Bayer Agrees to Pay Up to $10.9B to Resolve Roundup Lawsuits
On Wednesday, Bayer announced the agreements, which resolve 75% of an estimated 125,000 Roundup claims, some of which haven't been filed in court. Bayer also agreed to resolve lawsuits over its dicamba herbicide and PCB water contamination.
June 24, 2020 at 06:40 PM
7 minute read
Bayer AG has agreed to pay up to $10.9 billion to resolve current and future claims alleging its Roundup weed killer causes cancer.
In an announcement on Wednesday, Bayer said the multiple agreements would resolve 75% of the estimated 125,000 claims over Roundup, which includes those not yet filed in court and case inventories for the leading plaintiffs law firms spearheading the Roundup multidistrict litigation.
According to its announcement, Bayer will make a payment of between $8.8 billion and $9.6 billion to resolve all Roundup lawsuits, estimated to be more than 50,000, plus $1.25 billion toward future cancer claims, brought as part of a class action settlement. U.S. District Judge Vince Chhabria, who is overseeing the multidistrict litigation in San Francisco, would need to approve the class action settlement, which would use a class science panel to evaluate whether Roundup might have caused a claimant's non-Hodgkin lymphoma.
Bayer CEO Werner Baumann called the settlement the "right action at the right time."
"It resolves most current claims and puts in place a clear mechanism to manage risks of potential future litigation," he said in a statement. "It is financially reasonable when viewed against the significant financial risks of continued, multi-year litigation and the related impacts to our reputation and to our business. The decision to resolve the Roundup litigation enables us to focus fully on the critical supply of healthcare and food."
Bayer did not admit liability or wrongdoing as part of the settlement. It also ensured that Roundup would continue to remain on store shelves.
The settlement excludes more than 25,000 remaining cases anticipated to be resolved in the coming months.
In an unusual mention, Bayer noted that the total value of the agreements, estimated to be at least $10.1 billion, remained uncertain due to claims still under negotiation. Those claims, Bayer said, "consist of cases generated by TV advertising and for which plaintiffs' law firms have provided little or no information on the medical condition of their clients, and/or cases held by law firms with small inventories."
During the conference call, Baumann could not say how much of the agreements would go to attorney fees, insisting it was a "question for plaintiffs lawyers to answer."
Robin Greenwald, of Weitz & Luxenberg, who is co-lead counsel in the multidistrict litigation over Roundup, declined to address fees as to other firms but noted that New York capped her firm's contingency rates.
In an interview, she praised Bayer's agreements.
"This is the only way plaintiffs are going to see a resolution of their claims in their lifetime," she said. "So, for that, I'm happy for the people."
The MDL encompasses more than 3,300 lawsuits, meaning that most of the cases being settled are in state courts in California and Missouri, she said.
Also on Wednesday, Bayer announced two other settlements: one would resolve lawsuits by 100 farmers alleging its dicamba herbicide drifted into neighboring fields, while another pertained to PCB water contamination.
In the dicamba litigation, a jury had awarded $265 million earlier this year. On Wednesday, Bayer said it would continue to challenge the verdict but resolve cases pending in multidistrict litigation before U.S. District Judge Stephen Limbaugh, of the Eastern District of Missouri, that involve the crop years 2015 to 2020. The agreement, which also involves chemical company BASF, would provide $300 million to producers of soybeans and other crops, plus attorney fees and other expenses that bring the total value up to $400 million.
"This settlement could not come at a better time for farmers," said Don Downing, of Gray, Ritter & Graham who is lead counsel in the dicamba multidistrict litigation. "It will provide much-needed resources for farmers in these difficult times, and compensate them for dicamba-related losses they have suffered."
The PCB water contamination settlement involves $650 million to a class of local governments and others, subject to court approval, and $170 million to resolve claims brought by the attorneys general of New Mexico, Washington state and Washington, D.C.
The Roundup settlements have been in the works for months. Judges in California and Missouri had scheduled additional trials in 2020, including the MDL's second bellwether, but lawyers settled or postponed them to give more time for settlement talks.
The timing of the settlements comes as the COVID-19 pandemic has wreaked havoc on the economy and forced companies such as Bayer to focus on sales of their products over litigation. COVID-19 came up at several points in Bayer's announcement on Wednesday, and Kenneth Feinberg, the mediator involved in the deal, agreed that the pandemic played a role in the timing of the deals.
"The pandemic slowed the negotiations as a practical mechanical matter," he said. "It's very difficult to negotiate when lawyers and clients are locked in isolation and unavailable and can't be reached and can't discuss with one another possible terms and conditions of the settlement. So, it took a little bit of extra time, a few extra months, to rebuild the momentum."
Adding to that, he said, was the shutdown of the courts, which raised questions about whether trials scheduled for this year would occur.
Feinberg, who Chhabria appointed as special master in the Roundup multidistrict litigation, said he would assist some of the plaintiffs firms settling their caseloads in determining how much each client would get under the Bayer agreements, which involve 25 different law firms.
He said he also would be actively involved in determining the values of individual claims payouts as part of the class action settlement. Those would include potential expenses tied to medical monitoring and financial relief.
"I will remain, subject to the request of Judge Chhabria, prominently involved over the next year or two as we move forward," Feinberg said. "I am going to be very busy."
During a conference call, Bayer officials elaborated on the class action settlement, adding that the science panel would have five members selected by both sides by agreement. The panel's decision, said Bill Dodero, Bayer's global head of litigation, would determine how much each class member could get, although he noted few would be able to prove Roundup caused their cancer.
"We're confident the outcome will be no causal link between Roundup and NHL," he said during the conference call, referring to non-Hodgkin lymphoma. "We want the discussion about science. And that's what this whole settlement is meant to do: return the conversation to science. We think that's where the parties' debate is best served."
Greenwald, who was not involved in negotiating the class action settlement, said she had "serious concerns," insisting the "science hasn't changed."
"Seven courts found the science sufficiently reliable based on methodologically sound methods of evaluation to be admissible in a court to determine whether general causation was met," she said.
On Wednesday, Bayer said it would pay $5 billion of the settlements in 2020 and another $5 billion in 2021, with the remaining to follow in 2022 or later.
Verdicts against Monsanto have so far been in California state courts, where juries in San Francisco and Oakland have awarded $289 million, $80 million and $2 billion. Earlier this month, a California appeals court heard oral arguments on the $289 million award, the first Roundup verdict in the nation, in 2018.
The $80 million verdict, awarded in 2019 in the MDL's first bellwether trial, is before the U.S. Court of Appeals for the Ninth Circuit.
On Wednesday, Bayer said it would continue to appeal those verdicts.
"It is important for the company to continue these cases as the appeals will provide legal guidance going forward," the company said.
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