Speaker 1: You're listening to bloom Bird Law with June Grosso. After
Speaker 1: a year long legal battle and insistence on their innocence,
Speaker 1: Full House star Lourie Lacklan and her husband, fashion designer
Speaker 1: Massima Giannui gave up and pleaded guilty to paying half
Speaker 1: a million dollars in bribes to get their two daughters
Speaker 1: into the University of Southern California as Fate Crew stars,
Speaker 1: even as prosecutors announced that a twenty fifth parent would
Speaker 1: admit guilt in the sprawling case. Under their proposed deals,
Speaker 1: Laughlin will spend two months in prison and pay a
Speaker 1: one hundred fifty thousand dollar fine, and Giannuly will spend
Speaker 1: five months in prison and pay a two hundred fifty
Speaker 1: thousand dollar fine. Joining me is former federal prosecutor Robert Mintz,
Speaker 1: a partner mcarter and English. They put on such a
Speaker 1: fierce defense, challenging the prosecution again and again. Why throw
Speaker 1: in the towel at this point? Lori Laughlin and her
Speaker 1: husband Massima genuinely have bought this tooth and nail from
Speaker 1: the moment that they were charged, and now after almost
Speaker 1: a year, they decided to change their minds and enter
Speaker 1: a guilty plate. They fought the government by challenging whether
Speaker 1: the prosecution should have been brought in Massachusetts rather than
Speaker 1: in California, where they're located. They also challenged the government
Speaker 1: that had named dozens of other parents in the same
Speaker 1: charging document along with them. The only thing that tied
Speaker 1: all these parents together was the fact that they all
Speaker 1: had been involved with Mr. Singer, who was the mastermind,
Speaker 1: who ultimately cooperated with the government. But the last did
Speaker 1: that these defendants raised was they challenge the government over
Speaker 1: what they called out regious government misconduct, which was some
Speaker 1: discovery that the government was late in turning over. When
Speaker 1: that was denied, they changed their minds and decided to
Speaker 1: plead guilty. They were facing trial in October, and the
Speaker 1: prosecutors had recorded conversations and emails. Did they see that
Speaker 1: there was too much evidence to explain away? The evidence
Speaker 1: against Lochlan E. G anuinely did appear to be overwhelming.
Speaker 1: The problems the defendants faced in this case is that
Speaker 1: they had some very damaging emails that they had sent
Speaker 1: to various people. For example, Gia Newley had forwarded the
Speaker 1: two hundred thousand dollar invoice from Mr Singer, the scammed
Speaker 1: mastermind to his financial advisor and included a note saying,
Speaker 1: good news, my daughter is in SC. Bad is I
Speaker 1: had to work the system. There also was an email
Speaker 1: from Lori Loughlin to her daughter saying she shouldn't discuss
Speaker 1: the way she got into USC with her college guidance counselor.
Speaker 1: And so it appeared that there was some damaging evidence
Speaker 1: which showed consciousness of guilt on the airport, and ultimately
Speaker 1: there was even a photograph of one of their daughters
Speaker 1: looking like she was on a rowing machine since she
Speaker 1: was being admitted to the school as a rower, when
Speaker 1: in fact she was not rowing at all. Ultimately, this
Speaker 1: is going to be very damaging evidence and likely difficult
Speaker 1: to overcome a trial. The strategy here with the defense
Speaker 1: was to try to see whether there was some way
Speaker 1: to knock this case out prior to trial. They brought
Speaker 1: these charges against the government saying that there was government
Speaker 1: mis conduct. They tried to knock the case out in
Speaker 1: other ways by arguing that they shouldn't have been charged
Speaker 1: along with dozens of other parents. But ultimately, when all
Speaker 1: those legal strategies did not pan out, I think that's
Speaker 1: why they changed their mind and decided to enter the plague, Bob,
Speaker 1: we often talked about Felicity Hoffman being a parent that
Speaker 1: right away said I'm guilty, I'm sorry, and took her medicine.
Speaker 1: Are they still getting a sweetheart deal, a good deal
Speaker 1: even though they fought the system for a year twoth
Speaker 1: and nail as you say, well, there have been thirty
Speaker 1: seven parents charged in this overarching scheme, and to date,
Speaker 1: twenty four of them have pleaded guilty. As you mentioned,
Speaker 1: Felicity Huffman received two weeks in jail, was one of
Speaker 1: the first to step up and immediately acknowledge her guilt.
