South African unions are fretting that the continued local sale of the controversial herbicide, Roundup, will harm deep rural farm workers the most, just as Bayer this week paid out the dollar equivalent of R187 billion to settle US litigation. The German company, which is pinning its hopes on stemming further claims via a scientific panel consisting of an equal representation of plaintiff and its own experts, has settled, without prejudice or admitting Roundup causes cancer. It is hoping the panel will dismiss claims that the chemical is carcinogenic – something top US scientific bodies currently disagree on. Astonishingly, senior Bayer executives sounded upbeat after its share price rebounded slightly from two years of heavy stagnation, something attributed to strengthened oversight of its legal defence, the appointment of a new agriculture expert to its supervisory board and the launch of a new sustainability strategy. That includes setting aside R172 billion to settle outstanding claims by some 95 000 plaintiffs and potential future claims. In South Africa, where Roundup continues to be sold without a cancer warning label, the Food and Allied Workers Union says farmers generally don’t take health and safety of workers seriously, while Groundwork, an NPO, says many farm workers are ignorant of Roundup’s hazardous properties, and/or can’t read or understand labels. The other concern is the non or incorrect use of protective equipment. – Chris BatemanÂ
Bayer to pay up to $10.9 billion to settle lawsuits over Roundup weedkiller – Wall Street Journal
By Ruth Bender, Laura Kusisto and Sara Randazzo
Bayer AG said Wednesday it would pay up to $10.9 billion to settle tens of thousands of lawsuits with U.S. plaintiffs alleging the company’s Roundup herbicide causes cancer, a milestone in the German company’s legal battle that has been weighing down its share price for nearly two years.
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Investors have long been waiting for a settlement to bring clarity over how much the litigation will cost Bayer, following its 2018 purchase of U.S. agricultural giant Monsanto Co.
The deal brought the company thousands of Roundup-related lawsuits. Three jury-trial losses tanked shares and sparked a revolt among shareholders angry at Bayer’s management for plunging the company into one of the worst crises in its history with the $63 billion Monsanto acquisition.
Wednesday’s deal, which follows months of heated talks between Bayer and plaintiffs’ attorneys, doesn’t change anything in Bayer’s view that glyphosate, the active ingredient in Roundup, is safe and doesn’t cause cancer.
Bayer didn’t admit to any wrongdoing as part of the settlement and continued to defend its decision to purchase Monsanto. The company will continue to sell Roundup.
The agreement, however, leaves open the potential of more lawsuits being filed against the company in the future, an issue investors have been particularly concerned about.
As part of the deal, Bayer said it has set aside between $8.8 billion and $9.6 billion to settle claims brought by lawyers representing some 95,000 plaintiffs, as well as some 30,000 more claims that haven’t yet agreed to the settlement. The company said it would set aside another $1.25 billion to work toward a resolution of future claims, including funding a panel to evaluate whether the product causes cancer. The findings from that panel are geared to help shape the outcome of litigation going forward.
Separately, Bayer largely resolved two other legacy Monsanto cases Wednesday, involving a toxic banned chemical and a different weedkiller.
The series of settlements highlight how Bayer, the 157 year-old inventor of aspirin, is trying to move past the lingering problems triggered by the Monsanto deal.
“The litigation and the burden and some of the negative reputational impacts that come with this, we can leave those now behind us,” Werner Baumann, Bayer’s chief executive, said in an interview.
That Bayer’s Roundup products will continue to be sold, without a cancer warning label, leaves the company exposed to future lawsuits. It creates a unique legal conundrum for the company over how best to guard itself against potential future litigation.
To attempt to resolve the key question of whether glyphosate is a carcinogen, Bayer is seeking court permission to create a class of future plaintiffs and fund a five-member scientific panel that will spend several years evaluating the link between Roundup and cancer.
The panel will report its findings to U.S. District Judge Vince Chhabria in San Francisco. A conclusion that the product doesn’t cause cancer will essentially shut down any future cases. If the panel does find a link between Roundup and cancer, Bayer would have to fight plaintiff-by-plaintiff to prove the individuals’ cancer wasn’t caused by the product, a point that unsettled some investors.
