[g]oal" of "[g]eneric defense" is to '
35 ·
32 Ex. 78 (Cecil (Syngenta)) at 15: 17-17:4
-
).
33 Ex. 47 at CX2034-003.
34 Ex. 48 at slide 7.
Leitker (C01t eva)) at 172: 16-174:1 9 '
• see also Ex. 60 at-316
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2.
Defendants Track and Monitor Generic Competition by AI
Recognizing generics’ unique competitive threat, Defendants track generic
competition and market share by individual AI. For example, a 2020 Syngenta
management presentation reported an
for certain
azoxystrobin product chemistries.36 In 2023, Syngenta reported its import mesotrione
molecular market share as
•
.37 And Syngenta’s SMOC [S-metolachlor] Post-Patent
Strategy Update compared
38
Syngenta’s 2014
strategy for azoxystrobin and mesotrione refers to
36
Ex. 51 at slide 5.
37
Ex. 52 at -106.
38
Ex. 24 at -662.
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39
Syngenta documents reflect “post-patent” strategies specific to the individual AIs
and their particular market conditions. In strategy documents, Syngenta highlights sameAI generic competition as a particularly potent threat. For example, in an azoxystrobin
post-patent strategy presentation, Syngenta reports an
40
Syngenta’s “Mesotrione
Post Patent Workshop” included mesotrione
and notes that with
41
Syngenta’s “SMOC Post-Patent Strategy Update” identifies
42
At the very least, this creates an issue of
disputed fact regarding industry recognition of AI-specific markets.
Contrary to Corteva’s claims (Corteva Memo. ISO Summary Judgment
(hereinafter “Cor. Br.”) at 10, 13),43 Corteva also monitors its market share on an AI-byAI basis. For instance, a DowDuPont presentation discusses its
39
Ex. 53 at slides 2, 24.
40
Ex. 54 at slide 2.
41
Ex. 34 at CX2100-017.
42
Ex. 24 at slide 2.
43
Corteva does not claim that it calculates oxamyl market share by reference to other AIs.
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44 Other C01t eva documents refer to
"Rimsulfuron market shares."45 C01teva does the same with acetochlor- and oxamylbased products, specifically calculating its market share for each AI in comparison to
generic suppliers of the same AI.46
Corteva's internal documents reveal that its competitive strategy focuses on
generic competition as a principal threat. Corteva monitors generic AI imports for
rimsulfuron, acetochlor, and oxamyl.47 C01t eva's "generic defense strategies" target
competition from generic equivalents.48 C01t eva evaluates and sets prices and desired
profit margins with generic competition in mind. In one instance, Corteva recognized that
introducing lower-priced offerings for rimsulfuron in a market with generics "49 and C01t eva should instead:
Corteva's
own documents contradict its claim that plaintiffs "adduced no evidence" that industry
pa1ticipants recognize the existence of AI-specific markets. Cor. Br. at 52.
44 Ex. 55 at CX 1609-003.
45 Ex. 56 at slides 10-11 .
46 Ex. 57 at -052- 53 (acetochlor and rimsulfuron); Ex. 59 at slides 6, 8 (acetochlor); Ex.
60 at (oxamyl); Ex. 18 at slide 21 (oxamyl).
47 Ex. 61 at slide 11 (rimsulfuron); Ex. 62 at-1 98 (acetochlor); Ex. 63 at-522 (oxamyl).
48 Ex. 64 at slide 6.
49 Ex. 65 at -019.
50 Ex. 65 at -019.
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D.
Defendants Use Loyalty Programs to “Erect Barriers to Entry” that
“Keep the Channel Locked Up”
Defendants were unwilling to compete with generics on the merits after patent and
FIFRA protection expired. Instead, they sought to minimize generic entry to maintain
elevated prices for their branded products for as long as possible. Defendants developed
“loyalty” programs to limit potential generic competitors’ access to key distributors. As
described more fully below, each Defendant agrees to make distributors large, end-ofyear payments if they strictly limit their purchases of generic products for a given AI by
meeting “loyalty” thresholds calculated as a specific share of the distributors’ total needs
of that AI.
Syngenta understands its lifecycle management strategy as a series of hurdles for
generics,
51
51
Ex. 69 at slide 1.
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Syngenta spends
dollars annually on payments to major
distributors under its “Key AI” loyalty program.52 Key AI has covered the Syngenta AIs
azoxystrobin (since 2013); mesotrione (since 2014); and metolachlor (since 2002).53
As far back as 2010, Corteva (then Dow) used its loyalty program to
54
Corteva executive described,
52
-
In other words, and as a
55
Like
Ex. 1 ¶ 322 & Fig. 23.
Ex. 70 at -671–72 (azoxystrobin); Ex. 71 at -294 (mesotrione); Ex. 25 at slide 9
(metolachlor).
53
54
Ex. 66 at -225; Ex. 67 at -949.
55
Ex. 68 at CX1305-054, row 9.
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Syngenta, Corteva spends tens of millions of dollars annually on loyalty related
payments.56 Corteva Account Manager Douglas Van Vooren described
of
Corteva's loyalty program:
57
Corteva's loyalty program has covered the Corteva Als rimsulfuron, oxamyl, and
acetochlor since
58
60
As described below, Defendants' loyalty programs target the traditional
distribution channel and are structured to limit and exclude generic manufacturers' access
to that channel. 61
57
Ex. 73 at -214.
59 See
Ex. 75 at 133:18-134:1; e.g. , Ex. 76 at CXl 105-008, row 26 (acetochlor).
60 Infra
Section II.D.2.d.
61 See infra
Sections II.D.1.-D.2.
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1.
The Traditional Distribution Channel Is the Most Efficient Path
to Market
The traditional channel is largely comprised of five national distributors: Nut:rien
AG Solutions ("Nutrien"), Tenkoz,62 WinField United, Helena, and J.R. Simplot. These
distributors handle 81% of crop protection sales made through distributors.63 As
Defendants acknowledge, by limiting generic manufacturers' access to this channel,
Defendants effectively limit their opportunities to compete with Defendants ' branded
products.64
Access to the traditional channel is crucial for efficient distribution because the
traditional channel provides numerous important services to manufacturers that
alternative routes to market cannot replicate. As Syngenta observed in 2003 when it was
first rolling out its loyalty programs,
62 Tenkoz is a buying group comprising 12 regional distributors. See Ex. 4 at 24:10-25:7.
63 Ex. 1186 & Fig. 9. Neither Corteva nor Syngenta dispute this fact for purposes of
summary judgment. Cor. Br. at 2324.• Syn. Br. at 13 (just the subset of distributors that
are integrated with retail comprise
of sales).
. Ex. 77 at slide 2
6s
Ex. 80 at CX2836-150.
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a.
The Traditional Channel Influences Grower Product
Selection
Defendants recognize the power of the traditional channel to steer growers toward
their branded products, and away from generics. Syngenta identifies the traditional
channel as having
66
Corteva’s expert Dr. Grey details that growers commonly delegate product selection to
“crop advisors” employed by the channel.67 One grower cited by Dr. Grey testified that
.68
As one Syngenta document explained,
69
A former Corteva Vice President of National Accounts admitted that
Corteva found the traditional channel
”70
66
Ex. 80 at CX2836-150. See also Ex. 81 at slide 3 (
); Ex. 50 at 38:16–40:16.
67
Ex. 82 ¶ 35.
Ex. 82 ¶ 35 n.51 (citing Kirven (MDL Plaintiff) 88:14–24, 92:2–10; Ott (MDL
Plaintiff) 59:8–60:10).
68
69
Ex. 84 at slide 12.
70
Ex. 85 at 37:4–24.
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b.
The Traditional Channel Provides Unique Benefits to
Manufacturers
The traditional channel provides several unique benefits to crop protection product
manufacturers. First, by selling through a relatively small number of distributors, a
manufacturer can reach thousands of retailers, and in tum, hundreds of thousands of
farms. As Corteva's Distribution Strategy Channel Leader testified: "[t]here is no
possible way for our sales reps to sell to millions of end users. " 71 The distribution channel
eliminates the need to manage countless direct relationships and provides scale
efficiencies that manufacturers cannot cost-effectively replicate on their own.72
Second, multiple market participants testified that distributors provide core
logistics-cost-efficient warnhousing and transportation services- at scale.73 This allows
manufacturers, including generics, to distribute their products across the country, reduces
manufacturers' freight and warehousing burdens, and gets product closer to customers.
71
Ex. 86 at 68:1 6-69:6
11
'
.
(Corteva)) at 68: 16-69:6 (Corteva "would not be financially able to sustain a business
•
:25
at 37:13-24; Ex. 92 (Vance (Albaugh)) at 108: 10' 51:15- 22; Ex. 94 (Ripato) at 331:5- 24.
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Finally, numerous generic manufacturers testified that the traditional channel
provides critical protection from credit risk. One generic manufacturer explained:
“[T]hey are 100 percent responsible for what they sell to a retailer, that if the retailer
doesn’t pay them . . . that doesn’t affect us. So there is a significant benefit of not having
to try to manage credit with either very large growers or hundreds of dealers, retailers,
across the country.”74 Generic manufacturers cannot efficiently manage these risks
outside of the traditional channel.75
c.
Syngenta and Corteva Implement Their Loyalty
Programs with Substantially All of the Traditional
Channel
Rather than partner with one or two individual distributors to achieve the
marketing and logistics efficiencies of the traditional channel, Defendants have generally
implemented their loyalty programs across all of the major distributors, as well as midsize distributors CNI and Growmark.76 Defendants acknowledge that loyalty programs
require broad participation by major distributors. For example, a January 2014 Syngenta
post-patent strategy document about azoxystrobin describes Syngenta’s “Through and
With the Channel” approach to the market, noting that Syngenta has loyalty programs in
•
74
Ex. 92 (Vance (Albaugh)) at 109:20–110:9; see also
; Ex. 95 (Schumacher (Helm)) at 67:3–15, 66:9–18.
75
See Ex. 96 (Vance (Albaugh)) at 106:17–107:14;
.
-
Syn. Br. Ex. 30 (Orszag Report) Fig. 1 (summarizing Key AI payments to all major
distributors plus CNI and Growmark); Ex. 74 (Kaehler (Corteva)) at 33:4–25
76
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place with a
of the traditional channel.77 Corteva also recognized that
substantial generic sales by major distributors threatened to impose pricing pressure and
erode inflated prices sustained by the loyalty program.78 Corteva regularly reminded
distributors that everyone needed to “stay together” because “[a]nything else will create a
‘race to the bottom.’”79
Distributors understand this: Tenkoz emphasized to Syngenta that having a
- 80
And
asked Corteva to confirm that its loyalty payments would be high
-
enough to “keep everyone from ‘jumping ship.’”81 Corteva “assured [
] the
.”82 As the regional
Loyalty value would be significant
distributor CNI explained, if “a major channel player [] chooses not to participate,” it can
“prey on the loyalty participants,” leading to “lower[] prices[.]”83 “The result is the
loyalty program ceases to function as intended.”84 And a former Syngenta employee—a
77
Ex. 53 at slide 27.
See Ex. 99 at -431 (worrying that “a hot head customer” will “switch[] to generic” “and
in turn break our loyalty program”).
78
Ex. 100 at -191–93; see also Ex. 101 at -519 (“if [Helena] break[s], we would likely all
suffer as prices fall further”).
79
80
Ex. 102 at slide 16.
81
Ex. 103 at -176.
82
Ex. 103 at -176.
83
Ex. 104 at slide 4.
84
Ex. 104 at slide 4.
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2002 “architect” of Syngenta’s original loyalty program—testified that if generic market
penetration were to expand to somewhere
2.
-
30% and 40%,
85
Defendants’ Loyalty Programs Are Structured to Exclude
Generics
a.
High Loyalty Thresholds
Defendants condition their loyalty payments on a distributor meeting high loyalty
thresholds, thereby strictly limiting its purchases of generic products. To qualify in a
given year, a distributor must source a high percentage of its yearly total of a given AI
from Syngenta or Corteva, as applicable, as opposed to any generic manufacturer.86 The
set percentage share usually leaves 15% or less available for generics—and sometimes as
little as 1%.87 In practice, loyalty thresholds are often close to 100%. In 2021, for
example, Syngenta’s thresholds were
• •
•
•
for azoxystrobin,
• •
for mesotrione, and
for metolachlor.88 In 2016, Syngenta’s prevailing thresholds were
azoxystrobin,
for mesotrione, and
for
for metolachlor.89
85
Ex. 32 (Ripato) at 90:20–91:22, 183:11–20.
