Bayer Faces Roundup & PCB Lawsuits: Supreme Court Next?

Since its $63 billion acquisition of Monsanto in 2018, Bayer AG has been plagued by enormous liabilities concerning injuries allegedly caused by Monsanto’s Roundup weedkiller as well as lawsuits stemming from Monsanto successor Pharmacia’s past manufacture of toxic polychlorinated biphenyls, or PCBs. These mass tort cases in the United States have cost the company billions of dollars in settlements and jury verdicts, hampered the company’s efforts to pay off its $37 billion debt and contributed to a seven-year stock price decline of roughly 70%.

“The status quo is not an option,” CEO Bill Anderson declared at Bayer’s annual stockholder meeting on April 25. “In fact, we’re nearing a point where the litigation industry could force us to even stop selling [Roundup].” Last year, Anderson reportedly described the nationwide Roundup lawsuits as an “existential” threat to the company.

Nevertheless, at the April 25 stockholder meeting, Anderson committed to “significantly containing” the company’s legal difficulties by the end of 2026 through lobbying for liability-limiting state legislation and continued litigation.

As of Jan. 31, of the approximately 181,000 Roundup claims in total, roughly 114,000 have been settled or are not eligible for settlement for various reasons, according to the company’s most recent annual report. Monsanto has spent nearly $11 billion on settlements, most of which were reached in 2020, said Ronald V. Miller Jr. of Miller & Zois, which represents Roundup claimants from all 50 states. In 2022, the company rejected a proposed global settlement in California federal court and vowed to continue defending its product, only settling cases when it is “strategically advantageous” to do so.

The conglomerate has provisioned an additional $5.9 billion for future settlements, according to Bayer’s 2024 annual report.

These cases continue to progress in both trial and appellate courts.

Recently, the company filed a petition to the U.S. Supreme Court concerning a Missouri Roundup case, which centers on a Missouri intermediate appellate court’s February affirmation of a jury’s $1.25 million award to plaintiff John Durnell for injuries stemming from his decadeslong use of Roundup and exposure to glyphosate, the weedkiller’s purportedly carcinogenic ingredient. On April 1, the Missouri Supreme Court refused to consider Monsanto’s appeal of the decision, prompting Bayer to file a petition for a writ of certiorari with the Supreme Court on April 4.

In its petition, the company argues that state-law failure-to-warn claims related to the weedkiller, such as Durnell’s, are preempted by the Federal Insecticide, Fungicide, and Rodenticide Act, or FIFRA. A favorable ruling from the high court could “largely curtail” tens of thousands of similar cases filed against the company, a Bayer press release said.

According to the petition, the Ninth and Eleventh Circuits – alongside the Missouri appellate court – have erroneously affirmed verdicts that improperly impose labeling requirements that contradict or add to the requirements maintained by the U.S. Environmental Protection Agency through its purview over FIFRA. These decisions conflict with the Third Circuit’s more recent ruling in Schaffner v. Monsanto, Bayer notes, which held that Roundup plaintiffs’ failure-to-warn claims are preempted due to their potential infliction of heightened labeling requirements.

“These contrary holdings would open the door to 50 different state-required labels for … products governed by FIFRA, in conflict with the clear intent and letter” of the law, the company contends.

Although the company has twice unsuccessfully petitioned the Supreme Court to review Roundup cases, the previous requests were filed before the Third Circuit’s Schaffner decision created a circuit split. These interpretive differences between federal appellate courts distinguish Bayer’s most recent petition and could potentially entice the Supreme Court to accept review of the Durnell case.

Bayer argues that the Third Circuit’s Schaffner ruling correctly held that when the Environmental Protection Agency has reviewed the scientific evidence concerning a potential health issue and “approved proposed labels omitting a warning” – as the agency has done with glyphosate-based Roundup – FIFRA then preempts a state-law duty to include that same warning.

Bayer presented a similar rationale during the Eleventh Circuit review of Carson v. Monsanto (linked above). In its February 2024 ruling, however, the Eleventh Circuit held that the EPA’s individual product and labeling approvals are not themselves expressly preempted by FIFRA requirements.

