Bayer AG said the U.S. Supreme Court ruling that a federal pesticide law blocks failure-to-warn lawsuits in state courts should result in the dismissal of a "vast majority" of Roundup litigation.
The 7-2 decision released Thursday reversed a Missouri appeals court decision that had upheld a $1.25 million jury verdict for St. Louis area resident John Durnell, a gardener who alleged his two decades of Roundup use caused him to develop non-Hodgkin's lymphoma. He sued Bayer for not warning him on Roundup's label about the dangers of glyphosate.
Bayer said in a statement: "The holding in Durnell should result in the dismissal of current warnings-based claims and foreclose future claims based on state-failure-to-warn theories, which make up the vast majority of claims in the litigation to date."
Bayer's stock, which trades in Germany as Bayer AG, was up 17% to 19% Thursday — the largest percentage increase in more than 20 years.
Bayer inherited the Roundup liability through the $63 billion acquisition of St. Louis-based Monsanto in 2018. Bayer's Crop Science Division is based in Creve Coeur.
A Bayer spokesperson didn't respond to questions about the number of Roundup lawsuits alleging failure to warn. The Supreme Court's decision focused almost entirely on the failure-to-warn cause of action and does not appear to hold that all Roundup lawsuits are preempted.
Brent Wisner, managing partner at Wisner Baum LLP who led the first major Roundup verdict in 2018, said recently that Bayer has faced lawsuits alleging negligent design and design defects of the herbicide. Wisner did not have a number for those types of Roundup lawsuits.
Hours after the Supreme Court released its decision, Bayer said the proposed $7.25 billion Roundup class action settlement will move forward if Judge Timothy Boyer of St. Louis Circuit Court approves it.
"Together with today's positive ruling, the class — which has received preliminary approval — will help ensure that Monsanto can significantly contain this litigation," Bayer said.
In February, Bayer CEO Bill Anderson said the nationwide settlement would cover most of the 67,000 claims from plaintiffs who allege that glyphosate, the active ingredient in Roundup, caused their cancer.
Bayer has said the weedkiller is safe to use.
The German conglomerate has already paid about $10 billion in legal payouts for Roundup claims.
Markus Manns, portfolio manager at asset manager Union Investment in Frankfurt, Germany, said in an email that Bayer's victory at the Supreme Court is a "significant milestone for Bayer, marking the beginning of a new era for the company, 10 years after the Monsanto acquisition." Union is a Bayer investor.
He added: "While future lawsuits are not entirely off the table, they will be considerably more difficult to pursue. Plaintiffs can no longer sue over the absence of cancer warnings on the product label, but claims related to faulty marketing, for example, remain possible. The definitive turning point would come with plaintiffs' acceptance of the settlement and its approval in July. This would effectively close the chapter on glyphosate litigation for Bayer, allowing management to refocus fully on operational and strategic priorities."
Source: St. Louis Business Journal (St. Louis, MO)
Author: James Queally
