On June 24, 2020, the pharmaceutical giant, Bayer, announced its agreement to pay over $10 billion to settle thousands of cancer claims against its herbicide product, Roundup. Bayer took ownership of the popular weedkiller brand after acquiring agrochemical company, Monsanto, in 2018. This deal is the result of extensive negotiations with 25 lead law firms representing roughly 95,000 cases against the company.
Inherited Product Liability
Bayer became the parent company of mired weedkiller, Roundup, in 2018 following a $63 billion purchase. This acquisition also included widespread claims that the product had a deadly link to cancer. Allegations against Roundup have focused on the herbicide’s active ingredient, glyphosate. In 2015, the World Health Organization’s International Agency for Research on Cancer labeled glyphosate as a “probable carcinogenic to humans.” Monsanto and Bayer have long insisted that glyphosate poses no risk to humans. However, thousands of lawsuits assert that the Roundup formula has led to non-Hodgkin’s lymphoma, a type of lymphatic cancer.
The Approach to Settlement
Three of the first cases against Bayer that progressed to trial resulted in immense monetary damages paid to plaintiffs. Following these verdicts, Judge Vince Chhabria of the U.S. District Court in San Francisco suggested an alternative resolution approach for the thousands of remaining cases. This included pending cases within his court’s jurisdiction as well as those filed in other states. And so began many months of mediation between parties, led by attorney Kenneth R. Feinberg, who famously headed the federal September 11th Victim Compensation Fund.
Resolving Major Legacy Litigation
In an effort to avoid additional trials, Bayer has agreed to pay between $10.1 and $10.9 billion to resolve ongoing or potential Roundup litigation. The company indicated that between $8.8 to $9.6 billion will be used to settle roughly 75% of the 125,000 currently filed claims. In addition, $1.25 billion will be set aside to resolve “potential future litigation.” A portion of this $1.25 billion will be allocated to set up an independent expert panel. This panel will review the threshold of glyphosate exposure relative to cancer risks. Should the panel find definitive cancer links, Bayer will not be able to argue against this conclusion in any future cases. The inverse is true for litigators pursuing future liability suits. This agreement is subject to approval by Judge Chhabria.
The proposed settlement also pledges funds to resolve other outstanding toxicity claims against the company. Bayer allotted $400 million to settle mass tort claims against another Monsanto herbicide formula, dicamba. It also promised $820 million to settle claims that it leaked dangerous chemicals called polychlorinated biphenyls (PCBs) into water supplies. The EPA outlawed the use of PCBs in 1979 after research revealed they cause liver damage, birth defects, and developmental delays.
Short of Admitting Guilt
Despite offering up over $10 billion in settlements—one of the largest sums in American civil litigation history—Bayer maintains innocence of any wrongdoing. Werner Baumann, CEO of Bayer, explained that the settlement is meant to bring an end to a “long period of uncertainty for the company.” However, he further clarified, “At the same time, the extensive body of science indicates that Roundup™ does not cause cancer, and therefore, is not responsible for the illnesses alleged in this litigation. We stand strongly behind our glyphosate-based herbicides, which are among the most rigorously studied products of their kind, and four decades of science support their safety and that they are not carcinogenic.” The company’s official statement also cites an EPA interim review of Roundup from January 2020. The review found no health risks linked to glyphosate exposure. Bayer plans to continue the production of Roundup products.
Not Quite Out of the Woods
The proposed settlement would resolve a majority of legal claims against Bayer, but not all. Roughly 25,000 claimants declined to join this class action mediation, holding out for their day in court. However, the pandemic may play a role in urging more parties towards agreeing to the settlement. “The pandemic worked to the advantage of settlement because the threat of a scheduled trial was unavailable,” said Mr. Feinberg, the attorney who led the settlement conversation, “I will be surprised if there are any future trials.”