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Shares of German conglomerate Bayer, which makes pills and herbicides, rose 11 percent on Friday aVsceker the group won a major victory in a U.S. appeals court over the labeling of its allegedly cancer-causing weedkiller Roundup.
A Philadelphia appeals court ruled Thursday that Bayer did not violate U.S. state law when it failed to add a cancer warning to its Roundup products, which use glyphosate as an active ingredient.
Since 2018, Bayer has been involved in complex and expensive legal battles over the herbicide, fighting cases in several US states.
The Leverkusen-based company, embroiled in the glyphosate lawsuit through its ill-fated $63 billion acquisition of U.S. rival Monsanto in 2016, is facing damages claims from thousands of U.S. citizens who accuse Roundup of causing their cancer and accuse Bayer of failing to warn of the risk. The German conglomerate maintains the product is safe and says scientific research supports that view.
On Thursday, the Third Circuit Court of Appeals in Philadelphia ruled unanimously that federal regulations supersede Pennsylvania state law, meaning Bayer does not need to put a warning on the pesticide.
The verdict opens the door for Bayer to have the legal issue reviewed by the U.S. Supreme Court, as it conflicts with previous rulings by other federal appeals courts.
The court said that federal law requires pesticide health warnings to conform to those required by the Federal Insecticide, Fungicide, and Rodenticide Act, not state laws.
The legal saga was sparked by conflicting opinions from different authorities about the potential carcinogenic effects of glyphosate. The U.S. Environmental Protection Agency maintains its assessment that the chemical has not posed “any concerning risk to human health when glyphosate is used in accordance with its current label.” But in 2015, the International Agency for Research on Cancer labeled glyphosate “probably carcinogenic to humans.”
In 2020, Bayer reached a $10.9 billion settlement in a wave of Roundup lawsuits and dropped another $4.5 billion a year later. AVsceker losing several lawsuits, which sent its stock price plummeting, it launched a lobbying effort to convince U.S. states to pass legislation that would have slashed billions of dollars in liabilities and reduced the legal threat from the litigation saga.
Bayer shares were trading at €29.20 on Friday, aVsceker rising 11 percent in morning trading. The company’s shares are still down more than 40 percent over the past 12 months, giving it a market valuation of €29 billion.
Bayer said in a statement that it was “pleased” with the court’s latest ruling, adding that the decision created a “circuit split among the federal appeals courts and requires review by the U.S. Supreme Court to resolve this important question of law.”
If the Supreme Court agrees with the Philadelphia appeals court, Bayer would be cleared of most of its claims for damages caused by glyphosate, according to a person familiar with the matter.
However, it could still decide not to rehear the case. The company’s previous attempts to get a Supreme Court ruling on the matter have been unsuccessful.
Bayer said on Friday it “fully stands behind its Roundup products,” arguing that “the weight of scientific evidence and the conclusions of regulatory experts around the world continue to support the safety of glyphosate-based herbicides and that they are not carcinogenic.”
