Bayer can have increased hope of a positive landmark ruling from the US Supreme Court in the billion-dollar US glyphosate litigation.
The US Supreme Court agreed on Friday to accept the Durnell case for review. The judges then have to decide whether federal law on warning labels when selling weed killers – as Bayer argues – supersedes state law. The group welcomed the decision.
“The Supreme Court’s decision is good news for U.S. farmers who need regulatory clarity,” said Chief Executive Bill Anderson. “It is also an important step in our multi-pronged strategy to significantly reduce litigation. In the USA, it must now be made legally clear that companies cannot be convicted on the basis of individual state law if they adhere to the labeling requirements of US federal law.”
Plaintiff John Durnell’s case was originally heard in St. Louis in October 2023. The jury found that the company had a duty to warn about cancer and awarded the plaintiff high compensation. Bayer later selected this case to go to the US Supreme Court to obtain a landmark ruling.
Bayer argues that the US Environmental Protection Agency (EPA) does not see any health risks in the product if it is used according to regulations. The EPA had accordingly approved the product label without warning. Therefore, according to Bayer, claims for damages “based on the laws of individual states should not stand up in court.”
At the beginning of December, the so-called Solicitor General – a kind of attorney general for the US government – supported the company’s request for the US Supreme Court to review the “Durnell” case. The share price had already jumped back then. After the acceptance has now been made, the judges should decide in the case by the end of June, as the current session of the US Supreme Court ends around this time.
In the fall, Bayer increased its provisions for glyphosate when it presented its figures for the third quarter. CEO Anderson justified this with settlement agreements and a moderate increase in the number of glyphosate lawsuits filed. As of October 15, Bayer reported 197,000 registered claims, of which around 132,000 were settled or did not meet the settlement criteria.
Overall, Anderson, who took over the helm in Leverkusen in June 2023, has committed himself to, in addition to an operational turnaround, significantly curbing US legal disputes by the end of 2026. Bayer acquired this in 2018 with the takeover of the US agricultural chemicals company Monsanto, which Anderson’s predecessor Werner Baumann had pushed through. After an initial defeat in a glyphosate lawsuit, the number of plaintiffs increased and the share price fell for years. A notable recovery has now been underway since April 2024.
In addition to the hope of a positive Supreme Court ruling, settlements also play a role if, from the company’s perspective, these are more advantageous than ongoing legal risks and possible lawsuits with the plaintiffs who blame glyphosate for their cancer. Bayer had also intensified its lobbying work in US states to bring about changes in the law. As in the Durnell case, the issue here is whether federal law prevails over state law.
In after-hours trading on Friday on Tradegate, Bayer shares temporarily rose to 43.90 euros, 5.73 percent above their XETRA closing.
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WASHINGTON (dpa-AFX)
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