San Francisco, June 24, 2020 — The proposed $10 billion settlement over Roundup herbicide represents an inventive attempt to get around one of the thorniest issues in mass litigation: How can lawyers and their clients get paid today, while assuring the companies they are suing they won’t get sued in the future?
Roundup maker Monsanto’s parent company Bayer AG clearly thinks it has struck just such a bargain with plaintiff lawyers who used a pervasive advertising campaign to amass nearly 100,000 clients who claim Roundup made them sick. In exchange for as much as $9.6 billion in cash, those lawyers say they will deliver clients representing 95% of the cases set for trial.
The company is paying all of that money despite there being no consensus on whether its product actually causes the cancer alleged by plaintiffs lawyers who stand to make billions in the deal. The hope is that the settlement will end a disastrous experience with the American legal system.
“We unfortunately have to pay an awful lot of money for a product that is perfectly well regulated and that, frankly, can make you quite angry because we are exposed to the U.S. legal system” Chief Executive Werner Baumann told reporters. “But it is what it is.”
There are serious ethical concerns about lawyers signing contracts with the companies they are suing that require them to recommend a settlement to their clients, although it is a common practice in multidistrict litigation. But that alone would still leave Bayer exposed to billions of dollars in potential liability, since Roundup is a widely used chemical and plaintiff experts claim it causes non-Hodgkins lymphoma, one of the most common cancers.
Monsanto says it won’t remove Roundup from the market and it is barred by federal law from saying it causes cancer on the label. With 75,000 new NHL diagnoses a year in the U.S., each one is a potential future lawsuit since nearly everyone can claim they were exposed to Roundup.
The lawyers have a solution for that, too. In a pattern seen previously in settlements over the Deepwater Horizon oil spill, NFL concussion suits and other large MDLs, the lawyers representing real, living clients negotiated an additional settlement on behalf of anyone else who might sue in the future. The second part of the Roundup deal provides $1.1 billion in benefits, including direct payments to low-income NHL patients, in exchange for a four-year “litigation pause” while an independent science panel determines whether Roundup actually causes cancer.
The settlement was negotiated by Lieff Cabraser, a plaintiff law firm active in multidistrict litigation, during a year of intensive talks mediated by Kenneth Feinberg. In a 71-page filing with U.S. District Judge Vince Chhabria on Wednesday, the law firm said the proposed settlement class “solves a unique and complex problem” and is fair to future claimants because they will receive current benefits and be relieved of the uncertainty of “the luck of the jury pool.”
The arrangement raises serious questions about the conflict between lawyers at Lieff Cabraser who represent current claimants that will get the vast bulk of the money and people who may only discover they have a claim in the future. The U.S. Supreme Court rejected a similar arrangement in its landmark Amchem v. Windsor decision in 1997, saying a proposed global settlement of asbestos lawsuits was unfair toward future claimants who didn’t even know they were exposed to asbestos or were going to get sick.
“This is basically Amchem again,” said Elizabeth Burch, a professor at the University of Georgia Law School who studies mass tort resolution and has written a critical book about MDLs, “Mass Tort Deals: Backroom Bargaining in Multidistrict Litigation.”
“How do you notify people adequately of a disease that they don’t know they are going to get?”
Lieff Cabraser didn’t immediately respond to a request for comment. In the settlement filing, the firm says it has designed a comprehensive notice program to reach consumers and agricultural workers who use Roundup and inform them of their rights. It also says the proposal differs from Amchem in important ways, including the opportunity for class members to opt out of the deal if they want.
And the proposed class of future claimants are only agreeing to a temporary halt in litigation combined with a permanent halt on suits for punitive damages or medical monitoring. They described this as a “small give” in exchange for $1.1 billion in benefits.
The “small give” includes the two causes of action most likely to attract lawyers, however, since individual claims would be expensive and risky to pursue.
The settlement also proposes an independent science panel to decide once and for all the central question in Roundup litigation, which is whether its active ingredient glyphosate causes NHL and if so, at what dosage. Monsanto and nearly every government regulator say Roundup is safe. Only the International Agency for Research on Cancer, affiliated with the World Health Organization, has classified glyphosate a probable carcinogen.
