A federal judge has rejected a $2 billion plan put forth by Bayer to address a proposed class of plaintiffs who have been exposed to Roundup but have not filed lawsuits against the company, saying the purported benefits of the proposed settlement have been exaggerated.
In particular, U.S. District Judge Vince Chhabria said potential class members would be giving up too much to join the class, including the right to sue for punitive damages if they do contract non-Hodgkin lymphoma.
The proposed settlement “would accomplish a lot for Monsanto,” the judge said, identifying the company by the name it used before it was bought by Bayer. “It would substantially diminish the company’s settlement exposure and litigation exposure at the back end, eliminating punitive damages and potentially increasing its chances of winning trials on compensatory damages. It would accomplish far less for the Roundup users who have not been diagnosed with NHL — and not nearly as much as the attorneys pushing this deal contend.”
Bayer did not immediately comment on the decision, but class counsel Elizabeth Cabraser issued a statement saying, "While we are disappointed by the court’s ruling today, we continue to believe that a multibillion-dollar class settlement that includes free legal services and substantial compensation to claimants, NHL diagnostic assistance, research into NHL treatment, and Roundup label reform to inform users and the public on all the science regarding a Roundup/NHL link, would provide tremendous financial, health and safety benefits for class members."
The two groups covered by the proposed settlement include “Roundup users who have been diagnosed with [non-Hodgkin lymphoma] but who have not yet sued and have not yet hired a lawyer to sue,” Chhabria explained in his order. “The second group consists of people who used Roundup before February 2021 but who have not been diagnosed with NHL.”
But he said he didn't need to look at whether the deal was fair for the first group, “because it is clearly unreasonable for the second group.”
He said “the benefits of the medical monitoring program are far less meaningful than the attorneys suggest,” citing NHL’s long latency period. According to testimony from experts for both sides, he said, “People can reasonably expect to wait 10 or 15 years after exposure before developing the disease.”
The plaintiffs’ motion to approve the agreement “thus appears to greatly exaggerate the potential benefits of four front-end years’ worth of vaguely described medical monitoring for those without NHL,” he said in the ruling.
The benefits of the compensation fund, as well, are “vastly overstated,” Chhabria said.
“The fund is designed to last only four years,” he said. “It may even be exhausted earlier by claims from people already diagnosed with NHL. Since many people in the second group will likely receive their diagnosis more than four years down the line (with or without medical monitoring), they will not be able to request compensation from the fund.”
Although Cabraser emphasized at the hearing that Bayer could extend the life of the fund and add to it, Chhabria said in his order “there is no requirement to do so, and Monsanto would merely incur a relatively minor ‘exit fee’ if it decided to end the program. Accordingly, the court cannot assume (and a class member certainly could not assume) that money will be available for longer than four years.”
The judge said that “in exchange for these tenuous benefits, the proposed agreement calls upon class members to make two major sacrifices.”
First, he said, “although class members retain the ability to sue Monsanto upon diagnosis if they choose to forego compensation from the fund or if the fund has expired, they lose the right to seek punitive damages. Second, in any trial where class members seek compensatory damages, they must stipulate to the admission of the opinion of a seven-member science panel about whether Roundup can cause NHL.”
“The attorneys pushing this deal repeatedly intone that it will be difficult for Roundup users who are diagnosed with NHL in the future to get a trial, given the limited capacity of courts and given that many plaintiffs will be ‘in line’ ahead of them,” Chhabria said. “This means, the attorneys imply, that relinquishing the ability to seek punitive damages at trial is no big deal. Surely counsel must know that this misses the most important issue, which is that class members, by waiving punitive damages, would be greatly diminishing the future settlement value of their claims.”
The seven-member science panel, whose findings on the causal relationship between Roundup exposure and NHL could be used at future trials involving class members, came in for criticism from the judge.
“The reason Monsanto wants a science panel so badly is that the company has lost the ‘battle of the experts’ in three trials,” he said. “At present, the playing field on the issue of expert testimony related to causation is slanted heavily in favor of plaintiffs. Thus, agreeing in advance to admit the opinion of a court-blessed panel that might undercut the opinions of the plaintiffs’ experts is a significant concession for the class members — one that could greatly reduce their chances of winning. And again, it would reduce settlement value.”
He also sharply criticized the proposed notice to let potential class members that they can opt out of the class.
“Consider the first three sentences of the proposed ‘short form’ publication notice,” Chhabria said in his order: “’Exposed to weed killers? You could benefit from a $2 billion settlement. People diagnosed with Non-Hodgkin’s Lymphoma could receive up to $200,000.’ This might catch the eye of the people in the first group — those who have already been diagnosed. But if you’re trying to grab the attention of someone who has not been diagnosed with NHL, this is not the way to do it.”
Coming just a week after Chhabria held a hearing on a motion for preliminary approval of the plan, the ruling came as somewhat of a surprise, given that the judge had indicated parties in the case might want to submit revisions for the court’s consideration.
But he said that would be unfair to those objecting to the plan, including some nongovernmental organizations and other plaintiffs’ attorneys.
“Mere tweaks cannot salvage the agreement,” he said in his six-page order. “If a settlement that reasonably protects the interests of Roundup users who have not been diagnosed with NHL can be reached, that agreement must be presented on a new motion for preliminary approval.”
Nearly a year ago, facing thousands of lawsuits and having lost three cases brought by individual plaintiffs, Bayer proposed paying $8.8 billion to $9.6 billion to settle about 125,000 claims against the company by people who contracted non-Hodgkin lymphoma after using Roundup. Another $1.25 billion was allocated for potential future claims, which included compensation, as well as medical monitoring and diagnostic services.
After Chhabria expressed skepticism about the agreement, Bayer reworked it and came back with a $2 billion offer, including a compensation fund of $1.325 billion as well as the previous elements of the deal.
Numerous objections followed, and Chhabria held his hearing May 19, where he heard from the attorneys for the putative “futures” class as well as from objectors, including the group Public Justice.
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