The decision by the California Court of Appeal came after a San Francisco jury had in August 2018 awarded $289.2 million to the plaintiff Dewayne Johnson for his non-Hodgkin’s lymphoma, a sum later cut by the trial judge to $78.5 million (all figures US$).

Johnson’s case is separate from Bayer’s agreement on June 24 to pay up to $10.9 billion to settle nearly 100,000 lawsuits in the United States linking glyphosate-based Roundup to cancer.

If upheld, the verdict and payout could make it harder for Bayer to resolve lawsuits by other plaintiffs.

The German drugs and pesticides company inherited liability for the lawsuits when it bought Monsanto, which had produced Roundup, for $63 billion in 2018.

In a statement, Bayer called Monday’s decision “a step in the right direction” but said it may appeal to the California Supreme Court, calling the verdict inconsistent with the evidence and the law.

Bayer has long said regulators have deemed glyphosate safe. “We continue to stand strongly behind the safety and utility of Roundup,” the company said.

In its 86-page decision, the appeals court said Johnson offered “abundant” evidence that glyphosate, together with other ingredients in Roundup products, caused his cancer.

But it said the payout must be reduced because California law did not afford damages for a shortened life expectancy.

Johnson’s lawyer R. Brent Wisner called the decision another major victory for his client, who is known as Lee, despite the reduced damages.

“That Lee will not live an entire life with his wife and children should be compensable,” he said. “Hopefully, when this issue gets before the California Supreme Court, we can change this irrational law.”

— Reporting for Reuters by Jonathan Stempel and Tina Bellon in New York.

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The German company announced Wednesday it expects to spend up to $12 billion in the next few years to resolve “major legacy Monsanto litigation” — a reference to the U.S.-based chemical and seed company it bought for $63 billion in 2018 (all figures US$).

Glyphosate

Of that $12 billion, between $10.1 billion and $10.9 billion will go to “resolve current and address potential future Roundup litigation” — referring to about 125,000 “filed and unfiled” lawsuits alleging that the glyphosate-based product caused plaintiffs’ cases of non-Hodgkin’s lymphoma (NHL).

The deal announced Wednesday will settle the “vast majority” of current glyphosate-related suits, including 75 per cent of current cases and 95 per cent of cases set for trial, Bill Dodero, Bayer’s assistant general counsel and global head of litigation, told farm journalists on a conference call Wednesday.

The balance of the funds announced Wednesday are expected to allow for closure of any other related cases “in due course,” he said, noting the company is in negotiations with other lawyers about their “inventories” of such cases.

Class-action mechanisms will also limit future claims yet to be made, he added.

In a separate online notice to Canadian producers Wednesday, Bayer CropScience’s Canadian arm said the settlements “apply only to U.S. litigation” and “have no bearing on litigation in Canada.”

Furthermore, Bayer said in that notice, the company is “not contemplating a settlement of the Canadian cases related to glyphosate.”

While the U.S. and Canadian legal systems have “some similarities,” Bayer said, the two “are in fact quite different, including with respect to damage awards” and “very different considerations apply in Canada.”

At least one Canadian lawyer seeking certification for a class action, with a Saskatchewan farmer as the representative plaintiff and “slightly over 500” interested claimants, also confirmed Bayer’s statement.

Regina layer Tony Merchant told the Western Producer on Wednesday the announced settlements don’t apply to potential actions in Canada.

Bayer also plans to continue its appeals of glyphosate-related U.S. court decisions already made, Dodero said, as those include important arguments which could “reduce or perhaps even eliminate future litigation.”

Those decisions include the Dewayne Johnson, Edwin Hardeman and Alva and Alberta Pilliod cases in California.

In all, Dodero said, the settlements and appeals will provide Bayer with “the closure we require.”

Bayer “is in a position to still defend, and that’s very important, the science behind the product,” Dodero said, and the settlement “keeps our important legal arguments related to pre-emption and causation open” while putting the products’ assessments back in the hands of “regulators and experts.”

A class agreement governing “potential future cases” related to glyphosate includes the creation of an independent “class science panel,” which over the next four years will re-evaluate the chemical, Bayer said.

The panel, Bayer said, “will determine whether Roundup can cause (NHL), and if so, at what minimum exposure levels.”

If that panel finds “no causal connection” between the chemical and NHL, “class members will be barred from claiming otherwise in any future litigation against the company.”

Until the panel releases its findings, Bayer said, class members can’t proceed with Roundup claims or seek punitive damages.

