My latest Legal Newsline story:

SAN FRANCISCO — In a court hearing earlier this week, U.S. District Judge Vince Chhabria announced he had hired Kenneth Feinberg to oversee mediation talks between Bayer AG and lawyers for thousands of plaintiffs claiming the popular herbicide Roundup causes cancer.

Feinberg is the big gun in mass settlements, having overseen billions of dollars in payouts over Agent Orange, the September 11th terrorist attacks, diesel Volkswagens and the BP Deepwater Horizon oil spill. If anybody can convince Bayer to start writing checks, it’s Feinberg.

Jurors, allowed by judges to decide scientific issues, have so far nailed Bayer with three huge verdicts ($289 million, $80 million and $2 billion, the last coming shortly after the U.S. Environmental Protection Agency declared glyphosate, the active ingredient in Roundup, does not cause cancer).

Roundup litigation presents peculiar challenges, however. First, Bayer denies Roundup is a human carcinogen, an opinion shared by virtually all of the world’s national chemical regulatory bodies. While Bayer has lost the stunning jury verdicts so far, the company is appealing each loss and says it has strong defenses – including the argument federal law prohibits it from adding a cancer warning to Roundup labels, as plaintiff lawyers say it should.

Even if Bayer decides to settle, Feinberg might have a difficult time devising a fair system to pay claimants. Plaintiff experts acknowledge claimants got tiny amounts of the herbicide on their skin and a defense expert testified at a recent trial the total daily exposure could be measured in thousandths of a teaspoon.

Agricultural workers are routinely exposed to much higher doses of Roundup and glyphosate, yet epidemiological studies fail to show a higher risk of non-Hodgkin’s lymphoma in that population.

Of course, there’s nothing new about mass settlements over tort claims based on disputed scientific evidence. Dow Chemical paid billions of dollars to end litigation over silicone breast implants manufactured by its Dow Corning joint venture even though plaintiff claims that silicone was a dangerous, slow-acting toxin were thoroughly disproved.

Feinberg’s first big assignment as a court-appointed claims administrator came in the Agent Orange case in 1984, in which U.S. District Judge Jack Weinstein said there was “no substantial scientific evidence” it caused disease but urged settlement as a practical matter.

Plaintiff lawyers are likely to push for a global settlement of more than 13,000 Roundup claims so they can earn fees over litigation they have thus far funded out of their own pockets. But Bayer won’t agree to a settlement unless a significant percentage of claimants join it, a now-familiar pattern in multidistrict litigation, which unlike a class action is composed of individual lawsuits because of differences among plaintiffs.

“I think Bayer still wants to litigate these cases in court and see how the evidentiary questions shake out on appeal before it considers a settlement,” said Elizabeth Burch, a professor at the University of Georgia Law School and author of “Mass Tort Deals: Backroom Bargaining in Multidistrict Litigation.”

“Of course, typically everyone who enters into the settlement would have to give up their right to sue in court.”

The press to get plaintiffs to join a settlement can lead to distressing results. In one case Burch uncovered while researching the MDL process, lawyers negotiated a mass settlement of claims over the drug Propulsid that required at least 75% of claimants to join the program before the settlement agreement took effect.

Plaintiffs who refused to join were handed an “opt-out” form explaining their lawyers had agreed to drop them as clients as a condition of the settlement.

Those lawyers earned $22.5 million in fees for a settlement that ultimately paid 32 claimants a total of $3.7 million, Burch found. The rest of the claims were rejected by a scientific panel of physicians, supporting the manufacturer’s argument the drug was safe.

A Roundup settlement might present similar problems. Virtually every U.S. consumer diagnosed with non-Hodgkin’s lymphoma could plausibly claim some exposure to Roundup, the most widely used herbicide on earth.

The plaintiffs who have won large jury verdicts so far have also had well-identified other risk factors for lymphoma, including autoimmune disorders and other cancers. Juries ignored those risk factors and focused on Roundup as the sole cause, but a court-appointed scientific panel might take a more objective approach, as apparently happened with Propulsid.

“As part of the settlement, the negotiating parties would have to work out what criteria and evidence would suffice to create a compensable claim,” Burch said.

The Roundup verdicts so far illustrate a growing trend in mass tort litigation. After decades of experience handling such claims, especially over asbestos, plaintiff lawyers have developed the expertise to convince jurors that even if the scientific proof is disputed (and possibly lacking), jurors should award damages for what is, effectively, bad corporate behavior.

In the Roundup litigation, plaintiff lawyers hammered on allegations Roundup inventor Monsanto, which was later purchased by Bayer, influenced researchers and regulators behind the scenes to gain approval of the herbicide.

They criticized the company for failing to perform epidemiological studies while simultaneously dismissing the results of epidemiological studies suggesting glyphosate isn’t associated with higher cancer risk. What can happen is uncertainty in the courtroom, so that jurors suspect the defendant did something wrong and feel compelled to award punitive damages to send a message they disagree.

The tactic is effective with jurors, but claims administrators need physical evidence before they cut checks to plaintiffs. With Roundup, that may be difficult to find. And if Bayer ultimately agrees with plaintiff lawyers and successfully petitions the EPA to add a cancer warning to the label on Roundup, what then? Presumably, the tort disappears for future cancer victims. After all, they’ve been warned.

Categories: The Law