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U.S. Court Rejects Bayer's $2 Bln Settlement For Future Roundup Claims

A federal judge rejected Bayer's (BAYZF.PK,BAYRY.PK,BYR.L) $2 billion Roundup settlement, saying in an order it would not adequately address the concerns of families who may later be diagnosed with non-Hodgkin's lymphoma. Meanwhile, Bayer announced five-point plan to effectively address potential future Roundup claims.

Bayer said in February that it reached $2 billion agreement with plaintiffs' attorneys to settle future lawsuits over claims that its Roundup weedkiller causes cancer. The settlement would provide future plaintiffs, who contract non-Hodgkin lymphoma after using Roundup, up to $200,000 in compensation.

Bayer inherited thousands of lawsuits against Roundup inventor Monsanto Co. when it acquired the U.S. agriculture giant for $63 billion in 2018.

Bayer Wednesday announced five-point plan following the denial of the motion to preliminarily approve the Roundup class settlement agreement, designed to address potential future litigation, by Judge Vince Chhabria of the U.S. District Court for the Northern District of California.

The five-point plan includes creation and promotion of a new website with scientific studies relevant to Roundup's safety, and a request that the U.S. Environmental Protection Agency approves corresponding language on Roundup labels.

The company said it will remain in the residential lawn and garden market. But it will immediately engage with partners to discuss the future of glyphosate-based products in the U.S. residential market, as the overwhelming majority of claimants in the Roundup litigation allege that they used Roundup Lawn and Garden products.

The company noted that it will explore alternative solutions aimed at addressing potential future Roundup claims. The company also will explore the creation of an independent scientific advisory panel comprised of external scientific experts to review scientific information regarding the safety of Roundup.

The company noted that it will continue to be open to settlement discussions, as long as claimants are qualified and resolutions can be reached on appropriate terms.

The appeals of the Hardeman and Pilliod cases will continue through the legal process and can also help manage future liability risk. The Carson case, now before the 11th Circuit Court of Appeals, also raises the same federal preemption issue - whether state-based failure-to-warn claims can stand if they are different from or conflict with federal law - that is central to this litigation, Bayer said.

The company noted that it has strong legal arguments on its side and a favorable decision by the U.S. Supreme Court by mid-2022 on cross-cutting issues like preemption or expert evidence would significantly reduce future liability risk.

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