In Latest Roundup Herbicide Defeat for Bayer, Jury Awards California Couple $2 Billion -- 2nd Update
14 May 2019 - 9:24AM
Dow Jones News
By Sara Randazzo and Ruth Bender
A jury Monday awarded $2.055 billion to a California couple who
blamed Bayer's Roundup weedkiller for causing their cancer, the
largest such verdict to date and one that adds significant pressure
to a company struggling to contain the fallout from last year's
acquisition of Monsanto Co.
The verdict by the Northern California jury is the third
straight trial loss for Bayer over the safety of Roundup. Bayer is
facing a revolt from shareholders over the Monsanto deal, which
exposed Bayer to some 13,400 claims tying Roundup to cancer.
Two previous trial losses have helped wipe more than 30% off
Bayer's share price. Last month, a majority of Bayer shareholders
refused to endorse management's actions in the past year,
indicating that investors lack confidence in how the company is
being run.
The company now has until August to reevaluate its legal
strategy and try to appease investors before the next scheduled
trial. That trial will be the first to unfold outside the San
Francisco Bay Area, often seen as an unfavorable setting for
corporate defendants. It will be in St. Louis, the former
headquarters of Monsanto and now home to Bayer's global seed
business.
Bayer has appealed a $78.5 million verdict reached in August,
the first Roundup case to go to trial. It has said it would appeal
the second, a more than $80 million jury award decided in
March.
Some investors have pushed Bayer to settle the cases soon,
though companies facing product-liability claims often bring a
dozen or more cases to trial before seriously entering settlement
talks.
Reaching a settlement in the case is complicated by the fact
that the product continues to be sold to consumers and farmers and
doesn't carry a cancer-warning label, which means the potential
pool of plaintiffs could expand indefinitely. The company could
reach a deal with the current batch of plaintiffs and set aside
money to pay out future claims, or continue fighting case by case
to gather more data points. People familiar with Bayer say the
company isn't planning to settle before at least a first few cases
have gone through appeal.
Bayer said it is disappointed in the verdict and plans to
appeal. The company added that the litigation "will take some time
before it concludes" since appeals are pending and that it would
"continue to evaluate and refine its legal strategies as it moves
through the next phase of this litigation."
R. Brent Wisner, an attorney for the plaintiffs, thanked the
jurors for finding "that the science shows there are serious health
hazards associated with Roundup and that Monsanto did nothing to
warn people about the risk."
Elizabeth Burch, a law professor at the University of Georgia,
said the third trial loss was significant "given the learning
curve" that might have been expected of the company after the
earlier defeats. "Whatever the plaintiffs' lawyers are doing, they
have a pretty good formula," she said.
The jury in the third case found Bayer liable for the
non-Hodgkin lymphoma diagnoses of Alva and Alberta Pilliod, a
married couple in their 70s who used Roundup on their San Francisco
Bay Area property for 35 years. The two were diagnosed four years
apart, in 2011 and 2015; both are in remission.
The money awarded includes $2 billion in punitive damages and
$55 million in compensatory damages to the couple. An attorney for
the plaintiffs suggested to the jury that they award $1 billion in
punitive damages to send a message to the company. Large damages
awards are often reduced on appeal; the judge overseeing the first
Roundup trial cut punitive damages in the case by more than $210
million. Bayer called the punitive awards "excessive and
unjustifiable."
The trial unfolded much like the earlier two, with sparring over
scientific studies, the credibility of expert witnesses and the
relative importance of a 2015 designation by a World Health
Organization branch that glyphosate, the primary ingredient in
Roundup, is likely carcinogenic to humans.
Attorneys for the plaintiffs walked jurors through scientific
studies of rodents, cells and human populations that they say show
glyphosate and Roundup are carcinogenic. Bayer lawyers countered
that hundreds of studies have shown it to be safe, and pointed to
regulators like the U.S. Environmental Protection Agency that have
approved the product. The EPA in late April reaffirmed its
long-held conclusion that glyphosate, the world's most widely used
herbicide, is safe when used as directed and doesn't cause
cancer.
The health histories of Mr. and Mrs. Pilliod also figured
prominently in Bayer's case. Lawyers for the company pointed to
prior cancer diagnoses, family histories of cancer and autoimmune
diseases that they said elevated the couple's risk for non-Hodgkin
lymphoma -- not their weedkiller use.
Bayer reiterated Monday that it believes scientific studies and
the EPA's conclusions back up Roundup's safety, and said the jury
was presented with "cherry-picked findings from a tiny fraction of
the volume of studies available."
The case was the first to go to trial of hundreds of lawsuits
consolidated in California state court. A judge put the Pilliods'
case on an accelerated timeline because of their age.
Hundreds of other cases are part of multidistrict litigation in
federal court in San Francisco. The judge overseeing those cases
recently called off two scheduled trials and ordered the parties to
try resolving the claims in mediation.
Bayer and its shareholders are now setting their hopes on the
first appeal in the case of former school groundskeeper Dewayne
Johnson, expected to be argued before a California state appellate
court before the end of the year.
Costco Wholesale Corp. pulled Roundup from its shelves, but
sales overall don't seem to have suffered much from the litigation.
Scotts Miracle-Gro Co., which markets Roundup to home-and-garden
retailers in the U.S., said its Roundup sales increased 20% in the
first three months of the year from the same period last year.
--Jacob Bunge contributed to this article.
Write to Sara Randazzo at sara.randazzo@wsj.com and Ruth Bender
at Ruth.Bender@wsj.com
(END) Dow Jones Newswires
May 13, 2019 19:09 ET (23:09 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Bayer Aktiengesellschaft (PK) (USOTC:BAYRY)
Historical Stock Chart
From Apr 2024 to May 2024
Bayer Aktiengesellschaft (PK) (USOTC:BAYRY)
Historical Stock Chart
From May 2023 to May 2024