Yves here. The article below describes how Bayer is trying to get out of the Roundup herbicide liability it took on when it acquired Monsanto. Why the Trump Administration is assisting a big German company that knowingly entered into what institutional investors derided as the worst deal ever is beyond me. The kicker here is that Bayer bought Monsanto for entirely executive serving reasons. Bayer was vulnerable to acquisition by pharma giants like Pfizer. It bought Monsanto solely to bulk up so as to be too big to swallow comfortably.<\/p>\n
As we explained in our coverage of litigation against Bayer executives, board members, and the investment bankers on the deal, Bayer knew of the Roundup cancer liability risk yet chose to ignore it, because they had studies that pooh-poohed the idea. They persisted with the transaction even after the WHO found that glyphosate, the key ingredient in Roundup, was a probably carcinogenic to humans. The Bayer execs convinced themselves that that was not a firm enough finding to put them at legal risk, when US juries found otherwise.<\/p>\n
As we explained in a 2020 post<\/a>:<\/p>\n It isn\u2019t simply that Bayer-Monsanto has replaced AOL-Time Warner in most press reckonings as \u201cthe worst deal of all time\u201d. Yes, nearly every penny of the $66 billion that Bayer paid for Monsanto has gone poof. Yes, Bayer is the first time in German corporate history that a public company got a majority vote of no confidence from its shareholders. Yes, Bayer is at risk of bleeding out over seemingly endless Monsanto-related liability claims (Roundup has so taken the center stage that what would ordinarily be a big-deal litigation drain, Dicamba, is treated as an afterthought). Unlike any other company ever facing similar litigation, Bayer has neither taken Roundup off the market, nor reformulated it, nor put a cancer warning on it. It looks like Bayer will eventually declare bankruptcy.<\/p>\n It is that unlike AOL-Time Warner, initially hailed as a brilliant tie-up but quickly went a cropper when the dot-com mania ended, virtually all major analysts and shareholders hated the idea of the deal from the date it was announced, and the business press was just as critical. Monsanto was already recognized as being dependent on Roundup when more and more consumers and experts were concerned about glyphosate risks.<\/p>\n And most important, the deal went ahead for the worst possible reason: Bayer management wanted to bulk up so as not to be acquired. The real motive was to keep current management in place to preserve their lofty pay and high status.<\/p>\n Monsanto was the only major candidate left standing, for the obvious reasons. Both the chemical and the pharma industries had seen decades of consolidation, and Bayer was a tempting target by having little debt and not having kept up with the agglomeration game. When Pfizer\u2019s bid for Allergan fell apart due to an adverse tax ruling, long-standing and highly regarded CEO Marijn Dekkers, who had long opposed the idea of Monsanto deal, suddenly retired. The \u201ctwo Werners,\u201d Chairman Werner Wenning and the surprise new CEO, Werner Baumann, both of whom had long pushed to buy Monsanto, were in charge and moved forward rapidly with their plan.<\/p>\n Except they couldn\u2019t, save tying an anchor to Bayer in the form of a $2 billion breakup fee. Bayer could do only limited due diligence on Monsanto due to the fact that they were competitors and the acquisition was subject to anti-trust review in the US and Germany. Those assessments usually take months; this one took 24.<\/p>\n In the meantime, Bayer out of obstinancy or ignorance chose to ignore signs that the evidence of glyphosate\u2019s cancer risks were becoming solid enough to kick off a tidal wave of suits.<\/p>\n<\/blockquote>\n So what sexual favors were exchanged to get the Trump Team to weigh in on behalf of Bayer? Not that that will cut much ice with the Supremes, but the optics are dodgy, and not just for the obvious \u201csiding with big company peddling toxic weed killers, but for one that additionally thumbed its nose at and destroyed value of the capitalist classes.<\/p>\n By Carey Gillam. Originally published at The New Lede<\/a><\/strong><\/em><\/p>\n Bayer, the beleaguered maker of Roundup herbicide, has garnered the support of the US Department of Justice in its court battle to turn back a tide of litigation brought by people claiming the company failed to warn them of cancer risks associated with the weed killers.<\/p>\n In a Dec. 1 filing<\/a> with the US Supreme Court, Solicitor General D. John Sauer, appointed by the Trump administration in April, told the court that it should take up an appeal from Bayer that the company hopes could help it quash ongoing lawsuits inherited when it bought Monsanto in 2018.