86
Ex. 105 (Hawkins (Syngenta)) at 255:5–12; Cor. Br. at 26.
87
See Ex. 108 at -226.
88
Ex. 109 at CX2534-015; see also Ex. 1 ¶ 300 & Fig. 20.
89
Ex. 110 at CX2528-178.
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And in 2020, Corteva’s loyalty thresholds were
and
90
I % for rimsulfuron, I % for oxamyl,
I % for acetochlor.
90
Ex. 1 ¶ 312 & Fig. 22.
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Defendants' high loyalty thresholds leave the distributors minimal "open space" or
"headroom" within which to sell generic versions of that AI.91 The purpose and effect of
setting- and maintaining-high thresholds is to slow generic entty and avoid downward
pricing pressure for as long as possible. As a Corteva executive explained internally,
92 Defendants' repeatedly discussed internally
the need to keep thresholds high to avoid
Corteva's Van Vooren described Corteva's "Matrix [rimsulfuron] strategy" as ,.
" 94
Syngenta acknowledges that
-
95 Syngenta also recognizes that
96
So Syngenta needs to
91 Ex. 106 (Hawkins (Syngenta)) at 333 :11-334:21; Ex. 107 (Urbanowski (Corteva)) at
126:22-127:8.
92 Ex. 111 at -007.
93 Ex. 112 at -861 • see also Ex. 113 at-427
94 Ex. 114 at-310.
95 Ex. 11 5 at -824.
96
Ex. 11 6 at -954.
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97 As a Corteva presentation explained,
Consistent with this, Defendants recognize that once products become commoditized and
the channel is no longer able to hold value, there is no reason to retain loyalty
requirements. 99
b.
First-Dollar Payments
Defendants pay for loyalty on a "first-dollar" basis, which provides powerful
incentives for distributors to meet or exceed loyalty thresholds. As Corteva admits (Cor.
Br. at 24), if-and only if-the distributor crosses the required share-purchase threshold,
then the distributor is eligible for payment. The payment is "first dolhu" because it is
calculated not just on purchases beyond the threshold, but also earlier purchases.100 This
structure confers a large one-time benefit (or one-time penalty) for meeting loyalty
requirements (or missing them). With this stru cture, buying even modest amounts from
97 Ex. 116 at -954.
98
Ex. 117 at CX1361-012 see also Ex. 118 at -613
).
enta)) at 197:8-199:21
• Ex. 120 at slide 11
100
See Ex. ,r,r 261-62.
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generic suppliers can cause distributors to risk falling below thresholds and losing
payments on all purchases.101
c.
"Sticky Money": Defendants Share Monopoly Profits with
Distributors in Exchange for Exclusion of Generics
Defendants' loyalty payments are intended for distributors to keep the payments
they receive, not pass them onto growers, as Defendants claim. Cor. Br. at 5; Syngenta
Memo. ISO Summruy Judgment (hereinafter "Syn. Br.") at 29. Loyalty payments ru·e
intended to be "sticky money": Defendants want distributors to keep the payments as
additional profit margin, not use the payments to subsidize price discounts down the
channel.1°2 In Corteva's words:
-
"103 Or as Syngenta put it:
104 and ,
103 Ex. 124 at slide 4.
104 Ex. 125 at slide 10 & notes· see also Ex. 91
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105
Complete pass-through of payments to
farmgate prices is inimical to Defendants’ goal of ensuring they can maintain the elevated
prices and margins of their branded products.
Defendants use loyalty payments to share their monopoly profits with distributors
in exchange for the distributors restricting generic distribution. Syngenta told the channel
106
Syngenta wanted
107
Internally, Syngenta referred to
loyalty
-
108
Syngenta Head of Marketing Jeff Cecil testified that
.109
Corteva testimony and documents similarly confirm that loyalty payments are
intended as profit-sharing mechanisms, and not to subsidize channel discounts. Corteva’s
105
Ex. 53 at slide 28; see also Ex. 125 at slides 2, 10 (
.
106
Ex. 126 at slide 6.
107
Ex. 126 at slide 4.
108
Ex. 127 at slide 28.
109
Ex. 91 at 155:19–156:8.
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f01m er President of Global Crop Protection admitted that loyalty programs provide
distributors with
uo A Corteva document explains:
-
112 Corteva considered
113
Distributors likewise understand that loyalty payments are intended to insulate
their profit margins from generic pressure. 114 The distributor CNI candidly acknowledged
that "the channel like[s]" loyalty programs because they "maintain market values and
associated margins" and "keep margins and market share at pre generic levels"llS:
;E .
orteva' s loyalty program is '
).
m Ex. 65 at-019.
u 2 Ex. 65 at-019.
m Ex. 122 at Slide 2.
11s Ex. 104 at slide 2.
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Distributors treat loyalty payments as profit reward, not price discount. 116
118
. 119
Defendants recognize this feature of their programs. As a Corteva
National Account Manager explained when describing one distributor's
119 Ex. 133 (Card (WinField
Pinnacle)) at 181:16-19;
er Simplot &
Ex. 1 ,i,i 347- 50.
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120
Program complexity—
including intricate qualification and calculation requirements—further diminishes the
likelihood of pass-through by making it more difficult for distributors to factor loyalty
payments into per-unit costs, minimizing the use of payments to reduce grower prices.121
Distributors’ internal documents reflect this reality: distributors repeatedly
acknowledge that they benefit from the elevated prices resulting from the loyalty
programs. As one distributor put it: “We live on the rebates – and the Basics [branded
manufacturers] live on us.”122 Distributors view
.123 ■
-
124
d.
Program and Payment Structure: “Complex and Risky”
Defendants add more complexity to the loyalty programs through payment
calculation and structuring. Syngenta varies payments by product, applying different
Ex. 135 at -194. Corteva amplifies this uncertainty by deferring payments across
multiple years. See infra Section II.D.2.d.; Ex. 1 ¶¶ 351–53.
120
Ex. 1 ¶¶ 343–46; Ex. 32 (Ripato (former Syngenta, Tenkoz)) at 36:16–37:17, 38:18–
39:21, 69:23–70:16, 71:8–73:9 (describing loyalty program features that are designed to
allow distributors to retain payment instead of being passed through).
121
122
Ex. 136 at -352.
123
Ex. 137 at -427.
124
Ex. 137 at -427.
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percentage payments to different products,125 and the total product payment is often the
sum of multiple components reflecting varying percentages tied to specific
requirements.126 For example,
127
For premixes (products containing multiple Ais), Syngenta calculates Key AI
payments as a percentage of the full product price, including the other Ais, some of
which may remain under patent or regulat01y protection. 128 And in some cases
distributors must meet Key AI thresholds on multiple Ais to qualify for certain
bonuses.129 These features amplify the penalties for missing loyalty and increase the
uncertainty of payment, while increasing distributors' incentive to comply and decreasing
the likelihood distributors will pass through the payments to reduce fatmgate prices.
Tenkoz described Syngenta's "dual qualifier with both indexing and loyalty" as
125 See
Ex. 1 ,r 344.
126 See
Ex. 1 ,r 343.
121 See
Ex. 1 ,r 343.
Ex. 1 at App. C ,r 18; id. at App. E ,r,r 3- 5. Acuron contains bicyclopyrone (which
still has FIFRA exclusivity protection), mesotrione, metolachlor, and atrazine. See id. at
App. C ,r 18. Distributors must meet mesotrione loyalty thresholds, but the amount at risk
is calculated as a percentage of the full purchase price covering all four Ais. See id. at
App. E ,r 5 & Fig. 40.
128 See
); Ex. 132 (Cole
(Tenkoz)) at 225: 18- 226:11 (explaining that payment "hinges" on "[Tenkoz's] index"
and "loyalty").
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“punitive” and asked Syngenta to “unlink” the requirements to “put a little bit more
certainty in outcome and income stream.”130
Internally, Corteva describes its own program
131
Corteva has carefully designed its payment
structure to amplify the penalties for missing loyalty on one AI through (1) bundling, (2)
deferred payments, and (3) tying incentives to the lucrative “Corporate Offer” incentives.
These features further discourage distributors from either buying generics or using
loyalty payments to reduce grower prices. Corteva attempts to whitewash its program by
omitting critical aspects that impact the function and effect of the program and those facts
are disputed. Cor. Br. at 25–31.
First,
.132 Corteva
understands that this AI bundling amplifies the penalty for noncompliance. As a Corteva
employee wrote,
Corteva
130
Ex. 132 (Cole (Tenkoz)) at 226:12–17; Ex. 140 at -052.
131
Ex. 117 at CX1361-011.
Ex. 142 (Arens (Corteva)) at 151:18–153:4; see also id. 32:4–11 (listing different
offers).
132
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specific products.
Second, Corteva defers a portion of payments the distributor has ea1ned to later
years.
. 134
The share of
135
This is not offering "earlier payment for higher-tier performance" (Cor. Br. at 31), but is
instead deferring eained payments to increase the anticipated penalties of missing future
loyalty thresholds.
Corteva's
risks forfeiture of payments by magnifying the
penalty for disloyalty and-as Corteva witnesses admitted-is intended to "incentivize"
"continued participation" in loyalty.136 As Corteva documents and testimony show,
also limits the likelihood that they ai·e passed
through to growers in the form of lower prices. 137 In one instance, a Corteva National
133
Ex. 143 at -309-11 ; see also Ex. 144 at -925
134
Ex. 10 (Messner (Corteva)) at 104:5-105:3; Ex. 142 at 157:22-1 58:5.
135 See, e.g. ,
136
Ex. 145 at -001 , -004.
Ex. 10 at 103:19-104:4; Ex. 85 at 97:9-20.
Ex. 146 at -092 ("Deferment further kee
(Wasson (Corteva)) at 164:2- 20
137 See
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Account Manager "encouraged" Nutrien
-
" 138 The distributor IAP equates loyalty to "handcuffs," calling Corteva's
program "too complex and too RISKY" because distributors "cannot count on a cost, and
they can' t mn their business without understanding exact cost." 139 Contrary to Corteva's
assertion (Cor. Br. at 31),
140
Finally,
. 142 Corteva tries to argue that the Corporate Offer allows
(Cor. Br. at 27), but this is
wrong. In reality,
143
Corteva regular·ly reminded distributors of this risk. When Helena considered
"break[ing]" loyalty on the AI oxyfluorfen, Corteva's Van Vooren
138 Ex. 147 at -542.
139 Ex. 148 at -796.
140 See, e.g., Ex. 183 at 137:14-17.
141 Ex. 149 at slides 16, 19.
142 Ex. 150 at -213; see also Ex. 142 at 40:6-8.
143 Ex. 142 (Arens (Corteva)) at 218: 10-24.
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.”144 In another instance,
145
Corteva’s documents also reveal this tying strategy. Corteva predecessor Dow
explained that
”146 Corteva’s Channel Lead for
Distribution Strategy confirmed that
”147 He went on to explain that
148
In a presentation to its customers,
:149
144
Ex. 101 at -519.
145
Ex. 156 at -493, -496.
146
Ex. 153 at slide 70.
147
Ex. 154 at -261.
148
Ex. 154 at -261 (emphasis added).
149
Ex. 155 at -675, -691.
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In short, Corteva designed its program to ensure that disloyalty on even a single
AI would trigger penalties far exceeding any short-term benefit a distributor might gain,
effectively locking distributors into compliance across Corteva’s entire product line.
e.
Retaliation and Credible Penalties: Leaving Loyalty
“Would Be Suicide”
Defendants emphatically dispute that they retaliate or threaten penalties on
distributors who fail to participate in their loyalty programs. See, e.g., Cor. Br. at 33–34,
Syn. Br. at 50–53. The record disagrees: both Defendants retaliated against numerous
distributors for daring to defy them.
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150
One of Pinnacle’s product lines was
Innvictis, which Pinnacle sold to growers through Pinnacle retailers.151
.152
153
154
155
-
156
150
Ex. 134
at 22:4–10, 25:14–26:6.
151
Ex. 134 at 27:2–9.
152
Ex. 157 at -977; Ex. 158 at -818.
153
Ex. 105 (Hawkins (Syngenta)) at 283:4–284:4; Ex. 159 at -651–52.
154
Ex. 134 at 161:15–22, 177:14–178:5; Ex. 50 at 60:4–23.
155
Ex. 89 at 261:24-262:8; see also Ex. 160 (Semadeni (Simplot)) at 35:4–20; Ex. 161
at 300:2–25.
156
Ex. 162 at CX2360-007.
