1 00:00:00,480 --> 00:00:04,560 Speaker 1: You're listening to bloom Bird Law with June Grosso. After 2 00:00:04,640 --> 00:00:07,720 Speaker 1: a year long legal battle and insistence on their innocence, 3 00:00:08,039 --> 00:00:11,200 Speaker 1: Full House star Lourie Lacklan and her husband, fashion designer 4 00:00:11,240 --> 00:00:15,000 Speaker 1: Massima Giannui gave up and pleaded guilty to paying half 5 00:00:15,000 --> 00:00:17,840 Speaker 1: a million dollars in bribes to get their two daughters 6 00:00:17,840 --> 00:00:21,280 Speaker 1: into the University of Southern California as Fate Crew stars, 7 00:00:21,560 --> 00:00:24,599 Speaker 1: even as prosecutors announced that a twenty fifth parent would 8 00:00:24,600 --> 00:00:28,360 Speaker 1: admit guilt in the sprawling case. Under their proposed deals, 9 00:00:28,480 --> 00:00:30,880 Speaker 1: Laughlin will spend two months in prison and pay a 10 00:00:30,920 --> 00:00:34,560 Speaker 1: one hundred fifty thousand dollar fine, and Giannuly will spend 11 00:00:34,600 --> 00:00:37,200 Speaker 1: five months in prison and pay a two hundred fifty 12 00:00:37,200 --> 00:00:41,200 Speaker 1: thousand dollar fine. Joining me is former federal prosecutor Robert Mintz, 13 00:00:41,240 --> 00:00:44,960 Speaker 1: a partner mcarter and English. They put on such a 14 00:00:45,040 --> 00:00:50,480 Speaker 1: fierce defense, challenging the prosecution again and again. Why throw 15 00:00:50,560 --> 00:00:53,680 Speaker 1: in the towel at this point? Lori Laughlin and her 16 00:00:53,760 --> 00:00:58,480 Speaker 1: husband Massima genuinely have bought this tooth and nail from 17 00:00:58,520 --> 00:01:01,280 Speaker 1: the moment that they were charged, and now after almost 18 00:01:01,320 --> 00:01:04,480 Speaker 1: a year, they decided to change their minds and enter 19 00:01:04,520 --> 00:01:08,160 Speaker 1: a guilty plate. They fought the government by challenging whether 20 00:01:08,160 --> 00:01:10,920 Speaker 1: the prosecution should have been brought in Massachusetts rather than 21 00:01:10,959 --> 00:01:15,080 Speaker 1: in California, where they're located. They also challenged the government 22 00:01:15,319 --> 00:01:18,400 Speaker 1: that had named dozens of other parents in the same 23 00:01:18,480 --> 00:01:21,800 Speaker 1: charging document along with them. The only thing that tied 24 00:01:21,880 --> 00:01:24,120 Speaker 1: all these parents together was the fact that they all 25 00:01:24,440 --> 00:01:27,720 Speaker 1: had been involved with Mr. Singer, who was the mastermind, 26 00:01:27,720 --> 00:01:30,880 Speaker 1: who ultimately cooperated with the government. But the last did 27 00:01:31,000 --> 00:01:34,280 Speaker 1: that these defendants raised was they challenge the government over 28 00:01:34,360 --> 00:01:37,399 Speaker 1: what they called out regious government misconduct, which was some 29 00:01:37,600 --> 00:01:41,160 Speaker 1: discovery that the government was late in turning over. When 30 00:01:41,240 --> 00:01:43,840 Speaker 1: that was denied, they changed their minds and decided to 31 00:01:43,840 --> 00:01:47,319 Speaker 1: plead guilty. They were facing trial in October, and the 32 00:01:47,400 --> 00:01:52,560 Speaker 1: prosecutors had recorded conversations and emails. Did they see that 33 00:01:52,600 --> 00:01:56,080 Speaker 1: there was too much evidence to explain away? The evidence 34 00:01:56,160 --> 00:02:00,200 Speaker 1: against Lochlan E. G anuinely did appear to be overwhelming. 35 00:02:00,400 --> 00:02:03,000 Speaker 1: The problems the defendants faced in this case is that 36 00:02:03,040 --> 00:02:05,920 Speaker 1: they had some very damaging emails that they had sent 37 00:02:06,000 --> 00:02:09,400 Speaker 1: to various people. For example, Gia Newley had forwarded the 38 00:02:09,440 --> 00:02:14,160 Speaker 1: two hundred thousand dollar invoice from Mr Singer, the scammed 39 00:02:14,240 --> 00:02:18,080 Speaker 1: mastermind to his financial advisor and included a note saying, 40 00:02:18,440 --> 00:02:21,640 Speaker 1: good news, my daughter is in SC. Bad is I 41 00:02:21,680 --> 00:02:24,280 Speaker 1: had to work the system. There also was an email 42 00:02:24,320 --> 00:02:27,160 Speaker 1: from Lori Loughlin to her daughter saying she shouldn't discuss 43 00:02:27,200 --> 00:02:30,959 Speaker 1: the way she got into USC with her college guidance counselor. 44 00:02:31,200 --> 00:02:34,200 Speaker 1: And so it appeared that there was some damaging evidence 45 00:02:34,200 --> 00:02:37,520 Speaker 1: which showed consciousness of guilt on the airport, and ultimately 46 00:02:37,720 --> 00:02:40,280 Speaker 1: there was even a photograph of one of their daughters 47 00:02:40,680 --> 00:02:43,400 Speaker 1: looking like she was on a rowing machine since she 48 00:02:43,520 --> 00:02:45,679 Speaker 1: was being admitted to the school as a rower, when 49 00:02:45,680 --> 00:02:48,800 Speaker 1: in fact she was not rowing at all. Ultimately, this 50 00:02:48,840 --> 00:02:52,000 Speaker 1: is going to be very damaging evidence and likely difficult 51 00:02:52,000 --> 00:02:55,440 Speaker 1: to overcome a trial. The strategy here with the defense 52 00:02:55,480 --> 00:02:57,040 Speaker 1: was to try to see whether there was some way 53 00:02:57,080 --> 00:03:00,480 Speaker 1: to knock this case out prior to trial. They brought 54 00:03:00,520 --> 00:03:03,360 Speaker 1: these charges against the government saying that there was government 55 00:03:03,400 --> 00:03:05,840 Speaker 1: mis conduct. They tried to knock the case out in 56 00:03:05,880 --> 00:03:08,639 Speaker 1: other ways by arguing that they shouldn't have been charged 57 00:03:08,680 --> 00:03:11,320 Speaker 1: along with dozens of other parents. But ultimately, when all 58 00:03:11,360 --> 00:03:14,640 Speaker 1: those legal strategies did not pan out, I think that's 59 00:03:14,680 --> 00:03:17,720 Speaker 1: why they changed their mind and decided to enter the plague, Bob, 60 00:03:17,720 --> 00:03:21,000 Speaker 1: we often talked about Felicity Hoffman being a parent that 61 00:03:21,240 --> 00:03:25,520 Speaker 1: right away said I'm guilty, I'm sorry, and took her medicine. 