Thursday, April 4, 2019
Last month, another jury has determined that Bayer-Monsanto was liable for damages caused by its Roundup weed killer. Roundup contains glyphosate, the most heavily used herbicide worldwide. According to the USDA, about 240 million pounds of glyphosate were sprayed in the U.S. in 2014, and traces of it can be found in air, water, soil and food products.
The most recent jury verdict awarding $81 million in damages to a plaintiff who developed non-Hodgkin lymphoma came about eight months after a different jury (also in California) awarded a different plaintiff almost $300 million for his claim that Roundup caused his cancer. In that 2018 case, however, the judge reduced the damages to about a third of what the jury awarded.
Do these verdicts and the thousands of other cases that have been filed in the Roundup litigation mean anything to a farming or ranching operation?
The implications of the Roundup litigation on a farming or ranching operation– that’s the topic of today’s post.
The Roundup Litigation
The Roundup litigation is an important matter for agriculture. Roundup is used heavily on genetically modified corn and soybeans as well as oats. It is presently sold in more than 160 countries. The patent on glyphosate expired in 2001 with generic versions being sold virtually worldwide. Presently, over 11,000 cases involving Roundup have been filed and are waiting trial and adjudication. The basic claim in each case is that the use of Roundup caused some sort of physical injury to the plaintiff. In many of the cases, the claim is that physical injury occurred after usage (usually over a long period of time) of Roundup. Indeed, both of the cases involving plaintiff jury verdicts involved the spraying of Roundup over many years.
Studies have reached differing conclusions on the safety of glyphosate. The Environmental Working Group (EWG) claims that glyphosate is present in many oat-based cereals and breakfast bars. The EWG believes that there is a causal connection between glyphosate and cancer, but others differ. In 2015, the International Agency for Research on Cancer classified glyphosate as a “probable human carcinogen.” That classification spurred lawsuits against Monsanto. But, the U.S. Environmental Protection Agency asserts that glyphosate is safe for humans when used in accordance with label directions. In addition, the World Health Organization has stated that glyphosate is “unlikely to pose a carcinogenic risk to humans from exposure through the diet.”
Vince Chhabria has been selected to oversee the Roundup lawsuits and has deemed the case resulting in last month’s jury verdict as one of the “bellweather” (test) cases. Judge Chhabria is a judge on the bench at the U.S. District Court for the Northern District of California. He was nominated to the bench by the President in 2013.
What Does the Litigation Mean For My Farm/Ranch?
While the temptation may be great to dismiss the recent verdicts as the result of raw emotion and passion by juries that don’t have much, if any, relation to or understanding of agriculture, that temptation should be resisted. It is true that juries tend to react based on emotion to a greater degree than do judges (indeed, the judge in the 2018 case significantly reduced the jury verdict), but that doesn’t mean that there aren’t some “take-home” implications for farming and ranching operations at this early stage of the litigation.
Things to ponder. Farming and ranching operations should at least begin to think about the possible implications of the Roundup litigation.
- What about lease agreements? Farmers and ranchers that lease out farmland and pasture may want to reexamine the lease terms. Consideration should be given as to whether the lease should incorporate language that specifies that the tenant assumes the risk of claims arising from the use of Roundup or products containing glyphosate. Relatedly, perhaps language should be included that either involves the tenant waiving potential legal claims against the landlord or provides for the landlord to be indemnified by the tenant for any and all glyphosate-related claims. Should language be included specifying that the tenant has the sole discretion to select chemicals to be used on the farm and that any such chemicals shall be used in accordance with label directions and any applicable regulatory guidance? How should the economics of the lease be adjusted to reflect this type of lease language? The tenant is giving up some rights and will want compensation for the loss of those rights. If the lease isn’t in writing, perhaps this is a good time to reduce it to writing.
- Is the comprehensive liability policy for the farm/ranch sufficient to cover glyphosate-related claims? Many farm comprehensive general liability policies contain “pollution exclusion” clauses. Do those clauses exclude coverage for glyphosate-related claims? How is “pollution” defined under the policy? Does it include pesticides and herbicides and associated claims? Does it cover loss to livestock that consume corn and/or soybeans that were grown with the usage of chemicals containing glyphosate? Can a rider be obtained to provide coverage, if necessary? These are all important questions to ask the insurance agent and an ag lawyer trained in reading farm comprehensive liability policies.
- If the farm employs workers, should that arrangement be modified from employer/employee to independent contractor status? If employee status remains and an employee sues the employer for alleged glyphosate-related damages, what can be done? Will enrolling the farm in the state workers’ compensation program provide sufficient liability protection for the farming/ranching operation?
What About Food Products?
To date, the cases have all involved the use of Roundup directly over a long period of time. At some point will there be cases where consumers of food products claim they were harmed by the presence of glyphosate in the food they ate? If those cases arise, given the use of production contracts in agriculture and the possibility of tracing back to the farm from which the grain in the allegedly contaminated food product was grown, does the farmer have liability? If you think this is far-fetched, remember that there is presently a member of the U.S. House that is proposing the regulation (if not elimination) of cows with flatulence. Relatedly, there are certain segments of the population that are opposed to the manner in which modern, conventional agriculture is conducted. These persons/groups would not hesitate in trying to pin liability all the way back down the chain to the farmer.
The Roundup litigation shouldn’t be ignored. It may be time to start thinking through possible implications and modifying certain aspects of the way the typical farm or ranch does business in order to provide the greatest liability protection possible.
Just some additional things to think about as you deal with low crop and livestock prices, flooding in the Midwest and Plains, and tax season! Also, a special “hat tip” to Jeremy Cohen, a lawyer in the Denver, Colorado area who put the bug in my ear about writing on this issue. Jeremy and I started our legal careers together in North Platte, NE nearly 30 years ago with Don Kelley – an iconic name in farm and ranch estate and business planning circles.