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When Pinnacle needed Syngenta products, it was forced to purchase from another
distributor or broker, which is generally more expensive, less predictable, or both. 157 ■
158
_
_159 Simplot eventually broke from Syngenta in 2024.
160
Both Defendants retaliated against IAP, a buying group for independent retailers,
for failing to follow their respective loyalty programs.
); Ex. 161 (Baioni (Nuu-ien)) at 299:3-6.
159 Ex. 89 (Langkamp (Syngenta)) at 296: 12- 302:6; Ex. 160
at
40:7-41:22, 80:22- 81:1 8.
160 Ex. 165 at slide 2.
161 Ex. 89 (Langkamp (Syngenta)) at 166:19-1 67:22.
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162 As a former IAP
executive described, this forced some IAP members to buy from other distributors at
higher prices; 163 other IAP members were able to purchase directly from Syngenta, but at
a higher price than they had received through IAP. 164 And in 2018, Corteva canceled its
loyalty program and dissolved its distribution agreement with IAP because "IAP [was]
not acting as 'one"' or "meeting loyalty."16s
That was hardly the only time Corteva retaliated against distributors for disloyalty.
In 2019, C01teva limited product supply to three distributors
- ) because of Corteva's belief they were supp01ting generics. Van Vooren explained:
166
Corteva also targeted Gar Bennett, a California distributor-retailer, for lack of
loyalty. In 2018, Gar Bennett agreed to limit purchases of generic rimsulfuron and
instead purchase Corteva's Matrix in exchange for loyalty payments. 167 As pa1t of this
163 Ex. 87 at 202:4-23; Ex. 166 at-552-53.
164 Ex. 87 at 203:16-205:16; Ex. 166 at-552.
165 Ex. 167 at -920; Ex. 129 (Corteva's Responses to Plaintiffs' First Set of
Inten-ogatories) at 3.
166 Ex. 168 at-235.
161 Ex. 169 at -875; Ex. 170 at -423.
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process, Corteva threatened that “Lack of Support = Change in B2B”—an end to their
direct (business-to-business) relationship.168 Over the next two years, Gar Bennett
acquiesced and sharply limited its generic rimsulfuron sales to comply with Corteva’s
conditions.169 In 2021, Corteva responded to reports that Gar Bennett might be “go[ing]
generic” by sending it “
,”
.170 A Corteva employee explained: “My opinion is that
if they go a different way, we evaluate the whole relationship. We don’t need them on our
patented products. I would not let them [c]herry pick us.”171
In 2023, Corteva threatened to end the benefits of the Gar Bennett “partnership” if
it did not “stay loyal to branded products.”172 In response, Gar Bennett “promised” “they
will stay with Corteva.”173 Later that same year, Corteva told Gar Bennett it was
cancelling multiple payments because it lacked a “firm commitment . . . going forward”
on Corteva’s “entire” portfolio, including Matrix in particular.174 Gar Bennett responded
to Corteva the next day about “get[ting] us back on track together.”175
168
Ex. 171 at -183.
Ex. 172 (Bodily (Corteva)) at 123:15–124:18; Ex. 173 at -572; Ex. 174 at -883; Ex. 1
¶ 386 n.497; Ex. 175 at -633.
169
170
Ex. 169 at -875 (Van Vooren (Corteva)).
171
Ex. 169 at -875.
172
Ex. 176 at -591.
173
Ex. 177 at -104; Ex. 178 (Bodily (Corteva)) at 248:22–249:10.
174
Ex. 179 at -696.
175
Ex. 179 at -695.
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Corteva repeatedly discussed punishing disloyal distributors by cutting their
supply allocations. For example, when Simplot pursued generic alternatives, an internal
Corteva presentation set out a proposed threat:
176
A Corteva sales leader similarly proposed in
2018 that Corteva “lower[]” two distributors’ (
) allocations “due to
their lack of support” for Corteva’s branded products.177 He elaborated: “[W]e would just
pull back a small amount of the allocation (enough that they realized support of Matrix
and other generic brands is noticed) . . . and that those who have been loyal feel that are
making a good decision in remaining 100% loyal across all of Corteva.”178 The goal? To
“signal” “our desire for customers to remain loyal across the entire Corteva portfolio.”179
Consistent with this, Corteva executive Nate Feauto testified that Corteva generally
.180 As he also put it in a
favors compliant distributors as
text message to his colleagues: “I’m a firm believer in not giving the best deal to ones
that are not loyal to us and have left us.”181
176
Ex. 303 at slide 18.
177
Ex. 180 (Bodily) at -101.
178
Ex. 180 at -099.
179
Ex. 180 at -099.
180
Ex. 181 at 397:7–25.
181
Ex. 182 at -880.
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Distributors believe that Defendants’ threats are credible and act accordingly. As
Tenkoz’s President testified: If the distributor “kick[s the basic manufacturer] in the shins
on those products that have loyalty programs,” it is “naïve” to expect the manufacturer
“to treat you like a trusted value partner on the rest of their portfolio.”182 According to
another, “if we fight with a branded company on the stuff that is really important to them
[and] in late life cycle products . . . [we] are not going to be able to put programs [or]
private labels or other types of . . . mechanisms for us to make money in place.”183
.184
.185 A Tenkoz executive similarly viewed
, discussed above, as a cautionary tale. Responding to a proposal for
Tenkoz to sell more generics, he wrote:
What you are proposing is an IAP strategy of a few years ago,
which failed….they pursued the cheapest options and
subsequently took too much share to generics and lost their
credibility, support and distribution contracts with key R&D
182
Ex. 132 at 146:5–147:10.
183
Ex. 32 (Ripato (Tenkoz)) at 42:8–21.
184
Ex. 183 at 119:25–121:6.
185
Ex. 3 at 63:25–66:25.
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suppliers. Today, they are a small fraction of who they were
10 years ago.186
Distributors believe disloyalty will lead to being cut off from Defendants'
products- even those umelated to loyalty.
187 ■
188 Growmark's President similarly testified that if
Growmark were to stop participating in Defendants' loyalty programs, it risks "los[ing]
our ability to be an authorized distributor of these companies and not hav[ing] access to
the portfolio." 189 Tenkoz's President agreed that "there's a concern on Tenkoz's pa1t that
pa1ticipation in loyalty is imp01tant to help it keep access to supplier products that are not
in the loyalty programs."190
Distributors also fear losing access to Defendants ' products on competitive terms
if they are disloyal.
186 Ex. 184 at-391.
181 Ex. 3 at 270:3-11.
188 Ex. 3 at 62:9-19.
189 Ex. 185 at 117:20-11 9:1.
190 Ex. 132 at 147:6-10; see also Ex. 186 at slide 2 (listing "retain distribution contract"
as a reason to paiticipate in loyalty). Distributors' fears of bein cut off extend to new
roducts. See Ex. 187 Bernard Drexel at 283:24-284:1 9
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191
193
f.
Defendants Offer-and Take Away-Additional Profit
Opportunities Based On Loyalty
Defendants' allocation of private-label products is another tactic Defendants use to
reward distributors who are loyal and punish those who are not.
Private-label products are sold by manufacturers to distributors for distributors to
sell under their own name. 194 These products are generally priced just below the branded
product's price, but well above the generic price. 195 Because Defendants charge
distributors less for private-label products than for branded, distributors' margin on
private labels is often even higher than the margin on branded products. 196
191 Ex. 183 at 119:14-120:14.
192 Ex. 3 at 88:23- 90:3; see also Ex. 4
194 Ex. 78 (Cecil (Syngenta)) at 37:1-3.
; Ex. 188 at CX2474-019.
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Defendants' internal documents confirm that they consider private-label products
_191 Access to private-label
to be
opportunities is conditioned on loyalty, with private-label products reserved f o r or
According to Syngenta,
private labels are an
199 Corteva documents likewise
200
Distributors, too, understand that private-label products are intended to offer more
profit-sharing opportunities conditioned on loyalty.201 Internal Tenkoz documents
describe private labels as "margin opportunity to serve as loyalty incentive for the
channel,"202 and
_
_203
197 Ex. 189 at -610; Ex. 190 at slide 7; Ex. 191 at slide 18; Ex. 193 at slide 4.
198 Ex. 34 at CX2100-064· see also Ex. 194 at slide 16· Ex. 192 at slide 2 -
).
199 Ex. 196 at-133.
200
Ex. 197 at slides 3-4.
2
('
").
202 Ex. 102 at CX2838-023.
203 Ex. 195 at-769.
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E.
Defendants' Mesotrione and Metolachlor Supply Agreements
Syngenta-C01t eva supply agreements enhance and exemplify the exclusionary
effects of Defendants' loyalty programs. In particuhu , Syngenta's loyalty program
deten-ed C01teva from purchasing lower-cost generic mesotrione for a popular crop
protection product, which resulted in Corteva and Syngenta entering into an explicitly
exclusive mesotrione supply agreement. 204
After Syngenta' s mesotrione patent expired, C01t eva developed a pesticide
product (Resicore) containing mesotrione.205 Syngenta recognized that if C01t eva-
206 Syngenta used its loyalty program to respond to this competitive
threat.
A C01t eva executive testified that, absent loyalty, Corteva could have sourced
mesotrione from a low-cost generic supplier. 207 But Syngenta's loyalty program was a
"sticking point" because the thresholds would have prevented distributors from
20s Ex. 199 at 61:24-62:6.
206 Ex. 200 at-519.
201 Ex. 201 at 130:4-131:4, 143:18- 21; Ex. 202 at -785.
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purchasing Corteva mesotrione products in significant amounts.208 Internally, Corteva
acknowledged that
209
Syngenta agreed
.210
.211 Ultimately, Defendants saw Resicore’s inclusion
in Syngenta’s loyalty program as a way for them to
212
Corteva
acknowledged that its favorable treatment under Syngenta’s loyalty program
demonstrated to the market that it was “aligned” with Syngenta and expressed that it was
“committed to . . . supporting the post patent strategy for Mesotrione.”213
208
Ex. 203 at -834.
209
Ex. 204 at -233.
210
Ex. 202 at -785
; Ex. 9 at 265:7–15; Ex. 198 at -069.
211
Ex. 9 (Messner (Corteva)) at 256:12–257:24.
212
Ex. 205 at -873.
Ex. 204 at -233. Syngenta repeated this pattern in negotiations with other basic
manufacturers, including Bayer. Bayer initially pursued opportunities with lower costs
generics (Ex. 206 at -002–003) but abandoned its efforts after calculating that having its
products count against Syngenta’s loyalty program would cost Bayer
. Ex.
207 at -001–002. Ultimately, Bayer chose to retain favorable loyalty treatment, despite
” Id.
at -003.
213
-
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F.
Defendants' Loyalty Programs Have Foreclosed Generic Competition
For the Als Included In Loyalty Programs
Defendants' tactics have worked. Defendants have extensively documented how
their loyalty programs have prevented, delayed, and diminished generic ently and
expansion.
In 2014, as Syngenta was planning and implementing post-patent strategies for
mesotrione and azoxystrobin, Syngenta highlighted the success of its "Post Patent
Management," explaining that
214
Syngenta
touted its status as '
215
The reason for this success? "Syngenta's
post-patent strategies," including Key AI, which Syngenta deemed a216
Later Syngenta documents acknowledged that
Syngenta believed that its loyalty program was
, and believed that without it,
214
Ex. 47 at CX2034-003 · see also Ex. 53 at slides 9-10
215
Ex. 27 at slide 2.
216
Ex. 27 at slide 2; Ex. 47 at CX2034-03 1.
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When Syngenta executives analyzed ■
Syngenta would have
, they expressed grave concern
about the
.219 Syngenta
predicted that the resulting generic competition would cause Syngenta's
221
Corteva has repeatedly touted the success of its loyalty programs. In 2010,
Corteva's predecessor Dow described itself as
-
· " 222 Internally, Corteva employees regularly reported that loyalty programs were
successfully preventing distributors from stocking generics. In 2018, Corteva reported on
the distributor-
feeling that
219 Ex. 209 at-712-13.
220 Ex. 212 at-997.
222 Ex. 41 at CX1540-01 5.
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223 Corteva also descr i b e d -
as
explaining that
Corteva specifically highlighted its successes in excluding generics from the
markets for oxamyl and rimsulfuron. In 2019, when discussing whether to give Nutrien a
"break" on oxamyl loyalty requirements, Corteva' s Channel Lead wrote: "I would hate to
lower loyalty levels to let generics get back in the game, when we potentially could be so
close to pushing them out completely."225 A few months later, a Corteva Product
Manager praised Corteva's success with oxamyl loyalty:
On the generic side our team truly has done an A+ job
blocking generics. I am very proud of the coordinated, team
effort and understand the desire to thwart future enerics. A
Also in 2019, a C01teva executive highlighted its successful exclusion of generic
rimsulfuron in the period since the Dow-DuPont merger:
223 Ex. 216 at -945-46. Corteva noted that
224 Ex. 79 at slide 4.
22s Ex. 217 at-914 (emphasis added).
