Resolution of US Roundup litigation: Bayer pays up to US$10.85bn

25 Jun 2020 --- Bayer has announced a series of agreements that will substantially resolve major outstanding Monsanto litigation, including US Roundup product liability litigation. The German chemical giant is to pay up to US$10.85 billion to settle claims linked to its Roundup weedkiller, a glyphosate-based product that has been subject to around 125,000 lawsuits over its allegedly carcinogenic effects. Bayer denies any wrongdoing, however, says the resolution puts “an end to uncertainty”.

The resolution also puts in place a mechanism to resolve potential future claims efficiently. The company will make a payment of US$8.8 billion to US$9.6 billion to resolve the current Roundup litigation, including an allowance expected to cover unresolved claims, and US$1.25 billion to support a separate class agreement to address potential future litigation.

Glyphosate is the active ingredient in several weedkillers. Backed by the US Environmental Protection Agency, Bayer says glyphosate is a carcinogen. However, there is much debate surrounding its safety and some countries have banned herbicides that contain glyphosate. 

The Roundup class agreement will be subject to approval by Judge Vince Chhabria of the US District Court for the Northern District of California. The resolutions were approved unanimously by Bayer’s Board of Management and Supervisory Board with input from its Special Litigation Committee. The agreements contain no admission of liability or wrongdoing.

“First and foremost, the Roundup settlement is the right action at the right time for Bayer to bring a long period of uncertainty to an end,” says Werner Baumann, Bayer CEO. “It resolves most current claims and puts in place a clear mechanism to manage risks of potential future litigation. It is financially reasonable when viewed against the significant financial risks of continued, multi-year litigation and the related impacts to our reputation and to our business. The decision to resolve the Roundup litigation enables us to focus fully on the critical supply of healthcare and food. It will also return the conversation about the safety and utility of glyphosate-based herbicides to the scientific and regulatory arena and to the full body of science,” he adds.

“The Roundup agreements are designed as a constructive and reasonable resolution to a unique litigation,” adds Kenneth Feinberg, court-appointed mediator for the settlement talks. “The separate, independent settlements of the current claims are unique and a tribute to Bayer. The significant progress made to date – which exceeds the initial participation rates of other claims resolution proceedings – provides a robust framework that will enable the parties to bring closure to the current Roundup litigation in due course.”

The multi-step Roundup resolution includes several elements. The agreements will resolve the vast majority of the current litigation in US federal and state courts, including both plaintiffs with filed cases and parties who have retained counsel but not yet filed their claims in court. 

Those participating in the settlement will be required to dismiss their cases or agree not to file. The range of US$8.8 billion to US$9.6 billion covers both the agreements already signed and those that are still under negotiation. It also reflects the fact that the number of claimants who are eligible to receive compensation under these agreements won’t be known until the claims process is well underway. 

The three cases that have gone to trial – Johnson, Hardeman and Pilliod – will continue through the appeals process and are not covered by the settlement. It is important for the company to continue these cases as the appeals will provide legal guidance going forward, notes Bayer.

The company said that before deciding to settle, it considered the alternative course of continuing to litigate Roundup cases. In the company’s risk assessment, potential negative outcomes of further litigation, including more advertising and growing numbers of plaintiffs, upwards of twenty trials per year and uncertain jury outcomes, and associated reputational and business impacts, likely would substantially exceed the settlement and related costs.

Farmers and other professional users who depend on glyphosate-based herbicides for their livelihoods will see no change in the availability of Roundup products under the Roundup agreements, notes the company. 

Meanwhile, Bayer says it remains committed to offering customers more choices and announced last year an investment of approximately €5 billion (US$5.6 billion) over ten years to develop additional methods to manage weeds as part of an integrated approach to sustainable agriculture.

In 2018 Bayer acquired Monsanto, a leading producer of genetically engineered crops, for US$63 billion. It faced several legal challenges in relation to the herbicide. Two months after Bayer acquired Monsanto, a US jury ordered Monsanto to pay US$289 million to a school groundskeeper who claimed his Non-Hodgkin’s lymphoma was caused by regularly using Roundup.

Edited by Gaynor Selby