62 00:03:25,720 --> 00:03:28,960 Speaker 1: Are they still getting a sweetheart deal, a good deal 63 00:03:29,320 --> 00:03:32,480 Speaker 1: even though they fought the system for a year twoth 64 00:03:32,480 --> 00:03:35,120 Speaker 1: and nail as you say, well, there have been thirty 65 00:03:35,160 --> 00:03:39,520 Speaker 1: seven parents charged in this overarching scheme, and to date, 66 00:03:39,840 --> 00:03:42,920 Speaker 1: twenty four of them have pleaded guilty. As you mentioned, 67 00:03:42,920 --> 00:03:46,480 Speaker 1: Felicity Huffman received two weeks in jail, was one of 68 00:03:46,480 --> 00:03:49,720 Speaker 1: the first to step up and immediately acknowledge her guilt. 69 00:03:50,160 --> 00:03:53,240 Speaker 1: The longest sentence so far that's been handed down was 70 00:03:53,440 --> 00:03:57,920 Speaker 1: nine months for former pimcos CEO Douglas Hides. So the 71 00:03:58,080 --> 00:04:00,520 Speaker 1: range in terms of sentencing has really been from two 72 00:04:00,520 --> 00:04:04,560 Speaker 1: weeks to nine months. This sentence here, which is two 73 00:04:04,680 --> 00:04:08,200 Speaker 1: months for Lorie Laughlin and five months for a husband, 74 00:04:08,280 --> 00:04:10,560 Speaker 1: kind of falls in the middle. But they did fight 75 00:04:10,640 --> 00:04:13,200 Speaker 1: this charge for over a year. They did battle the 76 00:04:13,240 --> 00:04:16,320 Speaker 1: government by filing multiple motions to try to get these 77 00:04:16,400 --> 00:04:20,159 Speaker 1: charges dismissed or altered, and ultimately seen that they got 78 00:04:20,279 --> 00:04:23,000 Speaker 1: the same type of deal that most of these parents 79 00:04:23,000 --> 00:04:25,359 Speaker 1: have been offered so far in this case. Doesn't that 80 00:04:25,440 --> 00:04:28,800 Speaker 1: send the wrong message from prosecutors. Doesn't that send a 81 00:04:28,800 --> 00:04:32,640 Speaker 1: message that you can keep fighting us every which way 82 00:04:32,920 --> 00:04:34,960 Speaker 1: over and over again, but we'll still give you a 83 00:04:35,000 --> 00:04:38,360 Speaker 1: good deal, rather than the message that you might expect, 84 00:04:38,440 --> 00:04:41,560 Speaker 1: which is lead early and you'll get a good deal. 85 00:04:42,080 --> 00:04:44,479 Speaker 1: Often the rule is that if you're going to get 86 00:04:44,520 --> 00:04:47,560 Speaker 1: the best deal in a criminal case, that comes early on. 87 00:04:47,640 --> 00:04:50,280 Speaker 1: And if you put the government to its test, if 88 00:04:50,320 --> 00:04:53,599 Speaker 1: you make them respond to motions, and if you fight 89 00:04:53,640 --> 00:04:56,240 Speaker 1: them right up until the day of trial, usually the 90 00:04:56,320 --> 00:04:59,279 Speaker 1: deal is not so attractive. And prosecutors do that because 91 00:04:59,279 --> 00:05:01,599 Speaker 1: they try to get people to enter into these three 92 00:05:01,640 --> 00:05:04,480 Speaker 1: deals early on. If everybody makes them do all the 93 00:05:04,520 --> 00:05:07,080 Speaker 1: work to try to prepare for trial, it becomes an 94 00:05:07,080 --> 00:05:09,840 Speaker 1: overwhelming task for them. And they try to encourage people 95 00:05:09,880 --> 00:05:11,920 Speaker 1: to come in early, and they try to encourage people 96 00:05:11,920 --> 00:05:14,719 Speaker 1: to cooperate when cooperation is something that's on the table 97 00:05:14,800 --> 00:05:18,000 Speaker 1: for them. Here though, they do have many, many parents 98 00:05:18,000 --> 00:05:20,480 Speaker 1: who are charged in this case, and ultimately I think 99 00:05:20,480 --> 00:05:24,800 Speaker 1: they're looking forward please that send people to jail. That 100 00:05:24,920 --> 00:05:28,120 Speaker 1: send the signal that even though most of these parents 101 00:05:28,200 --> 00:05:30,520 Speaker 1: were very wealthy, most of these parents paid an awful 102 00:05:30,520 --> 00:05:32,400 Speaker 1: lot of money to try to get their children to school. 103 00:05:32,640 --> 00:05:34,440 Speaker 1: But they're not above the law that they have to 104 00:05:34,480 --> 00:05:37,680 Speaker 1: pay fines in connection with these guilty please, and they 105 00:05:37,760 --> 00:05:40,359 Speaker 1: ultimately have to serve time and jail. The amount of 106 00:05:40,400 --> 00:05:43,160 Speaker 1: time and jail, you could argue is somewhat less than 107 00:05:43,279 --> 00:05:47,120 Speaker 1: maybe perhaps another defendant in a similar case might have received. 108 00:05:47,440 --> 00:05:49,440 Speaker 1: But here the government I think is looking at the 109 00:05:49,480 --> 00:05:53,040 Speaker 1: overall charges, looking at the number of cases they have here, 110 00:05:53,240 --> 00:05:55,719 Speaker 1: and trying to come up with some fair resolution that 111 00:05:55,839 --> 00:05:58,520 Speaker 1: includes jail time for each of these defendants. And so 112 00:05:58,600 --> 00:06:01,960 Speaker 1: far that's what they've achieved. Why is j newly getting 113 00:06:01,960 --> 00:06:05,760 Speaker 1: a much different sentence when they were obviously in this together. 114 00:06:06,160 --> 00:06:08,800 Speaker 1: In entering their guilty, please, Lori Lock would admitted to 115 00:06:08,800 --> 00:06:12,120 Speaker 1: a single kind of conspiracy to commit wire and mail fraud, 116 00:06:12,120 --> 00:06:16,240 Speaker 1: while her husband, Mr Giannuly agreed to plead guilty not 117 00:06:16,360 --> 00:06:18,680 Speaker 1: only to wire and mail fraud but also a charge 118 00:06:18,680 --> 00:06:21,960 Speaker 1: of conspiracy to commit on its services fraud. That accounts 119 00:06:22,000 --> 00:06:25,719 Speaker 1: for her sentence of two months and his agreed sentence 120 00:06:26,000 --> 00:06:29,240 Speaker 1: of five months. Ultimately, the government here believed that Mr 121 00:06:29,320 --> 00:06:32,360 Speaker 1: Giannuly was more involved in these payments than his wife, 122 00:06:32,520 --> 00:06:34,719 Speaker 1: and that's why we see this disparity in terms of 123 00:06:34,720 --> 00:06:38,440 Speaker 1: the recommended sentences. But remember also that these are agreed 124 00:06:38,520 --> 00:06:41,760 Speaker 1: upon sentences only between the defendants and the government. It's 125 00:06:41,839 --> 00:06:44,240 Speaker 1: ultimately up to the judge as to what sentence will 126 00:06:44,279 --> 00:06:46,599 Speaker 1: be handed down. In this case, the judge is reading 127 00:06:46,600 --> 00:06:49,400 Speaker 1: the pre sentence reports. Do you think you will stick 128 00:06:49,440 --> 00:06:51,120 Speaker 1: to the plea deal in