The class agreement also commits Bayer to put $1.25 billion toward NHL research and diagnostic programs as well as “assistance payments to class members who develop NHL” before the panel makes its determination.

The Roundup class agreement, Bayer said, remains subject to approval by Judge Vince Chhabria of the U.S. District Court for the Northern District of California.

Dicamba

Up to $400 million will be set aside to resolve multi-district litigation related to non-targeted damage alleged to be caused by dicamba herbicides due to spray drift between 2015 and the current crop year.

Claimants seeking payouts from that settlement will have to provide proof of damage to crop yields and “evidence that it was due to dicamba” in order to collect, Bayer said.

Bayer also “expects a contribution from its co-defendant, BASF” toward settling those cases.

However, the only related dicamba drift case to have so far gone to trial — the Bader Farms case — is “not included in this resolution,” Bayer said.

The company believes the Bader case’s verdict is “inconsistent with the evidence and the law and will continue to pursue post-trial motions and an appeal, if necessary.”

Bayer said it “stands strongly behind the safety and utility” of its dicamba-based XtendiMax herbicide and “continues to enhance training and education efforts to help ensure growers use these products successfully.”

Asked whether the dicamba settlement might impact Bayer’s efforts to re-register dicamba in the U.S. — in the wake of a recent court case vacating its current federal registration there — Bayer CropScience president Liam Condon said the spray drift settlement is not connected.

Bayer now expects its dicamba re-registration to be approved this fall, based on “the latest data” available, which he said will be more current than the data on which the vacated registration was based.

PCBs

Also, about $820 million will go to resolve “most” of the company’s exposure to cases from U.S. state and local governments relating to wastewater discharges of polychlorinated biphenyls (PCBs), compounds formerly used mainly in coolants and insulators for electrical equipment.

Monsanto, according to Bayer, “legally manufactured PCBs” up until their manufacture and import were banned across North America in 1977, due to concerns over environmental impacts and risks of cancers and other illnesses in cases of long-term, high-level exposure.

In all, Bayer said Wednesday, cash payments are expected to begin this year, and the company assumes “potential cash outflow” will be no more than $5 billion in each of 2020 and 2021, with the rest to be paid out in 2022 or later.

To finance the payouts, Bayer said it may use current “surplus liquidity,” future free cash flows, bond issuances and/or the proceeds from the previously-announced $7.6 billion sale of its Bayer Animal Health division to Elanco, which it now expects to complete in August.

“Greater certainty”

Bayer emphasized the agreements announced Wednesday “contain no admission of liability or wrongdoing.”

Lisa Safarian, regional head for Bayer CropScience’s North American division, said on Wednesday’s conference call the agreements will “bring greater certainty to our farmer customers about the availability of our products” going forward.

There will be “no change” in availability for the crop chemicals in question due to the agreements, she added.

Asked whether the settlements will lead directly to any changes to label directions for farmers’ use of Bayer’s glyphosate or dicamba products, Condon said the company does “not expect any changes whatsoever to the labels of the products.”

“Basically, every regulator in the world has approved glyphosate as safe and non-carcinogenic,” he said, and “multiple” regulators reaffirmed it as such after the World Health Organization’s International Agency for Research on Cancer (IARC) in 2015 classified glyphosate as “probably carcinogenic to humans.”

“If you kind of step back, what we’re doing here is, in essence, we’re paying an awful lot of money to take the discussion about the safety of glyphosate out of the courtroom and actually put it back in the scientific and regulatory arena, because that’s where it belongs,” Condon said on the call.

The U.S. Environmental Protection Agency, Dodero added, had already written a letter to glyphosate manufacturers in which it “expressly said any label change indicating a cancer or carcinogenicity warning would be false and misleading.” — Glacier FarmMedia Network

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After more than a year of talks, however, some details and the overall amount of the settlement have yet to be finalised, one of the sources said on condition of anonymity.

German business daily Handelsblatt earlier on Tuesday reported a deal was imminent, with Bayer pledging $8 billion to $10 billion to settle the claims, including a $2 billion buffer for future cases (all figures US$).

The drugs and pesticides group, which said in May that talks were progressing, is keen to draw a line under the legal dispute over Roundup and other glyphosate-based herbicides, which it inherited via its $63 billion takeover of Monsanto in 2018.

Its shares rose six per cent to 72.78 euros at 2 p.m. GMT. Still, they were more than 20 per cent below their value August 2018, when Bayer lost the first of three court cases with damages in the tens of millions being awarded to plaintiffs.

