Cy pres arguments fail to overturn $39.55M class settlement

The 8^th U.S. Circuit Court of Appeals on June 29 affirmed a $39.55 million class action settlement with Monsanto in Missouri federal court. But an attorney for an objector said he would seek further review.

The settlement was approved in the U.S. District Court for the Western District of Missouri in May 2021. In a lawsuit filed in 2019, three plaintiffs representing a nationwide class alleged that labels on Monsanto’s Roundup weed and grass killer products were misleading.

They alleged the label falsely stated that glyphosate, the active ingredient in Roundup, “targets an enzyme found in plants but not in people or pets,” when in fact that enzyme is used by helpful bacteria in the digestive system of humans and animals. The case is one of several filed around the country making similar claims.

Following litigation and mediation, the parties reached a settlement that won preliminary approval in May 2020. But they continued to iron out details. In the end, the agreement provided payments to claimants of up to 50 percent of the value of the products they purchased, a 25 percent award of attorneys’ fees totaling $9.89 million, an administrator’s fee of $1.8 million, and $2,500 incentive payments for each of the three lead plaintiffs.

That left approximately $14 million to $16 million to be distributed under a cy pres clause in the revised settlement. Cy pres awards — derived from the Norman French expression cy pres comme possible, or “as near as possible” — are intended to benefit the “next best” recipient of unclaimed settlement funds. The potential recipients were the National Consumer Law Center, the National Advertising Division of the Better Business Bureau and the Berkeley Center for Consumer Law & Economic Justice.

But an objector named Anna St. John challenged several of the cy pres conditions, arguing among other things that the award to outside parties was a form of compelled speech that violated her First Amendment rights.

The U.S. Supreme Court has held that forcing someone to subsidize the speech of other private speakers raises First Amendment concerns — most notably in Janus v. AFSCME, Council 31, a 2018 case that said non-union workers couldn’t be required to pay union fees as a condition of employment.

But the 8^th Circuit said the cases weren’t analogous. The residual funds could only be distributed after class members who filed claims had been compensated, the court said, and potential class members who didn’t participate could have either filed claims or opted out.

“Cy pres distribution of residual funds pursuant to the settlement agreement neither constitutes speech by any individual class member nor infringes on their First Amendment rights,” Judge Jane Kelly wrote. Chief Judge Lavenski R. Smith and Judge Duane Benton concurred.

St. John also argued that the class members should have been paid 100 percent of the value of the Roundup they bought rather than distribute the money to outside groups. She pointed to In re BankAmerica Corp. Securities Litigation, an 8th Circuit case from 2015 that required the lower court to determine the measure of class members’ damages and whether they had been fully compensated before making a cy pres distribution.

But Kelly said the Western District of Missouri did make such a determination in the Roundup case.

“The district court reasoned that even if class members claimed they would not have purchased Roundup if it had not borne the allegedly misleading label, their damages would still have to be reduced from 100% to account for the value they received from using Roundup,” she wrote.

Ted Frank, director of the Hamilton Lincoln Law Institute in Washington, D.C., who represented St. John, said in an email that he would seek en banc review.

“The ruling contradicts existing Eighth Circuit precedent, the BankAmerica Securities case I also argued, and we’ll be asking the full court to look at the decision to divert millions of dollars of the class’s money to Berkeley Law School,” he said.

The plaintiffs were represented by attorneys from the Richman Law Group in New York and locally by Bell Law in Kansas City.

The case is Jones et al. v. St. John, 21-2292.

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