A federal judge in Los Angeles has rejected Bayer AG’s proposed $650 million settlement for approximately 2,500 U.S. cities, counties, and ports regarding claims of pollution from polychlorinated biphenyl (PCB). U.S. District Judge Fernando M. Olguin cited various issues with the settlement, including concerns about the extensive release of legal liabilities for Bayer. Judge Olguin expressed that he cannot approve an agreement that shields Bayer from claims by individuals or entities not part of the original lawsuit.
This decision, issued on November 25, deals a setback to Bayer’s attempts, announced in a $12 billion proposal in June, to address ongoing litigation inherited from its 2018 acquisition of Monsanto. Bayer stated in an email that it will collaborate with the plaintiffs to address the judge’s concerns and anticipates submitting a revised agreement by year-end.
Tom Claps, a litigation analyst at Susquehanna Financial Group, described the ruling as an unexpected setback for Bayer. While acknowledging that Olguin’s concerns are manageable, Claps noted that Bayer still faces additional PCB litigation nationwide, potentially including more lawsuits from states.
A group of 21 attorneys general, including those from California, New Jersey, Massachusetts, and Michigan, had expressed concerns to the judge that the proposed settlement might prevent them from pursuing their own legal actions against Bayer.
Judge Olguin emphasized that Bayer should not be allowed to have class members indemnify it for third-party claims, stating that it is conceivable for a third party to sue the defendant for conduct related to the case’s allegations.
Cities such as Seattle, San Diego, Portland (Oregon), and Oakland (California) had sued Monsanto before Bayer’s acquisition, holding Monsanto responsible for PCBs used in cooling heavy-duty electrical equipment for over 40 years. Bayer, now dealing with the pollution issues linked to these chemicals, faces challenges even as it attempts to resolve the litigation.
In a separate development, a federal judge in San Francisco recently lifted a pause on lawsuits alleging that Monsanto’s Roundup herbicide causes cancer. With thousands of cases still pending, U.S. District Judge Vince Chhabria scheduled a January 25 hearing to restart trials. Bayer had lost three Roundup trials in 2018 and 2019, with average awards of nearly $50 million per plaintiff, impacting the company’s stock. Despite a reduction in damages in the first case, Bayer is seeking to overturn verdicts in the other two cases. The PCB case in question is City of Long Beach v. Monsanto Co, 16-cv-3493, U.S. District Court, Central District of California.
