A federal judge may send Bayer back to the drawing board on a $2 billion settlement with people who do not have lawyers but have either been diagnosed with non-Hodgkin lymphoma after Roundup exposure, or were exposed to Roundup and not yet sick.
SAN FRANCISCO (CN) — A federal judge seemed hesitant Wednesday to green light a $2 billion deal to resolve future Roundup claims that he believes gives short shrift to people who have used the popular weed killer but haven’t developed cancer and may not be diagnosed for many years.
U.S. District Judge Vincent Chhabria said he has serious reservations about numerous aspects of the settlement, proposed in February after the parties withdrew their first attempt amid even greater concerns.
The latest effort comes as Bayer-owned Monsanto is trying to resolve 75% of claims filed by 125,000 people who attribute their non-Hodgkin lymphoma to Roundup use with a $10 billion mass settlement agreement.
At the start of a marathon hearing on the matter conducted over Zoom, Chhabria said the proposed deal divides the class into two groups, or subclasses: those who have been diagnosed with non-Hodgkin lymphoma and were exposed to Roundup but don’t have lawyers, and those who have been exposed to Roundup but have not been diagnosed with lymphoma.
The first group would be entitled to either accelerated payments of $5,000 or if they are willing to submit extensive records, could apply for an award ranging from $10,000 to $200,000, maybe $50 million in extreme cases.
Chhabria seemed primarily concerned about the second group, and he said bluntly that the agreement didn’t seem like a good deal for those people.
While they also retain the right to sue Roundup maker Monsanto for compensatory damages if they get sick, they must relinquish their right to sue for punitive damages, which if the last three jury verdicts were any indication, could leave billions on the table.
In the meantime, the U.S. Supreme Court could rule that the Federal Insecticide, Fungicide and Rodenticide Act preempts any future state failure to warn claims, leaving thousands of people who develop cancer later out in the cold.
“It seems to me that for the people who have not yet been diagnosed with NHL, by far the biggest litigation risk is that the Supreme Court will rule at some point that these state law claims are preempted and they’d have no claim whatsoever,” Chhabria said. “The judge’s primary job is to evaluate litigation risk for the class members. It seems the primary risk is you get the rug pulled out from under you by the Supreme Court.”
Lead class counsel Elizabeth Cabraser said there’s no guarantee that future Roundup verdicts will result in such high punitive damages awards. The specter of FIFRA preemption also presents an ongoing hurdle for the class, and a Supreme Court ruling in Monsanto’s favor “could wipe out at least some or not all of tort claims of people exposed to Roundup.”
Meanwhile, the current deal offers valuable benefits, like four years of medical monitoring and diagnostic testing, and the ability to collect from a roughly $1.3 billion compensation fund should they develop cancer in the future.
“We cannot look only at things that are arguably reducible to dollars and cents,” Cabraser said.
“The four years of medical monitoring and possibility of getting some compensation if I’m diagnosed with NHL in two, or three, or four years is not particularity enticing to me,” a skeptical Chhabria said, adding that the class cannot bank on there being enough money in the compensation fund to last very far into the future. Ninety percent will be eaten up in four years, and the latency period for non-Hodgkin lymphoma is quite long, and more than half of the people who contract NHL are diagnosed after the age of 65.
“Why would I possibly sign on to a settlement agreement like that? Why wouldn’t I just say look, there’s no indication that there’s going to be any money for me?” he asked, hypothesizing about a 51-year-old who sprays Roundup in his yard and develops cancer 15 years later.
“There’s no reason to believe there will be any compensation for me as a result of this settlement. There’s no reason to believe that there’s going to be medical monitoring for me at the time I’m most likely to contract the disease,” Chhabria said, “And yet I’m giving up my right to sue if I do get it in two years and I’m giving up the right to seek punitive damages, despite being harmed by a product Monsanto is unwilling to put a warning label on. I just can’t understand why it would be in my interest or the vast majority of the class members’ interest to not opt out.”
Cabraser said Monsanto could decide to replenish the fund.
“If Monsanto decides to put in additional funding,” Chhabria observed. “There’s not even any assurance that the money is going to be there in four years.”
Cabraser said the plaintiffs’ claims experts, who are “not wrong” have filed declarations estimating the number of claims that will come in and the amount of money in the fund to pay them. If the money runs out, she said Monsanto will pay individual claims to keep people from passing into the tort system.
But Chhabria and the objector attorneys remained focused on the issue of punitive damages as a deal breaker.
“I’m trying to measure the value of the punitive damages claim for the people who would be giving up those claims,” Chhabria said.
The threat of going to trial and winning a major punitive damages verdict gives Monsanto a major incentive to settle cases individually for a lot more money.
“If somebody possesses punitive damages claims, it affects settlement value,” he said.
Monsanto lawyer William Hoffman said even without the option of seeking major damages awards, the settlement represents the most fair deal for the greatest number of people.
“We do know that very few people go to trial, so very few people will get the benefit of punitive damages awards,” he said.
Objecting to the deal, class attorney Behram Parekh said Chhabria should be wary of approving anything that trades away an important bargaining chip for plaintiffs.
“Monsanto is trying to whittle away at the value of individual claims. Why is giving up punitive damages so important to Monsanto? Because that’s what holds a hammer above Monsanto. If I threaten to take that case to trial and get $10 million or a billion in damages, that makes a difference to Monsanto’s bottom line,” he said. “What makes this egregious is that Monsanto has not changed its behavior. It’s continuing to sell Roundup without a warning.”
Monsanto contends that it cannot put a warning label on Roundup because it was required under the Federal Insecticide, Fungicide, and Rodenticide Act to follow instructions not to do so by the U.S. Environmental Protection Agency, which determined that Roundup’s active ingredient glyphosate to be non-carcinogenic to humans.
The agency’s decision contravenes a 2015 report by a working group at the International Agency for Research on Cancer, which found Roundup’s active ingredient glyphosate to be “probably carcinogenic” to humans.
At Wednesday’s hearing, Chhabria proposed a warning label that would inform consumers about the ongoing scientific debate and include a link to the websites of both regulatory bodies.
“Wouldn’t a label like that inoculate Monsanto from lawsuits from people who use Roundup?” he asked.
While Cabraser said the plaintiffs were considering such a label, Hoffman balked, saying the EPA would object to its findings being placed under IARC’s. “They may view that as undermining their repeated conclusion.”
He also said there’s no guarantee that such a label would “inoculate” Monsanto from future lawsuits. “Far from a guarantee,” he said.
Chhabria said he might ask the EPA to submit a brief on what label wording it would accept.
Another controversial aspect of the settlement is its inclusion of a science panel to determine whether Roundup can cause non-Hodgkin lymphoma, and if so, at what minimum exposure levels.
Chhabria said aside from being a “major concession” for the plaintiffs, at this point, he’s not prepared to accept a deal that would make a science panel’s determination binding on other courts.
He said judges have discretion not to admit the panel’s opinion in a future trial where lawyers would not be able to question its members on the panel’s conclusions.
“I have very serious reservations about approving an agreement that effectively forces state court trial judges or federal judges to admit an opinion where it’s not subject to cross examination,” he said.
After more than five hours of argument, Chhabria took the motion for settlement approval under submission, saying, “Assuming the parties don’t come back and say they’re withdrawing this, it will be a while before I issue a ruling on it.”