226 Ex. 60 at -317 (emphasis added).
221 Ex. 218 at -566.
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Referring to Corteva’s threats to Gar Bennett, he continued:
228
Professor Hemphill’s expert analysis confirms Defendants’ judgment that loyalty
programs have minimized generic entry, resulting in substantial foreclosure.229 In every
year for which Professor Hemphill calculated foreclosure (since 2018), the share of sales
foreclosed is 61% or more—and in some instances as high as 95%.230
The high levels of foreclosure calculated by Professor Hemphill are consistent with
, the traditional channel’s general
Defendants’ high loyalty thresholds
adherence to loyalty requirements, and the importance of the traditional channel.231
228
Ex. 218 at -566; see also supra Section II.D.2.e.
229
Ex. 1 § 4.7.
230
Ex. 1 Fig. 28.
See supra Sections II.D.1., II.D.2.a.; Ex. 1 Figs. 26–27; see also infra Section
IV.E.1.b.iv.
231
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Distributors acknowledge that Defendants' loyalty agreements have caused
generic exclusion.
_233 -
Generic manufacturers repeatedly testified, and evidence in the record shows, that
because of loyalty programs, they did not enter the six relevant AI markets, have limited
232 Ex. 3 at 45:20-48:24· see also Ex. 219 at CX4442-007- CX4442-0009
). See also Ex. 220 at 81:24- 84:16 (if Van
Diest was not subj ect to loyalty program, it would have purchased generic metolachlor
for customer).
234 Ex. 220 (Van Diest (Van Diest)) at 81:24-84:16; Ex. 183 (Fowler (CNI)) at 114:2-
11 5: 1; Ex. 161 (Baioni (Nutrien)) at 271:25- 272:3 ("Q. Has Nutrien ever declined to
fulfill a requested purchase for generic product because of open space considerations? A.
Yes."); Ex. 133 (Card (WinField)) at 119:21-120:11 ("[W]e could not meet [generic]
demand because [we had] made the decision to meet the loyalty program.").
23s Ex. 88 (Bernard (Drexel)) at 88:16-89:6; 115:22-116:12.
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their product offerings in those markets, or have been unable to gain the necessa1y
foothold to meaningfully compete with Defendants:
• Azoxystrobin: exited the U.S. market236 ; Rotam did not enter
because of a lack of market access caused by Syngenta's loyalty
programs, despite selling azoxystrobin products worldwide237 ; Helm
registered product that it abandoned due to loya1ty238 ; Summit Agro
opted against introducing a premix of azoxystrobin and a proprietary AI
partly due to loyalty.239
Helm decided to stop
offering a mesotrione/metolachlor premix because of Syngenta
loyalty.241
• Metolachlor:
;242 Helm decided to stop offering a mesotrione/metolachlor
premix because of Syngenta loyalty.243
• Rimsulfuron: Albaugh did not enter the market due to DuPont's loyalty
program;244 Helm did not pursue sales because of limited selling
236 Ex. 222
at 195:12-196:7.
231 Ex. 98 (Chavez (Rotam)) at 195:9-196:10.
238 Ex. 95 (Schumacher (Helm)) at 38:3-39: 17.
239 Ex. 223 at-757.
240 Ex. 222
at 251:6-252:20.
241 Ex. 95 (Schumacher (Helm)) at 160:4-1 5.
242 Ex. 222
at257: 17-258:13.
243 Ex. 95 (Schumacher (Helm)) at 160:4-1 5.
244 Ex. 96 (Vance (Albaugh)) at 139:3-140:15. DuPont (a Corteva predecessor) owned
rimsulfuron brand (Matrix) and included it in a loyalty program ("SU Partnership"). Ex.
294 at slides 82-83.
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opportunity under loyalty; 245 Rotam delayed entty for at least six years
due to Corteva loyalty programs.246
•
Oxamyl: AMVAC and Atticus suspended their generic operations after
Corteva implemented its loyalty program.247 Rotam delayed entry into
the market because of loyalty.24s
Generic manufacturers' lack of domestic success contrasts with other geographies
where Defendants do not use loyalty programs, and generics have achieved greater
mai-ket penetration. 251 But in the United States, generic manufacturers have resorted to
selling products thrnugh the alternative channel because traditional distt·ibutors were
unwilling to sell their products due to limited headspace.252 As an executive from generic
245 Ex. 95 (Schumacher (Helm)) at 184:1 5-1 85: 13.
246 Ex. 98 (Chavez (Rotam)) at 153 :20-155:23.
247 Ex 60 at -317.
24s Ex 98 (Chavez (Rotam)) at 241 :5- 20.
249 Ex. 224 (Lewis (SummitAgro)) at 11 6:5-18.
250 Ex. 222
at 241:7- 243:1 8.
251 Ex. 225 (Schumacher (Helm)) at 187: 14-1 89:6 (in other geographies, generic "sales
are higher when there's
•
252 Ex. 225 (Schumacher (Helm)) at 101:1 9-1 02:4.
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manufacturer Albaugh explained: "We'd prefer not to [sell through the alternative
channel], but we can't get the sustainable levels of volumes we need on some of those
products selling through traditional distribution because of the loyalty programs. " 253
G.
Defendants' Loyalty Programs Have Resulted in Higher Prices
There is ample evidence that Defendants' loyalty programs have resulted in higher
prices compared to a world without the loyalty program-i.e., with unconstrained generic
competition. Defendants themselves have repeatedly acknowledged in internal
documents that loyalty thresholds are designed to keep branded products' prices elevated
and have successfully done so.
Syngenta's internal documents repeatedly confirm its understanding that absent
loyalty programs, it would face significant generic competition, resulting in lower prices.
253 Ex. 96 at 104:9-24.
254 Ex. 226 at slide 33.
255 Ex. 212 at-997.
256 Ex. 212 at-997.
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Corteva has similarly acknowledged in internal documents and testimony that
loyalty thresholds have successfully kept the prices and sales volume of their products
artificially elevated, and that in the event of generic competition prices would drop.
As Van Vooren emphasized to his colleague
259 Additionally:
•
In 2014, Corteva employees explained "why our generic defense
strategy works so well. Answer: We maintain market value. We
maintain value for everyone. Without our approach, market value oes
to zero. " 260 " T he mru· in colla se would onl be worst sic
251 Ex. 227 at slide 6.
25s Ex. 228 at-788.
259 Ex. 229 at -967.
260 Ex. 230 at -827-28 (emphasis added).
261 Ex. 230 at -826 (emphasis added).
262 Ex. 68 at CX1305-057.
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•
In 201
•
Van Vooren testified that, without the loyalty program, Corteva would
not have "the same support" "of our channel prutners[.]" 264
It is not just Defendants who predicted lower prices and greater generic output
absent loyalty programs-their customers did as well. For example, in 2 0 1 0 -
"265 The forecast's author-who helped create Syngenta's
loyalty program in 2002 and later worked for Tenkoz-stands by that forecast as of
2025.266 Similru·ly, when a Nut:rien employee was asked what he thought would happen if
a competing distributor stopped participating in a Defendant's loyalty program, he
testified that the competitor "would likely come to market with a cheaper alternative,"
which "would drive price down in the market. ''267
As Professor Hemphill explains, "given defendants' substantial market power
within each AI mru·ket, basic economic the01y and examples of generic penetration as to
263 Ex. 231 at -263.
264 Ex. 40 at 151:2-19.
265 Ex. 232 at -027-28.
266 Ex. 32 at 104:23-105:3 -
management position in 2010 and Ripato's position
in 2025 ru·e "the same"); id. at 183:11-20.
261 Ex. 21 at 137:19-138:6.
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other AIs support the expectation that unfettered generic competition results in lower
prices, compared to a world without such competition.”268 In addition, the Plaintiff States’
expert Dr. Loren Smith concludes that Defendants’ loyalty programs “increased
Syngenta’s and Corteva’s profits above what they would have realized in the absence of
those programs” and “caused prices paid by end-use growers in Illinois and Nebraska to
be higher than they would have been absent those programs.”269
As this robust evidentiary record amply demonstrates, Defendants’ loyalty
programs have excluded generic manufacturers and raised prices for growers. More
importantly, at this stage of the case, there are myriad disputes of material fact that can
only be resolved at trial.
III.
QUESTIONS PRESENTED
A.
Have Defendants clearly demonstrated that low price is Defendants’
predominant method of excluding generic competition such that that no reasonable
factfinder could find otherwise and the Court should depart from the default exclusive
dealing rule-of-reason standard?
B.
Have Defendants clearly demonstrated that no reasonable factfinder could
accept Plaintiffs’ proposed market definition?
C.
Have Defendants clearly demonstrated that no reasonable factfinder could
find that Defendants’ conduct harmed competition?
268
Ex. 1 ¶ 447.
269
Ex. 233 ¶ 14.
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D.
Have Defendants clearly demonstrated that no reasonable factfinder could
conclude that Syngenta Crop Protection AG or Syngenta Corporation controlled, dictated,
encouraged, or participated in anticompetitive conduct?
IV.
ARGUMENT
A.
Summary Judgment Standard
Summary judgment is appropriate only where the movant shows there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter
of law. Fed. R. Civ. P. 56. The court’s role at summary judgment “is not to assess the
truth of any fact alleged or to weigh facts, as would a jury in finding facts, but only to
determine whether facts are disputed and whether the disputed facts are material.” Duke
Energy, 111 F.4th at 353 (emphasis in original; citation omitted). Courts should therefore
“only enter summary judgment in favor of the moving party when the record shows a
right to judgment with such clarity as to leave no room for controversy and clearly
demonstrates that the non-moving party cannot prevail under any circumstances.” White
v. City of Greensboro, 608 F. Supp. 3d 248, 256 (M.D.N.C. 2022) (Schroeder, J.)
(cleaned up; citation omitted).
In determining whether there is a genuine dispute of material fact, “the court views
the evidence in the light most favorable to the non-moving party, according that party the
benefit of all reasonable inferences.” Intercollegiate Women’s Lacrosse Coaches Ass’n v.
Corrigan Sports Enters., Inc., 694 F. Supp. 3d 625, 656 (M.D.N.C. 2023) (Schroeder, J.)
(quotation omitted). The moving party bears the burden to show there is no genuine
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dispute of material fact for each challenged claim. City of Greensboro, 608 F. Supp. 3d at
256.
B.
Elements of Plaintiffs’ Claims
Plaintiffs claim that Syngenta and Corteva are each violating federal and state
antitrust laws through a course of unlawful exclusive dealing conduct. Doc. 81 (Amended
Complaint) ¶¶ 203–11. Exclusive dealing takes various forms, but is in essence an
agreement between a buyer and a seller that prevents the buyer from purchasing from
another seller or requires the buyer to purchase from that seller. Phillip E. Areeda &
Herbert Hovenkamp, Antitrust Law ¶ 1800a (5th ed. 2025) (“Areeda & Hovenkamp”).
Exclusive dealing may be unlawful whether express or de facto and whether it requires
complete exclusivity or not. See Doc. 160 (Memo. Op. & Order Denying Defendants’
Mot. Dismiss) at 60–61.
1.
Federal Claims
Each Defendant’s unlawful exclusive dealing conduct violates Sections 1 and 2 of
the Sherman Act, Section 3 of the Clayton Act, and Section 5 of the FTC Act. See Doc.
149 (Amended Complaint) ¶¶ 203–11. Each of these statutes, at a minimum,270 supports a
violation where plaintiffs prove by a preponderance of evidence the following elements:
“(1) the relevant product market; (2) the geographical area of competition for the product
market; and (3) that the arrangement at issue extends to a ‘substantial share of the
Defendants have not challenged the FTC’s standalone Section 5 claim, which is
discussed further in Section IV.F below.
270
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relevant market.’” Doc. 160 at 36–37 (citation omitted). These factors allow the court to
assess the “probable effect” that the exclusive deal has on competition. Id. (citations
omitted).
