By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.
Federal district court judge Vince Chhabria last Monday effectively torpedoed a controversial part of Bayer’s proposed $10.9 billion glyphosate settlement, which he must approve – thus effectively nixing the provision.Bayer wants a panel of specially selected scientific experts to decide whether something causes cancer or not, taking that decision away from future juries.
According to the New York Times, judge Chhabria said:
he “is skeptical of the propriety and fairness of the proposed settlement, and is tentatively inclined to deny the motion.” He raised concerns about the creation of a scientific panel to decide whether the key ingredient, glyphosate, causes cancer and whether the agreement unfairly limits potential plaintiffs from suing.
Glyphosate is the active ingredient in Roundup, the most widely used herbicide in the world, Bayer acquired Monsanto in August 2018 and assumed its Roundup-related liabilities. Bayer now faces liability for about 125,000 lawsuits throughout the United States. Three multi-million dollar verdicts have been returned so far and Bayer is appealing each of these judgments.
Bayer is keen to cap its Roundup-related legal exposure not only for the 95,000 lawsuits that have already been filed, but also to bind the roughly 30,000 plaintiffs who have only got so far as to contact a lawyer but have yet either to file suit, let alone agree to any settlement offer.
The amount to be paid out for 95,000 existing lawsuits has been negotiated. The panel’s carcinogenicity determination would apply to and limit the options for those 30,000 potential plaintiffs. According to the NYT:
The settlement, announced two weeks ago after months of effort with the help of the veteran mediator Kenneth R. Feinberg, includes $8.8 billion to $9.6 billion to cover about 95,000 cases. In addition, $1.25 billion was set aside to finance the scientific panel and assist impoverished Roundup users with non-Hodgkin’s lymphoma.
As I mentioned when I last posted on this topic, in Bayer Agrees to $10.9 Billion Glyphosate Settlement(quoting the Wall Street Journal), such a provision would be rare. Not only will the panel decide on whether glyphosate causes cancer and at what levels, but Bayer and other litigants would be bound by its determination in future proceedings.
You can see why defendants would want such a provision. Juries are unpredictable and tend to side with sympathetic plaintiffs, When a plaintiff gets sick, the jury wants to blame someone. What I think many fail to understand that a potential plaintiff does not just march down to the local court house and file a handwritten claim. That plaintiff must find a lawyer to help. For that task, plaintiffs’ law firms serve as entrepreneurs, sifting claims and bearing the costs for the litigation. Yes, they stand to make a lot of money for successful claims. Their contingency fees can top 35%. But here’s the kicker: the claims must be successful. They get paid nothing for flaky claims.
And many meritorious claims do not get heard, by any court nor make it to a jury simply because it is not worth a lawyer’s time to pursue them. This is especially at a time when legal “reforms” and the rightward shift in the makeup of courts mean even plaintiffs who are right get denied justice.
What happens next?
Bayer for its part is eager to settle. As well it should be. According to Successful Farming:
Juries awarded large sums of money to plaintiffs in the three glyphosate cancer cases that have gone to trial. The litigation has clouded Bayer’s financial outlook since it bought Monsanto. When it announced the settlement agreements two weeks ago, Bayer said it would be less costly to resolve the lawsuits than to face “growing numbers of plaintiffs, upwards of 20 trials per year and uncertain jury outcomes, and associated reputational and business impacts.”
The NYT reports that Bayer would address the judge’s concerns at the preliminary approval hearing, scheduled for July 24. In the meantime, Bayer has withdrawn the original settlement proposal, according to Fierce Pharma:
Bayer has taken its cue from a judge and decided to rework the portion of its proposed Roundup settlement that focuses on future lawsuits.
On Wednesday, Bayer said lawyers representing a class of plaintiffs who claim the Roundup weedkiller caused their cancer had withdrawn a request for court approval of that $1.25 billion section of the settlement deal.
“The withdrawal will enable the parties to more comprehensively address the questions” raised by Judge Vince Chhabria, the company said.
The company says it is optimistic about reaching a settlement and issued the following statement, as Fierce Pharma reports:
“Bayer remains strongly committed to a resolution that simultaneously addresses both the current litigation on reasonable terms and a viable solution to manage and resolve potential future litigation,” the company said in a statement.
Now, it’s working with the plaintiffs on a plan B, and it might not take too long. “Although the Court is not aware of any Plan B, it would be surprising if none existed given the stakes involved and the novelty of Plan A,” Chhabria noted earlier.
Judge Chhabria’s eyes are wide open as to what is at stake, as the NYT reports:
Judge Chhabria asked in his filing whether it was lawful to shift the question of whether Roundup caused cancer to a panel of scientists and away from judges and juries.
He also pointed to the three previous multimillion-dollar verdicts and asked, “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?”
Exactly. That is the question.
So let’s hope he remains vigilant as this drama continues to unfold.