<\/p>\n Bayer, which maintains its glyphosate herbicides do not cause cancer, argues that the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), which governs the registration, distribution, sale, and use of pesticides in the United States, preempts \u201cfailure-to-warn\u201d claims against the company. Because the Environmental Protection Agency (EPA) has approved labels with no cancer warning, failure-to-warn claims should be barred, the company maintains.<\/p>\n Multiple courts have rejected Bayer\u2019s argument, including two appellate courts, ruling that FIFRA does not preempt failure-to-warn claims, though one appellate court \u2013 the Third Circuit Court of Appeals- has sided with Bayer<\/a>.<\/p>\n A similar effort by Bayer to get the high court to weigh in on the preemption issue was rejected in 2022 after the Biden administration\u2019s Solicitor General asked the high court<\/a> not to hear Bayer\u2019s appeal on the same issue, saying that \u201cFIFRA does not preempt\u201d such claims.<\/p>\n \u201cAlthough some aspects of EPA-approved labeling may preempt particular state-law requirements, EPA\u2019s approval of labeling that does not warn about particular chronic risks does not by itself preempt a state-law requirement to provide such warnings,\u201d then-Solicitor General Elizabeth Prelogar wrote in the 2022 brief to the Supreme Court.\u00a0 The agricultural industry reacted with outrage<\/a> at the time, saying Prelogar\u2019s position posed \u201cgreat risks\u201d to the regulatory system and global food systems.<\/p>\n In contrast, Sauer\u2019s brief to the court this week was closely aligned with Bayer\u2019s arguments, saying the Third Circuit ruling favoring Bayer\u2019s position on preemption \u201ccorrectly allows EPA to determine on a nationwide basis what warnings must appear on a particular pesticide\u2019s label to avoid an unreasonable risk to human health.\u201d\u00a0He said given conflicting court rulings on the issue, review by the Supreme Court \u201cis now warranted\u2026\u201d<\/p>\n Sauer also echoed Bayer\u2019s language on Roundup safety: \u201cAfter careful scientific review and an assessment of hundreds of thousands of public comments, EPA has repeatedly determined that glyphosate is not likely to be carcinogenic in humans, and the agency has repeatedly approved Roundup labels that did not contain cancer warnings,\u201d the Solicitor General wrote in his brief.<\/p>\n Bayer has paid out more than $11 billion in jury verdicts and settlements but continues to face tens of thousands of lawsuits from people alleging they developed non-Hodgkin lymphoma from use of Roundup and other glyphosate-based herbicides sold by the company. It has told investors for the last few years that getting the Supreme Court to rule in its favor on the preemption issue is a key goal.<\/p>\n Bayer celebrated the support from the administration, issuing a statement<\/a> on Tuesday saying a positive ruling from the Supreme Court \u201ccould help bring the company closer to closure\u201d in the Roundup litigation.<\/p>\n \u201cThe support of the US Government is an important step and good news for US farmers, who need regulatory clarity,\u201d Bayer CEO Bill Anderson said in a statement. \u201cThe stakes could not be higher as the misapplication of federal law jeopardizes the availability of innovative tools for farmers and investments in the broader US economy.\u201d<\/p>\n Bayer said a ruling from the Supreme Court on the preemption issue could impact other industries as well.<\/p>\n \u201cIt is time for the US legal system to establish that companies cannot be punished under state laws for complying with federal label requirements,\u201d Bayer said.<\/p>\n Kelly Ryerson, co-executive director of American Regeneration and a leading lobbyist in the Make America Healthy Again (MAHA) movement that the Trump administration says it supports, was furious at the Justice Department move.<\/p>\n \u201cMAHA voters chose this administration because they were tired of watching captured regulators sign off on chemicals that are poisoning their families, not because they wanted Washington to hand pesticide giants a liability shield,\u201d Ryerson said.<\/p>\n \u201cPresident Trump specifically promised to address the harms from pesticides. This move to support the Supreme Court in hearing Bayer\u2019s case for federal preemption of state laws that protect our safety could not stray further from that promise he made to American citizens,\u201d she added.<\/p>\n The Roundup litigation began in 2015 after the International Agency for Research on Cancer, an arm of the World Health Organization, reviewed years of independent research on glyphosate and Roundup, and found the weed killer to be a \u201cprobable human carcinogen.\u201d<\/p>\n Alongside its path through the courts, Bayer has also been pushing for new state and federal legislation<\/a> that would effectively preempt lawsuits based on failure-to-warn claims.<\/p>\n\n
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