The two Sherman Act claims have additional elements not required by Clayton
Act Section 3 and FTC Act Section 5. Section 1 requires that plaintiffs show an
agreement and the possession of market power, and Section 2 requires that plaintiffs
show that the defendant possesses monopoly power. See, e.g., Advanced Health-Care
Servs. v. Radford Cmty. Hosp., 910 F.2d 139, 144–49 (4th Cir. 1990); see also Duke
Energy, 111 F.4th at 352–53; Valuepest.com of Charlotte, Inc. v. Bayer Corp., 561 F.3d
282, 286 (4th Cir. 2009). Both Sherman Act statutes generally require a showing of likely
harm to competition, but in the exclusive dealing context, the substantial-foreclosure
requirement provides a “useful screening function” for the challenged conduct’s probable
effect. United States v. Microsoft Corp., 253 F.3d 34, 69–71 (D.C. Cir. 2001) (analyzing
a Section 2 exclusive dealing claim and finding harm to competition due to substantial
foreclosure).
Defendants admit that their loyalty programs constitute agreements, and they do
not move for summary judgment as to geographic market definition—these elements are
not disputed for purposes of these motions. Further, neither Defendant moves for
summary judgment as to the elements of market and monopoly power in the markets as
alleged by Plaintiffs. Instead they claim that, should they prevail regarding market
definition, Plaintiffs’ allegations regarding market and monopoly power necessarily fail.
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Syn. Br. at 90-91; Cor. Br. at 80. However, Defendants make no attempt to establish that
there is insufficient evidence to find market and monopoly power in Plaintiffs’ proposed
markets. Corteva only notes that, under Plaintiffs’ proposed markets, Plaintiffs have not
shown monopoly power for acetochlor. Cor. Br. at 80. This is immaterial given that
Plaintiffs have alleged that Corteva possesses market power in the acetochlor market.
Therefore, the only bases for Defendants’ motions relate to (1) the definitions of
relevant product markets and (2) the probable effect of the challenged conduct on
competition, including substantial foreclosure. Plaintiffs amply show that issues of
disputed material fact dominate these elements. Each of Plaintiffs’ federal claims should
be set for trial.
2.
State Claims
Most Plaintiffs States’ state law claims in this case rise and fall with the Sherman
Act claims.271 Defendants are not entitled to summary judgment on the former for the
same reason they are not entitled to summary judgment on the latter. As discussed below
(Section IV.H.), Defendants also are not entitled to summary judgment on California’s
state-law claims, Indiana’s Deceptive Consumer Sales Act (“IDCSA”) claims, or Iowa’s
Consumer Fraud Act claims because Defendants ignore the distinctions between
California law and the Sherman Act and misconstrue what is needed to establish claims
under Indiana’s IDCSA and Iowa’s Consumer Fraud Act.
Washington is no longer seeking proprietary damages. See Ex. 238 (Plaintiffs’ Initial
Objections to Syngenta Defendants’ First Set of Interrogatories) at 54.
271
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C.
Defendants’ Conduct Should Be Analyzed Under the Rule of Reason,
Not Predatory Pricing Law
Plaintiffs bring exclusive dealing claims, which are properly analyzed under the
effects-based, burden-shifting framework of the rule of reason. See Mylan Pharms. Inc. v.
Sanofi-Aventis LLC, 2026 WL 201152, at *20 (W.D. Pa. Jan. 27, 2026) (“The default
antitrust test for exclusive dealing arrangements is the rule of reason test.”). At summary
judgment, Defendants seek to recast Plaintiffs’ exclusive dealing claims as “predatorypricing” claims to trigger the defendant-friendly price-cost test that applies only to
predatory pricing. Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S.
209, 222 (1993) (“[A] plaintiff seeking to establish competitive injury resulting from a
rival’s low prices must prove that the prices complained of are below an appropriate
measure of its rival’s costs.”) (emphasis added).
That effort fails both as a matter of law and in light of the factual record. The
Court may reject use of the price-cost test at the outset based on the nature of Plaintiffs’
claims. Plaintiffs challenge not a low price (nor a payment, nor a rebate), but an
exclusivity arrangement between Defendants and distributors that excludes lower-priced
rivals. Plaintiffs’ claims are directed at the exclusionary effect of structural features of
Defendants’ loyalty program (the share-based exclusivity conditions and Defendants’
tools for implementing those restrictions). Plaintiffs do not claim any exclusionary effect
caused by “low price”—in fact, Defendants’ prices are higher than generic prices. The
great weight of the case law confirms that when price is not the clearly predominant
mechanism of exclusion the rule of reason should apply rather than the price-cost test.
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In addition, the Court should reject Defendants’ invocation of the price-cost test
because Plaintiffs have assembled substantial evidence establishing each of the five nonprice mechanisms of exclusion referenced in this Court’s motion-to-dismiss decision.
Doc. 160 at 49–51. Defendants may dispute these facts, but summary judgment is
inappropriate because a reasonable fact finder could determine that price is not the
predominant means of exclusion. See Duke Energy, 111 F.4th at 359 (reversing
application of price-cost test at summary judgment because “factual dispute[s] preclude
summary judgment”).
1.
The Rule of Reason Applies to Loyalty Rebate Programs When
Price Is Not the Predominant Mechanism of Exclusion
a.
The Overwhelming Weight Of Authority, Including New
Fourth Circuit Precedent, Supports Applying the Rule of
Reason
Exclusive dealing arrangements raise antitrust concerns because they “may be
used by a monopolist to strengthen its position, which may ultimately harm competition.”
ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254, 270 (3d Cir. 2012). They do so by
restricting competitors’ access to the market, excluding potential rivals and enabling the
incumbent to maintain supracompetitive prices. Id. at 271; see also McWane, Inc. v. FTC,
783 F.3d 814, 827–28 (11th Cir. 2015) (exclusive dealing can violate the antitrust laws
when a dominant firm “impose[s] exclusive deals on downstream dealers to ‘strengthen
or prolong its market position’” (quoting Antitrust Law ¶ 760b7)). As this Court has
recognized, exclusive dealing is assessed under a form of the rule of reason that considers
the probable competitive effects of the conduct, including the degree of foreclosure of
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rivals, and balances those harmful effects against any cognizable procompetitive benefits.
Doc. 160 at 35–37.
Defendants want to avoid that fact-specific inquiry into their loyalty programs and
therefore urge the Court to apply the bright-line “price-cost” test, which is applicable to
evaluating a different type of conduct. Cor. Br. at 62; Syn. Br. at 35. The Supreme Court
adopted the price-cost test in Brooke Group, 509 U.S. at 222, to assess competitor
complaints that a firm is engaged in “predatory pricing”— anticompetitively lowering its
prices but otherwise leaving customers free to determine whether and how much product
to buy from the defendants and their rivals. Under this test, a defendant will not be held
liable for low pricing unless it is pricing below its own cost. Id. Predatory pricing claims
are analyzed under the demanding price-cost test because they challenge price cutting. Id.
But adding a “payment” or “pricing” element to an exclusive dealing program to
induce customers to accept the exclusivity requirement does not allow the program to
escape scrutiny under the rule of reason. “A discount conditioned on exclusivity should
generally be treated as no different from an orthodox exclusive-dealing arrangement.”
Areeda & Hovenkamp, ¶ 1807b1 (2025); see also In re Surescripts Antitrust Litigation,
608 F. Supp. 3d 629, 643 (N.D. Ill. 2022) (“Predatory pricing concerns below-market
prices, not pricing disparities a monopolist creates among its own customers.”).
Thus, to determine whether the rule of reason or the price-cost test applies, courts
focus on the predominant mechanism of exclusion (i.e., the reason that competitors face
difficulty achieving sales). The rule of reason applies “where there are mechanisms
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beyond price-cutting that exclude competition,” and the price-cost test applies when low
price “clearly predominates over other alleged non-price mechanisms of exclusion.” Doc.
160 at 45, 55. As posed by this Court, a relevant question is whether “the loyalty
programs leverage the Defendants’ monopolist status and the market’s substantial
barriers to entry to exclude competition for the AIs.” Doc. 160 at 49.
Courts in this Circuit and elsewhere have rejected antitrust defendants’ efforts to
extend the price-cost test beyond cases where a rival’s inability to match a low price is
the alleged mechanism of exclusion. Most recently, and following this Court’s decision
on Defendants’ motions to dismiss, three highly relevant decisions have been issued
rejecting use of the price-cost test in monopolization cases.
The Fourth Circuit addressed the issue in August 2025, rejecting application of the
price-cost test to a Duke Energy scheme designed to purchase exclusivity, cautioning that
“Brooke Group does not provide a one-size-fits-all analytic framework for assessing
exclusionary pricing allegations.” Duke Energy, 111 F.4th at 359. Defendant Duke
Energy offered a key customer discounts and payments on existing contracts in exchange
for the customer signing a new exclusive long-term contract at rates higher than the
excluded rival was offering. Duke Energy characterized the discounts and payments as
price reductions and argued that the price-cost test should apply. But the Fourth Circuit
concluded that, because there was a factual dispute as to whether Duke Energy’s
conditional discount was structured in such a manner as to exclude lower-priced rivals at
consumers’ expense, the district court should not have applied the price-cost test and
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granted summary judgment. The Fourth Circuit found the transaction structure at issue in
Duke Energy to be potentially exclusionary for three reasons: first, it “hindered a new
entrant’s ability to compete on the basis of efficiency”; second, it was designed by an
incumbent monopolist “with the intent of foreclosing” new entrants from competing on
the merits; and third, it was designed to charge elevated prices to end user customers. 111
F.4th at 357–58.
Here, too, Defendants do not seek to exclude generics by pricing below them;
rather they have laden their offers to customers with conditions that limit low-priced
generics’ market access at growers’ expense. Corteva mentions Duke Energy only for a
different point (about its cross-AI bundling), and Syngenta does not address it at all. But
Duke Energy is controlling authority that is directly relevant to whether, at summary
judgment, Defendants can use the price-cost test to avoid rule-of-reason analysis of their
loyalty programs. They cannot.
Two other recent cases (each a district court decision on a motion to dismiss)
address the price-cost-test question in the context of pesticide loyalty programs. In
February 2025, a federal district court in Arkansas rejected these same Defendants’
argument that the price-cost test applies to these very same loyalty programs. Arkansas,
2025 WL 551660, at *9–*10 . Recognizing that Arkansas “does not allege that low
pricing was the means defendants used to exclude competition,” the court held that the
rule of reason would be appropriate where, as alleged there (and here), “competition has
been significantly foreclosed in the relevant markets and . . . it has been difficult for any
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generic competitor to enter the market successfully, due to defendants’ loyalty
programs.” Id.
Similarly, in Rightline, LLC v. FMC Corp. the court evaluated complaint
allegations that FMC, a monopolist in the pesticide AI sulfentrazone, “effectively
block[ed] generic manufacturer Rightline’s access to the primary method of distribution”
via high loyalty program share thresholds. 2025 WL 1550234, at *4 (E.D. Pa. 2025). The
Court held that the price-cost test does not apply to such allegations, which “plainly set
forth a plausible non-price-based exclusionary program.” Id. (noting also that Rightline
was “not alleging that it is excluded from the market because of the price of FMC’s
sulfentrazone”). In Rightline, as here, the mechanism of exclusion is not price but the
condition required of distributors to obtain a payment.
These three decisions join a long string of cases rejecting application of the pricecost test to exclusionary conduct that—like Defendants’ loyalty programs—does not use
low price to exclude. See, e.g., ZF Meritor, 696 F.3d at 277 (holding that “price-cost test
cases are inapposite” when “price itself was not the clearly predominant mechanism of
exclusion”); In re Suboxone (Buprenorphine Hydrochloride & Naloxone) Antitrust Litig.,
622 F. Supp. 3d 22, 65 (E.D. Pa. 2022) (“Where, however, price is not clearly the
predominant mechanism of exclusion, the price-cost test does not apply.”); In re
Surescripts, 608 F. Supp. 3d at 642 (rejecting price-cost test because plaintiffs did not
allege that defendants’ “prices are now, or ever were, too low”).
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b.
Defendants Cite Inapposite Cases
Defendants’ cited cases do not change the result. Both Syngenta (at 39) and
Corteva (at 67) cite NicSand to suggest that the antitrust laws do not prohibit paid-for
exclusivity. NicSand Inc. v. 3M Co., 507 F.3d 442 (6th Cir. 2007) (en banc). Yet neither
take on—as this Court did in its motion to dismiss decision—the peculiarities of the
market at issue in that case. In NicSand, “exclusivity was an essential feature of this
specific retail market because the retailers (i.e., the buyers) required exclusivity.” Doc.
160 at 39. Thus, the main source of competition was dueling exclusive dealing
arrangements. In that context, “When one exclusive dealer is replaced by another
exclusive dealer, the victim of the competition does not state an antitrust injury.”