Speaker 1: The longest sentence so far that's been handed down was
Speaker 1: nine months for former pimcos CEO Douglas Hides. So the
Speaker 1: range in terms of sentencing has really been from two
Speaker 1: weeks to nine months. This sentence here, which is two
Speaker 1: months for Lorie Laughlin and five months for a husband,
Speaker 1: kind of falls in the middle. But they did fight
Speaker 1: this charge for over a year. They did battle the
Speaker 1: government by filing multiple motions to try to get these
Speaker 1: charges dismissed or altered, and ultimately seen that they got
Speaker 1: the same type of deal that most of these parents
Speaker 1: have been offered so far in this case. Doesn't that
Speaker 1: send the wrong message from prosecutors. Doesn't that send a
Speaker 1: message that you can keep fighting us every which way
Speaker 1: over and over again, but we'll still give you a
Speaker 1: good deal, rather than the message that you might expect,
Speaker 1: which is lead early and you'll get a good deal.
Speaker 1: Often the rule is that if you're going to get
Speaker 1: the best deal in a criminal case, that comes early on.
Speaker 1: And if you put the government to its test, if
Speaker 1: you make them respond to motions, and if you fight
Speaker 1: them right up until the day of trial, usually the
Speaker 1: deal is not so attractive. And prosecutors do that because
Speaker 1: they try to get people to enter into these three
Speaker 1: deals early on. If everybody makes them do all the
Speaker 1: work to try to prepare for trial, it becomes an
Speaker 1: overwhelming task for them. And they try to encourage people
Speaker 1: to come in early, and they try to encourage people
Speaker 1: to cooperate when cooperation is something that's on the table
Speaker 1: for them. Here though, they do have many, many parents
Speaker 1: who are charged in this case, and ultimately I think
Speaker 1: they're looking forward please that send people to jail. That
Speaker 1: send the signal that even though most of these parents
Speaker 1: were very wealthy, most of these parents paid an awful
Speaker 1: lot of money to try to get their children to school.
Speaker 1: But they're not above the law that they have to
Speaker 1: pay fines in connection with these guilty please, and they
Speaker 1: ultimately have to serve time and jail. The amount of
Speaker 1: time and jail, you could argue is somewhat less than
Speaker 1: maybe perhaps another defendant in a similar case might have received.
Speaker 1: But here the government I think is looking at the
Speaker 1: overall charges, looking at the number of cases they have here,
Speaker 1: and trying to come up with some fair resolution that
Speaker 1: includes jail time for each of these defendants. And so
Speaker 1: far that's what they've achieved. Why is j newly getting
Speaker 1: a much different sentence when they were obviously in this together.
Speaker 1: In entering their guilty, please, Lori Lock would admitted to
Speaker 1: a single kind of conspiracy to commit wire and mail fraud,
Speaker 1: while her husband, Mr Giannuly agreed to plead guilty not
Speaker 1: only to wire and mail fraud but also a charge
Speaker 1: of conspiracy to commit on its services fraud. That accounts
Speaker 1: for her sentence of two months and his agreed sentence
Speaker 1: of five months. Ultimately, the government here believed that Mr
Speaker 1: Giannuly was more involved in these payments than his wife,
Speaker 1: and that's why we see this disparity in terms of
Speaker 1: the recommended sentences. But remember also that these are agreed
Speaker 1: upon sentences only between the defendants and the government. It's
Speaker 1: ultimately up to the judge as to what sentence will
Speaker 1: be handed down. In this case, the judge is reading
Speaker 1: the pre sentence reports. Do you think you will stick
Speaker 1: to the plea deal in this case? Is there any
Speaker 1: way of telling with this judge? Well, with all cases,
Speaker 1: when a plea is entered, a judge makes clear that
Speaker 1: whatever deal that defendants have with the government, it's something
Speaker 1: that does not find the court of that the judge
Speaker 1: will not make up its mind until it reads the
Speaker 1: pre sentence report. But the judge is also mindful of
Speaker 1: the fact that in order to get these plea deals,
Speaker 1: it's important that defendants be able to rely upon the
Speaker 1: government's recommendation with some degree of certainty. So here I
Speaker 1: think we can expect that the judge to ultimately follow
Speaker 1: the government's recommendation to sentence these defendants to the terms
Speaker 1: that were agreed upon by the government. What's one of
Speaker 1: the things that is unusual here is that typically the
Speaker 1: government will agree to a range of sentencing. In other words,
Speaker 1: the federal sentencing guidelines has ranges of months that apply
Speaker 1: to a particular sentence based upon various factors. In this case,
Speaker 1: in order to entice these defendants to take this plea,
Speaker 1: the government is taking this somewhat unusual step of recommending
Speaker 1: a particular sentence of two months and five months as
Speaker 1: opposed to a range of sentencing. The government is also
Speaker 1: leaving open the defendant's ability to advance claims of ineffective
Speaker 1: assistance of council and prosecutorial misconduct. Is that unusual, Yes,
Speaker 1: that is unusual. Usually the way plea deals read is
Speaker 1: that you enter your plea and you give up your
Speaker 1: right to challenge the sentence unless it's outside the agreed
Speaker 1: upon range that you have agreed to the government with.
