Bayer Wins Roundup Trial as Settlement Decision Looms
Bayer AG won a St. Louis trial over its Roundup weedkiller, defeating claims by three women who blamed the herbicide for their cancers and bolstering its efforts to draw a line under its U.S. litigation overhang.
The unanimous verdict reached on Thursday marked the first courtroom test of alternative legal claims since the U.S. Supreme Court in June effectively blocked lawsuits alleging Bayer failed to include a cancer warning on Roundup labels. Lawyers in the St. Louis case had made a different argument, alleging Roundup was defectively designed, meaning it was unreasonably dangerous and shouldn’t have been sold.
Related: Bayer Faces Trial Test of Remaining Roundup Claims After Supreme Court Win
Bayer shares rose as much as 5.2% in early Friday trading in Frankfurt, extending this year’s gain to nearly 35%.
“While another trial win may initially look like business as usual ahead of final approval of Bayer’s proposed settlement, we think this case is more meaningful,” Jefferies analysts including Michael Leuchten wrote in a note. “We think it provides a positive first datapoint on plaintiffs’ remaining litigation routes.”
Chief Executive Officer Bill Anderson has pledged to “significantly contain” Bayer’s legal overhang by the end of this year. The German conglomerate inherited the legal troubles with its 2018 acquisition of Monsanto, which has already cost Bayer more than $11 billion.
Bayer argued the plaintiffs couldn’t prove Roundup should be banned, pointing to safety assessments of the weedkiller by the U.S. Environmental Protection Agency. Before the trial, the company said it had secured favorable outcomes in 17 of the last 25 trials over Roundup claims, though an estimated 65,000 cases are still pending.
The verdict validates “our belief that there is no evidence to prove design defect, fraud or negligence claims in the Roundup litigation,” said Bill Dodero, U.S. general counsel and Bayer’s global head of litigation. He added that it sends a “strong signal” that plaintiffs pursuing litigation after the Supreme Court decision will “face significant challenges both in demonstrating they have viable claims and putting forth the necessary evidence to prove them in court.”
Related: Bayer’s Supreme Court Win in Roundup Case No ‘Silver Bullet’
The key remaining step is a final decision regarding Bayer’s $7.25 billion settlement proposal by a state court judge in Missouri. The settlement is designed to resolve most current and future Roundup claims and already received a preliminary nod in March.
“Once that is secured, Bayer should have largely reduced its litigation risks, allowing management to refocus on operational and strategic issues,” said Markus Manns, a portfolio manager at Union Investment, a Bayer investor.
The three plaintiffs in the St. Louis case — Theresa Aretino, Cynthia Fernandez and Betty Larkin — opted out of Bayer’s proposed settlement. All three claimed they contracted non-Hodgkin lymphoma from exposure to Roundup. Fernandez died before the trial began.
Top photo: The logo of Bayer AG at the company’s pharmaceutical campus in Berlin. Photographer: Krisztian Bocsi/Bloomberg.