this case? Is there any 129 00:06:51,120 --> 00:06:54,279 Speaker 1: way of telling with this judge? Well, with all cases, 130 00:06:54,480 --> 00:06:57,039 Speaker 1: when a plea is entered, a judge makes clear that 131 00:06:57,080 --> 00:07:00,559 Speaker 1: whatever deal that defendants have with the government, it's something 132 00:07:00,600 --> 00:07:02,880 Speaker 1: that does not find the court of that the judge 133 00:07:02,920 --> 00:07:05,599 Speaker 1: will not make up its mind until it reads the 134 00:07:05,640 --> 00:07:09,000 Speaker 1: pre sentence report. But the judge is also mindful of 135 00:07:09,040 --> 00:07:11,520 Speaker 1: the fact that in order to get these plea deals, 136 00:07:11,640 --> 00:07:14,840 Speaker 1: it's important that defendants be able to rely upon the 137 00:07:14,920 --> 00:07:18,920 Speaker 1: government's recommendation with some degree of certainty. So here I 138 00:07:18,960 --> 00:07:21,800 Speaker 1: think we can expect that the judge to ultimately follow 139 00:07:21,840 --> 00:07:25,560 Speaker 1: the government's recommendation to sentence these defendants to the terms 140 00:07:25,560 --> 00:07:27,960 Speaker 1: that were agreed upon by the government. What's one of 141 00:07:27,960 --> 00:07:30,720 Speaker 1: the things that is unusual here is that typically the 142 00:07:30,800 --> 00:07:33,920 Speaker 1: government will agree to a range of sentencing. In other words, 143 00:07:34,080 --> 00:07:37,960 Speaker 1: the federal sentencing guidelines has ranges of months that apply 144 00:07:38,160 --> 00:07:41,840 Speaker 1: to a particular sentence based upon various factors. In this case, 145 00:07:41,880 --> 00:07:44,360 Speaker 1: in order to entice these defendants to take this plea, 146 00:07:44,760 --> 00:07:48,160 Speaker 1: the government is taking this somewhat unusual step of recommending 147 00:07:48,240 --> 00:07:51,720 Speaker 1: a particular sentence of two months and five months as 148 00:07:51,720 --> 00:07:54,560 Speaker 1: opposed to a range of sentencing. The government is also 149 00:07:54,680 --> 00:07:59,240 Speaker 1: leaving open the defendant's ability to advance claims of ineffective 150 00:07:59,240 --> 00:08:05,440 Speaker 1: assistance of council and prosecutorial misconduct. Is that unusual, Yes, 151 00:08:05,520 --> 00:08:09,040 Speaker 1: that is unusual. Usually the way plea deals read is 152 00:08:09,080 --> 00:08:11,320 Speaker 1: that you enter your plea and you give up your 153 00:08:11,400 --> 00:08:14,920 Speaker 1: right to challenge the sentence unless it's outside the agreed 154 00:08:15,000 --> 00:08:17,400 Speaker 1: upon range that you have agreed to the government with. 155 00:08:17,920 --> 00:08:20,320 Speaker 1: But in this case they've thrown that in. I think 156 00:08:20,320 --> 00:08:22,800 Speaker 1: it really is more window dressing than it is any 157 00:08:22,920 --> 00:08:26,680 Speaker 1: real right for the defendants. The likelihood that there will 158 00:08:26,720 --> 00:08:31,280 Speaker 1: be an ultimate finding of any kind of prosecutorial misconduct 159 00:08:31,480 --> 00:08:33,960 Speaker 1: is remote, and it's even more remote that there could 160 00:08:34,000 --> 00:08:37,560 Speaker 1: be some finding of ineffective assistance of counsel given the 161 00:08:37,640 --> 00:08:40,520 Speaker 1: lawyers who were involved in the case. So it really 162 00:08:40,600 --> 00:08:44,200 Speaker 1: is something that the defendants are holding out there in 163 00:08:44,280 --> 00:08:46,840 Speaker 1: case something might come up later in the case that 164 00:08:46,920 --> 00:08:50,160 Speaker 1: shows that prosecutors acted in some way that was inappropriate, 165 00:08:50,280 --> 00:08:53,160 Speaker 1: but it's unlikely, ultimately tat to have any real effect 166 00:08:53,400 --> 00:08:55,160 Speaker 1: on the outcome of this case or the amount of 167 00:08:55,200 --> 00:08:58,400 Speaker 1: time that these two defendant servant jail. Is it possible 168 00:08:58,800 --> 00:09:02,720 Speaker 1: that they will serve less time because of COVID nineteen, 169 00:09:03,679 --> 00:09:06,160 Speaker 1: while it's possible that they could serve less time due 170 00:09:06,200 --> 00:09:08,960 Speaker 1: to COVID nineteen, And it's possible that the judge could 171 00:09:08,960 --> 00:09:11,400 Speaker 1: sentence them to something less than what they've agreed to 172 00:09:11,520 --> 00:09:14,439 Speaker 1: with the government. In this case, given the high degree 173 00:09:14,440 --> 00:09:17,160 Speaker 1: of publicity and the fact that this had been fought 174 00:09:17,240 --> 00:09:19,720 Speaker 1: out between the government and the defense for over a year, 175 00:09:20,080 --> 00:09:23,440 Speaker 1: these are sentences that are, in the eyes of some people, 176 00:09:23,480 --> 00:09:26,520 Speaker 1: on the low end of where these cases should have 177 00:09:26,640 --> 00:09:29,400 Speaker 1: ended up. I think it's more likely than the judge 178 00:09:29,400 --> 00:09:32,160 Speaker 1: will sentence them to exactly the amount of time that 179 00:09:32,240 --> 00:09:34,840 Speaker 1: they've agreed to with the government and that they will 180 00:09:34,880 --> 00:09:37,880 Speaker 1: serve the full amount of that time. The COVID nineteen 181 00:09:37,880 --> 00:09:40,600 Speaker 1: issue is obviously something that the parties are aware of 182 00:09:40,679 --> 00:09:43,400 Speaker 1: going into this deal. So for the defense to then 183 00:09:43,520 --> 00:09:46,720 Speaker 1: argue that because of COVID nineteen they should serve less time. 184 00:09:47,160 --> 00:09:49,800 Speaker 1: Seems to be somewhat disingenuous, and I think it's unlikely 185 00:09:49,840 --> 00:09:52,280 Speaker 1: just to weigh the court. As we get closer and 186 00:09:52,320 --> 00:09:56,680 Speaker 1: closer to two trials that are scheduled for October and January, 187 00:09:56,840 --> 00:10:00,400 Speaker 1: is it likely that we'll see more plea deals. Well, 188 00:10:00,400 --> 00:10:02,960 Speaker 1: that's certainly what the government is hoping for us here. 189 00:10:03,400 --> 00:10:06,080 Speaker 1: Usually you see a bit of a domino effect as 190 00:10:06,120 --> 00:10:09,080 Speaker 1: you see defendants begin to plead guilty. But each of 191 00:10:09,080 --> 00:10:13,719 Speaker 1: these cases is somewhat different. Factually, the charges stem from 192 00:10:13,720 --> 00:10:16,880 Speaker 1: paying off the mastermind of this case in order to 193 00:10:16,960 --> 00:10:20,600 Speaker 1: get their children into school, some of them posing as athletes, 194 00:10:20,920 --> 00:10:24,400 Speaker 1: some of them just making large contributions to this foundation 195 00:10:24,800 --> 00:10:28,480 Speaker 1: that were really disguised brides to Mr Singer. So each 196 00:10:28,520 --> 00:10:31,120 Speaker 1: case is factually different. But on the other hand, there's 197 00:10:31,120 --> 00:10:34,160 Speaker 1: certainly gonna be some defendants who are sitting out there 198 00:10:34,200 --> 00:10:36,800 Speaker 1: looking at what's going on and saying, if Lori Laughlin 199 00:10:36,880 --> 00:10:39,520 Speaker 1: and her husband are deciding to plead guilty, given all 200 00:10:39,520 --> 00:10:41,960 Speaker 1: the money that they have, and given the high price 201 00:10:42,120 --> 00:10:45,040 Speaker 1: legal talent that was representing them, maybe they should consider 202 00:10:45,080 --> 00:10:48,920 Speaker 1: doing the same, you know, Bob. Also, what might make 203 00:10:49,040 --> 00:10:52,880 Speaker 1: some defendants want to plead is that they're going to 204 00:10:52,920 --> 00:10:57,240 Speaker 1: be tried in groups, and that is a disadvantage for 205 00:10:57,320 --> 00:11:01,120 Speaker 1: the defendants. Yeah, that is one of the key motions 206 00:11:01,160 --> 00:11:03,440 Speaker 1: that was made early on in this case by all 207 00:11:03,480 --> 00:11:06,800 Speaker 1: the defendants, the fact that they were indicted in groups 208 00:11:06,840 --> 00:11:09,760 Speaker 1: and going to be tried with dozens of other parents 209 00:11:09,800 --> 00:11:13,960 Speaker 1: that they had absolutely no contact with whatsoever. The government 210 00:11:14,080 --> 00:11:19,200 Speaker 1: theory behind that case was because the common mastermind, William Singer, 211 00:11:19,320 --> 00:11:21,760 Speaker 1: was the one who brought them all together, that they 212 00:11:21,760 --> 00:11:25,640 Speaker 1: could use him as a cooperating witness in one trial 213 00:11:25,800 --> 00:11:29,520 Speaker 1: against all of the parents. The prosecution here was trying 214 00:11:29,559 --> 00:11:33,160 Speaker 1: to avoid having Mr Singer testify over and over again 215 00:11:33,200 --> 00:11:36,880 Speaker 1: in repeated trial. During each trial, he would likely give 216 00:11:36,920 --> 00:11:39,720 Speaker 1: testimony that was slightly different from the trial before, and 217 00:11:39,760 --> 00:11:42,400 Speaker 1: that would be of defense lawyers ammunition to try to 218 00:11:42,559 --> 00:11:46,080 Speaker 1: attack his credibility. So they were indicted in groups, and 219 00:11:46,120 --> 00:11:48,560 Speaker 1: there's two large groups who are still set to go 220 00:11:48,600 --> 00:11:51,559 Speaker 1: to trial in this case. That does place the defendants 221 00:11:51,600 --> 00:11:54,400 Speaker 1: in a bit of a disadvantage because there's something to 222 00:11:54,640 --> 00:11:58,120 Speaker 1: argue that because one parent might be guilty, then they 223 00:11:58,120 --> 00:12:01,120 Speaker 1: all might be guilty. That's called prejudice will spill over something. 224 00:12:01,160 --> 00:12:04,640 Speaker 1: Defense lawyers try to argue against all the time. Usually, 225 00:12:04,679 --> 00:12:07,520 Speaker 1: if there's a reason for the judge to uphold the 226 00:12:07,520 --> 00:12:10,040 Speaker 1: way the government has charged the case, he'll go along 227 00:12:10,160 --> 00:12:13,520 Speaker 1: with prosecutors and allow these parents to be tried in groups. 228 00:12:13,920 --> 00:12:15,959 Speaker 1: If that continues to be the case, if the judge 229 00:12:16,000 --> 00:12:19,240 Speaker 1: does not agree to separate these trials out into individual cases, 230 00:12:19,440 --> 00:12:21,559 Speaker 1: that makes it more likely that the parents will ultimately 231 00:12:21,559 --> 00:12:25,679 Speaker 1: plead guilty. Why do you think the prosecutors never indicted 232 00:12:26,200 --> 00:12:28,360 Speaker 1: any of the students here? I mean, in some of 233 00:12:28,400 --> 00:12:31,240 Speaker 1: these cases, the students had to have known that they 234 00:12:31,240 --> 00:12:36,080 Speaker 1: don't row, and they're applying to school as rowing stars. 235 00:12:36,600 --> 00:12:39,679 Speaker 1: Why aren't the kids being indicted as well? Well, that's 236 00:12:39,679 --> 00:12:41,800 Speaker 1: a good question. A lot of people who looked at 237 00:12:41,800 --> 00:12:44,080 Speaker 1: this case have asked the question why none of the 238 00:12:44,080 --> 00:12:46,720 Speaker 1: students were charged, or frankly, why none of the schools 239 00:12:46,720 --> 00:12:49,280 Speaker 1: were charged. I think what went on here on the 240 00:12:49,320 --> 00:12:52,440 Speaker 1: side of the prosecutors was that they made a discretionary 241 00:12:52,520 --> 00:12:54,920 Speaker 1: call that, even though there might have been evidence to 242 00:12:55,040 --> 00:12:58,679 Speaker 1: charge the students, that ultimately these were kids who were 243 00:12:58,720 --> 00:13:01,160 Speaker 1: being guided by their and their parents were the ones 244 00:13:01,160 --> 00:13:03,320 Speaker 1: who were paying the money. The parents were the ones 245 00:13:03,400 --> 00:13:06,240 Speaker 1: who were having the conversations with Miter Singer and with 246 00:13:06,320 --> 00:13:09,160 Speaker 1: others and who were guiding their children, and they just 247 00:13:09,280 --> 00:13:11,880 Speaker 1: made the discretionary call that they were just going to 248 00:13:12,000 --> 00:13:15,040 Speaker 1: charge their parents and not charge the students. They also 249 00:13:15,080 --> 00:13:16,920 Speaker 1: have to know that if they charge the students, it 250 00:13:17,040 --> 00:13:19,880 Speaker 1: was going to be increasingly difficult to get people to 251 00:13:19,920 --> 00:13:23,040 Speaker 1: plead guilty. In these cases, the parents would likely fall 252 00:13:23,040 --> 00:13:24,720 Speaker 1: on the sword in order to protect their kids. Then 253 00:13:24,760 --> 00:13:27,800 Speaker 1: that's exactly what we're seeing happening here. Thanks Bob. That's 254 00:13:27,920 --> 00:13:31,760 Speaker 1: Robert Mints, a partner of Carter in English Virus, close 255 00:13:31,840 --> 00:13:34,200 Speaker 1: to a turning point in its legal battle over the 256 00:13:34,240 --> 00:13:37,839 Speaker 1: weed killer round up. According to Bloomberg sources, Buyer has 257 00:13:37,840 --> 00:13:41,319 Speaker 1: reached verbal agreements to resolve a substantial portion of an 258 00:13:41,440 --> 00:13:46,120 Speaker 1: estimated one thousand cancer lawsuits over use of its roundup. 