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July 20, 2020, 10:51 p.m. EDT

Bayer loses Roundup appeal, but damages slashed

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By Sara Randazzo

Bayer AG lost an appeal in the first case to go to trial linking its Roundup weedkiller to cancer, though the California court greatly reduced the amount of damages awarded to $20.4 million.

The Monday decision by the California Court of Appeal comes in the case of school groundskeeper Dewayne Johnson, who won a 2018 jury trial blaming Roundup for causing his non-Hodgkin lymphoma. The jury's initial $289.2 million award sent Bayer's stock tumbling and was followed by an even larger $2 billion award in a second trial.

Bayer, which inherited Roundup's legal liabilities with its $63 billion acquisition of seed and pesticide maker Monsanto Co. two years ago, recently said it would pay up to $10.9 billion to settle tens of thousands of Roundup lawsuits. The company said at the time it was still pursuing appeals in the three cases that have gone to trial.

Bayer has steadfastly said that Roundup and the weedkiller's active ingredient, glyphosate, are safe and backed by regulators including the U.S. Environmental Protection Agency. The company had argued to the California court that the jury decision should be thrown out in part because it conflicts with an EPA position preventing the company from putting a cancer-warning label on the product.

The court disagreed, finding that while the EPA currently says glyphosate isn't harmful to humans and that no cancer warning is needed, "that opinion, in the abstract, isn't binding on this court."

In shutting down separate arguments Bayer had made, the three-judge panel also said, "In our view, Johnson presented abundant -- and certainly substantial -- evidence that glyphosate, together with the other ingredients in Roundup products, caused his cancer." The judges pointed to experts who told jurors that Roundup could cause non-Hodgkin lymphoma generally as well as Mr. Johnson's cancer in particular.

The court reduced damages for economic loss to $10.2 million and said any punitive damage should match, granting total damages of $20.4 million. The judge who oversaw the trial had already reduced the original award to $78.5 million.

Brent Wisner, an attorney for Mr. Johnson, called the Monday ruling "another major victory" for Mr. Johnson and his family. He said the reduction in damages is "a function of a deep flaw in California tort law" that makes it difficult to have money awarded for a shortened lifespan, an issue he hopes would be addressed by the California Supreme Court.

Bayer said Monday the reduction in damages "is a step in the right direction" but that it continues to believe the jury's decision was "inconsistent with the evidence at trial and the law." The company said it will consider appealing the case to California's highest court.

Glyphosate's safety came under scrutiny in 2015 after the International Agency for Research on Cancer, a unit of the World Health Organization, classified glyphosate as likely having the potential to cause cancer.

The court said Monday it was underwhelmed by Bayer's argument that IARC's finding was an outlier that the jury shouldn't have relied on so heavily.

The appellate court's decision could make it more difficult for Bayer to reach settlements with holdout plaintiffs lawyers who haven't yet signed on to its recent $10.9 billion deal. Bayer said last month it had agreements with lawyers representing 75% of the known 125,000 cases, and was working to resolve the rest.

Jim Onder, a St. Louis-based lawyer who represents around 24,000 Roundup clients that have yet to settle, said the Monday ruling "keeps us steadfast in our determination to take cases to trial."

Bayer is also revamping a $1.25 billion component of the deal that is meant to resolve future Roundup lawsuits, after a federal judge indicated he was unlikely to approve the proposal. The company doesn't need a court's blessing on the settlement of existing cases, which it said will cost between $8.8 billion and $9.6 billion.

--Jacob Bunge contributed to this article.

Write to Sara Randazzo at sara.randazzo@wsj.com

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