Growing Pressure on Bayer’s CEO Over Roundup Lawsuits

and on Bloomberg dot com slash podcasts. Buyer, also known as Bayer, sells everything from aspirin and cancer medicines to shoe inserts and soybean seeds, but the focus has been on its sales of round Up weed killer as it faces suits from thirteen thousand, four hundred plaintiffs over that

weed killer. Tomorrow's annual meeting is shaping up to be its most contentious in years, with influential shareholders blaming management for not foreseeing the legal risks associated with Buyer's takeover of mont Santo, joining me as Robert Hocketor, professor at Cornell Law School Bob In separate trials, juries found that Roundup caused the cancer of two California men and awarded massive damages eighty million in one case and two d nine million in another. Buyers says it's going to keep

fighting these cases. What are the odds that it will fare any differently in future? Cases, Well, June, I think the odds are actually not not very good for buyer. I understand their sort of urge to be defiant maybe and try to take a confidence stance, but I think this is probably maybe a bit cool hardy. At this point,

there are over eleven thousand suits pending. As you know, all Bear has to do is lose even two or three of those to face significant trouble, and the idea of you know, defending all of them, particularly given how much evidence there seems to be out there that does indeed incriminate round Up, notwithstanding the sort of contrary evidence that sort of cuts in the opposite direction. I think the better part of valor would probably be to settle

these things as quickly as possible. Buyers, CEO and management are going into Friday's annual meeting facing this backlash with shareholders blaming the management for not foreseeing the legal risks associated with taking over My Santo. The company says it's executives reviewed the risks connected with round Up diligently should

it have foreseen this massive litigation. It's hard for me to see how they wouldn't have foreseen at least the risk, right, you know, my understanding is that there's great disquiet among the shareholders for two reasons, right, One is again the acquisition of MONTSNTO in the first place, and then the second is the decision to go ahead and adopt this sort of defiant posture, you know, in the face of

the litigation. I think that with respect of the first question, that whether to buy wants, I just I can't see how the risk would not have been foreseen. And again, the key point here is that even if they feel confident on the science, even if they think they're going to win some of the suits on the merits, the fact is that when you've got that many thousands pending, the thought that you could win them all and I

think it is just again a bit wishful thinking. I suppose, so a federal trial was set from May and it was adjourned the judge and ordered mediation. Does that tell you anything? Not really? I mean, the problem with us again is when you have this many lawsuits, you can expect a lot of sort of eccentric sort of uniqueness making quirks in each one of them. Right, each one of them is going to have particular characteristics that that

render it different from the others. But I don't think any one particular result, or any one particular procedural development in any one of these suits really tells us much about the other eleven thousand. Buyer is appealing the first verdict that was handed down, that's already been cut down by two d eleven million dollars. So what are the odds here? Is the verdict likely to be overturned, paired

down even more, or remain the same. I can't, of course foresee with any crystal clarity, but I suspect that that ruling will be upheld for a couple of reasons. The first is the fact that the judge sort of took down the award amount only signals, in my view, a certain ambivalence. I'm a part of the court towards punitive damages. The court did not cut back on the compensatory damages, which really are the damages that are sort

of relevant to the marriage of the case. Right. Secondly, the particular ground on which Buyer is looking for an overturn has to do with a particular evidentiary ruling made by the court, But that's a bit of a hail mary pass in my view, because the court was quite open to the allowing all sorts of evidence cutting both directions into the original litigation. I don't think anything hint on any one particular piece of evidence that the judge

ruled was too prejudicial to it into the court. But I suspect, in other words, that there is fighting a loss cause even with respect to that one particular lawsuit. And again that's not even to mention that the many that are that are still tending. Now again, I might be wrong on this um sort of shooting from the hip here in the sense that there's always a certain amount of you know, kind of gut instinct that enters into our predictions about how these things are going to go.

But you know, thus far the course of the litigation has been sort of garden variety. I find my sort of pun a bit is the litigation is sort of proceeded more or less in the way that we would have expected. You know, there's a lot of scientific uncertainty as to just how tight the causal nexus is between cancer and round up, but there's a lot of evidence that suggests that there is a link, even though there's

contrary evidence as well. We can expect, accordingly, for some courts to come out one way, some of course to come out the other. Uh. In addition, of course, some of the claims that are made against Bear is that they were acting or that Monsanto at least at acted to conceal at the very least the potential dangers of round up, and insofar as that happens, punitive damages are going to be in the offering in some of these cases, and buy are, in acquiring Monsanto, of course, acquired all

of that potential liability. And that's I think what has the shareholders troubled, right that just the risk that was taken on in doing this. Not that they don't think that Bear was completely unmindful of this, but they seem to have decided that Buyer's management and board were We're too cavalier about the possibility of significant liability. And it's hard for me to find fault with the shareholders when

it comes to that. I would have been I would have been inclined to be much more cautious than it seems buy Or was when it came to acquiring Monsanto, because this round up stuff was in the offering and everybody knew it. When you look at the puny, did the amount of punitive damages that both these juries met it out to punish Buyer. Does that tell you how jurors are going to view this company versus these individual plaintiffs who are suffering from cancer. Yeah, it's certainly a

good preliminary indicator, June. I mean, the thing again to remember about about punitive is that you know, these are sort of, as the term suggests, these register indignation on the part of the jury or the judge or both when it comes to the behavior of the liable party. And of course here we're talking about the behavior of Monsanto, but Buyer, as the successor and interest to Monsanto, in having acquired Monsanto, ends up, of course facing the brunt

of that very indignation. And it's looking as though there's a good bit of indignation out there about how Monsanto handled the emerging data that suggested at least a significant likelihood that round up was indeed associated with cancer or causing cancer. It's five billion, the number you're hearing to settle all the cases. I've been hearing numbers ranging between

five and six. Basically, I don't know, you know how much credence to place in those estimates, but that does seem to be the range within which people are sort of imagining what settlement would entail, and that looks like a bargain to me. Thanks so much, Bob. That's Robert Hackett, professor at Cornell Law School. Thanks for listening to the Bloomberg Law Podcast. You can subscribe and listen to the show on Apple Podcasts, SoundCloud, and on Bloomberg dot com

slash podcast. I'm June Brasso. This is Bloomberg