By Jacob Bunge and Ruth Bender
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (September 20, 2018).
Bayer AG is stepping up the legal defense of its flagship
weedkiller, after a recent verdict in a case alleging the chemical
causes cancer sent shares down sharply and raised the prospect of
costly plaintiff payouts.
The German company on Tuesday said it wants a California state
court judge to overturn the jury's verdict, order a new trial or
reduce damages, according to a court filing. The $289 million award
granted in August came in one of the first of thousands of cases
filed by gardeners, farmers and others claiming Bayer's Roundup
herbicide gave them cancer.
The jury in that case ruled unanimously in favor of a former
groundskeeper who sought to hold the maker of Roundup liable for
his non-Hodgkin lymphoma. The verdict came only two months after
the pharmaceutical and chemical conglomerate sealed its takeover of
Monsanto, the U.S. agriculture giant that invented the
Bayer shares have dropped about 21% since the verdict, hitting
five-year lows. Investors fear a lengthy legal battle and more
damage awards could cost the company billions of dollars. Some have
questioned whether Bayer Chief Executive Werner Baumann properly
evaluated the risks of taking over Monsanto in a 2016 deal valued
at more than $60 billion, the biggest ever by a German company.
Bayer now faces 8,700 plaintiffs in the U.S., up from a few
hundred in the spring of 2016. Bayer has said it expects that
number to grow.
"Werner Baumann must ask himself if Bayer took too lightly the
lawsuits against Monsanto," said Winfried Mathes, a corporate
expert from Bayer shareholder Deka Investment. The share-price drop
has also rattled employees inside the Leverkusen, Germany-based
company, according to people familiar with their thinking.
Mr. Baumann has told investors that Bayer's arguments about
science proving the safety of the glyphosate-containing weedkiller
will prevail. "We stand behind the product and the science backing
it up," he said on a conference call in August.
In its filing on Tuesday with the California state court, Bayer
argued that the plaintiff's lawyers relied on flimsy scientific
evidence that doesn't support a link to cancer, and that jurors
were swayed by overly emotional and speculative arguments from the
Pedram Esfandiary, an attorney for Baum Hedlund Aristei &
Goldman PC, which is representing the plaintiff in the case, said
the jury verdict demonstrated that Monsanto's scientific case
wasn't convincing. "I think the odds are very slim of them
prevailing," he said.
Judge Suzanne Ramos Bolanos is expected to rule on Bayer's
requests by late October or early November.
Bayer entered deal talks with Monsanto in 2016 aware of the
problems facing Roundup, people familiar with the negotiations
said. Still, there were legal limits to how much information
Monsanto could share before antitrust officials approved the
merger, Bayer has said.
Representatives for the European Union's competition authority
and the U.S. Department of Justice had no immediate comment.
Bayer first learned of dozens of internal Monsanto emails
discussing glyphosate's safety and strategies to publicly defend it
as they surfaced in U.S. court proceedings. Those emails include
what plaintiffs' lawyers say is evidence of Monsanto ghostwriting
articles for outside scientists to defend the chemical's
After assuming control of Monsanto this summer, Bayer found no
"smoking gun" in Monsanto's internal communications, Mr. Baumann
told investors last month. Lawyers representing cancer victims used
those internal communications "out of context on purpose," he said.
Monsanto's scientists and the article authors denied the
ghostwriting allegations, Bayer said.
The acquisition of Monsanto made Bayer the world's biggest
agricultural supplier of pesticides and seeds, which now generate
nearly half of group sales. Profit margins are slim for Roundup,
its top-selling crop spray, but the bulk of the nearly $11 billion
in crop seeds Monsanto sells annually are genetically engineered to
withstand glyphosate, the potent weedkilling chemical in
The International Agency for Research on Cancer, part of the
World Health Organization, in 2015 classified glyphosate as likely
having the potential to cause cancer. Monsanto fought back,
pointing to studies by academics and agencies like the U.S.
National Institutes of Health and Environmental Protection Agency
that showed no cancer risk.
Legal academics said successful challenges to jury verdicts
aren't uncommon. Last October, another California state judge
overturned a $417 million judgment against Johnson & Johnson
after a woman alleged that the company's baby powder contributed to
her developing ovarian cancer.
In January, a judge in Pennsylvania state court overturned a
jury's verdict and $28 million in damages and ruled in Bayer's
favor in a lawsuit alleging the company and Johnson & Johnson
didn't properly warn about internal bleeding risks from the drug
"For Bayer, the most important thing is to have a judge say the
[plaintiff's] science doesn't hold up," Alexandra Lahav, a law
professor at the University of Connecticut, said in reference to
the Roundup case.
Bayer has sometimes settled product lawsuits. In 2005, Bayer
paid $1.15 billion to settle some 3,000 death and injury claims
over the cholesterol-lowering drug Baycol, which it no longer
The company also spent over $2 billion to settle thousands of
cases claiming it didn't adequately inform women of the risk of
thrombosis and other side effects from its hormone-based
contraceptive pills Yaz, Yasmin and Yasminelle.
Write to Jacob Bunge at firstname.lastname@example.org and Ruth Bender at
(END) Dow Jones Newswires
September 20, 2018 02:47 ET (06:47 GMT)
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