Bayer's $648 Million U.S. Water Pollution Settlement Moves Ahead

(Bloomberg) -- Bayer AG won preliminary court approval for a $648 million settlement of suits over environmental contamination tied to now-banned chemicals made by its Monsanto Co. unit.

The proposed deal will cover more than 2,500 cities and counties that claimed harm from polychlorinated biphenyls, or PCBs, according to federal court filings. PCBs were banned in the U.S. in 1979 after researchers found they posed a cancer threat. 

The settlement would resolve a major legal headache for Bayer, the German conglomerate that acquired Monsanto in 2018 for $63 billion, becoming the world’s largest seed- and agricultural-chemicals maker. Monsanto was the exclusive maker of PCBs used to cool heavy-duty electrical equipment for more than 40 years.

“The court’s preliminary evaluation of the settlement does not disclose grounds to doubt its fairness,” U.S. District Judge Fernando Olguin in Los Angeles wrote in Monday’s ruling. He’d refused to give his preliminary approval to the deal for months. Olguin still must give a final sign-off to the accord. 

Read More: Bayer Faces 21-State Backlash Over Water Pollution Settlement

“We believe this is a fair resolution and look forward to working with the court and the parties throughout the remainder of the approval process, Nicole Hayes, a Bayer spokeswoman, said Tuesday in an emailed statement.

Cities including San Diego and Long Beach, California, sued Monsanto over the continued presence of PCBs in local waterways. Companies that used PCBs for insulation sometimes fouled manufacturing areas, with pollutants ending up in the soil or running off into lakes, rivers and streams.

Under the settlement, municipalities will get funds to clean up PCB pollution and monitor the health of local water sources. Lawyers for the cities and counties are slated to get $98 million in fees and costs for their work on the deal, according to court filings.

Last year, a Washington state jury ordered Monsanto to pay $185 million to three teachers who blamed their brain injuries on exposure to the company’s PCBs at a school in the state. The panel found Monsanto’s products weren’t safely designed and lacked adequate warning labels.

The case is City of Long Beach v. Monsanto Co., 16-03493, U.S. District Court, Central District of California (Los Angeles). 

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