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Supreme Court Unlikely to Hear Bayer’s Roundup Plea

12.05.2022 - Bayer’s advice to shareholders expressing concern about the development of the company’s stock at its early May annual general meeting, to bide their time and wait for the US Supreme Court to deal with the issue of warning labels for agrochemicals packaging, seems to have been too hasty.

Unless the country’s highest court decides to seek temporary relief from the furor over its leaked plans to declare abortion unconstitutional and instead take on an almost equally controversial topic, the nine-member panel may well opt not to get involved in the ongoing litigation over whether Monsanto’s glyphosate-based Roundup herbicide causes cancer. 

After losing all three lawsuits brought by plaintiffs who made such claims in lower US courts, Bayer last year asked the Supreme Court to hear its argument that federal law trumps state laws mandating warning labels on products such as home and garden crop protectants.

The justices then turned to the administration of US president Joe Biden for advice on whether to hear the case and on May 10 got an answer. Solicitor General Elizabeth Prelogar, who represents the administration at the Supreme Court, in a filing urged them not to consider Bayer's petition.

In early trading a day later, shares of the German pharmaceuticals and agrochemical giant fell by more than 6% to their lowest level in seven weeks, shaving a potential €3.7 billion off the company’s value.

Even with the setback, the paper has still shown a 20% gain since the beginning of 2022, reflecting higher demand from farmers, is now well below the 30% the company could point to at the meeting.

Despite the gradual share price recovery in the early part of the year, analysts have calculated that Bayer’s current market value is only about what it paid to acquire Monsanto for $63 billion in 2018.

Bayer hoped a Supreme Court decision in its favor would negate a California court's upholding of the $25 million in damages awarded to Edwin Hardeman. The Roundup user blamed his non-Hodgkin lymphoma on the controversial herbicide.

In the German company’s view, the claims against Roundup and its glyphosate active ingredient are not “sound science.” Bayer has repeatedly underscored that the US Environmental Protection Agency (EPA) has consistently stuck by its guidance that glyphosate is not carcinogenic and not a risk to public health when used as the label indicates.

In the filing, Prelogar rejected Bayer's argument that the EPA’s label approval under the federal Insecticide, Fungicide and Rodenticide Act preempts the "failure to warn" claims leveraged under California law by plaintiffs’ attorneys. The agency’s approval of package labeling, which doesn’t warn about particular chronic risks, in itself does not preempt a state’s requirement to provide such warnings, she insisted.

Bayer is still facing US plaintiffs’ claims in around 30,000 cases, out of 125,000 cases brought. The company has been holding back on seeking out-of-court settlements while waiting for a Supreme Court move.

Author: Dede Williams, Freelance Journalist