In an expensive clean-up of Monsanto litigation messes, Bayer AG said Wednesday that it will pay out more than $10 billion to settle tens of thousands of U.S. claims brought against Monsanto over its Roundup herbicide, as well as $400 million to resolve lawsuits over Monsanto’s dicamba herbicide and $650 million for PCB pollution claims.
The resolutions come two years after Bayer bought Monsanto for $63 billion and almost immediately saw share prices plummet due to the Roundup liability.
Bayer announced that it will pay $10.1 billion to $10.9 billion total to resolve roughly 75 percent of the claims by an estimated 125,000 people who allege exposure to Monsanto’s Roundup weed killers caused them to develop non-Hodgkin lymphoma. The deal includes plaintiffs who have retained attorneys with the intent to sue but whose cases have not yet been filed, Bayer said. Within that total, a payment of $8.8 billion to $9.6 billion will resolve the current litigation and $1.25 billion is being set aside to support potential future litigation, the company said.
The plaintiffs included in the settlement are those signed with the law firms that have been leading the Roundup federal multi-district litigation (MDL) and include The Miller Firm of Virginia, the Baum Hedlund Aristei & Goldman firm of Los Angeles and the Andrus Wagstaff firm of Denver, Colorado.
“After years of hard fought litigation and a year of intense mediation I am glad to see our clients will now be compensated,” said Mike Miller, of the Miller law firm.
The Miller firm and the Baum Hedlund firm worked together to win the first case to go to trial, that of California groundskeeper Dewayne “Lee” Johnson. Andrus Wagstaff won the second trial and The Miller Firm won the third case to go to trial. In all, the three trials resulted in jury verdicts totaling more than $2.3 billion, though the trial judges in each case lowered the verdicts.
The juries in all three trials found that Monsanto’s glyphosate herbicides, such as Roundup, caused non-Hodgkin lymphoma and that Monsanto covered up the risks and failed to warns users.
Each of the three trial verdicts are going through the appeals process now and Bayer said the plaintiffs in those cases are not included in the settlement.
Bayer said future Roundup claims will be part of a class agreement subject to approval by Judge Vince Chhabria of the U.S. District Court for the Northern District of California, who ordered the year-long mediation process that led to the settlement.
The agreement would take any future findings on cancer claims out of the hands of juries, Bayer said. Instead, there will be the creation of an independent “Class Science Panel.” The Class Science Panel will determine whether Roundup can cause non-Hodgkin lymphoma, and if so, at what minimum exposure levels. Both the plaintiffs in the class action and Bayer will be bound by the Class Science Panel’s determination. If the Class Science Panel determines there is no causal connection between Roundup and non-Hodgkin lymphoma then the class members will be barred from claiming otherwise in any future litigation against Bayer.
Bayer said the Class Science Panel’s determination is expected to take several years and class members will not be permitted to proceed with Roundup claims prior to that determination. They also cannot seek punitive damages, Bayer said.
“The Roundup™ agreements are designed as a constructive and reasonable resolution to a unique litigation,” said Kenneth R. Feinberg, the court-appointed mediator for the settlement talks.
Even as they announced the settlement, Bayer officials continued to deny Monsanto’s glyphosate herbicides cause cancer.
“The extensive body of science indicates that Roundup does not cause cancer, and therefore, is not responsible for the illnesses alleged in this litigation,” Bayer CEO Werner Baumann said in a statement.
Bayer also announced a mass tort agreement to settle U.S. dicamba drift litigation, which involves claims from farmers that use of dicamba herbicides developed by Monsanto and BASF to be sprayed over dicamba-tolerant crops developed by Monsanto caused widespread crop loss and injury.
In a trial earlier this year, Monsanto was ordered to pay $265 million to a Missouri peach farmer for dicamba drift damage to his orchard.
More than 100 other farmers have made similar legal claims. Bayer said it will pay up to a total of $400 million to resolve the multi-district dicamba litigation that is pending in the U.S. District Court for the Eastern District of Missouri, with 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. The company expects a contribution from its co-defendant, BASF, towards this settlement.
The settlement will provide “much-needed resources for farmers” who have suffered crop losses due to drifting dicamba herbicides, said lawyer Joseph Peiffer of the Peiffer Wolf law firm, which represents farmers with dicamba claims.
“The settlement announced today is an important step to making things right for the farmers who just want to be able to put food on the table of America and the world,” Peiffer said.
Earlier this month a federal court ruled that the Environmental Protection Agency had violated the law when it approved dicamba herbicides made by Monsanto, BASF and Corteva Agriscience. The court found the EPA ignored the risks of dicamba damage.
PCB Pollution Settlement
Bayer also announced a series of agreements that resolve cases the company said represent most of its exposure to litigation involving water contamination by PCBs, which Monsanto manufactured until 1977. One agreement establishes a class that includes all local governments with EPA permits involving water discharges impaired by PCBs. Bayer said it will pay a total of approximately $650 million to the class, which will be subject to court approval.
Additionally, Bayer said it has entered into separate agreements with the Attorneys-General of New Mexico, Washington, and the District of Columbia to resolve PCB claims. For these agreements, which are separate from the class, Bayer will make payments totally approximately $170 million.
Bayer said the potential cash outflow will not exceed $5 billion in 2020 and $5 billion in 2021 with the remaining balance to be paid in 2022 or later.