Bayer Reaches A Series Of Agreements
June 24, 2020 – In the past months, there has been ongoing discussion about glyphosate – the active ingredient in most Roundup™-brand herbicides – and the litigation over glyphosate-based products. The resolution Bayer has reached will bring closure to the vast majority of the current Roundup™ product liability claims, while also establishing a framework to resolve the remainder of the pending litigation. The resolution also puts in place a mechanism to manage and resolve potential future claims efficiently. Bayer has also reached a resolution to the dicamba drift litigation and PCB water litigation, which are other legacy Monsanto legal matters in the U.S.
The decision to settle the Roundup™ litigation is the right action at the right time for Bayer to bring a long period of uncertainty to an end – caused by the three Roundup™ verdicts to date. And importantly, it will return the discussion about the safety and utility of glyphosate-based herbicides back to where it belongs – to the scientific and regulatory arena and to the full body of science. Given the future risks and uncertainty, this settlement is the most efficient and financially reasonable outcome for the company, its owners, and all other stakeholders.
We Fully Stand behind the Safety and Utility of Our Roundup™ Products
It is important to emphasize that these resolutions contain no admission of liability or wrongdoing. Our company is grounded in the well-being of our customers. As a science-based company committed to improving people’s health, we have great sympathy for anyone who suffers from disease, and we understand their search for answers. At the same time, the extensive body of science indicates that Roundup™ does not cause cancer, and therefore, is not responsible for the illnesses alleged in this litigation.
Glyphosate-based herbicides are among the most rigorously studied products of their kind, and four decades of science support their safety and that they are not carcinogenic. We continue to fully stand behind the safety and utility of our Roundup™ products, and we are joined in our view by leading regulators across the globe, including the U.S. Environmental Protection Agency (EPA), the European Food Safety Authority (EFSA), the European Chemicals Agency (ECHA), and – among others – leading health authorities in Germany, Australia, Korea, Canada, New Zealand, and Japan. Additionally, the Joint Meeting on Pesticide Residues (JMPR), an expert body administered jointly by the Food and Agricultural Organization (FAO) and the World Health Organization (WHO), has reached the same conclusion as these regulatory authorities.
The availability of Roundup™ products to our customers remains unchanged. Farmers rely on these products not only to control weeds, but also to minimize tillage, reduce greenhouse gas emissions, preserve more land for native habitats, and provide enough food to meet the needs of a growing population worldwide.
Committed to Science, Innovation, and Serving Our Customers
The settlements allow us to fully focus on our business priorities at a time when there is a massive impact of the COVID-19 pandemic on society. As a leading company in the life science areas of health and nutrition, we run businesses that are of systemic relevance. More than 100,000 Bayer employees are committed to realizing our vision of ‘Health for all, Hunger for none.’ We believe that science and innovation will be critical to the future, just as they have been for Bayer in serving customers and patients over nearly 160 years. We are committed to addressing these challenges in a responsible manner, both to help meet the UN’s sustainable development goals and to maintain the transparency and constructive engagement with stakeholders that is essential to sustain public trust in our products and in our company.
The agreements will resolve the vast majority of the current litigation in U.S. federal and state courts, including both plaintiffs with filed cases and parties who have retained counsel but not yet filed their claims in court.
The resolved claims include all plaintiff law firms leading the Roundup™ federal multi-district litigation (MDL) or the California bellwether cases, and those representing approximately 95% of the cases currently set for trial, and establish key values and parameters to guide the resolution of the remainder of the claims as negotiations advance. The claims still subject to negotiation largely consist of cases generated by TV advertising and for which plaintiffs’ law firms have provided little or no information on the medical condition of their clients, and/or cases held by law firms with small inventories.
The resolution involves approximately 125,000 filed and unfiled claims overall and puts in place a mechanism to resolve potential future claims efficiently. For this settlement overall, Bayer will make total payments between $10.1 billion and $10.9 billion (€9.1 billion and €9.8 billion).
The company will make a payment of $8.8 billion to $9.6 billion to resolve the vast majority of the current Roundup™ litigation, including an allowance expected to cover unresolved claims and $1.25 billion to support a separate class agreement to address potential future litigation. The reason for the range is that the final cost will depend on the cost of resolving some outstanding claims, for which we have provided an allowance, and also the number of claims that ultimately are eligible under the agreements.
In the three cases that have gone to trial to date – Johnson, Hardeman, and Pilliod – we will continue with appeals to defend our company. These cases are not part of the agreement. It is important for the company to continue these cases as the appeals will provide legal guidance going forward.
Before making the decision to settle, Bayer also considered the alternative course of continuing to litigate Roundup™ cases.
U.S. mass torts like the Roundup™ litigation can persist for many years, and the number of plaintiffs can grow in size year after year as a result of aggressive plaintiff advertising. Roundup™ has become the favorite target of plaintiffs’ attorneys. Since 2015, no product has been subject to more TV ads by plaintiffs’ lawyers than Roundup™. In 2019 alone, plaintiffs’ attorneys and their surrogates spent an estimated $100 million on TV ads attacking Roundup™ and recruiting plaintiffs – which caused a surge in the number of plaintiffs filing cases. And we likely would face more advertising and another surge in cases without a settlement for years to come.
In addition, had we continued to litigate, we also could have faced upwards of 20 trials in a year in multiple venues, along with all the media coverage and confusion we’ve seen regarding the safety and availability of Roundup™ as a result of the three trials to date. We are well-aware of the negative impact high-profile trials have already had on our business and reputation.
Financially, we likely would face very steep costs if we continued to defend these cases. And, while the science remains very much on our side, allowing juries instead of experts to make science-based decisions in these cases would create a risk of more erroneous decisions with high damage awards and punitive damages, as we’ve seen in the three past cases.
These factors are not unique to the Roundup™ litigation. These are the challenging realities that many defendants face in dealing with large mass torts under the U.S. litigation system.
Bayer will pay up to $400 million for a settlement agreement that will resolve the previously disclosed dicamba drift cases and claims involving alleged damage to soybeans and other crops for the 2015-2020 crop year. Claimants will be required to provide proof of damage to crop yields and evidence that it was due to dicamba in order to collect.
The only dicamba drift case to go to trial – Bader Farms – is not included in this resolution. We believe the verdict in Bader Farms is inconsistent with the evidence and the law and will continue to pursue post-trial motions and, if necessary, an appeal.
Bayer stands strongly behind the safety and utility of its dicamba-based XtendiMax™ herbicide with VaporGrip™ technology and continues to enhance training and education efforts to help ensure growers use these products successfully. The company is settling the pending dicamba drift cases to be able to focus on the needs of its customers.
Bayer also announced a series of agreements that resolve cases representing most of the company’s exposure to PCB water litigation. Monsanto legally manufactured PCBs until ceasing their production in 1977. To resolve the PCB litigation, Bayer will pay a total of approximately $820 million.