Bayer has cleared a significant hurdle in the multi-billion dollar U.S. legal battle over its weedkiller, glyphosate. On Wednesday, a U.S. federal judge rejected an attempt by critics to move Bayer's proposed class-action settlement, valued at up to $7.25bn, to a federal court. Instead, Judge Henry Edward Autrey remanded the proceedings back to the competent state court in Missouri, granting motions filed by Bayer and the plaintiffs. Under U.S. law, only Bayer, as the actual defendant, has the standing to request a transfer, Autrey noted in his decision. Bayer shares ended the trading session up nearly 5%.

Bayer welcomed the ruling. The company stated that the decision provides much-needed clarity for all parties involved and allows the approval process to proceed before the competent court in St. Louis. The vast majority of lawsuits alleging cancer risks from Bayer's glyphosate-based weedkiller, Roundup, are pending there. Consequently, a proceeding before a special U.S. Judicial Panel on Multidistrict Litigation (JPML) is now moot. Bayer's subsidiary, Monsanto, remains convinced that the class-action settlement is fair to all parties.

In February, Bayer announced a new class-action settlement to resolve current and future claims, providing for payments of up to $7.25bn over a period of up to 21 years. The Missouri court had granted preliminary approval to the plan in March and scheduled a final hearing for July 9. However, the timeline was thrown into doubt in late May. Lawyers for several cancer patients, who attribute their illness to the use of Bayer's glyphosate-based product, had requested a transfer to a federal court in San Francisco, California. They criticized the proposed settlement as the result of a secret agreement between Bayer and the plaintiffs' attorneys.

The case threatened to land before U.S. District Judge Vince Chhabria, who oversees consolidated litigation at the federal level and had recently expressed extreme skepticism regarding the settlement negotiated in Missouri. In 2021, Bayer's first attempt to establish a settlement framework for handling future claims failed before him. Concerns over a legal stalemate in California had weighed heavily on Bayer's stock in early June.

Despite this latest tactical victory, Jefferies analyst Michael Leuchten warned that the path to a final agreement remains far from smooth. It remains to be seen whether there will be clarity by the July hearing regarding how many plaintiffs will ultimately opt out of the settlement. According to the expert, the ultimate pivot point for Bayer remains the U.S. Supreme Court. A decision from the Supreme Court in the multi-billion dollar glyphosate dispute is expected by the end of June. Leuchten considers the outcome entirely uncertain, as the justices appeared divided during a hearing in April. A ruling in favor of the Leverkusen-based pharmaceutical and agricultural group could represent a definitive breakthrough for Bayer in the years-long wave of litigation. The company inherited these legal liabilities through its $63bn acquisition of glyphosate developer Monsanto in 2018.

(Report by Dietrich Knauth and Patricia Weiss, edited by Philipp Krach. For inquiries, please contact the editorial management at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)