By Lauren Berg, Law360 (March 15, 2022, 10:15 PM EDT)

A California federal judge has given the green light to a $550 million class settlement that Long Beach and other local governments reached with Bayer AG‘s Monsanto Co. and subsidiaries of Pfizer and Eastman Chemical to resolve allegations that the localities face increased costs due to Monsanto’s contamination of waterways.

In a 32-page order Monday, U.S. District Judge Fernando M. Olguin granted preliminary approval to the proposed nationwide deal that would resolve allegations that Monsanto’s manufacture and supply of polychlorinated biphenyls, or PCBs, contaminated the cities’ water, necessitating costly treatment to remove the chemicals.

The judge said the deal is a “fair and reasonable outcome” for the class members, as it provides money that wouldn’t have been guaranteed had the localities chosen to litigate their claims.

“The court is persuaded that the parties thoroughly investigated and considered their own and the opposing parties’ positions,” Judge Olguin said. “The parties had a sound basis for measuring the terms of the settlement against the risks of continued litigation, and there is no evidence that the settlement is ‘the product of fraud or overreaching by, or collusion between, the negotiating parties.'”

Along with Long Beach, the cities of Chula Vista, San Diego, San Jose, Oakland and Berkeley, California, Spokane and Tacoma, Washington, and Portland, Oregon; the counties of Los Angeles and Baltimore; the Port of Portland, Oregon; and the mayor and City Council of Baltimore filed the operative settlement in June.

Judge Olguin on Monday appointed the localities as class representatives for the more than 2,500 settlement class members affected by water impaired by PCBs.

“The named plaintiffs, through their in-house counsel, ‘have been actively involved throughout the litigation, including the evaluation of the claims, the preparation of the complaint, the preparation, organization and production of discovery, [and] the technical expert-intensive development of the cases,'” the judge said.

Under the deal, three funds will be created to compensate the three main identified harms: $42.8 million for the need to monitor PCBs in stormwater, $250 million for the need to comply with the Clean Water Act’s National Pollutant Discharge and Elimination System and $150 million for sediment remediation.

A fourth fund of $107 million will also be created to compensate “special needs and costs of class members,” according to the order.

Monsanto also agreed to pay for all costs and expenses needed to implement the settlement, including the administration process, the order states.

And class counsel — Baron & Budd PC, Gomez Trial Attorneys and Gordon Wolf & Carney — agreed to request no more than $98 million in attorney fees, which Monsanto will pay separate from the settlement, according to the order.

This is the localities’ fourth motion for preliminary approval after the city of Seattle first bashed the deal as a “pittance” that could prevent other cities from receiving funds in other litigation against the company.

Then, in February 2021, Judge Olguin denied approval of the deal after taking issue with a narrow timeline for communities to access extra funds for cleanup should they discover PCBs with money the settlement provides them.

The plaintiffs in March 2021 renewed their motion, telling the judge they fixed the timeline concerns, but Judge Olguin again denied the request in May, court records show.

The localities filed the latest motion in June.

In his order Monday, Judge Olguin granted the motion, finding that the terms of the deal are fair and that the release of liability is not too broad.

“We are pleased with Judge Olguin’s order, which is the next step toward distributing up to $550 million to help monitor and remove PCBs from stormwater,” John P. Fiske of Baron & Budd PC, an attorney for the localities, told Law360 on Tuesday. “We look forward to completing the class settlement approval process as quickly as possible for the benefit of thousands of communities.”

In a statement Tuesday, a Bayer spokesperson said the company is pleased with the judge’s decision, noting the settlement resolves most of the company’s exposure to PCB water litigation.

“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,” the spokesperson said.

The plaintiffs collectively filed the operative class complaint in the Central District of California, seeking relief from the costs of testing and monitoring water sources, removing PCBs from sediment areas, reducing PCB levels in stormwater and complying with any regulations that require additional measures.

The chemicals were used in everything from paint and ink to hydraulic fluids and industrial equipment until PCBs were outlawed by Congress in 1979.

PCBs have been proven to cause cancer, weaken the immune system, decrease resistance to viruses and infections, and hurt the reproductive, nervous, neurological and endocrine systems, while studies in animals showed that even the smallest level of PCBs will affect the immune system.

Along with Monsanto, the plaintiffs named as defendants Eastman Chemical Co. subsidiary Solutia and Pfizer Inc. subsidiary Pharmacia.

A previous incarnation of Monsanto — referred to as “Old Monsanto” — ran businesses focused on agricultural products, pharmaceuticals and nutrition, and chemical products. Pharmacia now runs the pharmaceuticals business, Solutia operates the chemical products business and “New Monsanto” runs the agricultural products business.

Other localities, including Los Angeles County, the city of Los Angeles and Oakland, have lodged similar public nuisance suits against Monsanto.

Long Beach and the other local governments are represented by Scott Summy, Carla Burke Pickrel and John P. Fiske of Baron & Budd PC, John Gomez of Gomez Trial Attorneys and Richard Gordon and Martin Wolf of Gordon Wolf & Carney, among others.

Monsanto is represented by Mark D. Anstoetter and Brent Dwerlkotte of Shook Hardy & Bacon LLP.

The case is City of Long Beach et al. v. Monsanto Co. et al., case number 2:16-cv-03493, in the U.S. District Court for the Central District of California.