By Tom Hals
(Reuters) -A U.S. judge appeared receptive on Wednesday to aspects of Bayer AG (DE:BAYGN)’s proposed $2 billion settlement to resolve future claims that its top-selling Roundup weedkiller causes cancer.
The settlement would cover two types of Roundup users, those who currently have non-Hodgkin lymphoma but have not retained a lawyer, which the judge described as “class one,” and those who have been exposed to Roundup but are not sick.
“A settlement of this type could potentially be reasonable for class one,” said U.S. District Judge Vince Chhabria in San Francisco at the start of Wednesday’s hearing.
Chhabria acknowledged that he was more receptive to aspects of the plan than on Tuesday, when he posted questions on the docket asking why class members would agree to the deal when jury trials have gone well against Bayer (OTC:BAYRY).
Bayer inherited Roundup, a glyphosate-based herbicide, and the litigation as part of a $63 billion acquisition of Monsanto (NYSE:MON) in 2018.
The company has said that decades of studies have shown Roundup and glyphosate are safe for human use. Bayer last year defeated an attempt by California to require a cancer warning label on the weedkiller.
The settlement would create a class of potentially millions of people who have been exposed to Roundup at home or work.
Roundup users can opt out in the coming months and retain their full legal rights. Those who become part of the class would be eligible for free medical exams and up to $200,000 if they develop non-Hodgkin lymphoma during the agreement’s four-year period.
The agreement would pause all litigation for four years and prevent class members from seeking punitive damages if they refuse compensation and ultimately decide to sue.
The stakes are high. Bayer has said in the past that more than half of its herbicide revenue, which totaled nearly 5 billion euros ($6 billion) in 2020, was related to glyphosate.
Critics of the settlement say the proposal would unfairly limit consumers’ legal rights.
“It is an unconscionable gift to Monsanto,” said an objection to the settlement by 93 personal injury law firms.
Bayer has said the law has been misapplied in the three cases that went to trial, each of which resulted in tens of millions of dollars for plaintiffs.
One of those trials, a $25 million federal jury verdict against Bayer, was upheld by an appeals court on Friday.
Bayer said it will ask the U.S. Supreme Court to review the case. It hopes a favorable outcome would essentially wipe out future claims against it.
Bayer negotiated the current proposal with class action lawyers led by Elizabeth Cabraser. She argued in court papers the plan provides for outreach to undocumented migrant workers and other individuals who so far have not brought many of the claims against Bayer.
The class settlement proposal also establishes a science panel that would spend the four-year litigation pause assessing the link between Roundup and cancer.
A prior version of the settlement unveiled in June proposed binding Bayer and class members to that panel’s findings.
Chhabria said in July he was concerned the panel was replacing a jury with scientists. The parties subsequently toned down the panel’s role.
On Tuesday, the judge questioned how the science panel could be in the interest of class members, given how well jury trials have gone for plaintiffs.
Judge appears to warm to parts of $2 billion plan to limit Roundup claims against Bayer
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