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Contracts Keyed to Kuney
Monsanto Co. v. McFarling
Facts
Homan McFarling (defendant) acquired 1,000 packs of soybean seed that contained genetic-modification technology licensed by the Monsanto Company (Monsanto) (plaintiff). Under an agreement with Monsanto, McFarling concurred not to save any seed for replanting or supply spared seed to any third party. Under the agreement, if McFarling spared, provided, sold, or obtained seed in violation of the agreement, then the liquidated damages would be based on 120 times the applicable fee, which was $6.50 per 50-pound sack of seed. McFarling spared and replanted 1,500 bushels of seed from his 1998 crop and 3,075 bushels of seed from his 1999 crop. Monsanto sued McFarling for breach of agreement. Monsanto recognized that whether a producer spares seed for himself or transfers seed to other cultivators fundamentally impacts the harm caused by Monsanto. The district court allowed summary judgment to support Monsanto and entered a judgment for $780,000, representing 120 times the $6.50 charge for each of the 1,000 sacks of seed that McFarling at first acquired from Monsanto. McFarling appealed.
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