NicSand, 507 F.3d at 456. That is wholly unlike the markets here, where distributors can
and do sell both the named brand and their generic equivalent, except as limited by
Defendants’ loyalty thresholds.
Corteva cites In re EpiPen for the proposition that “courts have recognized that
price rebates . . . should be ‘strenuously protect[ed]’ from antitrust attack, absent
evidence they cross the line into the rare case of predatory below-cost pricing.” Cor. Br.
at 64 (quoting In re EpiPen Mktg., Sales Pracs. & Antitrust Litig., 44 F.4th 959, 1000
(10th Cir. 2022)) (Corteva’s modifications). That is an inaccurate description. The
EpiPen court “appl[ied] the full rule of reason analysis to Mylan’s exclusive rebate
agreements.” In re EpiPen, 44 F.4th at 984 n.7. In considering a different issue––whether
to “infer substantial foreclosure because Sanofi was only able to overcome exclusion by
paying a $36 million access tax” on the insulin drug Lantus––the court stated the basic
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rule that it “cannot and should not infer any exclusionary conduct on the part of Mylan
simply because Sanofi had to slash its prices to compete with Mylan.” Id. at 999–1000.
Those price cuts “exemplified vigorous price competition” that courts should
“strenuously protect.” Id. at 1000. Here, Plaintiffs do not complain that generic suppliers
must lower their prices to compete. Generic products are already priced below
Defendants’ products. Generic manufacturers are excluded by the restrictive share
conditions Defendants impose upon distributors.272
Finally, Defendants urge this Court to apply a different test, one that focuses on
the distributors’ motivation for agreeing to exclusivity, rather than evaluating the
mechanism of exclusion. See, e.g., Syn. Br. at 38 (addressing why distributors agree to
the loyalty payments, rather than why competitors are excluded from the market); Cor.
Br. at 62–63 (same). Defendants argue that distributors are induced by payments to
accept exclusivity, and that therefore the price-cost test should apply. But, even if the
distributors’ motivation for agreeing to exclusivity were the determinative factor, the rule
of reason would still be appropriately applied here. What appeals to distributors is not
Defendants’ low price vis-à-vis generics (Defendants’ prices are higher), but that
In Concord Boat Corp. v. Brunswick Corp., 207 F.3d 1039 (8th Cir. 2000), the court
did not apply the price-cost test for either claim. Instead, for one claim the court found it
significant that the discounts at issue left prices above cost, but did not rely on that fact
alone, and applied the rule of reason. Id. at 1060–63. Corteva’s citation to Virgin Atlantic
Airways Ltd. v. British Airways PLC, is even more unavailing because there the plaintiffs
actually brought a predatory pricing claim. 257 F.3d 256, 259 (2d Cir. 2001).
272
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Defendants have designed and implemented a scheme that encourages all participating
distributors to retain profits.
In addition to providing an incomplete picture of the incentives at play, this
approach leads to senseless results. For example, if Defendants offered payments (bribes)
to a distributor in return for that distributor setting fire to the factory operated by a
generic manufacturer, the Defendants could not escape liability (in antitrust or arson) by
claiming that the bribe was a “price cut,” and the net price of their pesticides after netting
out the bribes was “above cost.” Similarly, Defendants cannot escape liability for
exclusivity arrangements secured by payments simply by claiming that their prices net of
the payments are “above cost.”
2.
The Evidence Establishes that Price Is Not the Predominant
Mechanism of Exclusion
The factual record clearly refutes Defendants’ claims (in the case of Syngenta) that
its “payments to distributors and retailers” are “nothing more than price reductions” that
lead to “price-based ‘exclusion’” of competitors that cannot sell at that same low price
(Syn. Br. at 38–39) and (in the case of Corteva) that “Corteva has been forced to lower its
prices—via loyalty rebates—as the mechanism to win sales from branded and generic
manufacturers.” Cor. Br. at 65. Defendants’ loyalty programs do not use low prices to
out-compete higher-priced rivals; rather, they put in place a contractual mechanism that
excludes the lower-priced competition that would ordinarily follow patent expiration and
the unimpeded entry and expansion of generic manufacturers. As in Duke Energy,
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Defendants have "designed" their loyalty programs "to cut out a more efficient
competitor at consumers' expense." Duke Energy, 111 F.4th at 360.
a.
Defendants' Exclusion of Generics Is Not Achieved By
Offering Lower Prices
Low prices are not a mechanism of exclusion at all under Defendants' loyalty
programs-much less the predominant one-because Defendants are not pricing below
the generic competition they seek to exclude.273 Defendants admit that they intentionally
price their products higher than generics.274 As Syngenta's Head of Key Account
Management testified, it
_211 For
273 See infra Section IV.E.2.a. (collecting evidence that for each AI, Defendants price at a
premium to generic equivalents).
274 See Ex. 16 (Gesse (Syngenta)) at 68:9-19; Ex. 50 (Weikel (Syngenta)) at 133: 16-
134:12, 213 :20-2 14: 13; Ex. 17 Leifker Corteva at 61:2-11 , 19 1:7-14.; Ex. 224 (Lewis
~
7:19-1 68:20
).
275 Ex. 83 (Langkamp (Syngenta)) at 419:2-20.
; Ex. 3 (Fowler (CNI)) at 53:3-54:25.
277 See infra Section IV.E.2.a.ii.
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example, for both rimsulfuron and oxamyl Corteva charges a
”278
Moreover, Defendants’ internal documents and distributor communications
confirm that their loyalty programs are price-raising schemes that rely on distributor
exclusivity—not low prices—to impede market entry and expansion by generic
manufacturers. Syngenta admits its loyalty program
279
is not a
It
280
, Syngenta teaches distributors that its loyalty
Consistent with that
program helps avoid price-based competition from generics to keep prices high. In
Syngenta’s words, competition leading to declining consumer prices threatens
I
281
To
, Syngenta works with
distributors to
282
telling its distributors,
283
They
through Syngenta’s loyalty
278
See infra Section IV.E.2.a.ii; Ex. 290 at -372–73.
279
Ex. 91 (Cecil (Syngenta)) at 156:4–9.
280
Ex. 91 (Cecil (Syngenta)) at 155:19–156:9.
281
Ex. 37 at slide 5.
282
Ex. 126 at slide 6.
283
Ex. 126 at slide 5.
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program that induces the distribution channel to forgo purchases of lower-priced generic
products.284
Corteva recognizes the same price-raising effect. It understands that
285
Although it
tells this Court that its loyalty programs reflect “robust price competition,” Cor. Br. at 65,
its business-planning documents confirm that its
286
slow the
To
that accompanies loss of patent
protection and generic entry, Corteva tells its distributors to
287
In both cases, it is generic competition, not the Defendant, that threatens to drive
prices down. Defendants structure their loyalty programs to thwart that competitive
process.
For these reasons, this is completely unlike Matsushita, which Syngenta cites to argue
that its price-raising efforts are “‘the very essence of competition.’” Syn. Br. at 38
(quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 594 (1986)).
Matsushita did not address share-based loyalty arrangements, but rather allegations of a
conspiracy among 21 electronics manufacturers to “price below-market levels.”
Matsushita, 475 U.S. at 597 (emphasis added).
284
285
Ex. 111 at -007; see also Ex. 236 at -906.
286
Ex. 117 at CX1361-012.
287
Ex. 237 at -975.
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b.
The Loyalty Programs Have Structural Non-Price
Mechanisms of Exclusion
i.
The share condition excludes generic products
Each Defendant’s loyalty program conditions receipt of large, end-of-year, lumpsum payments on distributors meeting an AI-based share requirement nearing 100%.288
This share condition is an exclusionary non-price term. Had Defendants simply lowered
their per-unit prices by the pro rata amount of the loyalty payment, with no share
condition attached, the price-cost test would apply and the price cut (unless below cost)
would be a welcome competitive response to generic entry. With the share condition
attached, however, the programs keep out lower-priced generics and prevent prices from
falling to the competitive level.289 And the high thresholds combine with inherent
program complexity and market unpredictability (distributors cannot predict how much
they will sell later in the year) to often dissuade distributors from selling any generic
product at all, lest lower-than-predicted branded sales cause them to miss the threshold.
As Corteva explained when discussing its program:
290
As described in Section II.F,
distributors say that they turn down generic business to meet loyalty thresholds, and
288
See supra Section II.D.2.
289
See supra Section II.F.
290
Ex. 114 at -310.
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acknowledge that without the programs’ share requirements, they would buy and sell
substantially more generic product.
ii.
The at-risk loyalty payment is calculated across
purchases and across AIs
Defendants assess a distributor’s compliance with the loyalty program at the end
of the year. If a distributor purchases too much generic product it risks forfeiting millions
of dollars in loyalty payments, calculated as a percentage of all purchases of products
containing the relevant AI (many of which contain other AIs as well), over all purchases
in the entire year.291 The at-risk loyalty payments are thus multiplied across products and
over time, and their resulting size incentivizes distributors to comply with the loyalty
thresholds.292
Further, as this Court has recognized and as addressed further in Sections
IV.C.3.c.–d. below, these incentives are magnified even further in the case of Corteva,
which conditions payments on compliance across multiple years, and conditions
payments as to one AI on loyalty compliance as to others.293
iii.
The loyalty programs share supracompetitive
profits with distributors, at growers’ expense
Both Defendants’ documents confirm that the design of their programs—including
the end-of-year timing, complexity, and uncertainty, together with jawboning by
291
See supra Section II.D.2.; see also Ex. 1 § 4.4.2.
292
See supra Section II.D.2.b.–d.; see also Ex. 1 ¶¶ 336–39.
293
See supra Section II.D.2.d.
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Defendants-discourages complete pass-through of loyalty payments to growers. The
loyalty programs enable Defendants to share their inflated profits with distributors at the
expense of growers downstream. Cf Duke Energy, 111 F . 4th at 358 (offer was designed
to shift cost of payment to downstream customers). Section II.D.2.c. above recounts the
evidence that Corteva and Syngenta understand the loyalty program stru cture to be a
means of compensating distribution for excluding generics and maintaining high prices.
Corteva calls this "sticky money.''294 The loyalty payments stick at the distributor
(i.e. , they are not passed on to frumers). And as Corteva President of Global Protection
Susanne Wasson testified, distributors
295 Syngenta too views its loyalty
program as a way to deliver profit to distributors, not lower prices to growers,296 and
acknowledges that its pricing str·ategy succeeds because distributors retain significant
portions of the loyalty payments as profits.297 As Syngenta's head of marketing testified
regru·ding Syngenta's program payments,
294 Ex. 122 at -390.
295 Ex. 128 at 239:19- 240:25 (emphasis added).
291
Ex. 91 (Cecil (Syngenta)) at 87:23- 88: 11.
298 Ex. 256 at CX2029-030-31 (J. Cecil
WillowoodDeposition at 109:24-110:7).
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Defendants cannot substantively dispute that their loyalty programs maintain high
prices by sharing monopoly profits with distributors. Instead, they respond in two ways.
First, Syngenta resorts to an ad hominem attack on Professor Hemphill—who explains
this economic reality in his expert report—by branding him as being on a “crusade.” Syn.
Br. at 41 (citing Hemphill’s academic work as evidence of that “crusade”). That
Professor Hemphill’s expert opinions are consistent with his article published in the Yale
Law Journal does not change the fact that Defendants shared their monopoly profits with
distributors as part of an “inducement to secure the distributors’ acceptance” of these
loyalty programs.299
Second, Syngenta insists that Plaintiffs cannot argue both that distributors are
“coerced” to participate in the loyalty programs through non-price mechanisms and that
they are “complicit in sharing purported monopoly profits.” Syn. Br. at 41. Yet those two
things are plainly compatible, just as they were in ZF Meritor. A scheme that transfers
monopoly rents to distributors reduces the level of coercion necessary to secure their
participation. Distributors are more willing to buy Defendants’ expensive products––and
disappoint customers that would prefer the lower-priced generics––because agreeing to
those higher prices earns a share of Defendants’ higher margin. The coercive aspects of
Defendants’ loyalty programs provide a stick when that carrot is not enough.
299
Ex. 1 ¶ 50.
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The structural features of Defendants’ programs—further detailed in Section
II.D.2, above, and in the reports of Plaintiffs’ expert Professor C. Scott Hemphill,300 are
entirely different from a “lower price” offer that would merit the price-cost test. The
loyalty payments amount to paying off the entire distribution channel with a share of
monopoly profits in exchange for the broad exclusion of low-priced generics, maintaining
high prices to growers.
3.
