Trump administration backs Bayer's bid to curb Roundup lawsuits

In a brief filed at the court, US Solicitor General D. John Sauer bolstered Bayer’s effort to limit the lawsuits and potentially avert billions of dollars in damages, saying the company was correct that the federal law governing pesticides preempts lawsuits that make claims over the products under state law.

The shares had surged 14.9% to 35 euros at 0812 GMT on Tuesday.

"We see the Solicitor General’s recommendation as an important step towards containing glyphosate litigation," JPMorgan analysts said in a note, adding the Supreme Court was likely to rule next year.

The analysts flagged there could be a reduction in provisions for glyphosate litigation, which Bayer has said were $7.6 billion at the end of September.

Bayer BAYGn.DE has asked the justices to hear its appeal of a lower court's decision to uphold a $1.25 million verdict awarded by a St. Louis jury in a Missouri state court case in which a plaintiff named John Durnell sued after being diagnosed with non-Hodgkin's lymphoma he attributed to his exposure to Roundup. Bayer is facing more than 67,000 such lawsuits in US state and federal courts.

The German pharmaceutical and biotechnology company, which acquired Roundup as part of its $63 billion purchase of Monsanto in 2018, has said that decades of studies have shown Roundup and its active ingredient, glyphosate, are safe for human use.

LABEL FIGHT

Sauer told the justices that upholding the lower court's decision would allow juries to second guess the science-based judgments of the US Environmental Protection Agency.

"EPA has repeatedly determined that glyphosate is not likely to be carcinogenic in humans, and the agency has repeatedly approved Roundup labels that did not contain cancer warnings," Sauer said in the brief.

"Where, as here, EPA has specified the health warnings that should appear on a particular pesticide’s label, a manufacturer should not be left subject" to state labeling regimes each prescribing different requirements, Sauer said.

The brief comes as the Trump administration — which has aimed to address concerns from agricultural groups about potential restrictions on agrochemicals — must also contend with supporters of the “Make America Healthy Again” movement, who have highlighted possible health risks associated with pesticides.

Bayer's effort has drawn support from pro-business groups like the US Chamber of Commerce, which said that allowing Bayer to face the liability opens up many corporations that follow federal law to litigation.

Lawyers for Durnell asked the Supreme Court to turn away Bayer's appeal. They said the plaintiff relied on Bayer's advertising and not just the label when he chose to use Roundup, and the company's marketing failed to warn consumers of the product's risks.

The US Supreme Court asked the Trump administration in June for its views in the case.

MIXED RECORD

Roundup is among the most widely used weedkillers in the United States.

The company has paid about $10 billion to settle most of the Roundup lawsuits that were pending as of 2020, but failed to get a settlement covering future cases. New lawsuits have continued to pour in since then. Plaintiffs have said they developed non-Hodgkin's lymphoma and other forms of cancer due to using Roundup, either at home or on the job.

The company has had a mixed record at trial in the Roundup lawsuits. Bayer has prevailed in a series of Roundup trials, but it was also hit with large jury awards in the past few years, including a $2.1 billion verdict in a case in the US state of Georgia in March.

Bayer settled the Georgia case and three others that had been on appeal in November.

Bayer has threatened to withdraw Roundup from the US market as it fights the litigation. The company replaced glyphosate in U.S. consumer products with different weedkilling substances.

(Reporting by Diana Novak Jones; Additional reporting by Andrew Chung; Editing by Alexia Garamfalvi, Stephen Coates and Kate Mayberry)