BAYN Bayer AG

By Sara Randazzo and Jacob Bunge 

This fall, Virginia plaintiffs' attorney Timothy Litzenburg allegedly laid out a proposal to a chemicals company that supplies ingredients used in the popular weedkiller Roundup.

According to a federal criminal complaint filed this week, one of Mr. Litzenburg's clients was preparing to sue the company for its role in making Roundup, which has been blamed for causing cancer. Thousands of other lawsuits were likely to follow. But the problem could go away for a $5 million settlement, he allegedly told the company, plus a "reasonable" $200 million in consulting fees paid to Mr. Litzenburg and two associates.

Instead of paying, the company called the U.S. Justice Department, according to the complaint.

Federal prosecutors with the Justice Department's fraud section charged Mr. Litzenburg this week with extortion, laying out the alleged scheme to extract $200 million from a target they identify as "Company 1."

That company is Amsterdam-based chemicals maker Nouryon, according to people familiar with the matter. Nouryon is the former chemicals unit of Akzo Nobel NV, which a consortium led by private-equity firm Carlyle Group LP bought in 2018 for $12.6 billion.

Mr. Litzenburg was arrested Tuesday and released on bail. His attorney, Thomas Bondurant Jr., said Wednesday his client isn't guilty and that there appear to be inaccuracies in the charging document. A Nouryon spokesman said, "We have nothing to contribute to the ongoing DoJ investigation." A representative for Carlyle didn't respond to requests for comment.

The charges come against the backdrop of the broader Roundup litigation, which has roiled Bayer AG, the German company that owns the weedkiller. Bayer faces lawsuits from more than 42,700 farmers, home gardeners and landscapers who claim Roundup caused non-Hodgkin lymphoma and other cancers. It is fighting the claims.

The criminal complaint unsealed Tuesday against 37-year-old Mr. Litzenburg details the lawyer's alleged attempt to shift the Roundup litigation into a new phase that would target chemical suppliers involved in the herbicide's production.

"The [Company 1] non-Hodgkin lymphoma litigation that we are planning will be 'Roundup Two,' and I'm excited to lead the charge again," Mr. Litzenburg said in an Oct. 24 email to an attorney representing the company, as quoted in the complaint. "This time, to my great financial benefit."

Prosecutors allege Mr. Litzenburg first approached the chemicals company in September with the draft of a complaint that he planned to file claiming chemical compounds it and other suppliers provided to Bayer were carcinogenic and that they failed to warn about the risks.

He would forget the lawsuit, he told them, if they entered into a $200 million consulting agreement that would purportedly give him a conflict of interest that would make him unable to sue the company, according to the complaint. The money, he made clear, wouldn't be used as a payout to Roundup users to resolve any lawsuits, but would go to him and two lawyers in Chicago and Virginia.

Over a series of phone calls and emails detailed in the complaint, he described the fee as reasonable, saying in the Oct. 24 email: "The defense costs and cost to ultimately resolve the thousands or tens of thousands of cases would be well into the billions, setting aside the associated drop in stock price and reputation damage."

Mr. Litzenburg said that absent "a so-called 'global' or final deal with me, this will certainly balloon into an existential threat to [Company 1]."

The Justice Department recorded phone calls and a meeting between Mr. Litzenburg and attorneys for the company after the company approached the department about the initial interactions.

Until last year, Mr. Litzenburg worked with the Miller Firm in Virginia, which has been actively involved in the Roundup litigation and played a lead role in the first Roundup case to go to trial. That California state court case ended in a $289 million verdict in favor of groundskeeper Dewayne Johnson, which was later reduced to $78.5 million and is now on appeal.

On Wednesday, attorney Michael Miller said Mr. Litzenburg was fired by the Miller Firm in September 2018 and that the firm has nothing to do with the events laid out in the DOJ's criminal complaint.

In an email to The Wall Street Journal last month, Mr. Litzenburg laid out what he called his passion for holding companies accountable for selling harmful products and his dismay at what he views as an overly cozy relationship between industry and regulators.

"These companies make willful, knowing choices to put deadly products in the market anytime they figure their profits will far exceed any sort of 'penalty' they have to pay in lawsuits when people figure it out," he wrote.

He added: "I sleep well at night knowing I am helping injured people as best as is currently possible."

Write to Sara Randazzo at sara.randazzo@wsj.com and Jacob Bunge at jacob.bunge@wsj.com

(END) Dow Jones Newswires

December 19, 2019 08:06 ET (13:06 GMT)

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