On The Case

Revised $2 billion Roundup deal is much less ambitious – but likelier to survive

(Reuters) - There’s a faint tinge of resignation in plaintiffs’ lawyers’ announcement Wednesday of a revised agreement to resolve claims by thousands of people who have been exposed to Monsanto’s Roundup and may develop non-Hodgkin’s lymphoma but have not yet hired lawyers or filed a suit.

The settlement is undoubtedly a milestone in mass litigation involving alleged injuries that take years to develop. The proposed $2 billion settlement establishes a compensation fund of at least $1.35 billion for class members who file claims in the next four years, with top awards of $200,000 or more in extraordinary circumstances. The deal also includes hundreds of millions of dollars from Monsanto parent Bayer for cancer research and diagnostic testing for class members, who will receive notice through a multilingual program designed to reach even itinerant agricultural and landscaping workers.

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It’s a big, creative deal with benefits for both prospective plaintiffs and Monsanto’s parent Bayer, as I’ll explain. But it is also, as the plaintiffs’ press release noted, “a conventional mass tort class settlement.”

That’s in contrast to the settlement Bayer and plaintiffs’ lawyers proposed last summer. The previous deal, as I told  you in June, offered an entirely new vision for resolving mass torts with long latencies. Bayer and plaintiffs’ lawyers proposed the establishment of a scientific panel of five experts who would spend four years weighing the evidence to reach a final determination of whether there’s a link between Roundup and non-Hodgkin’s lymphoma and, if so, at what exposure level. The June settlement called for the findings of the science panel to bind all class members who did not opt out of the class. If the science panel found Roundup did not cause cancer at ordinary exposure levels, as Bayer and Monsanto have always contended, the company’s future liability would be minimal. If the panel found a link, plaintiffs could head to trial without having to prove causation.

The judge overseeing the Roundup multidistrict litigation, U.S. District Judge Vince Chhabria of San Francisco, had deep concerns about this new paradigm for resolving mass torts. In an extraordinary order delaying a preliminary hearing on the proposed settlement, the judge said he was inclined to reject the deal, in part because the proposal called for the scientific panel to supplant jurors on the threshold issue of causation. The judge said he didn’t understand how prospective plaintiffs would benefit from that arrangement. And though class members could opt out to avoid the binding authority of the science panel’s determination, Judge Chhabria said he was worried that prospective class members might not receive or understand notices explaining their rights.

Bayer and class counsel withdrew the proposal and re-entered negotiations. Wednesday’s proposal, which is modeled on previous mass tort class action settlements in the fen phen diet drug, Deepwater Horizon and NFL concussion cases, is far less visionary. Like class counsel from Lieff Cabraser Heimann & Bernstein, Audet & Partner, the Dugan Law Firm and Fegan Scott said in their press release, Bayer and plaintiffs’ lawyers are now asking Judge Chhabria to bless a “conventional” settlement.

He’s a lot likelier to do so. Plaintiffs’ lawyers, who were assisted by New York University law professor Sam Issacharoff, laid out in their motion for preliminary approval why this proposed deal does not provoke the concerns the judge expressed about this summer’s withdrawn agreement.

There’s still a five-expert science panel in the new agreement. The panel still has four years to consider the evidence and reach a determination of whether and at what exposure Roundup causes non-Hodgkin’s lymphoma. (Bayer and Monsanto deny any link and continue to sell the product.) But the panel’s determination will be merely advisory. The settlement calls for a four-year standstill on new suits against Monsanto by plaintiffs who choose litigation instead of compensation through the settlement. When the litigation resumes, either side can introduce the science panel’s findings – but the settlement agreement explicitly permits the other side to attempt to introduce evidence casting doubt on the panel’s determination. Causation, in other words, would still be decided by jurors, not by scientists – just as Judge Chhabria insisted.

And, in a feature that seems to address the judge’s fears about plaintiffs ceding rights without notice, the new proposed settlement would allow prospective plaintiffs to delay a decision on opting out of the class until they’ve applied for compensation and received an offer. If they believe they’d do better in the tort system, they can opt out and go to court after the standstill. In fact, according to plaintiffs’ lawyers, the only major concession from class members is the right to sue for punitive damages. (They’re also ceding the right to litigate in the next four years and the right to sue for medical monitoring, although the settlement offers its own robust diagnostic program.)

Bayer, meanwhile, gets the right to revisit the deal in four years – after the advisory science panel has reached a determination about whether Roundup causes non-Hodgkin's lymphoma. According to the settlement agreement, Bayer’s subsequent contributions to the compensation fund will be guided by the panel’s findings. The agreement projects the company will double its annual contributions if the panel finds a link and halve funding if the panel concludes Roundup doesn’t cause cancer. (Those terms are subject to negotiation and any continuation of the compensation plan would have to be approved by the court.)

So Bayer may still benefit from the scientific panel if experts vindicate the company’s longstanding defense of Roundup. For the company, the new deal isn’t the same sort of all-or-nothing gambit as the June settlement, but future mass tort defendants are going to be interested in how the advisory science panel findings shape the case in the long term.

Judge Chhabria halted a potential revolution last summer, forcing Bayer and class counsel drastically to scale back the novelty of their agreement. The new deal nevertheless offers benefits to thousands of prospective plaintiffs and a chance for Bayer to obtain expert confirmation of the safety of its product. It’s not as exciting as the June settlement, but it’s probably a better proposal.