Progressive’s Ray Grabanski gets aggressive in new endeavor
FARGO, N.D. -- Ray Grabanski might already be your crop marketing guru or your crop insurance agent. Now, he wants to be your ag lawyer, and in his quest to do so, he has run afoul of other lawyers, a massive national trade show and even Agweek i...
FARGO, N.D. - Ray Grabanski might already be your crop marketing guru or your crop insurance agent. Now, he wants to be your ag lawyer, and in his quest to do so, he has run afoul of other lawyers, a massive national trade show and even Agweek itself.
Grabanski has become a client-seeker for Texas firms that are suing global seed and technology company Syngenta because of a famous GMO corn case. And his firm is throwing in pro bono advocacy on a farm program issue.
For six months, Grabanski and national allies have been promoting legal work on a scale that’s never been seen in this region. The effort has involved miscues between Progressive Ag and Sarah Vogel, a Bismarck lawyer and notable state politician, as well as conflicts with officials at the recent Commodity Classic - the nation’s most important agricultural trade show.
Bucket list complete Grabanski, 53, is a native of Inkster, N.D., about 37 miles northwest of Grand Forks, N.D. He is known as a grain marketing columnist for Agweek and a passionate entrepreneur who acquired a bachelor’s degree in agricultural economics from North Dakota State University.
Grabanski says he was accepted to University of North Dakota law school at age 22, but he couldn’t afford it. So, he instead pursued a master’s degree in agricultural economics at Iowa State University in Ames. He served as the Grand Forks County Extension agent in 1989 and later became a state Extension Service farm management specialist.
In July 1992, he left NDSU and, with a farming partner, formed Progressive Ag Marketing and Progressive Ag Systems, Inc. for crop insurance sales.
In September 2013, Grabanski says he completed his “bucket list” by achieving a law degree from UND. He did little with the degree until September 2015, when he attended a continuing education seminar for lawyers in Fargo. The seminar was hosted by Texas lawyers, including James Lee and Martin Phipps.
The Texans were describing lawsuits against Syngenta on a corn GMO case worth billions of dollars.
“I thought, ‘Holy crap, this is a markets case,’” Grabanski says. “I thought with all of the business I’ve got with insurance and marketing, I’ll bet I could sign up more acres than almost all of the lawyers in this room.”
He told Phipps he could sign them 1 million acres.
“I left the room, and I had to pace a little,” he says. He thought, “‘Ray, this is the best business opportunity you’ve ever seen. If you’re going to do it, you have to go all in.’”
Progressive trio For more than two decades, Grabanski has been president of PAM and PAS. In September 2015, he incorporated a third - Progressive Ag Law.
PAL was formed to be a “local liaison” for the national firms, led by Lee Murphy Law Firm in Houston and Phipps Anderson Deacon LLP in San Antonio.
The Texans are among numerous teams of lawyers nationwide competing for farmer customer-clients in lawsuits against Syngenta. Since Oct. 29, 2015, those lawyers and their local associates have filed about 200 individual claims against Syngenta in Monroe, Ill.
All of the lawsuits are based on the same premise: Syngenta jumped the gun by releasing a GMO into the American seed corn market before it was accepted by China - a major import client. Because China rejected all U.S. corn in November 2013, farmers in the lawsuits allege they lost money on the corn they grew. Some allege losses on corn they might have grown.
While Syngenta has claimed on its website it acted legally in supplying the GMO corn, a legal battle is taking place on a number of levels.
A federal multidistrict panel has consolidated several federal court cases before one federal judge in Kansas City, Kan. That lawsuit is moving forward but has yet to be certified a class-action lawsuit.
Meanwhile, other law firms have filed suit in state courts, primarily in Minnesota, where Syngenta Seed Inc. is headquartered.
Watts Guerra law firm of San Antonio is a co-lead counsel in Syngenta suits in Minnesota, which now are in Hennepin County Court. Mikal Watts is one of the lead attorneys, with local associate firms, including Pemberton Law of Fergus Falls, Minn. (Watts currently is under indictment for making false claims and for identity theft, related to his involvement in litigation of a 2010 BP oil spill in the Gulf of Mexico, the San Antonio Express-News reported in November 2015.)
