Roundup Judge Appears Ready to Reject Bayer's $1.1B Class Settlement
In a setback for Bayer, which had hoped to cap future claims over its Roundup pesticide with the class settlement, U.S. District Judge Vince Chhabria said in a Monday order that he was "skeptical of the propriety and fairness of the proposed settlement, and is tentatively inclined to deny the motion."
July 06, 2020 at 09:38 PM
5 minute read
A federal judge said he is likely to reject a $1.1 billion class action settlement that Bayer AG reached last month to resolve future lawsuits over its pesticide Roundup.
In a Monday order, U.S. District Judge Vince Chhabria, who has scheduled a July 24 hearing on the settlement's preliminary approval, said he would not extend a July 13 deadline for class members to object to the proposed deal.
"However, even before receiving opposition briefs, the court is skeptical of the propriety and fairness of the proposed settlement, and is tentatively inclined to deny the motion," he wrote.
"Given the court's current skepticism, it would be contrary to everyone's interest to delay the hearing on preliminary approval," he wrote. "And if the parties are going to need to move to Plan B, they would presumably prefer to do that sooner rather than later. Moreover, if the motion would already be denied on the current record, it would be a waste of time and money to wait for hundreds of pages of briefing from dozens of lawyers and law professors from around the country, no matter how interesting those briefs would be."
The order's language is a setback for Bayer, which reached the class action deal on the same day as a raft of settlements that resolved 75% of an estimated 125,000 claims for up to $10.9 billion. The class action settlement, however, is a key part of Bayer's strategy to cap its subsidiary Monsanto's Roundup litigation, while keeping its product on store shelves.
A Bayer spokesman said in an email: "We appreciate the judge's order raising his preliminary concerns with the proposed class settlement, which we take seriously and will address at the preliminary approval hearing on July 24."
Elizabeth Cabraser, of Lieff Cabraser Heimann & Bernstein, lead plaintiffs counsel for the class action settlement, called Chhabria's decision a "wise order that candidly and substantively articulates the court's questions and concerns upfront, enabling the parties to focus on and address them, and establishes a sensible and to-the-point procedure going forward."
The settlement resolves claims of individuals who haven't sued yet, some of whom have non-Hodgkin lymphoma and some who do not.
Under the deal, a science panel would give the final say on whether Roundup causes non-Hodgkin lymphoma, ending the debate in the courts, and plaintiffs, if the decision goes in their favor, could sue, but only for compensatory damages. Bayer is appealing three Roundup verdicts totaling $2.4 billion awarded in the past two years.
Unlike the other Roundup settlements, the class action deal is subject to Federal Rule 23 of Civil Procedure, as well as class action guidelines in the U.S. District Court for the Northern District of California, where Chhabria has to approve the agreement over objections.
Since the June 24 motion for preliminary approval of the class action settlement, nearly a dozen law firms, including Napoli Shkolnik and Baron & Budd, filed requests to extend the deadline to object to the settlement before the hearing. Many of the filings, citing a July 4 ex parte application by Baron & Budd partner Roland Tellis and Brian Fitzpatrick, a professor and class action expert at Vanderbilt Law School, said such a deal had "never before been attempted in the history of American jurisprudence" and raised "profound questions" under Rule 23, federal statutes and the U.S. Constitution. "It could have a dramatic effect not only on this litigation but on the future of mass tort litigation," according to several of the filers.
Chhabria's concerns, outlined in only four pages, were the constitutionality of having a science panel, rather than a judge or jury, decide general causation, and whether the panel's decision is binding, regardless of further scientific studies that might refute its findings.
Further, Chhabria questioned why a class member would want to participate in such a settlement when other Roundup users have obtained "significant compensatory and punitive damages" at trial.
"Why would a potential class member want to replace a jury trial and the right to seek punitive damages with the process contemplated by the settlement agreement?" he wrote.
In 2018, Chhabria issued his own ruling allowing plaintiffs' scientific evidence into the first federal trial, which he oversaw. That trial ended last year in an $80 million verdict, which Chhabria reduced to $25.3 million.
In Monday's order, Chhabria also questioned how such a "diffuse, contingent, and indeterminate" class would receive adequate notice of the settlement.
"There's nothing wrong with certifying a class of people who are candidates to suffer harm in the future when the class is narrow and readily identifiable—for example, NFL players who have not yet developed CTE," he wrote. "A class that includes all Roundup users who will get cancer in the future is very different. For example, the idea that a migrant farmworker or someone who is employed part time by a small gardening business would receive proper notification (much less the opportunity to consider their options in a meaningful way) is dubious."
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