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economy4 min read

Bayer wins first Roundup trial after U.S. Supreme Court ruling

Bayer won unanimously in St. Louis the first Roundup trial held after the U.S. Supreme Court ruling, and it still faces about 65,000 lawsuits while awaiting a decision on its $7.25 billion settlement.

What signal does this verdict send for the roughly 65,000 remaining lawsuits and the $7.25 billion settlement under review?

Bayer won a trial on Thursday in St. Louis over claims by three women that its Roundup herbicide caused their cancer, while it awaits a broader ruling from a separate court on its $7.25 billion effort to resolve other Roundup cases.

The trial was a test of the viability of the Roundup lawsuits after a U.S. Supreme Court ruling in Bayer's favor limited the legal arguments that plaintiffs can bring. A St. Louis jury ruled unanimously for Bayer-owned Monsanto in the first case to go to trial after the Supreme Court's June ruling.

The litigation has weighed on Bayer since its 2018 acquisition of Monsanto, costing the company billions of dollars and depressing its share price. Bayer is also seeking to resolve tens of thousands of additional lawsuits through a proposed $7.25 billion settlement (10.13 billion Canadian dollars), which is under review by a judge at a Missouri state court in St. Louis.

Bayer shares rose 4 percent to a one-month high. Markus Manns, a portfolio manager at Frankfurt-based Union Investment, called the verdict one of the most important courtroom wins for the company. "Plaintiffs have failed in their new litigation strategy to prove that Bayer had ignored the risks as early as the development stage of glyphosate," he said.

Bill Dodero, Bayer's U.S. general counsel and global head of litigation, noted that the verdict shows how difficult it will be for other plaintiffs to win cases after the Supreme Court ruling. "This verdict should send a strong signal that plaintiffs who wish to pursue claims in the court system following the Durnell ruling will face significant challenges both in demonstrating they have viable claims and in putting forth the necessary evidence to prove them in court," he said.

The plaintiffs and the evidence

The plaintiffs Theresa Aretino, Cynthia Fernandez and Betty Larkin sued Monsanto, a Bayer subsidiary, in 2020 in St. Louis, alleging that they used Roundup regularly and later developed non-Hodgkin lymphoma. Their attorneys argued that Roundup was defectively designed and unreasonably dangerous, and that Bayer was negligent in selling it. The three women are not participating in Bayer's proposed settlement. Larkin died before the trial began.

Bayer has denied the claims and has said that decades of studies have shown that glyphosate, Roundup's active ingredient, is safe and does not cause cancer. The company faces about 65,000 claims in U.S. state and federal courts from plaintiffs who say they developed cancer after using Roundup at home or on the job.

The new legal framework

Before this year's Supreme Court ruling, most lawsuits alleged that Roundup's label failed to warn consumers about cancer risks. But the court blocked those legal arguments in June, ruling that federal law requires herbicide makers to use the exact label approved by the U.S. Environmental Protection Agency (EPA). The EPA has concluded that Roundup's label does not require a cancer warning.

Bayer has argued that other legal claims, including design-defect and negligence claims, are also foreclosed by the Supreme Court ruling, but plaintiffs' attorneys have maintained that those claims are not affected by the decision. The EPA previously concluded that glyphosate is probably not carcinogenic, though it is in the middle of a new review of its safety. In 2015, the International Agency for Research on Cancer concluded that glyphosate was "probably carcinogenic" to humans, but Bayer has noted that this is an outlier opinion based on flawed methodology.

Glyphosate-based herbicides such as Roundup are important crop protection tools for Canadian farmers.