Bayer’s Roundup Settlement Plan May Result in Monsanto Bankruptcy Filing: Report

A controversial bankruptcy plan is being considered if Bayer can not reach an agreement to settle outstanding Roundup lawsuits over Monsanto’s failure to warn about non-Hodgkin’s lymphoma.

After being hit with a series of massive verdicts in Roundup non-Hodgkin’s lymphoma lawsuits brought over the past decade, Bayer is reportedly considering placing its Monsanto subsidiary through Chapter 11 bankruptcy to resolve thousands of remaining cases, according to an exclusive report by the Wall Street Journal.

Bayer and Monsanto have faced more than 120,000 Roundup lawsuits, each raising similar allegations that consumers were not adequately warned about the risk that the popular weedkiller may cause users to develop non-Hodgkin’s lymphoma.

After failing to establish that it can consistently defend the safety of the weedkiller at trial, Bayer has already agreed to pay more than $10 billion in Roundup settlements.  However, there are still thousands of remaining claims involving plaintiffs who rejected settlement offers or have been more recently diagnosed with non-Hodgkins lymphoma.

In recent months, Bayer has focused efforts on securing protections from state legislatures or the U.S. Supreme Court, which could effectively end future Roundup lawsuits if they find that the claims are preempted by federal law.

However, the new report now suggests that Bayer may be planning to utilize a controversial tactic to force all current and future Roundup claims brought by former users through the U.S. bankruptcy system, if additional settlements can not be reached with plaintiffs.

If the Wall Street Journal reports are true, Bayer would be the latest in a string of major corporations to try to seek liability protection through the U.S. bankruptcy process, even though they have billions of funds on hand to deal with litigation brought by individuals injured by their products. 

However, those other companies, such as Johnson & Johnson and 3M Company, tried to use a very controversial tactic known as the “Texas Two-Step,” where they created a subsidiary specifically to carry the burden of liability, and then had that subsidiary declare bankruptcy. When successful, corporations can end up paying only pennies on the dollar to victims who suffered grievous injuries due to their products.

In recent years, judges have soured on the process, with Johnson & Johnson’s attempt to use the tactic to resolve talcum powder cancer lawsuits being rejected by a Texas bankruptcy judge earlier this year.

The Monsanto bankruptcy would be different, since Monsanto existed before the litigation and was the actual creator of Roundup, before it was subsequently acquired by Bayer in 2018. This could increase the chances that the bankruptcy courts will approve the filing.

Roundup Supreme Court Filing

While the bankruptcy efforts are unconfirmed, last month Bayer took what many legal observers considered a “hail Mary” attempt to end the company’s liability in Roundup non-Hodgkin’s lymphoma lawsuits, by filing a Writ of Certiorari with the U.S. Supreme Court that argues the failure to warn claims should be barred by federal preemption, since the herbicide was approved by federal regulators.

It is the company’s third attempt to get the U.S. Supreme Court to weigh in on the litigation, with the petition coming after the Missouri Supreme Court rejected a similar Roundup appeal in February, when it upheld a $1.25 million Roundup damage award from October 2023. 

The Supreme Court has already rejected Bayer’s Roundup appeals before, after the company petitioned the Court to review another Roundup trial defeat in May 2019, involving an $87 million verdict awarded to a California couple, Alva and Alberta Pilliod. However, the Supreme Court refused to review the case in June 2022. 

This followed a previous refusal to review another Roundup appeal in March 2019.

To cut off the potential for future claims, Bayer announced that it would reformulate Roundup in 2021, with plans to remove the active ingredient glyphosate from consumer versions of the weed killer. However, without additional settlements, the company is likely to continue facing new lawsuits for years, as former users develop non-Hodgkin’s lymphoma following use of the old Roundup formulations.