The US Supreme Court has rejected a bid by Bayer AG (ETR:BAYN, OTC:BAYZF) to dismiss lawsuits by customers alleging the company's Roundup weedkiller causes cancer, a move that could cost the chemical group billions in compensation.
Supreme Court justices rejected a Bayer appeal and upheld a lower court decision that awarded US$25mln in damages to California resident Edwin Hardeman, a Roundup user who allegedly blamed his cancer on the German company's glyphosate-based weedkillers.
The Supreme Court's action potentially leaves it liable in thousands of cases, reported Reuters, with the justices set to address a second Bayer petition in the coming weeks on a related issue.
The news sent Bayer's shares down 2.9% on Tuesday, eliminating gains from the previous two trading sessions. Shares were trading at €59.51 on Wednesday, down 4.11%.
In May, the administration of US President Joe Biden asked the court not to hear Bayer's appeal, reversing a position previously taken by the administration of former US President Donald Trump.
While Bayer lost three trials in which Roundup users were awarded millions of dollars, it has won four.
The company had pinned its hopes on the conservative-majority Supreme Court, which has a reputation as pro-business.
In response, Bayer said it "respectfully disagrees" with the decision and that the company is "fully prepared to manage the litigation risk associated with potential future claims in the US".
The court's decision frustrates Bayer's attempt to stem the litigation wave it has faced since its US$63bn acquisition of agri-chemicals major Monsanto in 2018.
Bayer set aside US$4.5bn last year for the more than 30,000 claims still outstanding, while appealing to the Supreme Court to review the case won by Californian Hardeman.
Additionally, Bayer has been forced to set aside approximately US$11.5bn for existing and future Roundup lawsuits, out of which more than 107,000 have already been settled.