Each of the Five Non-Price Mechanisms of Exclusion Identified
by the Court at the Pleading Stage Is Amply Supported by the
Record
In denying Defendants’ motion to dismiss, this Court identified five “non-price
mechanisms of exclusion” that “foreclose application of the price-cost test.” Doc. 160 at
49. In addition to (and overlapping with) the structural non-price mechanisms described
above, each of these mechanisms is present and fully supported by the summary
judgment record. A reasonable factfinder could determine that (1) the “loyalty programs
leverage the Defendants’ monopolist status and the market’s substantial barriers to entry
to exclude competition for the AIs,” (2) Defendants have threatened to—and actually
have—cut off supply when distributors fail to meet loyalty thresholds, (3) there is a
“longer-term effect” created by renewals, threats of retaliation, and deferred payments,
(4) Corteva’s program has some features akin to bundling that exacerbate its exclusionary
effect, and (5) the Syngenta-Corteva supply agreements for mesotrione and metolachlor
300
Ex. 1 § 4.6; Ex. 235 § 4.2.
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“enhance[] the exclusive effect of the loyalty programs.” Doc. 160 at 49–51. This
additional evidence further establishes that a reasonable factfinder could conclude that
price is not the predominant mechanism of exclusion such that the rule of reason applies.
a.
Defendants’ Loyalty Programs Extend and Increase
Significant Barriers to Entry and Expansion
In its motion-to-dismiss decision, this Court noted that loyalty programs can
“aggravat[e] existing barriers to enter the market,” that foreclosing the market in that way
is a non-price mechanism of exclusion, and that Plaintiffs adequately alleged that
Defendants’ loyalty programs “exacerbate[] the already high costs to enter the market by
locking up access to the most efficient channel of distribution.” Doc. 160 at 48–50.
Defendants say that undisputed evidence disproves that allegation. Syn. Br. at 59–60;
Cor. Br. at 83. Defendants’ own documents show the opposite. There is more than
enough evidence for a reasonable factfinder to conclude that each Defendants’ loyalty
program exacerbates—in duration and extent—the existing barriers to generic entry into
the relevant AI markets.
i.
The significant existing barriers to entry
A barrier to entry is “[a]ny market condition that makes entry more costly or timeconsuming and thus reduces the effectiveness of potential competition as a constraint on
the pricing behavior of the dominant firm.” FTC v. Surescripts, LLC, 665 F. Supp. 3d 14,
44 (D.D.C. 2023) (internal quotations and citations omitted); United States v. Google,
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778 F. Supp. 3d 797, 850 (E.D. Va. 2025) [“Google Ads”]. In the U.S. crop protection
industry, these barriers are “high.”301
The first barriers are legal. For the initial period of an AI product life cycle,
Defendants enjoy grants of exclusivity under patent and environmental laws.302 Generics
arrive on the scene “post-patent,” facing an incumbent monopolist with established
brands, registrations, knowhow, and relationships.303
Next are capital and technical barriers to entry. Generic manufacturers must source
the technical AI, typically from abroad;304 spend millions to secure manufacturing and
logistical capabilities to overcome incumbents’ supply chain “cost [] advantage;”305 and
expend resources to formulate the finished product.306
Next are regulatory barriers. A generic manufacturer must register both the
technical AI and the final product with the EPA. The former is a months-long process
that requires detailed chemical analysis and sampling.307 The latter generally requires
301
Ex. 241 at CX5114-103.
302
See supra Section II.A.
303
See supra Sections II.C., II.D.
304
Ex. 1 ¶ 243.
305
Ex. 242 at -759
).
Ex. 243 at -931 (the crop protection industry’s concentration is due in part to the “high
R&D spend” requirement); Ex. 1 ¶ 242.
306
307
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obtaining studies from the basic manufacturer that demonstrate the product’s safety and
efficacy.308
FIFRA is designed to ease these regulatory burdens by giving a generic
manufacturer the option to pay the basic manufacturer for the right to use its regulatory
data rather than bearing the greater expense of compiling the data itself. 7 U.S.C.
§ 136a(c)(1)(F)(iii).309 But even this somewhat reduced cost is still a significant “barrier[]
to entry.”310 So much so that, in other litigation, Syngenta’s experts opined that data
exclusivity creates a significant barrier to entry. See Syngenta Crop Prot., LLC v.
Willowood Azoxystrobin, LLC, 267 F. Supp. 3d 649, 656 (M.D.N.C. 2017) (“Syngenta’s
data exclusivity for mesotrione [and azoxystrobin] created similar barriers against
generics entering both markets”). Basic manufacturers regularly demand seven-figure
sums and can drag the process out
311
Some generics “decide the
investment is too rich and get out.”312
If generic manufacturers vault the legal, capital, technical, and regulatory hurdles,
they must still gain sufficient access to the concentrated traditional channel to justify the
Ex. 244 (Vance Dep. (Albaugh)) at 442:9–19 (“[T]o go generate all that data yourself
is way more expensive . . . .”).
308
Ex. 245 at slide 16 (describing a congressional objective behind FIFRA’s data use
provisions as being to “[f]oster competition by reducing barriers to entry”).
309
310
Ex. 66 at -224–25
).
Ex. 246 at -195 (“Where do we stand on the data compensation discussion? Is there
anything we can do here to create a delay?”); Ex. 26 at CX2835–024 (
).
311
312
Ex. 247 at -408.
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costs incurred. See McWane, F.3d at 823–24 (finding that limited access to major
distributors in the pipe fittings market was an important barrier because if a new entrant
was “unable to attract distributors, [it] was prevented from generating the revenue needed
to [grow] into a rival that could challenge McWane's monopoly power”); United States v.
Black & Decker Mfg. Co., 430 F. Supp. 729, 751–52 (D. Md. 1976) (“The ability to
obtain marketing outlets . . . constituted an entry barrier.”); United States v. Google LLC,
747 F. Supp. 3d 1, 120 (D.D.C. 2024) [“Google Search”] (crediting Google’s control
over the most efficient distribution channel as an important entry barrier). Without the
traditional channel, generics cannot sell enough volume to make entry worthwhile.313 To
use Syngenta’s words, a
314
ii.
Exclusion from the traditional distribution channel
exacerbates barriers to entry and imposes barriers
to expansion
Defendants’ loyalty programs exacerbate already formidable barriers. Courts have
recognized that an incumbent monopolist can use exclusive dealing contracts to slow
entry and expansion by rivals.
A set of strategically planned exclusive-dealing contracts may
slow the rival’s expansion by requiring it to develop
alternative outlets for its product, or rely at least temporarily
on inferior or more expensive outlets. Consumer injury results
from the delay that the dominant firm imposes on the smaller
rival’s growth.
Ex. 92 (Vance (Albaugh)) at 148:14–149:19 (“I think we would go bankrupt” without
the channel.).
313
314
Ex. 33 at -357.
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Mc Wane, 783 F.3d at 832 (quoting Areeda & Hovenkamp, ,i 1802c (1996)); see also ZF
Meritor, 696 F.3d at 270 (same). Defendants' loyalty programs do just this. They
exacerbate the already formidable barriers-and thwart FIFRA's objective of lowering
baniers-by curtailing generic access to the most efficient path to market.
As C01teva puts it,
315 Similarly, Syngenta's high AI thresholds permit distributors to
sell generic without
-
so that distributors
As Syngenta was first developing its loyalty program, it calculated
. 317 Syngenta
. 318 The point is the same for both companies: the traditional sales channel is
315 Ex. 66 at -225; see also Ex. 248 at-559 (discussing plan to hold distributors
"to ■%
loyalty" to "block generic entrants").
316 Ex. 249 at -448· Ex. 208 at -818
; Ex. 32 (Ripato (Syngenta)) at 166:18-168:8
( describing same) .
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an essential path to market and their loyalty programs close off so much of the space as to
render entry and expansion at least uninviting, if not uneconomic, to competitors.
These efforts are successful. As detailed in Section IV.E.1., Defendants’ loyalty
programs foreclose generics from substantial portions of the AI markets—markets that
the capital, technical, regulatory and legal barriers make already difficult to enter. See ZF
Meritor, 696 F.3d at 284 (applying rule of reason where “no significant external supplier
ha[d] entered into the market”). That Syngenta asserts the opposite in its motion (Syn. Br.
at 59) does not undo the admissions in its documents, nor carry its summary judgment
burden to show no material issue of disputed fact.
iii.
Limited generic entry is consistent with high
barriers to entry and expansion
Defendants’ argument that significant barriers cannot exist because some generics
have entered the market “misses the point.” Microsoft, 253 F.3d at 55. “That some” entry
has occurred “is not at all inconsistent with the finding that” the market’s “barriers to
entry discourage[] many from” doing so. Id.; see also Rebel Oil Co., Inc., v. Atlantic
Richfield Co., 51 F.3d 1421, 1440–41 (9th Cir. 1995) (“The fact that entry has occurred
does not necessarily preclude the existence of ‘significant’ entry barriers . . . . Barriers
may still be ‘significant’ if the market is unable to correct itself despite the entry of small
rivals.”); McWane, 783 F.3d at 831–32 (collecting cases). Competitors had entered the
markets in ZF Meritor, McWane, and In re Superscripts, and those courts still determined
that the defendants’ anticompetitive schemes aggravated natural barriers to entry. ZF
Meritor, 696 F.3d at 284–85; McWane, 783 F.3d at 831–32; In re Surescripts, 608 F.
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Supp. 3d at 636, 645-46. Indeed, in other cases, Syngenta has recognized meaningful
baniers to entry in these same mai-kets, despite some generic entry. Willowood, 267 F.
Supp. 3d at 656.
Even for those generic manufacturers that do enter, Defendants' loyalty programs
impose barriers to their expansion, thereby preventing the market from becoming fully
competitive. See Rebel Oil, 51 F.3d at 1441 ("Competitors may not be able to increase
output if there are baniers to expansion."). Syngenta's expert acknowledges that market
power may be protected by barriers to expansion, including insufficient access to
effective distribution.319 A former Syngenta employee-one of the "ai-chitects" of
Syngenta's loyalty program
- 3 0%and40%
■. 320 He further testified that, absent loyalty programs, this generic expansion and
resulting price competition would come to pass. 321
Defendants' cases neither hold that entry disproves the existence of entry barriers
nor bear on which legal standard applies here. Defendants' cases determined that
competitive entry indicated a defendant (1) lacked circumstantial mai-ket power or market
Ex. 250 (Orszag (Syngenta Expert)) at 285:25-287:12 (market power can be protected
by barriers to expansion, as distinct from baniers to entry, and access to distribution can
be one such banier to expansion).
319
320
Ex. 32 (Ripato (Syngenta)) at 90:20-91:22, 183: 11-20.
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power sufficient to establish attempted monopolization, see, e.g., Reynolds Tobacco Co.
v. Philip Morris Inc., 199 F. Supp. 2d 362, 394 (M.D.N.C. 2002);322 or (2) did not
substantially foreclose the market, see, e.g., Eisai, Inc. v. Sanofi Aventis U.S., LLC, 821
F.3d 394, 403 (3d Cir. 2016) (“[T]he test is not total foreclosure.”).323 The market power
cases are irrelevant because Defendants do not (and could not) dispute that there is
substantial evidence that they have market power in the six AI markets. See, e.g.,
Reynolds Tobacco, 199 F. Supp. 2d at 394 (70% market share “is usually ‘strong
evidence’ of monopoly power”). The foreclosure cases are irrelevant because evidence
establishes that Defendants’ loyalty programs have substantially foreclosed the at-issue
markets, see Section IV.E.1.
Barr Labs., Inc. v. Abbott Labs., 978 F.2d 98, 114 (3d Cir. 1992) (affirming grant of
summary judgment to defendant on attempted monopolization claim where defendant had
50% market share and the number of competitors increased in relevant years); Int’l
Distribution Centers, Inc. v. Walsh Trucking Co., 812 F.2d 786, 792 (2d Cir. 1987)
(reversing denial of defendant’s motion for judgment notwithstanding the verdict on
attempted monopolization claim for similar reasons); DeSoto Cab Co., Inc. v. Uber
Techs., Inc., 2020 WL 10575294, at *4-5 (N.D. Cal. Mar. 25, 2020) (determining
plaintiff failed to plead market power where the complaint “contain[ed] no allegations
that existing competitors in the market, for which they are several, are unable to expand
their output or offerings to challenge Uber’s market behavior”).
322
Concord Boat, 207 F.3d at 1059 (reversing denial of defendant’s motion for judgment
as a matter of law where plaintiffs “presented scant evidence that firms have difficulty
entering the stern drive engine manufacturing market” and Toyota had been able to not
only “enter[] the market” but “was on its way to competing with established
manufacturers”).
