Shares of biotechnology company Bayer rose 11 percent after it won a legal battle over its weed killer Roundup. The 3rd U.S. Circuit Court of Appeals in Philadelphia overturned a lower court’s ruling that Bayer had failed to properly disclose cancer risks associated with the herbicide.
The federal Insecticide, Fungicide, and Rodenticide Act requires uniform product labeling across the country. This prohibits Bayer from putting a cancer warning on Roundup packaging, according to Chief Judge Michael Chagares. The decision overturns an earlier ruling that Bayer should have warned consumers of the cancer risks under Pennsylvania state law. The case will likely influence the outcome of other pending cases before the state.
The plaintiff in that case, David Schaffner, was diagnosed with non-Hodgkin lymphoma in 2006. In 2019, he filed suit against Monsanto, the maker of Roundup, which was acquired by Bayer in 2018. The suit alleged that the cancer was caused by long-term exposure to Roundup and that the company failed to provide adequate warnings.
Although it is a legal victory for Bayer, it may be a short-lived victory. After the Philadelphia court’s decision, Bayer pointed out that the ruling contradicted the conclusions of other federal appeals courts, raising the possibility that the U.S. Supreme Court could take a look at the case.
While Bayer claims that Roundup’s main ingredient, glyphosate, is safe, it has paid nearly $11 billion to settle similar cases, yet more than 50,000 lawsuits remain unresolved.
In another case in Pennsylvania, plaintiff John McKivison claimed that Roundup caused his blood cancer. Bayer lost the case and was ordered to pay over $2 billion. However, the state’s highest court reduced the settlement amount to $400 million.
Bayer shares have fallen by almost 49 percent in the past year. The recent court ruling and the price increase could be a good sign for investors who have suffered significant losses since Bayer took over Monsanto.
