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Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every

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Speaker 1: day we bring you insight and analysis into the most

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Speaker 1: important legal news of the day. You can find more

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Speaker 1: episodes of the Bloomberg Law Podcast on Apple podcast, SoundCloud

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Speaker 1: and on Bloomberg dot com slash podcasts. Buyer, also known

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Speaker 1: as Bayer, sells everything from aspirin and cancer medicines to

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Speaker 1: shoe inserts and soybean seeds, but the focus has been

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Speaker 1: on its sales of round Up weed killer as it

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Speaker 1: faces suits from thirteen thousand, four hundred plaintiffs over that

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Speaker 1: weed killer. Tomorrow's annual meeting is shaping up to be

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Speaker 1: its most contentious in years, with influential shareholders blaming management

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Speaker 1: for not foreseeing the legal risks associated with Buyer's takeover

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Speaker 1: of mont Santo, joining me as Robert Hocketor, professor at

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Speaker 1: Cornell Law School Bob In separate trials, juries found that

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Speaker 1: Roundup caused the cancer of two California men and awarded

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Speaker 1: massive damages eighty million in one case and two d

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Speaker 1: nine million in another. Buyers says it's going to keep

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Speaker 1: fighting these cases. What are the odds that it will

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Speaker 1: fare any differently in future? Cases, Well, June, I think

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Speaker 1: the odds are actually not not very good for buyer.

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Speaker 1: I understand their sort of urge to be defiant maybe

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Speaker 1: and try to take a confidence stance, but I think

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Speaker 1: this is probably maybe a bit cool hardy. At this point,

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Speaker 1: there are over eleven thousand suits pending. As you know,

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Speaker 1: all Bear has to do is lose even two or

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Speaker 1: three of those to face significant trouble, and the idea

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Speaker 1: of you know, defending all of them, particularly given how

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Speaker 1: much evidence there seems to be out there that does

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Speaker 1: indeed incriminate round Up, notwithstanding the sort of contrary evidence

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Speaker 1: that sort of cuts in the opposite direction. I think

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Speaker 1: the better part of valor would probably be to settle

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Speaker 1: these things as quickly as possible. Buyers, CEO and management

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Speaker 1: are going into Friday's annual meeting facing this backlash with

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Speaker 1: shareholders blaming the management for not foreseeing the legal risks

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Speaker 1: associated with taking over My Santo. The company says it's

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Speaker 1: executives reviewed the risks connected with round Up diligently should

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Speaker 1: it have foreseen this massive litigation. It's hard for me

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Speaker 1: to see how they wouldn't have foreseen at least the risk, right,

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Speaker 1: you know, my understanding is that there's great disquiet among

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Speaker 1: the shareholders for two reasons, right, One is again the

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Speaker 1: acquisition of MONTSNTO in the first place, and then the

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Speaker 1: second is the decision to go ahead and adopt this

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Speaker 1: sort of defiant posture, you know, in the face of

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Speaker 1: the litigation. I think that with respect of the first question,

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Speaker 1: that whether to buy wants, I just I can't see

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Speaker 1: how the risk would not have been foreseen. And again,

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Speaker 1: the key point here is that even if they feel

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Speaker 1: confident on the science, even if they think they're going

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Speaker 1: to win some of the suits on the merits, the

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Speaker 1: fact is that when you've got that many thousands pending,

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Speaker 1: the thought that you could win them all and I

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Speaker 1: think it is just again a bit wishful thinking. I suppose,

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Speaker 1: so a federal trial was set from May and it

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Speaker 1: was adjourned the judge and ordered mediation. Does that tell

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Speaker 1: you anything? Not really? I mean, the problem with us

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Speaker 1: again is when you have this many lawsuits, you can

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Speaker 1: expect a lot of sort of eccentric sort of uniqueness

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Speaker 1: making quirks in each one of them. Right, each one

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Speaker 1: of them is going to have particular characteristics that that

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Speaker 1: render it different from the others. But I don't think

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Speaker 1: any one particular result, or any one particular procedural development

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Speaker 1: in any one of these suits really tells us much

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Speaker 1: about the other eleven thousand. Buyer is appealing the first

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Speaker 1: verdict that was handed down, that's already been cut down

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Speaker 1: by two d eleven million dollars. So what are the

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Speaker 1: odds here? Is the verdict likely to be overturned, paired

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Speaker 1: down even more, or remain the same. I can't, of

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Speaker 1: course foresee with any crystal clarity, but I suspect that

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Speaker 1: that ruling will be upheld for a couple of reasons.