259 00:13:46,520 --> 00:13:50,199 Speaker 1: The company denies that roundup or glipa state causes cancer, 260 00:13:50,520 --> 00:13:54,719 Speaker 1: a position backed by the Environmental Protection Agency, but altogether, 261 00:13:55,040 --> 00:13:57,840 Speaker 1: juries from three trials ordered the company to pay a 262 00:13:57,880 --> 00:14:01,920 Speaker 1: combined two point four billion dollars and damages. Judges later 263 00:14:02,000 --> 00:14:06,040 Speaker 1: slashed those awards to one million. The deals which have 264 00:14:06,160 --> 00:14:09,000 Speaker 1: yet to be signed, to cover and estimated fifty thousand 265 00:14:09,080 --> 00:14:12,080 Speaker 1: to eighty five thousand suits. They're part of a ten 266 00:14:12,120 --> 00:14:15,800 Speaker 1: billion dollar plan to end the costly legal battle. Joining 267 00:14:15,840 --> 00:14:18,120 Speaker 1: me is Eric Gordon, a professor at the Raw School 268 00:14:18,160 --> 00:14:21,560 Speaker 1: of Business at the University of Michigan. Eric, why settle 269 00:14:21,680 --> 00:14:25,200 Speaker 1: now after battling this for two years? Well, buyer would 270 00:14:25,240 --> 00:14:27,240 Speaker 1: like to settle and get it behind it because it's 271 00:14:27,240 --> 00:14:30,320 Speaker 1: been a big weight on the stock price of buyer. 272 00:14:31,040 --> 00:14:34,160 Speaker 1: Buyer stock price has gone down something like one third 273 00:14:34,320 --> 00:14:38,800 Speaker 1: since they bought Monsanto, So the CEO, who was the 274 00:14:38,840 --> 00:14:42,320 Speaker 1: person who actually did them on Santo o'deal probably wishes 275 00:14:42,360 --> 00:14:45,120 Speaker 1: he didn't would like to just put it behind him, 276 00:14:45,360 --> 00:14:49,120 Speaker 1: move on, get the uncertainty off the back of the 277 00:14:49,160 --> 00:14:54,520 Speaker 1: stock price. How much certainty is there when this covers 278 00:14:54,680 --> 00:14:59,000 Speaker 1: reportedly an estimated fifty thousand to eighty five thousand cases 279 00:14:59,040 --> 00:15:01,520 Speaker 1: out of a total of hundred and twenty five thousand, 280 00:15:01,920 --> 00:15:04,760 Speaker 1: So it seems like there's still a lot of uncertainty there. Yeah, 281 00:15:04,880 --> 00:15:06,760 Speaker 1: I think the settle that they're going to have to 282 00:15:06,840 --> 00:15:09,320 Speaker 1: do something about most of the rest of the cases. 283 00:15:10,040 --> 00:15:14,240 Speaker 1: Although if they knock out the big cases, meaning the 284 00:15:14,280 --> 00:15:17,720 Speaker 1: cases that are being handled by the big gun plaintiffs 285 00:15:17,800 --> 00:15:21,800 Speaker 1: lawyers um and all, they have left is the cases 286 00:15:21,840 --> 00:15:26,360 Speaker 1: that are being run by the lesser known, lesser sort 287 00:15:26,520 --> 00:15:30,760 Speaker 1: plaintiffs lawyers. It'll be easier to settle those those remaining 288 00:15:30,840 --> 00:15:34,600 Speaker 1: cases because those are countries just don't have the resources, 289 00:15:34,680 --> 00:15:37,680 Speaker 1: and I think they will jump on trying to get 290 00:15:37,680 --> 00:15:40,920 Speaker 1: their cases settled too. So there are a handful of 291 00:15:41,000 --> 00:15:45,320 Speaker 1: lawyers that are holding out. Do lawyers who hold out 292 00:15:45,480 --> 00:15:49,400 Speaker 1: fair better or worse? You know, the lawyers who hold 293 00:15:49,440 --> 00:15:51,560 Speaker 1: out not going to do any better than the rest 294 00:15:51,560 --> 00:15:55,440 Speaker 1: of the lawyers because any settlement is going to include 295 00:15:55,480 --> 00:15:59,320 Speaker 1: all of them. Belayers made it clear that it's motivations 296 00:15:59,360 --> 00:16:02,360 Speaker 1: for settling is to get this behind them. They're the 297 00:16:02,400 --> 00:16:05,120 Speaker 1: ones who hold out. Might at most get a better 298 00:16:05,160 --> 00:16:08,400 Speaker 1: deal for everybody, um, but what they might get is 299 00:16:08,480 --> 00:16:13,240 Speaker 1: just a delay. And given the uncertainty about COVID, the 300 00:16:13,320 --> 00:16:16,840 Speaker 1: delay might mean a worse deal for all of the plaintiffs. 301 00:16:17,120 --> 00:16:19,600 Speaker 1: So let's talk a little bit about COVID before we 302 00:16:19,640 --> 00:16:22,880 Speaker 1: go on. Buyer backed out of some of the deals 303 00:16:23,080 --> 00:16:26,560 Speaker 1: due to COVID nineteen. How did that play in. Well, 304 00:16:27,040 --> 00:16:30,400 Speaker 1: that's put a little bit of fear into some of 305 00:16:30,440 --> 00:16:34,160 Speaker 1: the plaintiffs, bar not all of them, but the COVID 306 00:16:34,480 --> 00:16:38,600 Speaker 1: UH COVID has changed everything. Now the prospect is paying 307 00:16:38,640 --> 00:16:43,480 Speaker 1: out the reported eight billion dollars of cash is less 308 00:16:43,560 --> 00:16:47,479 Speaker 1: and less attractive to buyer. I mean, there's no companies 309 00:16:47,560 --> 00:16:51,800 Speaker 1: have been scrambling within CBM or Boeing companies and scrambling 310 00:16:51,840 --> 00:16:55,720 Speaker 1: to get their hands on cash. So the value of 311 00:16:55,840 --> 00:16:59,200 Speaker 1: getting the cases behind them versus having to shovel out 312 00:16:59,320 --> 00:17:03,040 Speaker 1: eight billions dollars starting to look less attractive to buyer. 