What's your damage? (Corn Losers).

IN FEBRUARY THE creators and distributors of genetically modified (G.M.) StarLink corn settled a $110 million class action suit from corn farmers, marking a victory for environmentalist panic that could retard biotech development.

Back in 2001, StarLink corn, invented to resist an insect pest and intended only for animal feed, was found to have entered the human food supply via Taco Bell taco shells. The Environmental Protection Agency had not approved StarLink for human consumption because of speculative fears that a specific protein could cause an allergic reaction. Even though the U.S. Centers for Disease Control and Prevention found no evidence that such allergic reactions had actually occurred, anti-biotech activists created enough of a public panic that a class action suit against StarLink's sellers and food manufacturers led to a $9 million settlement last year, mostly through dollar-off coupons on food packages.

The class action suit settled for $110 million in February was brought by corn farmers, who argued that their sales were damaged by a backlash against corn caused by the StarLink panic. That is, the fact that anti-G.M. activists frightened everyone about StarLink was enough of an excuse for its makers to be sued-whether or not the corn itself ever harmed anyone. That's a powerful weapon for G.M. opponents: The very panic they create can be the basis of a damage claim.