(Bloomberg) – A $ 79 million award against Bayer AG fell three-quarters nearly a month after the company reached a settlement to settle lawsuits over its weed killer Roundup.
© Photographer: Scott Olson / Getty Images North America
CHICAGO, ILLINOIS – MAY 14: Roundup weed removal products are offered for sale at a home improvement store on May 14, 2019 in Chicago, Illinois. A jury yesterday ordered Monsanto, the maker of Roundup, to pay a California couple more than $ 2 billion in damages after discovering that the herbicide had caused their cancer. This is the third jury to discover that Roundup had caused cancer since Bayer bought Monsanto about a year ago. Bayer’s share price has fallen more than 40 percent since the acquisition. (Photo by Scott Olson / Getty Images)
Bayer’s shares rose to 2.1% in response to a California appeals court decision, which affirmed the 2018 verdict in favor of a landscaper and reduced its award to $ 20.5 million.
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However, the ruling can support tens of thousands of claims that Roundup causes cancer. It could embolden settlement reserves to demand higher payments and lead to more lawsuits from herbicide users who have not yet fallen ill, said Anna Pavlik, senior advisor to investment adviser United First Partners in New York.
“This risk is precisely what probably led Bayer to resolve some of the current cases before the appeal decision was announced,” Pavlik said.
The San Francisco-based court rejected Bayer’s central argument for overturning the three verdicts it lost in California. The company claims that the US Environmental Protection Agency has reviewed and approved the Roundup warning label and that the lawsuits ignored the agency’s authority. Federal Roundup regulation, Bayer argues, preempts California law.
Read more: California employees face skeptical courts for punitive damages
Bayer, maintaining that Roundup is not cancerous, appealed all three verdicts, resulting in a total of $ 191 million in damages, none covered by the settlement. Roundup users in all three cases convinced juries that, under California law, the company had not adequately warned users that the use of Roundup can cause cancer.
The lawsuit is not covered by Bayer’s broader settlement settling 95,000 of approximately 125,000 lawsuits in the United States by Roundup users.
Monday’s decision is not the last word on the matter. Bayer can still appeal to the state supreme court, and it may have more luck pressing similar arguments before a federal appeals court over another verdict.
In an emailed statement, Bayer praised the reduction of the sum by the appeals court, adding that it continues to believe that the verdict and compensation for damages are “inconsistent with the evidence at trial and the law” and that you are considering an appeal.
“We continue to strongly support the safety and usefulness of Roundup, a position backed by four decades of extensive science and favorable assessments by leading health regulators worldwide,” said Bayer.
Mike Miller, who represented the landscaper, Lee Johnson, at the trial, said the ruling was not a surprise given the tenor of the oral arguments in court last month.
“We are very pleased for Mr. Johnson because the court validated his claim,” said Miller. He declined to comment on the court’s decision to cut the award.
Johnson initially earned $ 289 million, then was reduced by a lower court judge to $ 78.5 million.
The case is Johnson v. Monsanto, A155940, California Court of Appeals (San Francisco).
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