The Economics of “Science versus Settle”
Major developments on the decades-long legal battle over glyphosate, the active ingredient in Roundup weed killer, occurred this week. The impact of each individually would garner headlines, but collectively these developments could have far reaching impact on other contentious legal battles where science, litigation, and economics collide.
Earlier this week a federal judge permanently blocked efforts by the state of California to require cancer warning labels on Roundup. In his ruling, Judge William Shubb said such labels would be misleading, were not backed up by regulatory findings, and undermine “California’s interest in accurately informing its citizens of health risks.”
In 2018, the same judge ruled that government agencies and health organizations which have reviewed studies on glyphosate had found there was no evidence that it caused cancer—and he isn’t alone. The National Institutes of Health and the European Chemicals Agency found that there was no association between glyphosate and overall cancer risk. The Environmental Protection Agency also holds that the chemical is not likely to be carcinogenic.
The only dissenting voice in the body of scientific evidence on the chemical is a 2015 study by the World Health Organization’s International Agency for Research on Cancer (IARC) that found glyphosate was “probably carcinogenic.” This report has been widely disputed by many other government agencies and scientific organizations, and a Reuters investigation in October 2017 even showed that the IARC edited out findings that contradicted its conclusion that the chemical causes cancer in an early draft of the report.
Judge Shubb’s decision to block California regulators from placing warning labels on Roundup, while a significant victory for the scientific facts, did not preclude the week’s second major development: the decision by Bayer to pay more than $10 billion to settle thousands of claims that the glyphosate in Roundup caused non-Hodgkin’s lymphoma.
This is a classic “science versus settle” decision that is an unfortunate characteristic of American courtrooms. The company was faced with a dilemma between two undesirable options: continue to rely on the scientific evidence and spend years (and incalculable financial resources) defending thousands of lawsuits, or set aside a definable amount of money to settle such cases and put the issue behind them.
It all comes down to economics—and the trial bar understands this equation well. Defense costs for mass litigation are incredibly expensive, and the risk of losing one or more cases based on the ability of an adept litigator to spin a compelling narrative only adds to the financial risk. Add to that the damage to a company’s reputation and its stock price and you can understand why executives, boards, and shareholders may be tempted to reach a financial settlement.
Sadly, what is often overlooked is where this money goes. According to a New York Times story, “individuals, depending on the strength of their cases, will receive payments of $5,000 to $250,000” through Bayer’s settlement. What is not mentioned is how much of the $10 billion will go to the 25 lead law firms for the plaintiffs. Forty percent would be a conservative estimate, which points out another weakness of the judicial system: mass torts are not an effective or efficient way to distribute payments to those who are legitimately harmed by the negligence of another person or corporation.
There was, however, a small glimmer of hope for the integrity of science in the terms of the Roundup settlement. In addition to the $10 billion allocated to pay existing claims, Bayer will set aside another $1.25 billion to fund future claims. Part of those funds will be used to try and definitively resolve the question of whether glyphosate causes cancer.
Bayer is asking the court to fund a scientific panel—whose members will be approved by both the company and plaintiffs’ attorneys—that will evaluate the link between Roundup and cancer. In explaining the request, Bayer’s CEO Werner Baumann said, “We need to take the decision about carcinogenicity of the product out of the hands of juries.”
The results of the study will be presented to a judge and will determine the fate of future litigation on this issue. If the scientists find that glyphosate does not cause cancer, future lawsuits will be shut down. If the researchers discover a link between the product and cancer, Bayer would have to defend each individual case to prove that the cancers were not caused by Roundup.
Of course, the results will have no impact on the $10 billion that Bayer has already agreed to pay to settle existing lawsuits, and some investors are worried about this component of the settlement, believing it is too big a bet on science and may open the company up to future lawsuits.
An independent, unbiased, and objective review of all the scientific evidence should have been the first step in these proceedings, not the last. Such an independent review could have revealed the scientific facts about glyphosate’s carcinogenic qualities and precluded the fear-based tactics that require companies to make “science versus settle” decisions.