BAYN Bayer AG

By Sara Randazzo 

Bayer AG is scrapping a $1.25 billion proposal for resolving future lawsuits over whether its Roundup weedkiller causes cancer, highlighting the difficulty of settling litigation over a product still on the market.

The snag doesn't affect deals worth up to $9.6 billion that Bayer reached with lawyers representing tens of thousands of plaintiffs who blame Roundup for making them sick. It does, however, call into question how the German conglomerate will ever fully put to rest the Roundup liabilities it inherited when it purchased seed and pesticide maker Monsanto Co. in 2018.

Bayer had asked a federal judge in San Francisco to approve a unique type of class action that would dictate how people can sue the company in the future over claims that Roundup causes non-Hodgkin lymphoma. The proposed class action depended on the creation of a panel of scientists that would definitively conclude whether Roundup and its active ingredient, glyphosate, are carcinogens.

U.S. District Judge Vince Chhabria said this week he was skeptical that a science panel could fairly replace judges and juries in the case, and that he was unlikely to sign off on the idea. "Although the court is not aware of any Plan B, it would be surprising if none existed given the stakes involved and the novelty of Plan A," the judge wrote after expressing his concerns.

Bayer and plaintiffs' lawyers said Wednesday they will work on refining the idea and bring it back to the judge.

Elizabeth Cabraser, a well-known class-action expert representing the plaintiffs, said they "remain strongly committed to a fair and just resolution." Bayer echoed that, saying it will seek "a viable solution to manage and resolve potential future litigation."

Bayer plans to continue selling Roundup with no change to its label for use in commercial farming and everyday gardening. But doing so makes it difficult for the company to fully contain lawsuits filed over Roundup's safety since people who use the product today could get sick years from now and try to blame Bayer.

The Environmental Protection Agency and other regulators have said glyphosate doesn't cause cancer. Three California juries, meanwhile, have concluded that Roundup caused plaintiffs' illnesses and awarded large verdicts.

Legal observers say a backup plan that meets the judge's approval could take a few forms, including allowing the science panel to conduct new research rather than simply analyzing existing studies. "In an area where the science may be evolving, how could it be appropriate to lock in a decision from a panel of scientists for all future cases?" Judge Chhabria wrote in his order. Bayer could also alter a proposal it made to monitor current Roundup users to see if they develop non-Hodgkin lymphoma, to better use that monitoring to come up with new research.

Another option, said University of Connecticut law professor Alexandra Lahav, is to simply wait for decisions in the appeals that Bayer is pursuing in the three Roundup cases that have gone to trial. Those appeals rest on the idea that the jury verdicts are in direct contrast with the conclusions of the EPA, which has told Bayer it can't put a cancer warning label on the weedkiller since the agency determined the product isn't carcinogenic.

The problem for companies trying to resolve any mass tort, Ms. Lahav said, is how to put an end date on liability. "What is a way to cabin it and control it, while still being fair to people?" she said.

As Bayer works to recast the class-action proposal, it continues to negotiate with lawyers who have existing cases. At the time of its June settlement, Bayer said it had settled with lawyers representing 75% of the 125,000 known plaintiffs and had set aside between $8.8 billion and $9.6 billion to cover the entire batch of existing claims.

Plaintiffs' lawyers unsatisfied with settlement offers, meanwhile, are still signing up new clients. Legal marketers say television advertisements urging Roundup users with non-Hodgkin lymphoma to call the number on the screen continue to air around the country.

"There is no recall. There is no label change," a narrator says in an advertisement airing this week sponsored by the Goldwater Law Firm. "So why all these lawsuits? If you have non-Hodgkin's lymphoma, we have information to help you decide how to move forward."

--Micah Maidenberg contributed to this article.

Write to Sara Randazzo at sara.randazzo@wsj.com

(END) Dow Jones Newswires

July 08, 2020 16:44 ET (20:44 GMT)

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