Bayer Announces Plans to End Roundup Litigation, Hopeful for Favorable SCOTUS Ruling

Bayer AG said in a press release on Thursday that it plans to set aside an additional $4.5 billion to settle claims regarding Roundup, an herbicide produced by its subsidiary Monsanto, which it hopes to use to settle claims if its appeal to the Supreme Court is not heard or decided in their favor. This is in addition to $10 billion the company already set aside to address allegations that the herbicide has caused cancer, specifically non-Hodgkin’s lymphoma, among its users. 

The company claimed that it has more control at this point over “important aspects of the risk mitigation process” and outlined for its investors how it hopes to address the rest of the litigation. Specifically, it plans to seek a favorable decision from the U.S. Supreme Court on federal preemption, which it claimed could end the litigation or, if the court declines to hear the matter or rules in favor of the plaintiff, Bayer said it would begin a claims administration program on its own. 

Bayer said that it “sees good chances” for it to receive a favorable Supreme Court decision, it plans to file a petition asking the court to review Hardeman vs. Monsanto in August and said it will be selective in settlement discussions until the Supreme Court issues a decision. The company continued to hold that there is no relationship between Roundup and non-Hodgkin’s lymphoma citing that “the large body of science does not support a causal relationship between NHL and glyphosate.” 

The press release said, however, that it is prepared if this plan falls through and is setting aside the $4.5 billion in the second quarter of 2021 in case it is forced to resort to the secondary plan.  Bayer explained that the claims administration program would have pre-determined compensation values and would address each individual who used Roundup individually over 15 years to address the latency period of non-Hodgkin’s lymphoma. 

“We want to provide comfort to our investors that the glyphosate litigation exposure should now be reasonably accounted for and leaves significant upside in the event of a favorable Supreme Court decision on the case. It is important for the company, our owners, and our customers that we move on and put the uncertainty and ambiguity related to the glyphosate litigation behind us. This clarity should also allow informed investors to direct their focus on operational performance, the quality of Bayer’s businesses and its intrinsic value,” Werner Baumann, Bayer’s CEO, said during an investor call.

Thursday’s press release contained more of Bayer’s plans to conclude the roundup litigation, and to reduce the number of claims including replacing glyphosate-based products in the residential lawn and garden market, and says it hopes the alternative products are approved by the U.S. Environmental Protection Agency in early 2023. “As the vast majority of claims in the litigation come from Lawn & Garden market users, this action largely eliminates the primary source of future claims beyond an assumed latency period,” the release explained. 

Bayer’s glyphosate products will still be available to professional agricultural markets, as the company explained when it first announced its intent to take Roundup off of the shelves for home gardeners.