Bayer Loses Roundup Appeal in Blow to Bid to End Litigation

Bayer AG suffered a blow to its efforts to put a lid on the expensive and long-running litigation over its Roundup weedkiller, as a US appeals court ruled against it.

In an opinion Monday, the 11th US Circuit Court of Appeals rejected the German company’s argument that federal law on pesticide labels trumps state court claims from plaintiffs who say Roundup should come with a cancer warning.

The decision makes it harder for Bayer to overcome thousands of outstanding lawsuits that are complicating new Chief Executive Officer Bill Anderson’s efforts to turn the company around.

Bayer’s shares fell as much as 1.7% in early trading Tuesday, bringing their decline over the past 12 months to 52%. They were up 0.5% to €28.72 ($30.82) at 3:30 p.m. in Frankfurt.

Setback to Strategy

The ruling is a setback to Bayer’s hopes that the US Supreme Court will review the matter and could raise pressure on the company to change its litigation strategy and settle more suits, Bloomberg Intelligence’s Justin Teresi wrote. The total cost of the Roundup litigation is likely to grow beyond the $16 billion that Bayer earmarked for it, Teresi said.

Bayer still has an appeal pending before the 3rd Circuit, where it is similarly arguing that federal law preempts state-based claims. The argument is based on the Environmental Protection Agency’s finding that glyphosate, Roundup’s active ingredient, isn’t a carcinogen and the fact that the EPA approved the Roundup label without a warning.

Bayer disagrees with the 11th Circuit decision, the company said in a statement, arguing that it contradicts Supreme Court precedent and Congress’s “objective of uniformity in pesticide labeling.” Bayer, which maintains that Roundup is safe, is considering its options in the case and will continue to seek a Supreme Court review, it said.

‘Hiding Behind the EPA’

The case stems from a lawsuit filed by a consumer who used the popular weedkiller for decades and then developed cancer, alleging that Roundup caused his disease and claiming failure to warn of the product’s risks.

Brent Wisner, a California-based attorney who has helped several plaintiffs win Roundup cases against Bayer, said in a statement that the decision was expected.

“Hiding behind the EPA is not valid,” Wisner said.

The case is John D. Carson v. Monsanto Co., 21-10994, 11th US Circuit Court of Appeals.

(Updates stock action in first section and adds Bloomberg Intelligence analysis in second.)

Top photo: Bayer AG signage. Photographer: Daniel Acker/Bloomberg.