The Lee and Phipps efforts are called torts - often called “mass torts,” which seek damages for numerous clients. Lawyers sign up farmer-clients for a percentage fee (40 percent for Phipps and PAL, with the law firms absorbing marketing costs). They get paid a pre-agreed retaining fee percentage if the lawsuit is settled or goes to court.
Grabanski and his Texas partners promote the theory there are enough differences among individuals that they might gain more individually than they would in the class-
action lawsuit in Kansas City.
ARC-CO data While Phipps and Lee recruited Grabanski on the Syngenta case, Grabanski awakened them to the Agriculture Risk Coverage-County issue, which he considered another injustice.
ARC-CO is a program option that many farmers in North Dakota embraced in the 2014 Farm Bill. It turned sour for some. Farmers in Logan and LaMoure counties in North Dakota told Agweek they lost tens of thousands of dollars each because too few farmers filled out National Agricultural Statistics Service surveys - a basic data point used to calculate ARC-CO payments for farmers in a county. Instead, the Farm Service Agency used figures from the Risk Management Agency, which showed higher yields and lower ARC-CO returns.
Sen. John Hoeven, R-N.D., asked FSA Administrator Val Dolcini in mid-March to base ARC-CO payments on better data.
The North Dakota Corn Growers Association and others have been working on an administrative solution. Grabanski thinks it might go through administrative appeals and, perhaps, to court.
Grabanski calculates ARC-CO might have cost farmers $100 million to $450 million nationwide, involving all crops. “That estimate is going up,” Grabanski says, but he isn’t aware of any others making estimates. These estimates are based on maps that show how many of the counties used Risk Management Agency and not NASS figures.
FSA officials in Fargo referred Agweek to a national spokesperson in Texas, who wasn’t available for comment. Dale Ihry, executive director of the North Dakota Corn Growers Association and a former FSA state program specialist, says he can only estimate there might be as much as $14 million in underpayments for corn in seven North Dakota counties.
The national lawyers and a Washington lobbyist flew a private jet into Jamestown, N.D., on Jan. 20 to judge the ARC-CO potential. They met with three North Dakota farm families, including state Rep. Mike Brandenburg, R-Edgeley. Also in the meeting was Tom Lilja, a new employee of Progressive Ag Marketing and former director of the North Dakota Corn Growers Association.
Meanwhile, PAL and its national affiliates hosted a series of February meetings across North Dakota. Grabanski says the Lee firm paid for the meetings.
Minto meeting Advertisements (published in Agweek and elsewhere) titled the meetings “Fix the Formula: Join the Fair Farm Bill Lawsuit,” referring to their advocacy on the ARC-CO program. They also included presentations about the Syngenta suit. Meetings were held in Lisbon, Edgeley, Napoleon, Hebron, Minot, Devils Lake, Northwood and Casselton, all in North Dakota. Several of the Texas lawyers flew into the state on Phipps’ corporate jet.
Before those meetings, Progressive Ag held its own Feb. 16 in Minto, N.D.
Grabanski announced the company would provide the first 300 people at the event with a free steak dinner and three free drink tickets. The Minto event drew 40 people, several who were introduced as staff or agents.
In Minto, Peter Kemp, an attorney and manager of PAL, talked about the Syngenta lawsuit. In 2006, the company developed a patent for Viptera corn seed - called MIR 162 - which is genetically modified to fend off certain insect pests. Syngenta released the seed in 2010, and it was commercialized in 2012. China hadn’t yet approved it and discovered it in its commodity supply. The country began rejecting U.S. corn.
A 2014 graduate of the University of Minnesota Law School, Kemp said Syngenta didn’t heed warnings of the National Grain and Feed Association and the North American Export Grain Association. The NGFA has estimated the move cut U.S. corn prices by 11 cents to 50 cents per bushel in 2013, 2014 and 2015.
