Bayer Roundup Deal Is Close as Claims Surge, Mediator Says

By Joel Rosenblatt | January 17, 2020

Bayer AG may be only weeks away from settling more than 75,000 cancer claims over its Roundup weed-killer, after a surge in claims to almost double the number disclosed by the company in September, according to the court-appointed mediator in the litigation.

Mediator Ken Feinberg said in an interview Thursday that he remains “cautiously optimistic” a deal will be reached in about a month and that the accord would be comprehensive. Bayer disclosed in its third quarter report that it was facing 42,700 claims over the herbicide. Feinberg said the caseload has grown to between 75,000 and 85,000 and “maybe more.”

He declined to discuss terms of the possible settlement. Bayer rose as much as 1.8% in early Frankfurt trading.

Chris Loder, a spokesman for the company, said the figure cited by Feinberg is “a speculative estimate” that includes “potential plaintiffs” who haven’t filed court complaints and that “the number of served cases as reported on a quarterly basis remains significantly below 50,000.”

The Washington-based mediator was elaborating on his comments last week about negotiating with various plaintiffs’ lawyers across the U.S. who have “significant inventories” of Roundup suits.After losing three trials in California that resulted in combined damages of $191 million, Bayer said in December that it agreed to postpone some Roundup trials to give mediation a chance, and at least a half-dozen trials scheduled to start this month and next have been put on hold. Bayer is appealing the verdicts it lost.

Bayer shares have been under siege since the purchase of Monsanto in June 2018 , losing as much as 47% of their value as trial losses and plaintiffs mounted. The shares have begun edging up again with the prospect of a settlement drawing closer, yet such an agreement might still cost Bayer $10 billion to $12 billion, according analysts at Bloomberg Intelligence.

Two trials are set to start Friday, one in Martinez, California, a suburb of San Francisco, and the other in St. Louis, where Monsanto Co. produced Roundup before the company was acquired by Bayer in 2018.

The court docket for the multi-district litigation overseen by a federal judge in San Francisco shows that new suits are piling up every day. State court dockets also reflect a burgeoning caseload. Feinberg described the Roundup litigation as a “classic mass tort” that the courts are ill-equipped to manage.

Loder said the increase in cases is expected following $100 million spent by plaintiffs on TV advertising in 2019, “combined with speculation about settlement, factors that have driven up plaintiff numbers in the past.”

Feinberg said one of the attorneys he’s negotiating with is Michael Miller, whose Orange, Virginia-based firm is handling the two trials set for jury selection Friday. Feinberg said he isn’t worried about those trials undercutting a settlement.

“I don’t believe it’s going to have any lasting impact on the ongoing effort by myself to reach a comprehensive settlement of all these cases nationwide, including his,” Feinberg said.

Miller’s firm represented plaintiffs in two of the three trials Bayer lost, including one that resulted in May in a $2 billion verdict for a husband and wife that was later reduced by a judge to $86.7 million.

Miller said his firm and another, Weitz and Luxenberg, have more than 16,000 cases nationwide.

“We will be in trial every month with teams of lawyers across America,” he said in an email. “Like all attorneys if we can get a fair resolution for our claims we will do so.”

He didn’t respond to questions about whether he’s negotiating with Feinberg.

Asked if a deal might be reached before the trials wrap up in six or seven weeks, Feinberg said, “I don’t think it’ll take that long,” adding it could be completed “within the next month.” Still, he cautioned that it’s a “massive undertaking” to resolve all the Roundup cases, including those not yet filed.

“The effort continues, it is a full-time preoccupation,” Feinberg said. “We shall see, I’ve been wrong before.”

Anna Pavlik, senior counsel for special situations at United First Partners LLC in New York, said that if Feinberg can pull it off, it may signal that Bayer is willing to settle early in order to get ahead of the rapidly growing claims and put the litigation exposure behind it.

“If a comprehensive settlement is indeed achieved in the near term it would be a stunning achievement by the company and the mediator,” she said. “Without knowing the per-plaintiff payouts of any such settlement it is hard to judge why the plaintiffs’ lawyers would agree so early in the game to settle, given significant victories under their belt.”

–With assistance from Jef Feeley.

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