Speaker 1: But in this case they've thrown that in. I think
Speaker 1: it really is more window dressing than it is any
Speaker 1: real right for the defendants. The likelihood that there will
Speaker 1: be an ultimate finding of any kind of prosecutorial misconduct
Speaker 1: is remote, and it's even more remote that there could
Speaker 1: be some finding of ineffective assistance of counsel given the
Speaker 1: lawyers who were involved in the case. So it really
Speaker 1: is something that the defendants are holding out there in
Speaker 1: case something might come up later in the case that
Speaker 1: shows that prosecutors acted in some way that was inappropriate,
Speaker 1: but it's unlikely, ultimately tat to have any real effect
Speaker 1: on the outcome of this case or the amount of
Speaker 1: time that these two defendant servant jail. Is it possible
Speaker 1: that they will serve less time because of COVID nineteen,
Speaker 1: while it's possible that they could serve less time due
Speaker 1: to COVID nineteen, And it's possible that the judge could
Speaker 1: sentence them to something less than what they've agreed to
Speaker 1: with the government. In this case, given the high degree
Speaker 1: of publicity and the fact that this had been fought
Speaker 1: out between the government and the defense for over a year,
Speaker 1: these are sentences that are, in the eyes of some people,
Speaker 1: on the low end of where these cases should have
Speaker 1: ended up. I think it's more likely than the judge
Speaker 1: will sentence them to exactly the amount of time that
Speaker 1: they've agreed to with the government and that they will
Speaker 1: serve the full amount of that time. The COVID nineteen
Speaker 1: issue is obviously something that the parties are aware of
Speaker 1: going into this deal. So for the defense to then
Speaker 1: argue that because of COVID nineteen they should serve less time.
Speaker 1: Seems to be somewhat disingenuous, and I think it's unlikely
Speaker 1: just to weigh the court. As we get closer and
Speaker 1: closer to two trials that are scheduled for October and January,
Speaker 1: is it likely that we'll see more plea deals. Well,
Speaker 1: that's certainly what the government is hoping for us here.
Speaker 1: Usually you see a bit of a domino effect as
Speaker 1: you see defendants begin to plead guilty. But each of
Speaker 1: these cases is somewhat different. Factually, the charges stem from
Speaker 1: paying off the mastermind of this case in order to
Speaker 1: get their children into school, some of them posing as athletes,
Speaker 1: some of them just making large contributions to this foundation
Speaker 1: that were really disguised brides to Mr Singer. So each
Speaker 1: case is factually different. But on the other hand, there's
Speaker 1: certainly gonna be some defendants who are sitting out there
Speaker 1: looking at what's going on and saying, if Lori Laughlin
Speaker 1: and her husband are deciding to plead guilty, given all
Speaker 1: the money that they have, and given the high price
Speaker 1: legal talent that was representing them, maybe they should consider
Speaker 1: doing the same, you know, Bob. Also, what might make
Speaker 1: some defendants want to plead is that they're going to
Speaker 1: be tried in groups, and that is a disadvantage for
Speaker 1: the defendants. Yeah, that is one of the key motions
Speaker 1: that was made early on in this case by all
Speaker 1: the defendants, the fact that they were indicted in groups
Speaker 1: and going to be tried with dozens of other parents
Speaker 1: that they had absolutely no contact with whatsoever. The government
Speaker 1: theory behind that case was because the common mastermind, William Singer,
Speaker 1: was the one who brought them all together, that they
Speaker 1: could use him as a cooperating witness in one trial
Speaker 1: against all of the parents. The prosecution here was trying
Speaker 1: to avoid having Mr Singer testify over and over again
Speaker 1: in repeated trial. During each trial, he would likely give
Speaker 1: testimony that was slightly different from the trial before, and
Speaker 1: that would be of defense lawyers ammunition to try to
Speaker 1: attack his credibility. So they were indicted in groups, and
Speaker 1: there's two large groups who are still set to go
Speaker 1: to trial in this case. That does place the defendants
Speaker 1: in a bit of a disadvantage because there's something to
Speaker 1: argue that because one parent might be guilty, then they
Speaker 1: all might be guilty. That's called prejudice will spill over something.
