By Sara Randazzo and Ruth Bender
This article is being republished from the WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (May 14, 2019).
A jury Monday awarded $2.055 billion to a California couple who blamed Bayer’s Roundup weedkiller for causing their cancer, the largest such verdict to date and one that adds significant pressure to a company struggling to contain the fallout from last year’s acquisition of Monsanto Co.
The verdict by the Northern California jury is the third straight trial loss for Bayer over the safety of Roundup. Bayer is facing a revolt from shareholders over the Monsanto deal, which exposed Bayer to some 13,400 claims tying Roundup to cancer.
Two previous trial losses have helped wipe more than 30% off Bayer’s share price. Last month, a majority of Bayer shareholders refused to endorse management’s actions in the past year, indicating that investors lack confidence in how the company is being run.
The company now has until August to reevaluate its legal strategy and try to appease investors before the next scheduled trial. That trial will be the first to unfold outside the San Francisco Bay Area, often seen as an unfavorable setting for corporate defendants. It will be in St. Louis, the former headquarters of Monsanto and now home to Bayer’s global seed business.
Bayer has appealed a $78.5 million verdict reached in August, the first Roundup case to go to trial. It has said it would appeal the second, a more than $80 million jury award decided in March.
Some investors have pushed Bayer to settle the cases soon, though companies facing product-liability claims often bring a dozen or more cases to trial before seriously entering settlement talks.
Reaching a settlement in the case is complicated by the fact that the product continues to be sold to consumers and farmers and doesn’t carry a cancer-warning label, which means the potential pool of plaintiffs could expand indefinitely. The company could reach a deal with the current batch of plaintiffs and set aside money to pay out future claims, or continue fighting case by case to gather more data points. People familiar with Bayer say the company isn’t planning to settle before at least a first few cases have gone through appeal.
Bayer said it is disappointed in the verdict and plans to appeal. The company added that the litigation “will take some time before it concludes” since appeals are pending and that it would “continue to evaluate and refine its legal strategies as it moves through the next phase of this litigation.”
R. Brent Wisner, an attorney for the plaintiffs, thanked the jurors for finding “that the science shows there are serious health hazards associated with Roundup and that Monsanto did nothing to warn people about the risk.”
Elizabeth Burch, a law professor at the University of Georgia, said the third trial loss was significant “given the learning curve” that might have been expected of the company after the earlier defeats. “Whatever the plaintiffs’ lawyers are doing, they have a pretty good formula,” she said.
The jury in the third case found Bayer liable for the non-Hodgkin lymphoma diagnoses of Alva and Alberta Pilliod, a married couple in their 70s who used Roundup on their San Francisco Bay Area property for 35 years. The two were diagnosed four years apart, in 2011 and 2015; both are in remission.
The money awarded includes $2 billion in punitive damages and $55 million in compensatory damages to the couple. An attorney for the plaintiffs suggested to the jury that they award $1 billion in punitive damages to send a message to the company. Large damages awards are often reduced on appeal; the judge overseeing the first Roundup trial cut punitive damages in the case by more than $210 million. Bayer called the punitive awards “excessive and unjustifiable.”
The trial unfolded much like the earlier two, with sparring over scientific studies, the credibility of expert witnesses and the relative importance of a 2015 designation by a World Health Organization branch that glyphosate, the primary ingredient in Roundup, is likely carcinogenic to humans.
Attorneys for the plaintiffs walked jurors through scientific studies of rodents, cells and human populations that they say show glyphosate and Roundup are carcinogenic. Bayer lawyers countered that hundreds of studies have shown it to be safe, and pointed to regulators like the U.S. Environmental Protection Agency that have approved the product. The EPA in late April reaffirmed its long-held conclusion that glyphosate, the world’s most widely used herbicide, is safe when used as directed and doesn’t cause cancer.
The health histories of Mr. and Mrs. Pilliod also figured prominently in Bayer’s case. Lawyers for the company pointed to prior cancer diagnoses, family histories of cancer and autoimmune diseases that they said elevated the couple’s risk for non-Hodgkin lymphoma — not their weedkiller use.
Bayer reiterated Monday that it believes scientific studies and the EPA’s conclusions back up Roundup’s safety, and said the jury was presented with “cherry-picked findings from a tiny fraction of the volume of studies available.”
The case was the first to go to trial of hundreds of lawsuits consolidated in California state court. A judge put the Pilliods’ case on an accelerated timeline because of their age.
Hundreds of other cases are part of multidistrict litigation in federal court in San Francisco. The judge overseeing those cases recently called off two scheduled trials and ordered the parties to try resolving the claims in mediation.
Bayer and its shareholders are now setting their hopes on the first appeal in the case of former school groundskeeper Dewayne Johnson, expected to be argued before a California state appellate court before the end of the year.
Costco Wholesale Corp. pulled Roundup from its shelves, but sales overall don’t seem to have suffered much from the litigation. Scotts Miracle-Gro Co., which markets Roundup to home-and-garden retailers in the U.S., said its Roundup sales increased 20% in the first three months of the year from the same period last year.
–Jacob Bunge contributed to this article.
Write to Sara Randazzo at [email protected] and Ruth Bender at [email protected]