313 00:17:03,200 --> 00:17:07,600 Speaker 1: So there's some pressure on both sides to get this settle. Reportedly, 314 00:17:08,440 --> 00:17:13,080 Speaker 1: Buyer used the threat of bankruptcy in settlement talks. Is 315 00:17:13,119 --> 00:17:16,600 Speaker 1: that something that companies often do. Yes, companies often do 316 00:17:16,640 --> 00:17:19,680 Speaker 1: it in the in these mass sport things. Um, we 317 00:17:19,760 --> 00:17:22,360 Speaker 1: saw it in a story you and I have talked 318 00:17:22,400 --> 00:17:29,600 Speaker 1: about a bunch the New Farmer case involving the opioid crisis. Um. 319 00:17:29,640 --> 00:17:34,480 Speaker 1: If if you go into bankruptcy, uh, then all of 320 00:17:34,520 --> 00:17:38,400 Speaker 1: these claims are unsecured claims, which in a human's language 321 00:17:38,440 --> 00:17:41,040 Speaker 1: means they get paid at the at the back of 322 00:17:41,040 --> 00:17:43,879 Speaker 1: the line with all of the other trade vendors and 323 00:17:44,040 --> 00:17:46,960 Speaker 1: everybody else, and there might not be much for them. 324 00:17:47,520 --> 00:17:52,120 Speaker 1: So it's a pretty it's a pretty scary threat. Although 325 00:17:52,240 --> 00:17:57,040 Speaker 1: I'm not sure anybody really thinks Buyer would put Monsanto 326 00:17:57,119 --> 00:18:00,800 Speaker 1: into bankruptcy, But if they did, it changes everything. The 327 00:18:00,960 --> 00:18:04,160 Speaker 1: range of settlements is so wide, from a few million 328 00:18:04,280 --> 00:18:07,359 Speaker 1: to a few thousand. How do the settlements get worked 329 00:18:07,359 --> 00:18:09,840 Speaker 1: out moments? Is it whose lawyer is better, or is 330 00:18:09,880 --> 00:18:14,560 Speaker 1: it whose claim is better? It's a little of each. Unfortunately, 331 00:18:14,680 --> 00:18:18,080 Speaker 1: part of it doesn't depend on how feared your lawyer is. 332 00:18:18,560 --> 00:18:23,760 Speaker 1: So some members of the plaintiff's bar are are intensely feared. Uh, 333 00:18:23,800 --> 00:18:26,679 Speaker 1: they probably get a little bit more for their clients. 334 00:18:26,680 --> 00:18:30,480 Speaker 1: But they also will be looking at the individual cases. 335 00:18:30,560 --> 00:18:35,040 Speaker 1: And we're looking at two things, the severity of the 336 00:18:35,119 --> 00:18:39,639 Speaker 1: injury suffered by the plaintiffs, and to how strong is 337 00:18:39,680 --> 00:18:44,720 Speaker 1: the evidence that the plaintiffs injury was substantially caused by 338 00:18:44,840 --> 00:18:49,040 Speaker 1: round up. So in some cases you have a groundskeeper 339 00:18:49,480 --> 00:18:53,879 Speaker 1: who hangs in using roundup for thirty years, Well, that 340 00:18:54,040 --> 00:18:58,040 Speaker 1: case seems a little stronger, assuming you buy the idea 341 00:18:58,119 --> 00:19:01,119 Speaker 1: that round up is timeful. Case of somebody using it 342 00:19:01,200 --> 00:19:04,520 Speaker 1: for thirty years seems stronger than somebody who puts it 343 00:19:04,560 --> 00:19:08,040 Speaker 1: in their backyard, you know, once a year for the 344 00:19:08,119 --> 00:19:13,159 Speaker 1: last five years. Let's talk a little bit about Ken Feinberg, 345 00:19:13,240 --> 00:19:17,760 Speaker 1: who is a renowned mediator. What was his role in this? 346 00:19:18,720 --> 00:19:24,320 Speaker 1: So Ken plays the role of an honest broker. When 347 00:19:24,320 --> 00:19:28,639 Speaker 1: you're trying to settle a case, each side poses and 348 00:19:28,800 --> 00:19:33,720 Speaker 1: postures and rattles sabers, and the other side discounts half 349 00:19:33,760 --> 00:19:38,399 Speaker 1: of what they say. Having a neutral mediator who is 350 00:19:38,840 --> 00:19:43,160 Speaker 1: well respected, nobody who's better respected at this than Ken Feinberg, 351 00:19:43,760 --> 00:19:46,880 Speaker 1: who can say things to both sides and and they 352 00:19:46,880 --> 00:19:50,960 Speaker 1: will listen and they will believe it is very valuable. 353 00:19:51,640 --> 00:19:53,879 Speaker 1: Think of the things he's been in June, you know, 354 00:19:53,960 --> 00:19:58,400 Speaker 1: most recently the Boeing seven seven MAX, the Penn States 355 00:19:58,520 --> 00:20:02,280 Speaker 1: and Dusky Sex and O v W g M with 356 00:20:02,320 --> 00:20:05,200 Speaker 1: the ignition switched all the way back to the BP 357 00:20:05,440 --> 00:20:10,600 Speaker 1: deep Water. So he knows how to deal with cases 358 00:20:10,640 --> 00:20:15,200 Speaker 1: that are very complicated, cases that involve a lot of emotion. 359 00:20:15,640 --> 00:20:20,280 Speaker 1: So he's the right guy. I'm also curious about the 360 00:20:20,359 --> 00:20:23,960 Speaker 1: transparency here. The estimate is that there are at least 361 00:20:23,960 --> 00:20:27,440 Speaker 1: a hundred and twenty five thousand claims. That's more than 362 00:20:27,480 --> 00:20:32,600 Speaker 1: twice the amount of cases Buyer has previously disclosed. So 363 00:20:32,920 --> 00:20:38,159 Speaker 1: why this lack of disclosure of all these cases? Well, 364 00:20:38,440 --> 00:20:41,240 Speaker 1: the fifty two thousand number, which appeared to I think 365 00:20:41,240 --> 00:20:44,119 Speaker 1: in the April April of this year quarterly statement that 366 00:20:44,200 --> 00:20:48,399 Speaker 1: buyer files, Um, what are the cases, according to buyer 367 00:20:48,680 --> 00:20:53,440 Speaker 1: are cases that have actually been filed in US courts. 368 00:20:53,600 --> 00:20:56,080 Speaker 1: How you get from fifty two thousand to two or 369 00:20:56,119 --> 00:20:59,520 Speaker 1: two and a half times that number is by making 370 00:20:59,560 --> 00:21:02,520 Speaker 1: an s in that of all of the cases that 371 00:21:02,640 --> 00:21:06,760 Speaker 1: have not been filed but that could be filed or 372 00:21:06,840 --> 00:21:09,800 Speaker 1: will be filed at some point in the future. Some 373 00:21:09,920 --> 00:21:12,560 Speaker 1: buyer's point of view as well, we don't really know 374 00:21:12,640 --> 00:21:17,200 Speaker 1: how to estimate that number. That's a guess. Uh sure 375 00:21:17,240 --> 00:21:19,560 Speaker 1: it's going to be more than fifty two thousands. But 376 00:21:19,640 --> 00:21:21,600 Speaker 1: the number we know for sure is is the number 377 00:21:21,600 --> 00:21:25,200 Speaker 1: that has actually been filed. In the Bloomberg story, did 378 00:21:25,240 --> 00:21:30,439 Speaker 1: it refer to some lawyers not filing cases under an 379 00:21:30,440 --> 00:21:34,680 Speaker 1: agreement with buyer? Yeah, Timlow had a good story, Jeffiel, 380 00:21:34,680 --> 00:21:36,760 Speaker 1: We had a good story that I saw in the terminal. 