Speaker 1: Defense lawyers try to argue against all the time. Usually,
Speaker 1: if there's a reason for the judge to uphold the
Speaker 1: way the government has charged the case, he'll go along
Speaker 1: with prosecutors and allow these parents to be tried in groups.
Speaker 1: If that continues to be the case, if the judge
Speaker 1: does not agree to separate these trials out into individual cases,
Speaker 1: that makes it more likely that the parents will ultimately
Speaker 1: plead guilty. Why do you think the prosecutors never indicted
Speaker 1: any of the students here? I mean, in some of
Speaker 1: these cases, the students had to have known that they
Speaker 1: don't row, and they're applying to school as rowing stars.
Speaker 1: Why aren't the kids being indicted as well? Well, that's
Speaker 1: a good question. A lot of people who looked at
Speaker 1: this case have asked the question why none of the
Speaker 1: students were charged, or frankly, why none of the schools
Speaker 1: were charged. I think what went on here on the
Speaker 1: side of the prosecutors was that they made a discretionary
Speaker 1: call that, even though there might have been evidence to
Speaker 1: charge the students, that ultimately these were kids who were
Speaker 1: being guided by their and their parents were the ones
Speaker 1: who were paying the money. The parents were the ones
Speaker 1: who were having the conversations with Miter Singer and with
Speaker 1: others and who were guiding their children, and they just
Speaker 1: made the discretionary call that they were just going to
Speaker 1: charge their parents and not charge the students. They also
Speaker 1: have to know that if they charge the students, it
Speaker 1: was going to be increasingly difficult to get people to
Speaker 1: plead guilty. In these cases, the parents would likely fall
Speaker 1: on the sword in order to protect their kids. Then
Speaker 1: that's exactly what we're seeing happening here. Thanks Bob. That's
Speaker 1: Robert Mints, a partner of Carter in English Virus, close
Speaker 1: to a turning point in its legal battle over the
Speaker 1: weed killer round up. According to Bloomberg sources, Buyer has
Speaker 1: reached verbal agreements to resolve a substantial portion of an
Speaker 1: estimated one thousand cancer lawsuits over use of its roundup.
Speaker 1: The company denies that roundup or glipa state causes cancer,
Speaker 1: a position backed by the Environmental Protection Agency, but altogether,
Speaker 1: juries from three trials ordered the company to pay a
Speaker 1: combined two point four billion dollars and damages. Judges later
Speaker 1: slashed those awards to one million. The deals which have
Speaker 1: yet to be signed, to cover and estimated fifty thousand
Speaker 1: to eighty five thousand suits. They're part of a ten
Speaker 1: billion dollar plan to end the costly legal battle. Joining
Speaker 1: me is Eric Gordon, a professor at the Raw School
Speaker 1: of Business at the University of Michigan. Eric, why settle
Speaker 1: now after battling this for two years? Well, buyer would
Speaker 1: like to settle and get it behind it because it's
Speaker 1: been a big weight on the stock price of buyer.
Speaker 1: Buyer stock price has gone down something like one third
Speaker 1: since they bought Monsanto, So the CEO, who was the
Speaker 1: person who actually did them on Santo o'deal probably wishes
Speaker 1: he didn't would like to just put it behind him,
Speaker 1: move on, get the uncertainty off the back of the
Speaker 1: stock price. How much certainty is there when this covers
Speaker 1: reportedly an estimated fifty thousand to eighty five thousand cases
Speaker 1: out of a total of hundred and twenty five thousand,
Speaker 1: So it seems like there's still a lot of uncertainty there. Yeah,
Speaker 1: I think the settle that they're going to have to
Speaker 1: do something about most of the rest of the cases.
Speaker 1: Although if they knock out the big cases, meaning the
Speaker 1: cases that are being handled by the big gun plaintiffs
Speaker 1: lawyers um and all, they have left is the cases
Speaker 1: that are being run by the lesser known, lesser sort
Speaker 1: plaintiffs lawyers. It'll be easier to settle those those remaining
Speaker 1: cases because those are countries just don't have the resources,
Speaker 1: and I think they will jump on trying to get
Speaker 1: their cases settled too. So there are a handful of
Speaker 1: lawyers that are holding out. Do lawyers who hold out
Speaker 1: fair better or worse? You know, the lawyers who hold
Speaker 1: out not going to do any better than the rest
Speaker 1: of the lawyers because any settlement is going to include
Speaker 1: all of them. Belayers made it clear that it's motivations
Speaker 1: for settling is to get this behind them. They're the
Speaker 1: ones who hold out. Might at most get a better
Speaker 1: deal for everybody, um, but what they might get is
Speaker 1: just a delay. And given the uncertainty about COVID, the
Speaker 1: delay might mean a worse deal for all of the plaintiffs.