Texas lawyer Martin Phipps “has a soft spot for little farmers against big agribusiness,” Grabanski said. “He is the new David that slays Goliath.” Phipps and Deacon were lead attorneys in litigation over another GMO case in 2010 against Bayer CropScience - a “very similar set of facts to a rice case they’d litigated involving Bayer CropScience.” That case was settled for about $750 million on 2.5 million acres of rice, or $300 an acre.
ARC-CO lobbying Also in Minto, PAL attorney Lynn Baldus, who has since left the company to be an associate attorney with an Austin, Minn., law firm, laid out his company’s rationale to proceed pro bono on ARC-CO. The contract is technically with Texas lawyer Martin Phipps, who is associated with PAL.
The contract on ARC-CO specifies “legislative and lobbying efforts in Congress and as otherwise appropriate in attorney’s judgment only” and not “any lawsuits or institute any administrative proceedings against the USDA or any other federal agency on behalf of client.”
Grabanski says Phipps has relationships with registered lobbyists, “or will,” to do the national lobbying. Grabanski acknowledged neither he nor anyone at Progressive Ag is a lobbyist, although he plans to meet with representatives of U.S. Rep. Kevin Cramer, R-N.D., as a “private citizen.”
Grabanski says about 65 percent of the farmers west of the Mississippi River might have some claims on ARC-CO. Progressive Ag wants USDA to admit to an administrative mistake, possibly legislatively, or through a lawsuit involving “all of the resources of our law firm and our litigating partners, as well,” he says. Further work would require a separate contract, Grabanski says.
In response to an audience question, Kemp said any farmer can “hire-fire that attorney at any time.”
“Generally, it’s not our practice to steal clients away from other attorneys,” Kemp said. “If you’re signed up with somebody else, we’re glad you’ve signed up. We hope the best for you. I didn’t come here today to steal clients away from other attorneys but, as always, if you want to choose another attorney, that is your prerogative.”
Vogel involvement Grabanski wanted to work with Sarah Vogel, a North Dakota lawyer, on his ARC-CO efforts.
He called her Feb. 2, a few days after she announced she would not run for the Democratic-NPL nomination for governor.
Vogel famously sued USDA’s Farmers Home Administration in the Coleman v. Block case that stopped loan foreclosures from 1983 to 1989. She and colleagues won the Wiley v. Glickman case in 2001, in which 8,000 farmers received $43 million in a durum crop insurance case.
North Dakota agriculture commissioner from 1989 to 1997, Vogel says she told Grabanski “what terms might work” for a collaboration - including a $500-an-hour rate - but he didn’t follow up with details about the case or a retainer agreement.
“I expected I would hear more details about what my role would be and what my involvement would be,” she says.
In early February, Grabanski started promoting his Vogel connection. “Sarah is a consulting attorney to Progressive Ag Law on the ARC-CO case, as she simply is a battle tested lawyer who has a track record of beating Goliath USDA again and again!” Grabanski wrote. “We are so excited to have her fighting with us for farmers’ legal rights, and also the training she can provide to our very talented group of lawyers.”
Grabanski on Feb. 14 texted Vogel about appearing at the Feb. 22 to 26 meetings. He said he’d increase her rate up to $1,000 an hour to show up in person at the meetings, which she repeatedly said she didn’t want to do. At the same time, Grabanski asked Vogel to help him contact Hollywood actress Jessica Lange, a Cloquet, Minn., native who starred in and co-produced the 1984 movie “Country.” Lange earned an Academy Award nomination for playing an Iowa farm wife whose farm was threatened with foreclosure. In his emails to clients, Grabanski said he was “inspired” by the movie, which was “about our very own Queen of Ag in ND, Sarah Vogel. Sarah was the ‘David’ that defeated ‘Goliath, USDA-FmHA’ and the first woman ag commissioner.”
The movie was not about Vogel, but she says she provided some legal documentation for it.
Grabanski acknowledges he proposed chartering a jet to pick up Lange in New York City and would write a check for $100,000 if she’d go to a meeting in Lisbon, N.D., or to the Commodity Classic trade show March 3 to 5 in New Orleans. Vogel told Grabanski through text she was sure Lange would not be interested. Vogel said she wasn’t interested in “any legal matter because of potential payments,” but on “the merits of the case."
