Bayer Stock Jumps—Ruled Not Liable In Cancer Risk Case Involving Roundup Weedkiller

Topline

The Supreme Court ruled in favor of former agrochemical giant Monsanto on Thursday in a dispute over whether the company should have warned consumers about potential harms arising from its weed killer product Roundup, in a 7-2 ruling that led shares of parent company Bayer to spike Thursday morning.

Potesters gather at the US Supreme Court on April 27 in Washington, DC.

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Key Facts

The Supreme Court ruled in favor of Monsanto—which no longer exists as a separate entity after being bought by Bayer—in a 7-2 ruling, after a man sued the company after contracting non-Hodgkin’s lymphoma.

The man, John Durnell, argued his cancer was caused by Monsanto’s Roundup weedkiller product, and sued the company in Missouri state court, arguing that under state law, Monsanto should have provided a cancer warning on Roundup’s label.

Roundup uses the herbicide glyphosate, which the Environmental Protection Agency has determined is “unlikely to be a human carcinogen”—but that finding has been disputed, with a World Health Organization working group instead believing it to be “probably carcinogenic.”

While a state court sided with Durnell and awarded him more than $1 million in damages, Monsanto—now Bayer—appealed the ruling to the Supreme Court, arguing that federal law should override state law.

The Supreme Court agreed, ruling Thursday the Federal Insecticide, Fungicide, and Rodenticide Act trumps state law, and since that law doesn’t require Roundup to have a warning—since the EPA doesn’t believe glyphosate causes cancer—Monsanto isn’t legally liable.

Shares of Bayer jumped by more than 16% after the court’s ruling came out Thursday morning.

What Does This Mean For Other Roundup Lawsuits?

Durnell’s litigation is one of thousands of lawsuits that have been brought against Monsanto and Bayer over Roundup’s allegedly harmful effects, with Bloomberg reporting some 67,000 cases remained pending as of February. Bayer has previously suggested a Supreme Court ruling in its favor would help shield it from the other lawsuits it still faces, but the company also proposed a $7 billion settlement in February to resolve pending and future litigation. The Associated Press reported in April that patients who contracted cancer after using Roundup could still receive money through a fund established by the settlement, which has received preliminary approval, even if the company prevailed at the Supreme Court. The amounts are likely to be lower than the seven-figure payouts others have received through litigation, though, with the AP noting potential amounts awarded through the settlement could range from about $10,000 to $165,000.

Chief Critics

Justices Neil Gorsuch and Ketanji Brown Jackson dissented from the ruling Thursday, calling it a “remarkable and regrettable” decision that “unjustifiably closes the courthouse doors” to Durnell and others suing Bayer. The court’s majority “misunderstands FIFRA’s requirements, misinterprets the scope of FIFRA’s preemption, and ultimately leaves Durnell without a remedy for the significant harms he has suffered,” Jackson wrote in her dissent, which Gorsuch joined, referring to the federal law governing the pesticide labels. The ruling was also criticized by environmental advocates, with Tarah Heinzen, legal director at advocacy group Food and Water Watch, describing the ruling as a “disaster for public health” in which the court “once again … sided with big business over people and the environment.”

Surprising Fact

The debate over glyphosate has led to a fracture between President Donald Trump and the “Make America Healthy Again” coalition, or “MAHA,” that’s backed him and Health Secretary Robert F. Kennedy Jr. The Trump administration sided with Bayer in the Supreme Court case and argued for the court to rule in the company’s favor. The president also signed an executive order in February to expand production of the herbicide, describing it as “a cornerstone of this Nation’s agricultural productivity and rural economy.” That has upset many MAHA supporters who are anti-chemical and believe the herbicide is dangerous, with NPR noting some members of the movement met with Trump this year to express concerns about the herbicide and other chemicals. “You cannot tell Americans to eat real food while protecting the cancer-causing chemicals sprayed on it,” MAHA supporter Vani Hari—also known as the “Food Babe”—said at an April “People Versus Poison” rally, as quoted by NPR.

Key Background

Monsanto debuted Roundup in 1974 and it quickly became a popular and widely used pesticide, with glyphosate also gaining popularity. Glyphosate targets weeds without harming crops themselves, and has become an effective tool for farmers that’s been estimated to save them billions of dollars each year. The EPA first approved glyphosate when Roundup hit the market in the 1970s and has upheld its approval of the herbicide since then, but the WHO’s report in 2015 about the chemical potentially being a carcinogenic sparked a public outcry, leading to the flood of litigation over Roundup. As Monsanto faced widespread scrutiny and legal liability over the controversy, Bayer closed its acquisition of the agrochemical company in 2018, and subsequently retired the Monsanto name. It has also removed glyphosate from the version of Roundup that’s now on shelves for residential users, though the company maintains the herbicide is safe to use and has only been removed because of the litigation risk.

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