According to the three-judge Eleventh Circuit panel in Carson, agency approvals under FIFRA can be retracted and only provide “prima facie evidence” – not conclusive proof – that a product is properly branded. EPA approval of a pesticide’s registration merely signals compliance with FIFRA, the Eleventh Circuit found, and does not impose any new requirements. Because the agency’s determination “is neither conclusive nor irrevocable, it would make little sense to deem it a ‘requirement’ on equal footing with FIFRA’s prohibition on misbranding,” the circuit court held.

The statute also specifies that product registration should not be “construed as a defense” for the violation of other FIFRA provisions, including its general misbranding prohibition, the ruling stated.

Ultimately, the Eleventh Circuit determined that the state-law failure-to-warn claim in Carson, which alleges that the absence of a cancer warning on Roundup labels constitutes misbranding, is not expressly preempted since Georgia’s duty-to-warn laws “parallel,” and do not exceed, FIFRA’s general misbranding standards.

According to the Third Circuit in Schaffner, however, “FIFRA’s labeling requirements are articulated at two distinct levels of generality”: the broad statutory prohibition on misbranding and the specific regulations concerning label content. Splitting with the Eleventh Circuit, the Third Circuit asserted that the Supreme Court’s 2005 decision in Bates v. Dow Agrosciences expressly identifies EPA regulations as a source of “requirements” for the purposes of preemption under FIFRA.

The court further noted that the EPA’s prohibition on modifying approved labels carries the force and effect of law, meaning that the EPA’s label approvals do constitute FIFRA requirements. “It is illegal to distribute a pesticide with labeling substantially different from the EPA-approved label,” Bayer notes in its April 4 petition.

In Bates, the Third Circuit continued, the Supreme Court also emphasized that specific label regulations take precedence over FIFRA’s general misbranding prohibition when determining whether state-law requirements are preempted. According to the Supreme Court, state labeling requirements must be measured “against any relevant EPA regulations that give content to FIFRA’s misbranding standards.” For this reason, state-based failure-to-warn claims related to Roundup are preempted insofar as they seek to impose labeling requirements that conflict with the EPA-approved label, the Third Circuit found.

Although the Eleventh Circuit only applied this “parallel-requirements test” to the broad statutory definition of misbranding in its express preemption analysis of Carson, the court did consider whether plaintiff John Carson’s state-law claim was barred via “implied preemption.”

According to the Eleventh Circuit, implied preemption is triggered when it is “impossible for a private party to comply with both state and federal requirements.” Nevertheless, the court held that neither the EPA’s current classification of glyphosate as “not likely to be carcinogenic to humans” nor the agency’s repeated approvals of Roundup labels without cancer warnings would have prevented Monsanto from seeking approval for such a warning in accordance with Georgia state law.

In the midst of the appellate court rulings and Supreme Court petition, Bayer has continued to litigate other outstanding Roundup claims.

In March, a Georgia state jury found the company liable for more than $2 billion in injuries to plaintiff John Barnes. Despite the setback, the conglomerate insisted in a post-verdict press release that it “remains committed to trying cases, having secured favorable outcomes in 17 of the last 25 trials.” Cases that have reached final judgments have reduced damages to “90% overall compared with the original jury awards,” Bayer noted.

The record-setting $2.25 billion verdict in Pennsylvania’s McKivison case – initially handed down in January 2024 – was reduced to $400 million in June by a state court judge. In April 2024, a Missouri judge similarly reduced a $1.56 billion jury verdict to three Roundup plaintiffs to $611 million. In September, a Missouri appellate panel upheld Monsanto’s victory in the Moore case, and later that month a Philadelphia jury cleared the company of liability in Young v. Monsanto.

Bayer has lost other trials, and in October a Philadelphia jury returned a $78 million verdict in the Melissen case.

Bayer lobbyists have begun to push state lawmakers for legislation that would shield the company from further Roundup actions. On April 25, North Dakota Gov. Kelly Amrstrong approved the first statute of its kind establishing that EPA-approved labels for pesticides and herbicides such as Roundup are sufficient to warn of potential product hazards. Last month, a similar bill passed both chambers of the Georgia Legislature and currently awaits the final say of Gov. Brian Kemp.

The National Agricultural Law Center has been tracking the status of other liability-limiting measures in Florida, Missouri, Oklahoma and Tennessee. Some states have recently rejected such legislation including Iowa and Wyoming.

