October 20, 2021
A California federal judge declined to dismiss a suit against Bayer AG on Tuesday in which investors claim the company downplayed the significance of litigation related to the weedkiller Roundup that it faced after acquiring Monsanto in 2018.
U.S. District Judge Richard Seeborg denied the dismissal motion in its entirety but noted in his order that some claims put forth by the investors are not “viable” and suggested they retry those theories with an amended complaint.
The City of Grand Rapids General Retirement System and the Michigan city’s Police & Fire Retirement System sued Bayer in July 2020, alleging it downplayed “the significance of the Roundup cancer lawsuits against Monsanto” when it announced its decision to buy the agrochemicals giant in 2018. The two pension funds say the purchase hasn’t benefited the proposed class and led to artificially inflated stock prices.
The funds later filed a motion saying the securities suit should be tied with the sprawling multidistrict litigation of roughly 125,000 claims over whether Roundup causes non-Hodgkin’s lymphoma.
Bayer urged the court to keep the securities suit and the MDL separate and moved to dismiss the case for failure to plead falsity, scienter and loss causation.
In a statement to Law360, counsel for the plaintiffs said the court’s ruling Tuesday brings them a step closer to holding Bayer accountable.
“As the case proceeds, we intend to prove Bayer lost considerable value for its shareholders by covering up the extreme risks of acquiring Monsanto through continued false and misleading statements regarding Bayer’s due diligence on the acquisition,” said Carol Gilden of Cohen Milstein Sellers & Toll PLLC.
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