“I would perhaps consult on legal issues, but this seems out of that realm. Sorry I can’t be of further assistance at this time. Thanks. Sarah.”
Still thinking he “had an agreement” with Vogel, Grabanski continued texting about his anticipation of her further guidance and “instruction” on administrative law.
Vogel didn’t respond.
When Grabanski continued promoting the Vogel work, Vogel’s attorney, Derrick Braaten of Bismarck, on Feb. 26 wrote a letter to Grabanski on Vogel’s behalf, requesting Grabanski cease and desist from telling anyone that Vogel was working with Progressive Ag. Braaten is an ag law columnist for Agweek and is a former law partner of Vogel’s.
Commodity Classic On his website, Grabanski promoted a big effort at the Commodity Classic, a huge annual trade show this year in New Orleans. Farmers could pick up a “Syngenta/ARC-CO packet to sign up for representation by PAL” and receive a free ticket to a two-hour “private concert by country music legend Hank Williams Jr.” March 4 at the New Orleans Marriott. They would spend more than $100,000 on the concert, but they hoped to make a lot more through the promotion.
David Williams, the new manager for PAM and PAS, on Feb. 10 reserved a booth at the event to promote the firm. The PAM marketing company had exhibited there once, about 10 years ago.
On Feb. 29, Barbara F. Dunn O’Neal, the attorney for the Commodity Classic, sent a letter to Williams notifying him the event had canceled Progressive Ag’s booth, its hotel room sub-block, its reception spaces at the Hotel Monteleone and their concert space for the Hank Williams Jr. concert.
The Classic had determined that promoting the “Syngenta and ARC-CO matters” were “not in keeping with the character or purpose of Commodity Classic.” Syngenta, Monsanto and DuPont are the three platinum sponsors for the Classic, each contributing more than $100,000 for the nation’s “largest farmer-led, farmer-focused convention and trade show.”
“I said, ‘I’m trying to take $6 billion - give or take a few million - out of Syngenta’s pocket and put it into corn farmers,” Grabanski recalls. “And that’s not in corn farmers’ interests? Are you crazy? It would take me five minutes to prove that in court.” Grabanski says he told the Classic to give his booth back or face legal claims. “It wasn’t that I wanted to,” he says. “I’d just had it.”
He had expenses involving the concert and staffers heading to the event, with nonrefundable plane tickets.
“We registered under marketing, crop insurance and law,” Grabanski says. “They took our money, our registrations, and two days before (canceled the event)? That was unacceptable.”
By Friday, the second day of the event, the two sides came to an agreement, and Progressive used its booth.
“Both sides are content,” says Ken Colombini, spokesman for the National Corn Growers Association and for the Commodity Classic. He says Progressive Ag “changed what they were doing.”
The concert went on as scheduled, and Progressive Ag staff handed out tickets to Commodity Classic farmers on the street outside the hotel. Progressive had 3,000 tickets printed, and Grabanski thinks 850 farmers came.
Grabanski also recently ran afoul of Agweek. A longtime columnist for the publication, two of Grabanski’s recent pieces were rejected by the magazine. Also, a long submission by Grabanski about his cousin, Tom, was rejected.
Grabanski eventually ran the submission about his cousin as a paid advertisement.
Editor Kirsten Stromsodt says the rejected pieces by Grabanski ventured too far from markets analysis. Agweek Publisher Korrie Wenzel has since sent Grabanski a letter asking that Grabanski stay on topic in future columns.
Free lobbying Michelle Donarski of the Anderson, Bottrell, Sanden & Thompson firm in Fargo has been gathering Syngenta clients since October 2014 and says her firm represents about 2,000 growers in North Dakota, South Dakota and Minnesota. Donarski is connected to the lead counsel in a multidistrict federal litigation in Kansas City, Kans.
Donarski says she received withdrawals from about a dozen clients who suddenly left her group for PAL.
“When I asked why, they said Ray’s group was going to do this as a package deal,” Donarski says.
She says it’s her “understanding” from departing clients “if they’d sign up with Syngenta, with a 40 percent contingency fee, they’d be represented in ARC-CO, pro bono. And they said they had North Dakota lawyer Sarah Vogel, consulting them.”