In line with its May 2021 plan to close the Roundup litigation, Bayer removed glyphosate-based Roundup from the U.S. residential lawn and garden market in 2023 “to further reduce future litigation risk” while maintaining that the product poses no substantial health risks. The original formulation remains available for purchase by commercial farmers.

Over the past half decade, Bayer has also faced costly liabilities related to PCBs, a toxic chemical banned by the EPA in 1979. Monsanto – which was acquired by former PCB manufacturer Pharmacia in 1999 before being spun off in 2000 – is obligated to indemnify Pharmacia for certain pre-spinoff liabilities under their separation agreement.

In February, the Washington Supreme Court heard oral arguments in an appeal of a decision overturning a $185 million verdict against Pharmacia stemming from PCB exposure at a Washington public school.

The original verdict affirmed the claims of three Washington plaintiffs who suffered adverse health effects from exposure to PCBs manufactured in Missouri. The Washington Court of Appeals in May 2024 overturned the verdict, holding that the trial court erroneously applied Missouri law instead of Washington law to the questions of how long Pharmacia is subject to liability for post-sale harm caused by its products and whether punitive damages are allowed.

Bayer has addressed many of its other PCB liabilities via settlement agreements. In 2020, Bayer entered into a $650 million class settlement to resolve the PCB claims of 2,500 municipal entities. According to the company’s annual report, about 84 entities opted out of the settlement, the majority of which have now filed lawsuits. In 2024, Bayer entered into two PCB settlements with the city of Seattle and the city of Los Angeles, agreeing to respective payments of $160 million and $35 million.

Prior PCB cases filed or threatened by Washington, Washington, D.C., New Mexico, New Hampshire, Ohio, Pennsylvania and Virginia were cumulatively settled by Bayer for approximately $456 million. The company settled an additional case with the state of Oregon for $698 million in 2022.

Other large PCB cases remain outstanding. In April 2024, the Maine attorney general filed suit in state court for damages related to PCB contamination; attorneys general in Delaware, Illinois, Maryland, New Jersey and Vermont are pursuing similar PCB litigation. A separate complaint has also been filed by 93 Vermont school districts in Vermont federal court.

A number of personal injury suits alleging PCB exposure have also been filed against Monsanto, according to Bayer’s annual report, including nine cases in Massachusetts state court and a Nevada case involving about 150 current or former employees at Clark County Government Center.

Because investors have expressed concerns about Bayer’s current trajectory, CEO Bill Anderson – appointed in 2023 – has curtailed dealmaking in the pharmaceutical industry and forestalled plans to break up the conglomerate’s diversified businesses in order to focus on resolving its outstanding liabilities and better manage its $37 billion debt.

In February 2024, Bayer announced a proposed three-year dividend cut of 95% to address the company’s “high level of debt,” offering investors only the minimum amount required by German law (approximately $0.12 per share for 2023). The policy change, formulated in response to the company’s high interest rates and limited cash flow, is intended to increase “flexibility,” said Anderson.

According to Bayer’s annual report, although the company’s free cash flow rose to $3.5 billion this past year, net income was negative $2.9 billion. The company said it expects improved performance from 2026 onward, despite a projected decline in earnings and cash flow for 2025, Anderson said at the April 25 stockholder meeting.

Last year, Bloomberg reported that Bayer was actively considering a “Texas two-step” divisional merger and bankruptcy filing to address its liabilities and lower the cost of a potential global settlement with Roundup plaintiffs. The company has nevertheless declined to comment on a prospective bankruptcy and publicly maintains a commitment to its current litigation strategy.

As previously reported by Octus, formerly Reorg, a bankruptcy filing for Monsanto or a Texas two-step chapter 11 would face serious obstacles. In June 2024’s Purdue Pharma ruling, the U.S. Supreme Court determined that bankruptcy courts lack the power to grant nonconsensual nondebtor plan releases, closing off a former key benefit of chapter 11 for mass tort debtors – the ability to conclusively resolve all claims against the debtors and affiliates, even if a minority of claimants opposes the plan settlement.

The controversial two-step tactic has also been rejected by various bankruptcy judges, most notably in cases involving 3M and Johnson & Johnson.