381 00:21:37,480 --> 00:21:41,160 Speaker 1: So apparently there is an agreement, and this is not uncommon, 382 00:21:41,520 --> 00:21:45,720 Speaker 1: an agreement that while settlement is going on, everybody who 383 00:21:45,720 --> 00:21:48,119 Speaker 1: had not everybody, but you know, the people who agree 384 00:21:48,200 --> 00:21:52,520 Speaker 1: to this, don't just keep wasting your money and our 385 00:21:52,600 --> 00:21:57,199 Speaker 1: money filing lawsuits. If there's a settlement, you will be 386 00:21:57,240 --> 00:21:59,840 Speaker 1: included in it, but you don't have to go to 387 00:21:59,880 --> 00:22:03,240 Speaker 1: the expensive filing the lawsuit. We don't have to go 388 00:22:03,280 --> 00:22:06,320 Speaker 1: to the expense of answering it. That will need to 389 00:22:06,359 --> 00:22:09,560 Speaker 1: actually more money on the table for settlement. So it's 390 00:22:09,600 --> 00:22:13,040 Speaker 1: not a bad IDEA Buyer is still going forward with 391 00:22:13,119 --> 00:22:17,639 Speaker 1: appeals of early cases. It lost. Is that usual in 392 00:22:17,680 --> 00:22:23,080 Speaker 1: a settlement like this, Well, they can't abandon their appeals. Um. 393 00:22:23,200 --> 00:22:26,920 Speaker 1: They have to show the other side that if there 394 00:22:27,119 --> 00:22:30,399 Speaker 1: is no settlement, um, we are going to put you 395 00:22:30,480 --> 00:22:33,280 Speaker 1: through the appeals process every time you win a case. 396 00:22:33,760 --> 00:22:37,639 Speaker 1: So that's part of buyer showing its strength uh to 397 00:22:37,920 --> 00:22:41,360 Speaker 1: the plaintiff's attorneys. So that's part of the everybody kind 398 00:22:41,359 --> 00:22:45,479 Speaker 1: of posturing to show the other side the consequences of 399 00:22:45,560 --> 00:22:49,639 Speaker 1: not reaching a settlement. So Buyer has set aside reportedly 400 00:22:49,720 --> 00:22:53,240 Speaker 1: ten billion dollars for this altogether eight billion for these 401 00:22:53,240 --> 00:22:56,760 Speaker 1: current cases and two billion for future With all these 402 00:22:56,880 --> 00:23:00,920 Speaker 1: ifs and cases outstanding and lawyers nuts uddling, is it 403 00:23:01,000 --> 00:23:04,240 Speaker 1: possible that Buyer won't be able to come in at 404 00:23:04,280 --> 00:23:08,080 Speaker 1: that number. It is possible. It's possible that the number 405 00:23:08,200 --> 00:23:11,240 Speaker 1: won't make sense to both sides. It's possible that when 406 00:23:11,280 --> 00:23:15,200 Speaker 1: you split eight billion dollars or ten billion dollars amongst 407 00:23:15,200 --> 00:23:17,440 Speaker 1: all of the cases, that there are too many cases 408 00:23:17,480 --> 00:23:20,200 Speaker 1: that will get too little money to get those people 409 00:23:20,200 --> 00:23:23,520 Speaker 1: to agree to a settlement. And then they would say, well, pious, 410 00:23:23,520 --> 00:23:25,800 Speaker 1: you've got to put in more money. And buyer could say, 411 00:23:25,880 --> 00:23:29,360 Speaker 1: all right, we're putting another billion dollars or another two 412 00:23:29,359 --> 00:23:33,200 Speaker 1: billion dollars, as I could say, never mind, because for 413 00:23:33,320 --> 00:23:37,520 Speaker 1: another billion dollars we can litigate every one of these 414 00:23:37,560 --> 00:23:42,399 Speaker 1: cases forever. So the eight billion or the ten billion 415 00:23:42,440 --> 00:23:45,840 Speaker 1: dollar may not be found, but it's a clear signal 416 00:23:46,160 --> 00:23:49,320 Speaker 1: of the range. It's a clear signal to plaintiffs when 417 00:23:49,359 --> 00:23:53,720 Speaker 1: this gets split up, don't be expecting twenty billion dollars. Now, 418 00:23:53,880 --> 00:23:56,760 Speaker 1: why settle If you're going to keep round up on 419 00:23:56,800 --> 00:23:59,560 Speaker 1: the market, it's going to continue to be sold without 420 00:23:59,640 --> 00:24:03,800 Speaker 1: safe d warnings. That is the weirdest part of the 421 00:24:03,840 --> 00:24:09,200 Speaker 1: settlement stories On the plaintiff side, If you're really worried 422 00:24:09,440 --> 00:24:13,040 Speaker 1: about people getting cancer, and you really believe that round 423 00:24:13,119 --> 00:24:16,280 Speaker 1: up causes the cancer, why would you agree to a 424 00:24:16,320 --> 00:24:20,440 Speaker 1: settlement along the lines of yeah, keep selling it without 425 00:24:20,520 --> 00:24:23,920 Speaker 1: the warning. Our complaint is that it's unsafe. Our complaint 426 00:24:24,000 --> 00:24:26,160 Speaker 1: is that you failed to warn people. But as long 427 00:24:26,200 --> 00:24:29,199 Speaker 1: as you pay us, we're okay with you continuing to 428 00:24:29,280 --> 00:24:33,480 Speaker 1: do that. From the buyer side, it seems like, well, 429 00:24:33,560 --> 00:24:37,240 Speaker 1: if they exercise that right and keep selling it without 430 00:24:37,280 --> 00:24:40,720 Speaker 1: a warning, seems us if they're asking for another whole 431 00:24:40,920 --> 00:24:45,000 Speaker 1: batch of new cases from people making the same claims. 432 00:24:45,560 --> 00:24:48,879 Speaker 1: So that part of the rumored settlement thing is a 433 00:24:48,920 --> 00:24:52,000 Speaker 1: real head scratcher from both points of view. You talked 434 00:24:52,000 --> 00:24:54,159 Speaker 1: about how the CEO, you know, the company wants to 435 00:24:54,200 --> 00:24:57,200 Speaker 1: put this behind them, and the stock has gone down 436 00:24:57,280 --> 00:25:00,119 Speaker 1: so much. Explain what's been happening with the c go 437 00:25:00,320 --> 00:25:05,400 Speaker 1: through this. So the CEO has had some ups and downs. Um, 438 00:25:05,440 --> 00:25:10,560 Speaker 1: he is the Uh, he's the architect of this acquisition. Uh. 439 00:25:10,640 --> 00:25:15,560 Speaker 1: It was a big acquisition, over sixty billion dollars. Widely concerned, 440 00:25:15,560 --> 00:25:20,679 Speaker 1: who have considered you've been a failure? Um, people wonder 441 00:25:20,720 --> 00:25:24,359 Speaker 1: how could you have bought all of these liabilities? Didn't 442 00:25:24,359 --> 00:25:27,320 Speaker 1: you do due diligence? Well, June, of course they did 443 00:25:27,440 --> 00:25:29,680 Speaker 1: due diligence. They took on the risk. They just didn't 444 00:25:29,680 --> 00:25:32,280 Speaker 1: expect it to blow up like this. So this has 445 00:25:32,359 --> 00:25:35,840 Speaker 1: not been good for him. He's been under a lot 446 00:25:35,920 --> 00:25:40,520 Speaker 1: of pressure recently, it's eased a little bit. Um. The 447 00:25:40,600 --> 00:25:45,520 Speaker 1: company as a whole buyer has done reasonably well. Uh 448 00:25:45,720 --> 00:25:50,600 Speaker 1: Monsanto has done reasonably well other than this litigation. But 449 00:25:50,800 --> 00:25:53,880 Speaker 1: the stock price bumped up um