* Bayer shares gain following court's 7-2 decision

* Consumers sued over cancer they attribute to Roundup

* Bayer says state law claims preempted by federal law

* Trump administration backed Bayer in the case

By Andrew Chung

WASHINGTON, June 25 (Reuters) - The U.S. Supreme Court

reined in thousands of lawsuits pursued in state courts accusing

Bayer of failing to warn users that the active

ingredient in its Roundup weedkiller causes cancer, handing a

major legal victory on Thursday to the German company.

The justices in a 7-2 decision overturned a jury verdict in

Missouri awarding $1.25 million to a man named John Durnell who

said he was diagnosed with non-Hodgkin lymphoma after years of

exposure to glyphosate in Roundup. The Supreme Court agreed with

Bayer that a U.S. law that governs pesticides precludes

failure-to-warn claims that are brought under state law from

moving forward in court.

Bayer shares were up about 16% in the wake of the decision.

President Donald Trump's administration backed Bayer in the

case.

Conservative Justice Brett Kavanaugh, who authored the

ruling, said the U.S. Environmental Protection Agency, or EPA,

has concluded glyphosate does not cause cancer and has not

required a cancer warning on Roundup.

The law preempts Durnell's claim because it "would require

Monsanto to add a cancer warning to Roundup's label even though

federal law requires Monsanto to use the EPA-approved label

without a cancer warning," Kavanaugh wrote.

Liberal Justice Ketanji Brown Jackson, in a dissent joined

by conservative Justice Neil Gorsuch, said that Durnell's claim

would impose equivalent labeling requirements on Monsanto that

the federal law requires and so should not be preempted.

Jackson called the ruling "remarkable and regrettable, for

it unjustifiably closes the courthouse doors to state tort

plaintiffs like Durnell."

Bayer acquired Roundup as part of its $63 billion purchase

of agrochemical company Monsanto in 2018. More than 100,000

plaintiffs have filed cases in U.S. state and federal courts

alleging a cancer link, and the German drugmaking and crop

science company had said that the lawsuits could threaten its

ability to supply the herbicide to farmers.

The torrent of litigation already prompted Bayer to remove

glyphosate from its consumer version of Roundup. Bayer said

before the Supreme Court ruled that a decision in its favor

could largely end the Roundup litigation.

Bayer CEO Bill Anderson praised the decision, saying it is

good for American farmers.

"This litigation has enormous costs for the company and has

impacted public trust. The decision brings overdue justice on an

issue that should have been clarified much earlier. It's time to

put it behind us," Anderson said.

Bayer's shares before Thursday's gains had been down just

over 50% since the company acquired Monsanto.

The company emphasized throughout the litigation that the

EPA repeatedly found that glyphosate does not cause cancer and

approved its product labels without a warning.

Facing billions of dollars in potential liability, Bayer

announced in February a proposed $7.25 billion settlement to

resolve tens of thousands of current and future lawsuits. The

settlement would not affect claims that stem from pending

appeals or that fall outside the deal, according to the company.

Those amount to nearly $1 billion, it said.

'A DISASTER FOR PUBLIC HEALTH'

Environmental activists and others criticized the court's

ruling on Thursday.

"Once again, the Supreme Court has sided with big business

over people and the environment. Today's ruling is a disaster

for public health," said Tarah Heinzen, legal director at the

advocacy group Food and Water Watch.

"The harm from this decision will perpetuate our cancer,

infertility and general chronic disease epidemic for generations

to come," said Kelly Ryerson, co-executive director of advocacy

group American Regeneration and a Make America Healthy Again

activist who posts on social media under the moniker "The

Glyphosate Girl."

The sprawling dispute centers on a U.S. law called the

Federal Insecticide, Fungicide and Rodenticide Act, or FIFRA,

that governs the sale and labeling of pesticides and bars states

from imposing differing or additional requirements.

The measure prohibits pesticides that are "misbranded" with

labels that lack an adequate warning to protect health and the

environment.

Bayer has argued that Durnell's claims are preempted by this

law. The EPA has repeatedly approved labels without such a

cancer warning, demonstrating that these products are not

misbranded, the company said, adding that labels cannot be

substantially changed without the agency's approval.

Durnell's lawyers said that despite the EPA's registration

of Roundup, the label may still be challenged as misbranded.

They also said Durnell's claims are not preempted because

Missouri state law that requires products to adequately warn of

dangers imposes the same requirements as FIFRA's prohibition on

misbranding.

'A NEW ERA'

Union Investment fund manager Markus Manns called Thursday's

ruling a significant milestone for Bayer, adding that a decade

after the Monsanto acquisition, the company is "entering a new

era."

"While future lawsuits are not entirely off the table, they

will become considerably more difficult. A final breakthrough

would come if the settlement is accepted by the plaintiffs and

approved by the competent court in July. This would bring

Bayer's glyphosate litigation chapter to a definitive close,

allowing management to fully refocus on operational and

strategic matters," Manns said.

Durnell sued Monsanto in Missouri state court in 2019,

claiming it failed to warn users of the dangers associated with

Roundup and glyphosate.

He was diagnosed with a rare and often aggressive form of

non-Hodgkin lymphoma, a cancer that starts in the white blood

cells, and attributed the disease to his exposure to Roundup

starting in 1996. For about 20 years he was the "spray guy" for

a neighborhood association in St. Louis, killing weeds at local

parks without protective equipment, according to court papers.

A jury sided with Durnell in 2023, and in 2025 a state

appeals court upheld that verdict.