Company not at fault for lost bull semen, cow embryos, 4th Circuit says

A cattle farmer’s claim that he lost millions of dollars because a Wisconsin genetics company that specializes in in-vitro fertilization and genetic manipulation of prize cattle didn’t keep life-saving nitrogen in the tanks that preserved his bull semen and cow embryos is without merit, the 4th U.S. Circuit Court of Appeals has ruled.

Dexter Edwards, owner of Edwards Land and Cattle in Duplin County, had kept “elite” semen from prize bulls and embryos from prize cows in tanks filled with nitrogen provided by Genex for 15 years, according to the June 19 ruling. During the first few years, Edwards and Genex did business without a contract, but in 2004 they entered into a written agreement which said that Genex would refill his tanks with liquid nitrogen every three months. 

In September 2015, Genex informed Edwards that it would no longer be providing liquid nitrogen services in his area and thus would not be filling his tanks again. Its letter said that the tank had last been serviced on Aug. 31 in order to allow Edwards time to find a new provider.

But in October, Edwards discovered that four of the seven tanks were completely empty and the others were extremely low. After he was unable to get into touch with Genex, another provider filled the tanks, but four of the seven suffered losses after the semen and embryos thawed and spoiled. Edwards sued Genex, alleging breach of contract. He claimed that the company did not fill the tanks in August and did not give him the required 60 days’ notice that it would no longer fill the tanks.

An udder failure 

A U.S. District Court granted summary judgment for Genex, saying that Edwards had failed to raise a genuine issue of material fact as to whether Genex had breached the contract, which stated that it was Edwards’ responsibility, not Genex’s, to make sure the tanks were full–and stickers that a representative from Genex placed on the tanks said as much. 

 “The contract between them required that Mr. Edwards take regular measures to check on the level of coolant, and he did not do that from June until October,” said Matt Little of Teague, Campbell, Dennis and Gorham in Raleigh, who represented Genex along with Becky Thornton of the same firm.

In its ruling affirming the decision, the 4th Circuit said that hanging tags on the tanks showed the last date that the tanks were filled, and Edwards conceded that he did not check the hanging tag with any regularity, because there had not been any issues with nitrogen levels in the past. Moreover, even if Genex mistakenly said that it filled the tanks on Aug. 31, Edwards could have learned that the tank had not been filled then by simply lifting the tanks to check their weight, as the agreements required.

“Given that the tanks were to be refilled approximately every twelve weeks, the tanks would have been half of the expected weight of a freshly refilled tank on Aug. 31,” according to the ruling. “If Edwards had lifted the tank on or after Aug. 31, the difference in weight would have been appreciable and would have clearly indicated that the Aug. 31 fill date could not be accurate.”

The ruling also notes that the agreements between Edwards and Genex expressly waived Genex’s liability for consequential damages.

“They each include an ‘Embryo Storage Policy’ providing that ‘Genex will not accept responsibility or liability for embryos or any other frozen biologic products,’” the ruling says.

Ken Thompson of Warsaw represented Edwards. He could not be reached for comment. 

 Follow Bill Cresenzo on Twitter @bcresenzonclw