Despite having disbursed billions in Roundup settlement agreements, Bayer and Monsanto continue to remain entangled in thousands of Roundup lawsuits. A U.S. Court of Appeals decision in February 2024 decreed that the manufacturers must persist in confronting these legal actions, notwithstanding Bayer and Monsanto’s assertions that federal insecticide laws shielded them from failure to warn claims.
According to a report from Bloomberg, Bayer AG is now deciding whether to employ the “Texas Two-Step,” a controversial legal maneuver that would force the settlement of any claims now or in the future through the U.S. bankruptcy system.
While the company has won more trials recently than it has lost over the past four months, Roundup jury verdicts have totaled around $4 billion.
In response to a series of expensive jury verdicts concerning the herbicide, Bayer executives are reportedly seeking guidance from legal firms and advisors on persuading a bankruptcy judge to suspend upcoming trials this year. According to individuals familiar with the matter but who preferred to remain anonymous due to its confidential nature, the aim is to negotiate a settlement for over 50,000 cases.
The legal tactic’s name comes from a Texas state law that allows a business to manage mass lawsuits by dividing itself in two and loading one business entity with its assets while loading another with legal or financial liabilities.
In 2021, Johnson & Johnson attempted to spin off liability unsuccessfully using the Texas Two-Step in suits over talcum powder. 3M Company also tried to use the strategy last year during a lawsuit by veterans against the company’s allegations of defective earplugs.
“Given the recent rulings on Texas Two-Step bankruptcies, I’m pretty sure Bayer knows this is a long-shot bid for a settlement,” Bruce Markell, a former federal bankruptcy judge who now teaches law at Northwestern University, told Bloomberg. “But they may feel like they don’t have any other choice.”
While facing tens of thousands of lawsuits, Bayer attempted to consolidate litigation through a settlement program in 2021. However, a federal judge rejected the company’s efforts.
Bayer has lost about 70 percent of its market value since its $63 billion acquisition of Monsanto, from which it inherited Roundup, in 2018.