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Speaker 1: The first is the fact that the judge sort of

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Speaker 1: took down the award amount only signals, in my view,

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Speaker 1: a certain ambivalence. I'm a part of the court towards

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Speaker 1: punitive damages. The court did not cut back on the

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Speaker 1: compensatory damages, which really are the damages that are sort

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Speaker 1: of relevant to the marriage of the case. Right. Secondly,

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Speaker 1: the particular ground on which Buyer is looking for an

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Speaker 1: overturn has to do with a particular evidentiary ruling made

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Speaker 1: by the court, But that's a bit of a hail

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Speaker 1: mary pass in my view, because the court was quite

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Speaker 1: open to the allowing all sorts of evidence cutting both

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Speaker 1: directions into the original litigation. I don't think anything hint

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Speaker 1: on any one particular piece of evidence that the judge

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Speaker 1: ruled was too prejudicial to it into the court. But

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Speaker 1: I suspect, in other words, that there is fighting a

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Speaker 1: loss cause even with respect to that one particular lawsuit.

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Speaker 1: And again that's not even to mention that the many

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Speaker 1: that are that are still tending. Now again, I might

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Speaker 1: be wrong on this um sort of shooting from the

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Speaker 1: hip here in the sense that there's always a certain

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Speaker 1: amount of you know, kind of gut instinct that enters

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Speaker 1: into our predictions about how these things are going to go.

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Speaker 1: But you know, thus far the course of the litigation

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Speaker 1: has been sort of garden variety. I find my sort

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Speaker 1: of pun a bit is the litigation is sort of

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Speaker 1: proceeded more or less in the way that we would

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Speaker 1: have expected. You know, there's a lot of scientific uncertainty

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Speaker 1: as to just how tight the causal nexus is between

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Speaker 1: cancer and round up, but there's a lot of evidence

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Speaker 1: that suggests that there is a link, even though there's

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Speaker 1: contrary evidence as well. We can expect, accordingly, for some

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Speaker 1: courts to come out one way, some of course to

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Speaker 1: come out the other. Uh. In addition, of course, some

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Speaker 1: of the claims that are made against Bear is that

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Speaker 1: they were acting or that Monsanto at least at acted

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Speaker 1: to conceal at the very least the potential dangers of

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Speaker 1: round up, and insofar as that happens, punitive damages are

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Speaker 1: going to be in the offering in some of these cases,

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Speaker 1: and buy are, in acquiring Monsanto, of course, acquired all

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Speaker 1: of that potential liability. And that's I think what has

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Speaker 1: the shareholders troubled, right that just the risk that was

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Speaker 1: taken on in doing this. Not that they don't think

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Speaker 1: that Bear was completely unmindful of this, but they seem

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Speaker 1: to have decided that Buyer's management and board were We're

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Speaker 1: too cavalier about the possibility of significant liability. And it's

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Speaker 1: hard for me to find fault with the shareholders when

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Speaker 1: it comes to that. I would have been I would

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Speaker 1: have been inclined to be much more cautious than it

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Speaker 1: seems buy Or was when it came to acquiring Monsanto,

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Speaker 1: because this round up stuff was in the offering and

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Speaker 1: everybody knew it. When you look at the puny, did

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Speaker 1: the amount of punitive damages that both these juries met

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Speaker 1: it out to punish Buyer. Does that tell you how

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Speaker 1: jurors are going to view this company versus these individual

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Speaker 1: plaintiffs who are suffering from cancer. Yeah, it's certainly a

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Speaker 1: good preliminary indicator, June. I mean, the thing again to

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Speaker 1: remember about about punitive is that you know, these are

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Speaker 1: sort of, as the term suggests, these register indignation on

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Speaker 1: the part of the jury or the judge or both

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Speaker 1: when it comes to the behavior of the liable party.

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Speaker 1: And of course here we're talking about the behavior of Monsanto,

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Speaker 1: but Buyer, as the successor and interest to Monsanto, in

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Speaker 1: having acquired Monsanto, ends up, of course facing the brunt

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Speaker 1: of that very indignation. And it's looking as though there's

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Speaker 1: a good bit of indignation out there about how Monsanto

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Speaker 1: handled the emerging data that suggested at least a significant

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Speaker 1: likelihood that round up was indeed associated with cancer or

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Speaker 1: causing cancer. It's five billion, the number you're hearing to

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Speaker 1: settle all the cases. I've been hearing numbers ranging between

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Speaker 1: five and six. Basically, I don't know, you know how

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Speaker 1: much credence to place in those estimates, but that does

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Speaker 1: seem to be the range within which people are sort

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Speaker 1: of imagining what settlement would entail, and that looks like

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Speaker 1: a bargain to me. Thanks so much, Bob. That's Robert Hackett,

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Speaker 1: professor at Cornell Law School. Thanks for listening to the

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Speaker 1: Bloomberg Law Podcast. You can subscribe and listen to the

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Speaker 1: show on Apple Podcasts, SoundCloud, and on Bloomberg dot com

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Speaker 1: slash podcast. I'm June Brasso. This is Bloomberg