323
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b.
Distributors Are Also Incentivized to Comply with
Loyalty Programs Because They Fear Loss of Supply
i.
Distributors fear loss of supply if they are
noncompliant
The evidence fully supports a finding that Defendants have threatened to and in
fact have cut off supply to distributors that fail to meet loyalty thresholds, and that the
potential for such retaliation influences distributors’ purchasing decisions. Defendants
gloss over this issue, with Syngenta telling only part of the Pinnacle story, Syn. Br. at 51–
53, and Corteva insisting there is no “non-price consequence” for breaking loyalty, Cor.
Br. at 67. Their arguments, at most, raise disputed issues of fact for trial.
Syngenta’s punishment of Pinnacle shows that the consequences of breaking
loyalty can go beyond the loss of that year’s payment. When Pinnacle missed its loyalty
obligations in 2016 and 2017, Syngenta terminated Pinnacle’s distribution contract and
stopped selling its products to Pinnacle.324 Both Syngenta and Corteva similarly retaliated
against IAP, a buying group for independent retailers, for failing to follow their
respective loyalty programs.325 Corteva also threatened Gar Bennett, a California
distributor and retailer, and others for lack of loyalty, threatening, for example, to end the
benefits of Corteva’s “partnership,” including “product allocations” and “equal access to
new products,” if the distributor did not “stay loyal to branded products.”326
324
See supra Section II.D.2.e.
325
See supra Section II.D.2.e.
326
Ex. 176 at -591; supra Section II.D.2.e.
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Corteva also considers compliance with AI loyalty thresholds when allocating
supply. Corteva’s Nate Feauto testified that Corteva considers compliance with AI
thresholds as
.327 As an internal Corteva presentation explains:
328
Corteva
has put that ethos into practice, limiting distributors’ supply of crop protection products
Intrepid and Intrepid Edge based on generic support.329
It does not take more than a few public examples to discipline a concentrated
industry like crop protection distribution, particularly for distributors that rely heavily on
access to maintain their businesses. See Doc. 160 at 50 (even “limited instances” of
follow-though on threats can support the inference that “threats to restrict supply are
effective deterrence against non-compliance”). There are examples of that influence
throughout the record, as described in Section II.D.2.e. above.
At summary judgment, where all reasonable inferences must be drawn in the
Plaintiffs’ favor, these examples of actual punishment and its chilling effect evidence an
additional non-price mechanism of exclusion.
327
Ex. 181 (Feauto (Corteva)) at 397:7–25.
328
Ex. 303 at slide 18.
329
Ex. 168 at -235.
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ii.
Distributors fear loss of profitable "private-label"
opportunities if they are noncompliant
Each Defendant commonly allows loyal distributors to sell their own "privatelabel" products containing its name-brand Als. Those products are generally priced just
below the branded product, but well above the generic. 330 Yet distributors maintain high
profit margins because Defendants charge distributors less for private-label products
compared to branded products. 331 Indeed, distributor margins are high enough that
Defendants view them as "channel profit opportunities." 332
Not all distributors get the opportunity to sell these high-margin products. Access
is contingent on loyalty. Syngenta offers private-label opportunities as
or
333 It uses these _
as a
-
and an
334 Syngenta told distributor Nutrien that p1ivate labels are
to.
330 See Ex. 4 (Cole (Tenkoz)) at 193:25-194:24; Ex. 188 at CX2474-019 (comparing
prices ofTenkoz S-MOC Private Label Brawl ($39) against generic S-metolachlor prices
of $31).
331 Ex. 32 (Ripato (Tenkoz)) at 62:<:K>3:23 (private-label products have "a better cost
position, and that allows them to make more money").
332 See Ex. 189 at -610· Ex. 190 at slide 7· Ex. 191 at CX2353-020 (private labels are
• Ex. 193 at slide 4
~laining that private labels
1111).
333 Ex. 34 at CX2 l 00-064; see also Ex. 194 at slide 16.
33 4 Ex. 191 at CX2353-20; Ex. 196 at -133.
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-
distributors.335 Corteva documents likewise emphasize the value of private
labels to
336
Distributors recognize that conditionality and act accordingly. Former Tenkoz
(and before that Syngenta) executive Mark Ripato testified that, “if we fight with a
branded company on the stuff that is really important to them . . . in late life cycle
products,” “it means that we just are not going to be able to put programs [or] private
labels or other types [of] mechanisms for us to make money in place.”337 For example,
.338 That consideration is an added reason why distributors comply
with loyalty thresholds.
c.
Threats and Deferred Payments Have Long-Term Effects
Defendants’ agreements have long-term effects because they are tethered to
product availability, because they are kept in place and adhered to year after year, and
because, in Corteva’s case, they include terms that defer payments into subsequent years.
Defendants’ linking of product supply to loyalty extends the programs’ effect
beyond any contract duration. As discussed above in Sections II.D.2.e.–f., distributors
335
Ex. 192 at slide 2.
336
Ex. 197 at CX5117-005–006.
337
Ex. 32 at 42:8–21.
338
Ex. 195 at -769.
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face potential loss of supply, and loss of private-label opportunities, if they do not remain
loyal. And if one distributor endures such a loss, it sets a lasting example for the others.
For example, as late as 2018, distributor Tenkoz viewed IAP’s loss of distribution
contracts years earlier (around 2010) as a cautionary tale.339
.340 In both cases, a long past example of the
consequences of disloyalty was cited as a reason for other distributors to remain loyal.
Taken on their own terms, the loyalty programs encourage long-term adherence.
As discussed in Section IV.E.1.b.iv below, even nominally short-term or “at-will”
exclusive arrangements can accomplish the anticompetitive effects of long-term
exclusive contracts, and the record establishes that Defendants’ loyalty programs result in
long-term foreclosure of generic rivals. Both the Third Circuit (in Dentsply) and the
Eleventh Circuit (in McWane) have recognized that under exclusivity deals, “in spite of
the legal ease with which the relationship can be terminated, the [distributors] have a
strong economic incentive to continue [buying defendant’s product].” McWane, 783 F.3d
at 834 (quoting United States v. Dentsply Intern. Inc., 399 F.3d 181, 193–94 (3d Cir.
2005)).
The record shows that the incentives for distributor compliance provided by the
loyalty programs do not materially change over time, and distributors meet loyalty
339
Ex. 184 at -391; see also supra Section II.D.2.e.
340
Ex. 3 (Fowler (CNI)) at 64:24–66:25; see also supra Section II.D.2.e.
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thresholds year after year, with only occasional exceptions.341 And Corteva’s program
layers on additional features that further incentivize distributors to continue adhering to
loyalty thresholds year after year. By deferring portions of its loyalty payments into
future years and making payment contingent on future loyalty compliance, Corteva locks
distributors into a cycle of compliance, using retained payments to force compliance with
future loyalty obligations.342
d.
Corteva’s Program Shares Features with Bundling
The large amounts at risk under each Defendant’s program if a distributor breaks
loyalty are multiplied further in the case of Corteva, because Corteva
-
Doc 160 at 51.343
Those facts are borne out in the factual record.344 As described in Section II.D.2.d.
above, Corteva recognizes that its bundling approach increases the incentive for
345
distributors to comply with loyalty and
and Corteva
regularly reminds distributors of these increased stakes.
341
Ex. 1 Figs. 26–27; see also infra Section IV.E.1.b.iv.
342
Supra Section II.D.2.d.
343
See supra Section II.D.2.d.
344
See supra Section II.D.2.d.
345
Ex. 154 at -261.
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Corteva insists that this conduct should not be judged under the rule of reason
because “the mechanism used to lower prices does not matter so long as the result is
lower (above-cost) prices.” Cor. Br. at 70 (Corteva’s emphasis). That argument fails
because Corteva uses its loyalty payments to maintain high prices above those that would
prevail without them. See supra Section IV.C.2.a.; infra Section IV.E.2.
Corteva next argues that, even if the bundling keeps prices high, Plaintiffs still
must demonstrate “that it is the ‘predominant’ exclusionary mechanism.” Cor. Br. at 70–
71 (Corteva’s emphasis) (quoting ZF Meritor, 696 F.3d at 275). That gets the test
backwards. The rule-of-reason applies unless “price is the clearly predominant
mechanism of exclusion.” ZF Meritor, 696 F.3d at 275; In re Suboxone, 622 F. Supp. 3d
at 65 (“Where, however, price is not clearly the predominant mechanism of exclusion, the
price-cost test does not apply.”). The bundled nature of Corteva’s Corporate Offer need
not be the predominant exclusionary mechanism for the rule of reason to apply; it need
only be one factor among many showing that price is not the predominant exclusionary
mechanism.
Finally, Corteva argues (Cor. Br. at 71–73) that its bundling cannot matter because
bundled discounts violate the antitrust laws only when “the bundled rebates excluded
rivals from the market because rivals are not able to supply all the products in the
bundle.” (Corteva’s emphasis). That misses the point. Plaintiffs do not allege that
Corteva’s bundling, standing alone, violates the antitrust laws. The allegation (and
evidence) here is that these bundling features of Corteva’s program, and the similar, less
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extreme features of Syngenta’s program (see supra Section II.D.2.d.), heighten the
consequences of breaking loyalty and therefore exacerbate the exclusionary effect of the
loyalty programs.
e.
Syngenta and Corteva’s Exclusive Supply Agreements
Enhance the Exclusionary Effect
Exclusive supply agreements between Syngenta and Corteva also enhance the
exclusionary effect of Defendants’ loyalty programs. It is undisputed that Corteva and
Syngenta have agreements for mesotrione and metolachlor that allow Corteva to
manufacture products using those AIs, and that Syngenta’s loyalty program does not
penalize distributor sales of the resulting Corteva products.346 This enhances the
exclusionary effect of Defendants’ loyalty programs by further limiting the available
paths to market for generic manufacturers.
The history of Defendants’ mesotrione agreement illustrates both the foreclosure
effect of Defendants’ loyalty programs and the price-raising consequences of that
foreclosure. After Syngenta’s mesotrione patent expired, Corteva developed a pesticide
product (Resicore) containing mesotrione.347 Syngenta saw this as a
346
See supra Section II.E.
347
See supra Section II.E.
-
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Syngenta leveraged its loyalty program to avoid that generic-fueled price war and
keep prices high.
350 Defendants ultimately agreed that the
" 351 The result is straightforward: Corteva's Resicore costs growers significantly
-
more than it would absent loyalty, and generic manufacturers lose another piece of the
market.
Corteva suggests that these agreements "expand the variety and volume of
competing products that are not subject to the allegedly 'exclusionary effect of Key AI
thresholds."' Cor. Br. at 61. But the exact opposite is true. Syngenta recognized ■
348 See supra Section II.E.
349 See supra Section II.E.
350 See supra n.210 & text.
351 Ex. 151 at-835.
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.352 Rather than engage in price competition, however, Syngenta
and Corteva agreed to protect Syngenta’s monopoly prices for mesotrione by including
Corteva’s products in Syngenta’s loyalty program. As Corteva’s executives
acknowledged in internal communications, these agreements show that Corteva and
Syngenta
and that Corteva is
353
The result of
that collaboration: Syngenta continues to charge supracompetitive prices for mesotrione;
Corteva incorporates those high prices into its mesotrione products; and Defendants use
Syngenta’s loyalty program to pass those higher prices on to growers.
In sum, Defendants’ efforts to invoke the price-cost test should fail as a matter of
law both on the basis of the nature of the challenged programs and Plaintiffs’ claims, and
in light of the summary judgment record. The rule of reason is the appropriate vehicle for
evaluation of Defendants’ loyalty programs.
D.
Disputed Fact Issues Preclude Summary Judgment on the Relevant
Product Markets
“Market definition is a question of fact.” Doc. 160 at 25; see also FTC v. Tapestry,
Inc., 755 F. Supp. 3d 386, 415 (S.D.N.Y. 2024). Here, Defendants introduce factual
disputes about the existence of broad markets, quibble about market definition analysis
offered by Plaintiffs’ expert, and misrepresent their own strategies and documents
352
See supra Section II.E.
353
Ex. 204 at -233.
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supporting Plaintiffs’ single-AI markets. None of this establishes, as Defendants must to
obtain summary judgment, that there is not “sufficient evidence on which a trier of fact
could adopt plaintiff[s’] market definition.” Meredith Corp. v. Sesac, LLC, 1 F. Supp. 3d
180, 219 (S.D.N.Y. 201
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