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 Bayer shares tumbled more than 12 percent on Wednesday after a
unanimous jury in San Francisco federal court found Roundup to be a
"substantial factor" in causing California resident Edwin Hardeman's
non-Hodgkin's lymphoma.
The jury decision was a blow to Bayer after the judge in the
Hardeman case, at the company's request, had split the trial,
severely limiting evidence plaintiffs could present in the first
phase. Tuesday's defeat on terms considered advantageous to Bayer
sets up the second phase to be even tougher and limits the grounds
on which the company could appeal any final verdict, the experts
said.
"The fact that Bayer lost this trial despite it being set up in the
most favorable way for them is a huge setback," said Thomas Rohback,
a Connecticut-based defense lawyer.
Bayer in a statement on Tuesday said it stood behind the safety of
Roundup and was confident the evidence in the second trial phase
would show that Monsanto's conduct was appropriate and the company
not liable for Hardeman's cancer.
The company, which bought Monsanto last year, on Wednesday declined
to comment beyond that statement.
Tuesday's finding did not address liability, which will be
determined following the second trial phase that began on Wednesday.
Bayer denies glyphosate or Roundup cause cancer. The German company
faces more than 11,200 lawsuits over the popular weed killer. Last
August, following the first Roundup trial, a California state court
jury issued a $289 million verdict against the company.
Two weeks after that verdict, which was later reduced to $78 million
and is being appealed, Bayer Chief Executive Werner Baumann
reassured analysts that the company had a new legal strategy based
on focusing jurors on the scientific evidence.
"Bayer and the joint litigation team are working to ensure that,
going forward, this overwhelming science will get the full
consideration it deserves," Baumann said in an Aug. 23 conference
call.
A LOT AT STAKE
There is a lot at stake for Bayer, which acquired Roundup maker
Monsanto last year for $63 billion. Though Bayer does not break out
sales figures for Roundup, glyphosate is the world's most widely
used weed killer, and Roundup is the leading brand.
Bayer's new strategy was focused on keeping out plaintiffs'
allegations that the company improperly influenced scientists,
regulators and the public about the safety of Roundup. Bayer has
denied it acted inappropriately and said in public statements
following the August verdict that it thought the jury was inflamed
by the claims of corporate misconduct.
Vince Chhabria, the San Francisco federal judge overseeing the
Hardeman case, agreed with the company's argument that such evidence
was a "distraction" from the scientific question of whether
glyphosate causes cancer. He agreed to split the trial in a January
order.
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Had Bayer had won the first phase, there would have been no second
phase looking at company liability. Now that it has lost, almost all
of the previously excluded evidence can be presented to the jury.
Plaintiffs' lawyers hit Bayer with those allegations in their
opening statements for the second phase on Wednesday. Aimee Wagstaff,
one of Hardeman's lawyers, said Monsanto influenced the science
around Roundup through its "cozy" relationship with regulators.
Bayer could convince the jury in the second phase that, despite
their finding that Roundup played a substantial role in Hardeman's
cancer, the company was not liable. Experts said that was unlikely.
"They could present evidence of how careful they were in developing
Roundup, but that's an uphill battle given that the scientific
evidence was their strongest argument," said Alexandra Lahav, a law
professor at the University of Connecticut.
A lawyer for Bayer on Wednesday argued that Bayer could not be held
liable because the U.S. Environmental Protection Agency, as well as
other regulators worldwide, approved Roundup without a cancer
warning.
If the Hardeman trial had not been split and a final verdict went
against Bayer, the company might have been able to appeal any
damages award to the U.S. 9th Circuit Court of Appeals by claiming
the jury had been improperly swayed by inflammatory evidence, said
Lori Jarvis, a Virginia-based mass tort defense lawyer. That
argument will now be difficult to make.
"It would not be surprising at all for the 9th Circuit to uphold
what the jury did in this case, particularly given the great effort
Chhabria put into creating a level playing field for Monsanto,"
Jarvis said.
Some lawyers said Bayer could still argue on appeal that plaintiffs'
experts and their scientific evidence were insufficient and
statistically invalid and should not have been admitted at trial.
But they noted the 9th Circuit, which oversees the San Francisco
federal court, has generally been permissive in allowing expert
testimony.
However, experts said it was probably too soon to write off Bayer's
legal strategy, noting future Roundup cases could result in
different outcomes.
"It's a relatively early phase in this litigation as a whole and we
just need to see more trials to understand Bayer's liability," said
Adam Zimmerman, a law professor at Los Angeles-based Loyola Law
School.
(Reporting by Tina Bellon; Editing by Anthony Lin and Bill Berkrot)
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