On Feb. 29, Donarski sent Grabanski a cease and desist letter, copied to the Lee and Phipps firms. Donarski tells Agweek she thinks PAL is “not providing legal representation on the ARC-CO matter, but instead is providing pro bono ‘lobbying’ in return for the corn growers’ Syngenta claim.”
Brandenburg, who attended all of the Progressive Ag meetings on Syngenta, tells Agweek he’d terminated his lawsuit with Donarski’s firm to switch to Progressive Ag, on the theory compensation might be higher in the individual suits than in the federal class action.
Similarly, Tim Erbele, a Streeter, N.D., farmer and feed company owner, became interested in the ARC-CO issue and signed up with Progressive Ag. He also signed up for the Syngenta corn issue. He says he’s grateful Grabanski put him in contact with the big Texas firms. “Without Ray’s help, we never would have had access to that.”
James M. McCormack, an ethics counsel to the Lee firm on March 8 responded to Donarski’s letter, saying “despite what you may have heard, it is my understanding that no one has interfered with your firm’s contracts in any impermissible way.”
McCormack and Grabanski, in a separate letter dated March 17, told Donarski they thought “Vogel initially agreed to participate as a consulting attorney” and “later changed her mind.”
A shift to law Grabanski says Top Producer magazine and agweb.com has ranked PAM as the “best or second best marketing firm each year for corn and soybeans the past eight years running.”
“My business model is do something you can do better than everybody else and do it over and over and over and over again,” Grabanski says.
He says the PAS crop insurance agency is the second-largest in the Northern Plains, with more than $25 million in premiums, including the government subsidy. Crop insurance and marketing packages have become more complementary since becoming more revenue-based and subsidized since about 2000. Agency growth also accelerated in 2004 and 2008 when large weather-related issues created dissatisfaction with some other carriers.
In January, Grabanski wrote in emails that in October 2015, Progressive Ag’s “significant stockholders” had decided the company needed “improved management” of PAM and PAS “as our law firm was moving mountains and making great strides while our marketing and insurance firm was stagnant the last five years.”
Staff changes Randy Martinson, a Progressive Ag Marketing employee since 1995 and PAM shareholder since 2003, was head of marketing. He says he quit the company Dec. 29, even though he still owns 30 percent of it. Grabanski says he and Dan Hankey, a Park River, N.D., farmer, are primary owners in the PAS company. Martinson is not a lawyer and is not an owner in the PAL firm.
Martinson, in an interview with Agweek, says “what bothered me most was that we were using marketing as a method to get interest in the company to feed the law firm its customers.”
Grabanski says he is able to approach clients for law work that he only personally knows because they are his marketing or crop insurance clients.
Martinson’s departure was followed by Amy Ryan, the crop insurance agency manager who had been with Progressive Ag for 11 years; Derel Wicklund, an underwriter for nine years; and Kelsey Zurn, who had been there two years. All joined Martinson in a new company, registered Jan. 8 as Ag-vice Risk Management LLC in Fargo.
Meanwhile, Progressive Ag now includes David Williams as national manager of PAM and PAS and adviser to PAL. Williams had come from managing 200 employees at Cargill’s Southern Plains grain division. Grabanski hired his wife, Joan, as overall manager of the Fargo offices of PAM and PAS. By mid-February the company had six underwriters and had a bigger capacity than before the others left, Grabanski says.
Grabanski tells Agweek he’ll probably invest about $1 million in personnel and promotion to grow his law firm, and he hints he’s planning to serve agriculture through a troubled economic phase.
“We had a crash in grain prices and land values by 40 to 50 percent, from 1981 to 1987, in six years. Can we do that in the next six years?” Grabanski asked. “Could 10 to 20 percent of all farmers be at risk of going bankrupt in the next six, seven years? Maybe.
“The staff is capable of handling the 20 to 40 percent growth we expect in 2016 in our crop insurance agency and possibly every year for the next five to 10 years,” Grabanski says. But those are goals, he says.
“Sometimes you shoot for the stars.”