U.S. Supreme Court rejects Bayer bid to nix Roundup weedkiller suits

© Reuters. FILE PHOTO: Monsanto Co's Roundup is shown for sale in Encinitas, California, U.S., June 26, 2017. REUTERS/Mike Blake/File Photo

By Lawrence Hurley

WASHINGTON (Reuters) -The U.S. Supreme Court on Tuesday rejected Bayer AG (ETR:BAYGN)'s bid to dismiss legal claims by customers who contend its Roundup weedkiller causes cancer as the German company seeks to avoid potentially billions of dollars in damages.

The justices turned away a Bayer (OTC:BAYRY) appeal and left in place a lower court decision that upheld $25 million in damages awarded to California resident Edwin Hardeman, a Roundup user who blamed his cancer on the pharmaceutical and chemical giant's glyphosate-based weedkillers.

The Supreme Court's action dealt a blow to Bayer as the company maneuvers to limit its legal liability in thousands of cases. The justices have a second Bayer petition pending on a related issue that they could act upon in the coming weeks.

Bayer's shares were down 2.9% on the news, eliminating gains over the previous two trading sessions.

U.S. President Joe Biden's administration in May urged the court not to hear the Bayer appeal, reversing the government's position previously taken under former President Donald Trump.

Bayer has lost three trials in which Roundup users have been awarded tens of millions of dollars in each, while also winning four trials. Bayer had pinned hopes for relief on the conservative-majority Supreme Court, which has a reputation for being pro-business.

Bayer said it "respectfully disagrees" with the court's decision and that the company is "fully prepared to manage the litigation risk associated with potential future claims in the U.S."

On Friday, a federal appeals court ordered the U.S. Environmental Protection Agency (EPA) to take a fresh look at whether the active ingredient glyphosate poses unreasonable risks to humans and the environment.

The San Francisco-based 9th U.S. Circuit Court of Appeals agreed with several environmental, farm worker and food safety advocacy groups that the EPA did not adequately consider whether glyphosate causes cancer and threatens endangered species.

Bayer has asked the Supreme Court to review the verdict in Hardeman's case, which was upheld by the 9th Circuit in May 2021. Hardeman had regularly used Roundup for 26 years at his home in northern California before being diagnosed with a form of non-Hodgkin's lymphoma.

Bayer said in its March annual report that it had resolved about 107,000 cases out of about 138,000 cases overall.

Bayer, which also makes aspirin, Yasmin birth-control pills and the stroke prevention drug Xarelto among other products, has argued that the cancer claims over Roundup and glyphosate go against sound science and product clearance from the EPA.

The agency has upheld guidance that glyphosate is not carcinogenic and not a risk to public health when used as indicated on the label.

Bayer has said it should not be penalized for marketing a product deemed safe by the EPA and on which the agency would not allow a cancer warning to be printed.

The lawsuits against Bayer have said the company should have warned customers of the alleged cancer risk.

Roundup-related lawsuits have dogged Bayer since it acquired the brand as part of its $63 billion purchase of agricultural seeds and pesticides maker Monsanto (NYSE:MON) in 2018.

Bayer struck a settlement deal in principle with plaintiffs in June 2020 but failed to win court approval for a separate agreement on how to handle future cases.

In July 2021, Bayer took an additional litigation provision of $4.5 billion in case of an unfavorable ruling by the Supreme Court or in case the justices declined to consider its appeal.

The provision came on top of $11.6 billion it previously set aside for settlements and litigation over the matter.

Bayer plans to replace glyphosate in weedkillers for the U.S. residential market for non-professional gardeners with other active ingredients.