when the stories ran 450 00:25:54,000 --> 00:25:58,359 Speaker 1: this week about the potential settlement, and the rumors are 451 00:25:58,560 --> 00:26:05,000 Speaker 1: that the CEO, gentleman named Herman, has regained more support 452 00:26:05,320 --> 00:26:08,720 Speaker 1: of the equivalent of his board of directors by telling 453 00:26:08,760 --> 00:26:12,840 Speaker 1: them that he is committed to settling these cases. Does 454 00:26:12,880 --> 00:26:17,960 Speaker 1: this put his strategy of pairing pharmaceuticals, consumer health, and 455 00:26:18,080 --> 00:26:22,359 Speaker 1: agriculture to the test. It does put it to the test, 456 00:26:22,800 --> 00:26:25,960 Speaker 1: although if you look at it from an investment point 457 00:26:26,000 --> 00:26:28,880 Speaker 1: of view, you can you can tell two stories. One 458 00:26:29,160 --> 00:26:34,680 Speaker 1: is these are all good areas. Agriculture isn't going away. 459 00:26:34,720 --> 00:26:39,800 Speaker 1: We need improvements in agriculture globally. Consumer health good field, 460 00:26:40,080 --> 00:26:45,400 Speaker 1: pharmaceuticals also a good field. Three good lines of business. 461 00:26:45,440 --> 00:26:49,440 Speaker 1: The question about the strategy is, if you're an investor, 462 00:26:50,119 --> 00:26:52,959 Speaker 1: do you need all three of them in the same company? Well, 463 00:26:53,000 --> 00:26:55,919 Speaker 1: couldn't you just buy shares of a farmer company and 464 00:26:55,920 --> 00:26:58,879 Speaker 1: then shares in a different consumer health company and shares 465 00:26:58,920 --> 00:27:03,159 Speaker 1: it a different cultural company um and and get the 466 00:27:03,200 --> 00:27:07,000 Speaker 1: same results. And if you're actually not industry and agriculture, 467 00:27:07,119 --> 00:27:10,960 Speaker 1: then you would just buy Farma and the Summer help. So, uh, 468 00:27:11,480 --> 00:27:14,119 Speaker 1: all three of them are good areas to be in 469 00:27:14,280 --> 00:27:18,720 Speaker 1: going forward. But his strategy brings up the constant strategy 470 00:27:18,880 --> 00:27:22,159 Speaker 1: question of the scope of the firm, the constant investor 471 00:27:22,240 --> 00:27:25,479 Speaker 1: question of wait a minute, wait a minute, unlock the value. 472 00:27:25,600 --> 00:27:28,679 Speaker 1: Break these things up, because we can always put them 473 00:27:28,760 --> 00:27:32,080 Speaker 1: back together by the way we construct our portfolio by 474 00:27:32,080 --> 00:27:34,959 Speaker 1: buying stock in three different companies. But some of us 475 00:27:35,080 --> 00:27:37,919 Speaker 1: just want to be in Parma and we would value 476 00:27:37,960 --> 00:27:41,760 Speaker 1: your farming division, we would value it higher if it's 477 00:27:41,800 --> 00:27:45,560 Speaker 1: stood alone. So that question will continue to haunt the 478 00:27:45,640 --> 00:27:49,720 Speaker 1: CEO and Eric, whose approvals are needed at the company 479 00:27:49,760 --> 00:27:52,119 Speaker 1: and in the courts for these deals to go through, 480 00:27:52,240 --> 00:27:55,600 Speaker 1: for the settlement to go through. So that's a tricky 481 00:27:55,680 --> 00:28:01,200 Speaker 1: question because at the courts you have the the federal level, 482 00:28:01,440 --> 00:28:05,280 Speaker 1: there is the big multi district litigation proceeding going on 483 00:28:06,080 --> 00:28:10,119 Speaker 1: in California in front of Jocabra, and then they're also 484 00:28:10,400 --> 00:28:13,240 Speaker 1: are state courts. The suits we've seen have been in 485 00:28:13,280 --> 00:28:17,520 Speaker 1: California and are sort of gathered under California's version of 486 00:28:17,840 --> 00:28:22,680 Speaker 1: multi disciation to speeding. But there there are cases all 487 00:28:22,680 --> 00:28:27,440 Speaker 1: over in different states, so the mechanics of this settlement 488 00:28:27,560 --> 00:28:30,640 Speaker 1: will will not be easy. This is true in all 489 00:28:30,680 --> 00:28:34,000 Speaker 1: of these mass torts types of things. The mechanics are 490 00:28:34,040 --> 00:28:38,080 Speaker 1: difficult and will take some time. So it will probably 491 00:28:38,200 --> 00:28:41,959 Speaker 1: see if there is a settlement. Progress is an announcement 492 00:28:42,040 --> 00:28:47,440 Speaker 1: of a settlement in principle. I'm emphasizing in principle because 493 00:28:47,520 --> 00:28:49,160 Speaker 1: then there's still a lot of hard work to put 494 00:28:49,200 --> 00:28:53,840 Speaker 1: together the details. And finally, does this settlement remind you 495 00:28:53,920 --> 00:28:56,800 Speaker 1: of any other mass towards settlements in the past where 496 00:28:56,840 --> 00:28:59,400 Speaker 1: it's sort of it seems a lot of piecemeal stuff. 497 00:29:00,040 --> 00:29:03,200 Speaker 1: The most recent one I can think of is the 498 00:29:03,240 --> 00:29:08,360 Speaker 1: opioid settlements, where the opio settlement or non solment, where 499 00:29:08,440 --> 00:29:13,800 Speaker 1: you have states, you have cities, you have counties filing suits, 500 00:29:13,960 --> 00:29:17,800 Speaker 1: you have private people filing suits, lots of different moving parts, 501 00:29:17,880 --> 00:29:20,800 Speaker 1: including people who don't talk to each other. Because the 502 00:29:20,880 --> 00:29:24,120 Speaker 1: city of Chicago had anything to do with the state 503 00:29:24,240 --> 00:29:29,040 Speaker 1: of Arizona typically not. So that's the other recent one 504 00:29:29,120 --> 00:29:34,080 Speaker 1: where the mechanics of blocking that down very very difficult. 505 00:29:34,520 --> 00:29:37,360 Speaker 1: Thanks Eric, that's Eric Gordon, a professor at the Raw 506 00:29:37,440 --> 00:29:40,360 Speaker 1: School of Business at the University of Michigan. And that's 507 00:29:40,400 --> 00:29:42,800 Speaker 1: it for this edition of Bloomberg Law. Remember you can 508 00:29:42,840 --> 00:29:44,840 Speaker 1: always get the latest legal news by going to our 509 00:29:44,880 --> 00:29:48,800 Speaker 1: Bloomberg Law Podcast. You can find them on iTunes, SoundCloud, 510 00:29:48,960 --> 00:29:53,200 Speaker 1: or Bloomberg dot com slash podcast Slash Law. I'm Jude Grosso. 511 00:29:53,400 --> 00:29:55,840 Speaker 1: Thanks so much for listening, and remember to tune to 512 00:29:55,880 --> 00:29:58,280 Speaker 1: the Blomberg Law Show weeknights. Attend them Eastern