Mr. Baumann said on a conference call Wednesday that while “it’s not 100% certain,” Bayer is confident the panel will back its view that glyphosate isn’t carcinogenic. The company has previously said that hundreds of regulatory agencies, including the Environmental Protection Agency, and scientists have deemed the product safe.
“We need to take the decision about carcinogenicity of the product out of the hands of juries,” said Mr. Baumann. The scientists on the panel, he said, would be selected both by Bayer and plaintiffs’ lawyers, to come to a “fair and solid” conclusion.
The creation of such a court-overseen science panel is rare, said University of Georgia law professor Elizabeth Burch, and raises questions over whether future plaintiffs who may not be sick yet are getting a fair shot at pressing claims that Roundup caused their illnesses.
Markus Manns, portfolio manager at longtime Bayer shareholder Union Investment, said the amount to settle current claims is in the range of what investors expected, but it remains unclear if the sum for future claims would be sufficient. “Over and all it seems, though, that this is the best deal Bayer could get in the current environment,” Mr. Manns said.
John Ramuno, a 72-year-old plaintiff in Southern California who suffers from multiple myeloma after working as a landscaper for 14 years, said he isn’t optimistic the settlement will help him very much.
Mr. Ramuno said his attorney told him he will have to pay 40% of his settlement for attorney fees and at least another $102,000 to Medicare for his medical bills. Mr. Ramuno said he hasn’t heard from his attorney yet about what he will get from the settlement, but he would need to get a roughly $500,000 settlement to pay Medicare and his attorneys and help cover his medical bills and living costs for the remainder of his life.
“It would be foolish to accept a settlement that pays [back] everybody but me,” he said.
Bayer is still negotiating with lawyers representing another roughly 30,000 existing clients who haven’t yet signed on to the deal. Ken Feinberg, the court-appointed mediator, said he is confident those claims will be resolved in the coming few months.
Jim Onder, senior member of the St. Louis-based Onder Law Firm, said he has 24,000 of those outstanding claims and rejected the offer as too low. “Our trial teams will continue holding Bayer accountable in Roundup trials nationwide,” Mr. Onder said.
Bayer said it would continue appealing the first three cases it had lost in jury trials, a chance for it to get favorable court decisions to bolster its stance on Roundup’s safety. A decision in the first appeal is expected later this summer. In another case on appeal, the Trump administration recently backed Bayer’s argument that Roundup is safe.
Bayer moved Wednesday to resolve two other pieces of litigation it inherited in its Monsanto acquisition.
The company will pay around $820 million to U.S. states and local governments that blame a toxic chemical banned decades ago for causing widespread waterway contamination.
The fire-resistant chemical compounds, called polychlorinated biphenyls, were used as a coolant and in a variety of commercial uses for four decades before being banned by U.S. regulators in the late 1970s over health concerns. The local and state governments allege the chemicals contaminate storm water and passively flow into waterways. The chemicals have been found in the tissue of fish, birds and other wildlife.
Bayer also said it would pay up to $400 million to resolve legal challenges and crop-damage claims to another of its herbicides, dicamba, which the company has marketed to kill weeds that have evolved to resist Roundup. Farmers and agricultural experts have blamed dicamba-based sprays for drifting on winds and damaging millions of acres of soybeans, peaches and other crops.
The settlements come as investors have recently turned more positive on Bayer. After investors scolded management at last year’s shareholder meeting, when Mr. Baumann became the first German CEO to lose a routine shareholder confidence vote, Bayer responded to investor criticism. The company strengthened oversight of its legal defense, hired a new agriculture expert to its supervisory board and launched a new sustainability strategy, winning back shareholder approval at this year’s meeting in April.
Bayer’s shares recently pared back some of the dramatic losses incurred by the first three jury losses, but as of late Wednesday, they were still down some 25% from before the first verdict in August 2018 as investors awaited clarity on the litigation.
“The settlement is an expensive liberation for Bayer that massively reduces the legal risks and with that the uncertainties on the capital market,” said Ingo Speich, head of sustainability & corporate governance at Deka Investment, another Bayer shareholder. “The reputational damage, however, won’t be repaired with that.”
—Jacob Bunge contributed to this article.
Write to Ruth Bender at [email protected], Laura Kusisto at [email protected] and Sara Randazzo at [email protected]
