SAN FRANCISCO (Legal Newsline) – Class action lawyers are lining up to take another shot at Bayer AG, with major securities firms asking to be in charge of litigation on behalf of investors in the company.
As the firm tries to resolve the more than 100,000 claims that the weed-killer Roundup caused non-Hodgkin’s lymphoma, it must also fight claims from securities firms that the company misled investors about the financial impacts of the personal injury lawsuits.
Bayer till says the scientific evidence shows Roundup’s active ingredient glyphosate is safe – a position echoed by the U.S. Environmental Protection Agency and nearly every other national regulatory agency.
But lawyers at Bernstein Litowitz Berger & Grossman, in a lawsuit filed July 15, say the non-scientist jurors who have awarded billions of dollars in damages against Bayer following its purchase of Roundup-maker Monsanto revealed the truth about the widely used product.
Bernstein Litowitz won’t be the only firm trying to lead the shareholder litigation, though.
On Sept. 14, three separate motions to appoint lead counsel were filed. Bernstein Litowitz, of course, was one of the firms.
Its client, the City of Grand Rapids’ retirement systems, says it filed the first and only case and lost about $751,000 in its investment in Bayer American Depositary Receipts.
Another motion from the firms Wagstaffe, Von Loewenfelt, Busch & Radwick and Labaton Sucharow says their clients – carpenters’ pension funds in Ohio and Pennsylvania – should be named lead plaintiffs.
Their losses double what Grand Rapids lost, they say - $1,512,763.72.
“Furthermore, prior to seeking a role as Lead Plaintiff, representatives from Ohio Carpenters and GPCPF participated in a conference call to discuss, among other things, the merits of the claims against Defendants, as well as their common goals in prosecuting this litigation,” the motion says.
Lastly, the firms Cohen Milstein and Berman Tabacco want control to go to the Sheet Metal Workers National Pension Fund and International Brotherhood of Teamsters Local No. 710.
Their alleged losses dwarf the others – about $3.8 million.
Bayer agreed to buy Monsanto in 2016 for $63 billion, saying the combination would create the world’s leading life sciences company. Instead the takeover turned tricky, as lawyers spent more than $100 million recruiting plaintiffs who accuse Roundup of causing non-Hodgkins lymphoma, a common cancer that doctors say has no known cause three-quarters of the time.
It is pursuing appeals of the three jury verdicts against it, including on the basis of federal preemption, or the argument it shouldn’t be subjected to a jury trial that effectively challenges the federal regulations over the product. One of those verdicts was just upheld, though a California appeals court reduced the damages from $78 million to $21 million.
Bayer Chairman Werner Baumann repeatedly told investors the Roundup litigation risk was low because the product was safe. It turns out he underestimated the lottery-like characteristics of the American legal system, in which plaintiff lawyers can win huge verdicts despite the weight of scientific evidence going against them.
Bayer has agreed to pay as much as $10 billion to settle some 100,000 individual lawsuits over Roundup, once again telling investors it believes the settlement will contain the litigation. The company’s attempt to settle all future litigation hit a snag, however, when the judge overseeing federal multidistrict litigation indicated he wouldn’t approve a $1 billion class settlement that would have employed a “science panel” of experts to decide whether glyphosate causes cancer.
Bayer and negotiating plaintiffs firm Lieff Cabraser withdrew the proposal, with the company saying it would continue to work out concerns from the judge and other plaintiffs firms with Roundup cases.
The proposed class action would cover investors who purchased Bayer shares between May 23, 2016, when Bayer first announced its takeover offer for Monsanto, and March 19, 2019, when a jury in the first federal bellwether trial delivered a verdict against Bayer. The company’s stock plunged 9% on the news. The shares have yet to recover.
After the first jury verdict in 2018, Baumann told investors a “verdict by one jury in one case does not change the scientific facts and the conclusions of regulators that glyphosate does not cause cancer.” The company still says glyphosate is safe and it continues to sell Roundup, one of the most widely used chemicals on earth.
A federal judge recently ruled that California cannot order a cancer warning on Roundup because it would be false and mislead consumers.