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(Reuters) – With Bayer (OTC:BAYRY) facing investor pressure to resolve thousands of lawsuits over its Roundup weedkiller after being hit with $2 billion in verdicts in recent weeks, all eyes are on a trial wrapping up in Philadelphia.
Plaintiffs have won the last four trials over their claims that the product causes cancer, each time securing a larger verdict. Those losses ended a nine-trial winning streak for Bayer, shattering investor and company hopes that the worst of the Roundup litigation was over.
In the ongoing case, which kicked off Nov. 6 in the Philadelphia Court of Common Pleas, Pennsylvania resident Kelly Martel claims she developed non-Hodgkin lymphoma from using Roundup. Her case will help test whether plaintiffs’ recent victories were an aberration, or the payoff from favorable court rulings and a shift in plaintiffs’ strategy.
Interviews with lawyers on both sides, and a review of trial transcripts, suggest several factors could explain the difference in outcomes. Those include judges’ rulings allowing jurors to hear testimony about regulatory issues related to Roundup, which Bayer has called misleading, and a new emphasis by plaintiffs lawyers on chemicals in the product other than its active ingredient, glyphosate.
Lawyers for Martel did not immediately respond to requests for comment. Bayer maintains that Roundup is safe and said in a statement that it would “continue to try Roundup cases as the science is strongly on our side.”
The German pharmaceutical conglomerate acquired Roundup as part of its $63 billion purchase of U.S. agrochemical giant Monsanto (NYSE:MON) in 2018, amid opposition from some of its own shareholders.
In 2020, the company agreed to pay up to $9.6 billion to settle then-existing Roundup lawsuits, but was not able to resolve claims that would be filed in the future. It is currently facing about 50,000 lawsuits.
CHANGE IN FORTUNE
Bayer’s trial fortunes changed abruptly when plaintiffs began winning in October, most recently securing a $1.56 billion verdict for three people. Bayer said it will appeal the verdicts on numerous grounds.
Every trial depends on specific facts in the case, and juries, which deliberate in secret, are inherently unpredictable. Both sides, however, point to factors they say are behind the shift.
In court filings and public statements, Bayer has attributed its recent losses to judges allowing juries to hear what it considers to be improper evidence.
Specifically, the company has said, jurors were allowed to hear of a ruling last year by a federal appeals court ordering the U.S. Environmental Protection Agency (EPA) to reconsider its 2020 finding that glyphosate probably did not cause cancer.
Bayer says plaintiffs’ lawyers were allowed to imply that the ruling meant glyphosate was unsafe, when the court only found that the agency had not followed required procedure. The EPA still states that glyphosate is unlikely to be capable of causing cancer.
The company also said plaintiffs’ lawyers in recent trials used the failure of some European Union member states to re-approve glyphosate to suggest that its approval in Europe would soon expire. In fact, unanimity was not required for European regulators to re-approve the product, which they did last month.
Plaintiffs’ lawyers reject the notion that the evidence about regulators explains their wins.
“That’s just not true,” Tom Kline, who along with co-counsel Jason Itkin represented Ernest Caranci, the second plaintiff to prevail at trial in October. He and others say that new studies in the last year supporting a cancer link are one reason for the wins, although those studies were used in some cases Bayer won as well.
The World Health Organization’s cancer research agency concluded in 2015 that glyphosate was likely capable of causing cancer, though it did not reach a conclusion about whether it posed a risk in real world use.
Bart Rankin, a lawyer for plaintiffs in the $1.56 billion verdict, pointed to a more concrete shift in strategy.
In recent trials, plaintiffs have placed greater emphasis on the theory that known toxins in Roundup other than glyphosate, including formaldehyde, arsenic and others, enhanced its cancer-causing potential. Bayer witnesses and lawyers have said these substances are present in only trace amounts.
While plaintiffs’ lawyers in earlier trials mentioned other chemicals, transcripts of recent closing arguments suggest they have become more prominent. Rankin devoted a section of his closing argument to what he called the “cocktail” of harmful chemicals in Roundup.
“Ladies and gentlemen, they are carcinogens, and when you stack them one on top of the other, it makes an impact,” he told the jury.
Bayer said in early November it would remain very selective when considering settlements of Roundup cases and reassured investors in a call in late November that it has reserves to deal with the litigation. The company has set aside about $6.5 billion for that purpose.
Nonetheless, if plaintiffs prove able to replicate recent wins, it will increase pressure on Bayer, which faces other significant setbacks, including stopping a late-stage study of what it hoped would be a blockbuster anti-clotting drug.
More Roundup trials are expected in 2024. Martel’s case could go to jurors later on Monday.
