(Reuters) – The U.S. Supreme Court on Monday declined to hear a dispute involving a lawsuit against Bayer AG’s Monsanto Co. which could rein in a common form of class-action settlement where money is distributed to charities and third parties unrelated to litigation.
The judges rejected an appeal from Anna St. John, a lawyer who opposed an agreement that would have Monsanto pay more than $39 million to settle claims that the company fraudulently labeled certain Roundup herbicide products. Lower courts rejected the objection of St. John, who had opposed the settlement because $14 million to $16 million of the award would go to nonprofit consumer groups and a university that were not harmed by the company̵7;s alleged misconduct.
It is about so-called Cyprus awards in class actions that govern money that may remain unclaimed or that cannot be distributed to class members to unrelated entities as long as it is in the plaintiffs’ interest.
Critics have said such awards encourage frivolous lawsuits and exorbitant fees that go to class-action lawyers who might seek to advance their own interests instead. Proponents have said these settlements could use other low-value-per-person awards by favoring groups that work for the public good or support underfunded entities.
In 2019, the Supreme Court avoided resolving a challenge to Cyprus awards in a case involving Google. Conservative Justice Clarence Thomas, who dissented in that case, called the Cyprus settlements “unfair and unreasonable.”
The plaintiffs in the Monsanto case sued in 2019 on behalf of a proposed nationwide class of individuals who purchased some of the company’s Roundup herbicide products with the allegedly misleading labeling. Monsanto and the plaintiffs defend the settlement because both sides stepped up efforts to reach out to as many consumers as possible to file a claim — even increasing compensation to generate more claims — before any leftover money would be used for cypress distribution.
Class members filed more than 240,000 claims worth more than $13 million. The settlement proposed three cypres recipients — the National Consumer Law Center, the National Advertising Division of the Better Business Bureau and the Center for Consumer Law & Economic Justice at the University of California, Berkeley.
St. John, the only person who opposed the settlement, is an attorney with the Hamilton Lincoln Law Institute’s Center for Class Action Fairness, which is also representing her in the case. Monsanto has called the group, which advocates against what it considers abusive class-action suits, a “serial objector to class-action settlements.”
The group said in court papers that additional steps could have been taken to distribute the settlement award to the class members. Additionally, it said the cypress distribution would encroach on St. John’s right to free speech under the US Constitution’s First Amendment because the selected recipients would subsidize “left-leaning organizations” that “work against her political beliefs.”
A federal judge rejected the St. John’s objections and approved the settlement, a judgment which the St. Louis-based 8th US Circuit Court of Appeals upheld last year.