Federal District Judge Vince Chhabria announced in a ruling on Monday that he is “skeptical of the appropriateness and fairness of the proposed agreement between Bayer and Monsanto, and is inclined to deny the motion.
Bayer bought the multinational company, Monsanto, in 2019 for $63 billion. Since then, it has seen all the inherited claims against it transferred. The German chemical company Bayer reported in mid-June that it had approved “… a series of agreements that will substantially resolve major outstanding Monsanto litigation, including U.S. Roundup™ product liability litigation, Dicamba drift litigation, and PCB water litigation”. But there’s no end in sight for Bayer’s plan to get out of its legal problems. Just two weeks after the agreement, Judge Chhabria described it as problematic and said he was “tentatively inclined” to reject it.
The judge also set a hearing on July 24 to consider the proposal. That part of the plan would establish a scientific panel to determine whether Roundup’s active ingredient causes cancer, while still potentially allowing herbicide users to file claims.
The users’ multi-million dollar claims on Monsanto were derived from evidence that glyphosate, one of the main ingredients in Monsanto’s Roundup herbicide, is carcinogenic.
Regarding the Bayer—Monsanto settlements, Bayer said the most critical issue is the U.S. Roundup™ resolution that will bring closure to approximately 75 percent of the current Roundup™ litigation. There are about 125,000 filed and unfiled claims overall. “The resolution puts in place a mechanism to efficiently resolve possible future claims.”
Bayer stated they will “make a payment of $8.8 billion to $9.6 billion to resolve 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 Roundup Class Settlement ™ will be subject to the approval of Judge Vince Chhabria of the United States District Court for the Northern District of California”.
Bayer CEO Werner Baumann said “First of all, the Roundup agreement is the right action at the right time for Bayer to put an end to a long period of uncertainty,” adding “It resolves most of the current complaints and establishes a clear mechanism for managing the risks of possible future litigation.”
According to Bloomberg, the judge’s insinuations flag the possibility of voiding the agreement and forcing the parties to start over. A minority of plaintiffs did not accept the deal arguing that the $10.5 billion settlement would prevent other victims from seeking compensation. Deeply worried Bayer shareholders have already seen their shares fall by up to 6.9 percent in Frankfurt since March 23.