MINNEAPOLIS, Sept. 19, 2003 (PRIMEZONE) -- German drug giant, Bayer AG (NYSE:BAY), faced with thousands of Baycol lawsuits across the country, now must assess what impact a Court Order, denying class action status, will have on the company. Instead of proceeding in one, unified proceeding or in several coordinated proceedings, the cases - estimated at about 11,000 - will proceed individually, trial by trial. To date, Bayer has paid out over $477 million on only 1,342 of the claims which have been brought by individuals injured by Baycol.
Lead attorney for the Plaintiffs, Charles Zimmerman, noted, "Our clients will still have their day in court; it will just involve a lot more courtrooms, more time, more lawyers and more expense." Asked for a comment on announcements by Bayer's lawyers, declaring the denial of class action status a victory, Co-lead attorney, Richard Lockridge, responded, "Given the number of individual cases now facing Bayer, this is a pyrrhic victory for them. I think Bayer and its shareholders are the practical losers here."
Without the consolidation afforded by a class, Bayer is likely to face ongoing, costly and lengthy litigation, both in the federal case in Minnesota, as well as in multiple state court cases. Zimmerman observed that "now, the calculus changes. Now, Bayer must deal with the same liability spread over multiple individual cases. Such compounding of expense without a reduction in liability must necessarily cause Bayer to ask itself whether this is a real victory."
The costs related to the withdrawn drug have already been significant. In its latest Annual Report, Bayer AG reports expending 229 million Euros in "Other Operating Expenses" during 2001. Of this amount, Bayer reports 57 million Euros in charges related to the market withdrawal of Baycol. During 2002, the costs reported for this category rose to 298 million Euros. During the same time period, Bayer also reported increased administrative expenses. According to Zimmerman, "in light of this recent decision, which contemplates thousands of individual trials, there is every reason to believe that '03, '04 and '05 will witness a significant increase in expenses." Critically, Bayer has reported that it may not have adequate insurance to cover the thousands of pending claims and, as of the end of 2002 had not made "provision" should the liability exceed the coverage. Lockridge and Zimmerman suggested that the company may have to revisit that position. Zimmerman and Lockridge once again urged Bayer to get appropriate compensation to the injured parties as promptly as possible and not allow this procedural ruling to be a basis for delay.
Plaintiffs' attorneys also took issue with representations in a press conference by one of Bayer's lawyers. During the press conference, it was represented that the Court rejected all arguments by Plaintiffs. Mr. Zimmerman responded that actually, "what the court confirmed is that the injuries from Baycol were so serious, from so many different states, from so many different doses, at so many different times...that Bayer had created an overwhelming problem, too difficult to manage in one case. I am not sure how this amounts to a "significant victory" for Bayer."
According to Zimmerman and Lockridge, "There's a long way to go. In the past 24 hours, we have visited with dozens of attorneys around the country about the court order. These attorneys all agreed that they will begin to prepare their cases for trial. Everyone remains fully committed to doing everything we can to obtain meaningful recovery to people injured by Bayer's drug, Baycol."
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca