The U.S. Supreme Court reined in thousands of lawsuits pursued in state courts accusing Bayer of failing to warn users that the active ingredient in its Roundup weedkiller causes cancer, handing a major legal victory on Thursday to the German company.
The justices in a 7-2 decision overturned a jury verdict in Missouri awarding $1.25 million to a man named John Durnell who said he was diagnosed with non-Hodgkin lymphoma after years of exposure to glyphosate in Roundup. The Supreme Court agreed with Bayer that a U.S. law that governs pesticides precludes failure-to-warn claims that are brought under state law from moving forward in court.
Bayer shares were up about 16% in the wake of the decision.
President Donald Trump‘s administration backed Bayer in the case.
Conservative Justice Brett Kavanaugh, who authored the ruling, said the U.S. Environmental Protection Agency, or EPA, has concluded glyphosate does not cause cancer and has not required a cancer warning on Roundup.
The law preempts Durnell’s claim because it “would require Monsanto to add a cancer warning to Roundup’s label even though federal law requires Monsanto to use the EPA-approved label without a cancer warning,” Kavanaugh wrote.
Liberal Justice Ketanji Brown Jackson, in a dissent joined by conservative Justice Neil Gorsuch, said that Durnell’s claim would impose equivalent labeling requirements on Monsanto that the federal law requires and so should not be preempted.
Jackson called the ruling “remarkable and regrettable, for it unjustifiably closes the courthouse doors to state tort plaintiffs like Durnell.”
Bayer acquired Roundup as part of its $63 billion purchase of agrochemical company Monsanto in 2018. More than 100,000 plaintiffs have filed cases in U.S. state and federal courts alleging a cancer link, and the German drugmaking and crop science company had said that the lawsuits could threaten its ability to supply the herbicide to farmers.
The torrent of litigation already prompted Bayer to remove glyphosate from its consumer version of Roundup. Bayer said before the Supreme Court ruled that a decision in its favor could largely end the Roundup litigation.
Bayer CEO Bill Anderson praised the decision, saying it is good for American farmers.
“This litigation has enormous costs for the company and has impacted public trust. The decision brings overdue justice on an issue that should have been clarified much earlier. It’s time to put it behind us,” Anderson said.
Bayer’s shares before Thursday’s gains had been down just over 50% since the company acquired Monsanto.