Bayer, which has repeatedly said the product is safe to use and has approval from market regulators, is appealing all three jury verdicts.

In April, Bayer’s management regained shareholder support for its handling of the litigation process.

A Bayer spokesman declined to comment. Perry Weitz of Weitz and Luxenberg, one of the leading plaintiffs’ firms involved in the Roundup litigation, also would not comment.

Court-appointed mediator Ken Feinberg, who started work little over a year ago, also declined comment.

The company’s supervisory board was due to discuss and vote on the settlement in the coming days, Handelsblatt cited company and negotiating partner sources as saying.

As of April, the company had been sued by 52,500 U.S. plaintiffs who blame Roundup and other glyphosate-based herbicides for their cancer, up from 48,600 in February.

— Reporting for Reuters by Tina Bellon and Patricia Weiss; writing by Ludwig Burger.

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The drugs and pesticides group is keen to draw a line under the legal dispute, which it inherited via its $63 billion takeover of Monsanto in 2018 (all figures US$). In April, Bayer’s management regained shareholder support for its handling of the litigation process.

Bloomberg cited people familiar with the negotiations as saying that the deals have yet to be signed and Bayer is likely to announce the settlements in June.

“We’ve made progress in the Roundup mediation discussions under the auspices of Ken Feinberg, but in keeping with the confidentiality of this process, the company will not speculate about settlement outcomes or timing,” a Bayer spokesman said, referring to a court-appointed mediator.

Bloomberg reported the overall number of U.S. cancer lawsuits stood at 125,000, including tens of thousands being held in abeyance by plaintiffs’ lawyers under agreements with Bayer.

Bayer said in April it has been served with cases in court from 52,500 U.S. plaintiffs who blame Roundup and other glyphosate-based herbicides for their cancer, up from 48,600 in February.

The Bayer spokesman said potential plaintiffs with unserved cases accounted for the difference but he said the company expected more claims to be filed in court because lawyers have advertised heavily to recruit plaintiffs.

“For several reasons, many claims gathered by lawyers will not be compensable in a settlement program,” he added.

Bloomberg reported the verbal agreements were part of a prospective $10 billion deal package, which would include $2 billion for any future cases that are brought after the deal.

Bayer said in February that the average analyst prediction of a settlement was for about $10 billion and that Bayer would not have to write down the value of the Monsanto acquisition in case of such a deal with plaintiffs.

Bloomberg said that under terms of the prospective deals, Roundup would continue to be sold in the United States and plaintiffs’ attorneys would agree to stop taking new cases or advertising for new clients.

— Ludwig Burger is a Reuters correspondent covering Europe’s chemical and pharma sectors from Frankfurt.

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Bayer has said it is engaged in mediation to resolve the litigation, which has hit its share price since it acquired Roundup as part of its US$63 billion takeover of Monsanto in 2018.

The company has denied claims that Roundup or its active ingredient glyphosate causes cancer, saying decades of independent studies have shown the product is safe for human use.

The person said that Bayer believes an agreement with plaintiffs’ attorneys to ban advertising would limit the company’s future legal exposure since the “vast majority” of U.S. law firms that would bring such claims would be bound by the agreement.

Bayer declined to comment.

German newspaper Handelsblatt reported on Thursday that Bayer was considering stopping retail sales of glyphosate while continuing to serve farmers, because the bulk of plaintiffs are private users. Bayer did not comment to Reuters on this report.

The company has ruled out putting a cancer warning on the weedkiller because market regulators such as the U.S. Environmental Protection Agency have deemed it safe to use, but that means lawsuits could keeping piling in.

In October, Bayer largely blamed law firms’ TV ad campaigns for the more than doubling of U.S. plaintiffs seeking damages to 42,700 within just three months.

A provision such as the one the company is considering could result in “dramatically fewer claims” so that the litigation is no longer a “big drag on Bayer’s balance sheet,” said David Noll, a professor at Rutgers Law School and expert in mass torts, who is not involved in the litigation.

In January, court-appointed mediator Ken Feinberg put the number of Roundup cancer claimants at more than 75,000, which includes those that have not been filed. Bayer said the claims it has been served with in court were below 50,000.

While such a provision is unusual, there is precedent.

As part of a 2013 settlement between Merck and Co. and plaintiffs claiming the company’s Fosamax osteoporosis drug caused jaw injury, lawyers pledged that they did not intend to “solicit claims” that arose after the settlement.

Perry Weitz of Weitz and Luxenberg, one of the leading plaintiffs’ firms involved in the Roundup litigation, criticized an idea to bar firms from advertising for future clients.

