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Article: Bayer seals settlements on glyphosate and dicamba litigation

02 July 2020

This article is from our crop science coverage dated 29/06/20.

Bayer has settled several major legacy Monsanto litigations out of court including with tens of thousands of plaintiffs for the alleged link between Monsanto's glyphosate-based Roundup herbicide and cancer.

Pending agreement of the courts, the Roundup settlements could total between $10.1 billion - $10.9 billion.

The headline Roundup deal is among a series of agreements that will substantially resolve major outstanding Monsanto litigation, Bayer says. They include the US Roundup litigation, as well as the dicamba drift, for which it has settled for $400 million, and polychlorinated biphenyl (PCB)-contaminated water litigations with payments totalling $820 million, it adds. The combined settlements could total $12 billion. The glyphosate litigation settlement covers about three-quarters of the some 125,000 filed and unfiled claims, around 90,000 litigants.

"First and foremost, the Roundup settlement is the right action at the right time for Bayer to bring a long period of uncertainty to an end," Bayer group chief executive officer Werner Baumann says. Court-appointed mediator Kenneth Feinberg rates the glyphosate litigation agreement as "designed as a constructive and reasonable resolution to a unique litigation". He also pays "tribute" to Bayer for the progress made, which "provides a robust framework that will enable the parties to bring closure to the current Roundup litigation in due course".

The resolved glyphosate lawsuit claims include all plaintiff law firms leading the Roundup federal multi-district litigation (MDL) or the California bellwether cases, and those representing around 95% of the cases set for trial, and establish key values and parameters to guide the resolution of the remainder of the claims as negotiations advance, Bayer notes.

Furthermore, the resolution puts in place a mechanism to resolve potential future claims efficiently, the company says. Bayer will make a payment of $8.8-9.6 billion to resolve the current Roundup litigation, including an allowance expected to cover unresolved claims, and $1.25 billion to support a separate class agreement to address any further litigation. The agreed Roundup class settlement will be subject to approval by Judge Vince Chhabria of the US District Court for the Northern District of California. The agreements contain no admission of liability or wrongdoing, Bayer stresses. The company cites uncertainty over a growing number of litigants, extended trials, and reputational loss for its seeking a settlement.

Outstanding cases

The claims still subject to negotiation largely 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, Bayer explains. The three cases that have gone to trial - Johnson, Hardeman and Pilliod - will continue through the appeals process and are not covered by the settlement. Bayer says that it needs to continue those cases as the appeals will provide legal guidance. The company stresses that in an appellate court filing, it has the support of the US government for its pre-emption arguments, asserting that state law warning claims in the Roundup litigation conflict with US federal law, requiring no cancer warning, and that the case be dismissed. Earlier this week, a federal judge blocked California from requiring a cancer warning on glyphosate-based pesticide products, concluding that the "great weight of evidence" indicated that the herbicide was not a known carcinogen.

In the Dewayne Johnson case in August 2018, a California state court found Monsanto liable for failing to add warnings that its Roundup herbicide could have caused his cancer. The state judge overseeing that trial reduced the $279 million award to $78 million. That case has gone to appeal in which the plaintiff is seeking the reintroduction of the original penalty, while Bayer is counter-suing for the case to be dismissed. In July last year, a California state court judge slashed damages awarded to a couple, Alva and Alberta Pilliod, in a similar lawsuit from over $2 billion to under $87 million. In March 2019, a federal jury awarded another California resident, Edwin Hardeman, some $80 million. In July that year, a federal judge cut that award to just over $25 million.

Bayer further notes that potential future cases will be governed by a class agreement, which is subject to court approval. The agreement includes the creation of an independent class science panel, which will determine whether Roundup can cause non-Hodgkin's lymphoma (NHL), and if so, at what minimum exposure levels. Bayer and the plaintiff class will be bound by the panel's findings, taking the decision of causation out of any jury's hands. However, that panel's determination "is expected to take several years". Class members will not proceed with legal claims against the company until the panel's resolution of the issue.

Dicamba settlement

Bayer has struck a $400 million mass tort agreement to settle dicamba drift litigation related to Monsanto's XtendiMax herbicide. That deal resolves the multi-district litigation pending in the US District Court for the Eastern District of Missouri and claims for the 2015-2020 crop years. Claimants will be required to provide proof of damage to crop yields and evidence that it was due to dicamba in order to collect. Bayer says that it expects a contribution from BASF - its co-defendant in many of the dicamba lawsuits - towards the settlement.

The deal does not cover the lone dicamba drift case that has gone to trial. A jury in February awarded a Missouri peach farmer some $250 million in punitive damages and $15 million in compensatory damage for crop damage from dicamba. Bayer and BASF are challenging that decision.

Resolution of PCB litigation

Bayer has also made a series of agreements that resolve cases representing most of the company's exposure to PCB water litigation. Monsanto legally manufactured PCBs until ceasing their production in 1977. One agreement establishes a class that includes all local governments with EPA permits involving water discharges impaired by PCBs. Bayer will pay approximately $650 million to the class, subject to court approval.

The company has also sealed deals with the US Attorneys-General of the states of New Mexico and Washington, and the District of Columbia to resolve similar claims. Bayer will make payments on these deals totalling some $170 million.

Several states have sued Monsanto for environmental damage from PCB chemicals the company had manufactured and sold for decades.

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