That finding is criticized by Monsanto and others because the non-voting chair of the panel that declared glyphosate dangerous was Chris Portier, a scientist who signed on as a paid plaintiff expert shortly after IARC reached its conclusion.
The Roundup settlement proposes a new panel of five scientists selected by both sides, none of whom can be paid expert witnesses or in close contact with experts involved in the litigation. That panel will study the available literature and reach a conclusion as to whether there is evidence of so-called general causation, or whether glyphosate causes NHL, and if so, the minimum dose required to make someone sick.
Plaintiff lawyers described this as a “knowledge remedy,” citing a recent article by University of Connecticut Law School professor Alexandra Lahav, who believes corporations that are accused of wrongdoing should in essence be required to pay for research to determine whether their behavior actually harmed anyone. The science panel’s decision will be binding on Monsanto and the class members, meaning if it finds a link they can use that evidence in future litigation.
In a startling concession by lawyers who stand to earn $4 billion from Roundup litigation, however, the Lieff Cabraser attorneys now say if the science panel finds no link, “there was no scientific basis for them to sue Monsanto to begin with” and “the public can use Roundup products without fear.” The lawyers also criticize the very system that is making them rich, saying the question of causation “should have the same answer in every case.”
“In the absence of a settlement that generates an issue-preclusive, class-wide determination of this question, both plaintiffs and Monsanto will incur endless expense and endless risk as that question is posed to different juries for different answers over and over again,” they say.
None of this uncertainty will apply to their own clients, since they are excluded from the class and will receive the bulk of the money in individual settlements. In a conference call with reporters Wednesday, Bayer’s Baumann said the company has no idea how much of the $8-9 billion will go to the lawyers in fees, but the standard rate, which lawyers rarely deviate from, is around 30% plus often substantial expenses. That could mean the average plaintiff gets around $50,000.
There are several large hurdles facing Monsanto and the plaintiff lawyers to get this agreement completed. Judge Chhabria must approve its terms, including the novel settlement class, which appears to have been primarily negotiated by lawyers representing plaintiffs whose interests are directly opposed to the class. Lieff Cabraser attempted to address this by naming two outside attorneys to represent subclasses of potential claimants, people currently diagnosed with NHL and Roundup consumers with no signs of disease.
Those lawyers, William Audet of San Francisco and New Orleans attorney TerriAnne Benedetto, are frequent players in MDL litigation, however, with a strong incentive not to anger the lawyers representing the bulk of the plaintiffs in the MDL. As Professor Burch has explained, most MDLs are controlled by a tight group of repeat players who hold extraordinary power to dispense lucrative roles in the leadership structure and collect common-benefit fees from all of the plaintiffs whether they represent them or not.
If Judge Chhabria does approve the settlement class, he must invoke the All Writs Act to shut down all other Roundup litigation in state and federal court, an aggressive use of the law that isn’t always successful. And Monsanto must still reach a agreements with holdout attorneys including the Onder Law Firm in St. Louis, which has 24,000 Roundup clients in a very dangerous venue for defendants. Partner James Onder has told reporters the proposed settlement doesn’t offer enough.
There is also an undisclosed hurdle rate of opt-outs in the settlement class that will allow Monsanto to walk away from the deal. Details of the larger MDL settlement aren’t public yet, but most such agreements contain similar clauses requiring plaintiff lawyers to convince a specific percentage of their clients to sign off on the deal.
“All of these provisions are pretty questionable,” Burch said. “You’re supposed to represent each client individually and represent their best interests.”
The attorneys at Lieff Cabraser paint a more realistic picture of how MDL law is actually practiced in their brief supporting the settlement they negotiated. While plaintiffs have won one trial in federal court and two in state court, all of the verdicts are on appeal and could generate years of future litigation.
“The grist of the MDL mill — bellwether trials, Daubert rulings, protracted appeals — none offers much of anything to those exposed to Roundup who do not have lawyers and have not sued Monsanto,” the lawyers say.