“A company cannot ask a lawyer to enter an agreement to restrict his practice in the future,” he said.

He said there had not been “serious discussions about future cases,” but declined to elaborate.

Michael Miller of The Miller Firm, another major party in the talks, said that “it is possible, if done correctly, to manage the exposure to future claims.” He declined to elaborate.

Three other plaintiffs firms who have brought the bulk of the claims — Baum Hedlund Aristei and Goldman; Andrus Wagstaff PC; and Holland Law Firm — declined to comment. Moore Law Group PLLC did not respond to requests for comment.

Bayer’s shares have lost about 20 per ce t of their value since August 2018 when a California jury in the first lawsuit over Roundup found Monsanto should have warned of the alleged cancer risks. Bayer has lost two more jury verdicts and is appealing all three rulings.

— Reporting for Reuters by Ludwig Burger, Patricia Weiss and Arno Schuetze.

Q+A: What are the obstacles to Bayer settling Roundup lawsuits?

Reuters — Bayer is in mediation to potentially settle thousands of U.S. lawsuits claiming that the company’s Roundup herbicide causes cancer, but some legal experts said the cases raises novel questions that may prevent an easy settlement.

More than 42,700 plaintiffs claim Roundup causes a type of cancer called non-Hodgkin’s lymphoma.

Bayer to date has lost three U.S. jury trials in the Roundup litigation. The company is appealing or has vowed to appeal the decisions, saying Roundup and its active ingredient glyphosate are not carcinogenic and safe for human use.

Legal experts outlined several obstacles the parties may face on the path toward settlement.

Why is the Roundup litigation different from other product cases?

Settlements involving drugs, medical devices or consumer goods often result in the addition of a warning label, a recall or the outright discontinuance of a product. Those steps generally close the door to future lawsuits, making settlement costs and risks predictable.

Bayer has never publicly considered pulling Roundup off the market. The company in June announced a $5.6 billion investment to research and develop a glyphosate alternative.

Bayer unit Monsanto began selling Roundup in 1974 and while the formulation is no longer patent-protected, Roundup remains widely available today. Bayer has repeatedly said Roundup is safe and important to farmers who use the herbicide in combination with the company’s genetically modified seeds

Non-Hodgkin’s lymphoma on average can take up to 10 years to emerge, increasing the likelihood of claims being filed after the litigation has settled. Product liability settlements generally include a cut-off date for future claimants and need to be properly funded for a court to approve the agreement.

As long as the product continues to be sold without changes to the label, plaintiffs may continue to file lawsuits, said Elizabeth Burch, a law professor at the University of Georgia.

Could Bayer add a cancer warning?

Plaintiffs’ lawyers, who claim the company manipulated the science, told Reuters they would insist on a cancer warning label as part of any Roundup settlement.

Such a warning has been rejected by the U.S. Environmental Protection Agency, which regulates pesticides and repeatedly has found glyphosate to be safe.

The agency said it has finished a regulatory review that found glyphosate is not a carcinogen.

In a filing to a federal appeals court, which hears one of the appeals to a jury verdict, the EPA and the U.S. Justice Department backed Bayer and said it was unlawful for manufacturers to make label claims that differ from EPA approval.

David Noll, a professor at Rutgers Law School, said adding a cancer warning over a regulator’s explicit opposition presented unchartered legal territory.

How could Bayer settle the Roundup litigation?

To settle product liability litigation, companies generally set up a fund and the parties define criteria that current and future claimants must fulfill to receive compensation.

In the Roundup litigation, claimants could be divided into different groups depending on the frequency of their Roundup use and disease severity and length.

But Adam Zimmerman, a law professor at Loyola Law School, said defining those groups is complicated by the lack of a signature disease associated with Roundup, making it difficult to predict Bayer’s liability.

For example, in asbestos litigation, mesothelioma, a rare tissue cancer, was recognized as a signature disease caused by exposure to asbestos fibres.

Doctors recognize several risk factors leading to non-Hodgkin’s lymphoma, but the disease is largely considered to have no known cause. Around 74,000 people in the United States are expected to be diagnosed with the disease in 2019, according to the American Cancer Society.

Settling claims might not preclude future lawsuits if the fund runs out of money. In the Agent Orange litigation, Vietnam War veterans were allowed to sue chemical companies decades after a settlement was reached because the compensation fund was depleted by the time they developed their diseases.

— Reporting for Reuters by Tina Bellon in New York.

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