Speaker 1: So let's talk a little bit about COVID before we
Speaker 1: go on. Buyer backed out of some of the deals
Speaker 1: due to COVID nineteen. How did that play in. Well,
Speaker 1: that's put a little bit of fear into some of
Speaker 1: the plaintiffs, bar not all of them, but the COVID
Speaker 1: UH COVID has changed everything. Now the prospect is paying
Speaker 1: out the reported eight billion dollars of cash is less
Speaker 1: and less attractive to buyer. I mean, there's no companies
Speaker 1: have been scrambling within CBM or Boeing companies and scrambling
Speaker 1: to get their hands on cash. So the value of
Speaker 1: getting the cases behind them versus having to shovel out
Speaker 1: eight billions dollars starting to look less attractive to buyer.
Speaker 1: So there's some pressure on both sides to get this settle. Reportedly,
Speaker 1: Buyer used the threat of bankruptcy in settlement talks. Is
Speaker 1: that something that companies often do. Yes, companies often do
Speaker 1: it in the in these mass sport things. Um, we
Speaker 1: saw it in a story you and I have talked
Speaker 1: about a bunch the New Farmer case involving the opioid crisis. Um.
Speaker 1: If if you go into bankruptcy, uh, then all of
Speaker 1: these claims are unsecured claims, which in a human's language
Speaker 1: means they get paid at the at the back of
Speaker 1: the line with all of the other trade vendors and
Speaker 1: everybody else, and there might not be much for them.
Speaker 1: So it's a pretty it's a pretty scary threat. Although
Speaker 1: I'm not sure anybody really thinks Buyer would put Monsanto
Speaker 1: into bankruptcy, But if they did, it changes everything. The
Speaker 1: range of settlements is so wide, from a few million
Speaker 1: to a few thousand. How do the settlements get worked
Speaker 1: out moments? Is it whose lawyer is better, or is
Speaker 1: it whose claim is better? It's a little of each. Unfortunately,
Speaker 1: part of it doesn't depend on how feared your lawyer is.
Speaker 1: So some members of the plaintiff's bar are are intensely feared. Uh,
Speaker 1: they probably get a little bit more for their clients.
Speaker 1: But they also will be looking at the individual cases.
Speaker 1: And we're looking at two things, the severity of the
Speaker 1: injury suffered by the plaintiffs, and to how strong is
Speaker 1: the evidence that the plaintiffs injury was substantially caused by
Speaker 1: round up. So in some cases you have a groundskeeper
Speaker 1: who hangs in using roundup for thirty years, Well, that
Speaker 1: case seems a little stronger, assuming you buy the idea
Speaker 1: that round up is timeful. Case of somebody using it
Speaker 1: for thirty years seems stronger than somebody who puts it
Speaker 1: in their backyard, you know, once a year for the
Speaker 1: last five years. Let's talk a little bit about Ken Feinberg,
Speaker 1: who is a renowned mediator. What was his role in this?
Speaker 1: So Ken plays the role of an honest broker. When
Speaker 1: you're trying to settle a case, each side poses and
Speaker 1: postures and rattles sabers, and the other side discounts half
Speaker 1: of what they say. Having a neutral mediator who is
Speaker 1: well respected, nobody who's better respected at this than Ken Feinberg,
Speaker 1: who can say things to both sides and and they
Speaker 1: will listen and they will believe it is very valuable.
Speaker 1: Think of the things he's been in June, you know,
Speaker 1: most recently the Boeing seven seven MAX, the Penn States
Speaker 1: and Dusky Sex and O v W g M with
Speaker 1: the ignition switched all the way back to the BP
Speaker 1: deep Water. So he knows how to deal with cases
Speaker 1: that are very complicated, cases that involve a lot of emotion.
Speaker 1: So he's the right guy. I'm also curious about the
Speaker 1: transparency here. The estimate is that there are at least
Speaker 1: a hundred and twenty five thousand claims. That's more than
Speaker 1: twice the amount of cases Buyer has previously disclosed. So
Speaker 1: why this lack of disclosure of all these cases? Well,
Speaker 1: the fifty two thousand number, which appeared to I think
Speaker 1: in the April April of this year quarterly statement that
Speaker 1: buyer files, Um, what are the cases, according to buyer
Speaker 1: are cases that have actually been filed in US courts.
Speaker 1: How you get from fifty two thousand to two or
Speaker 1: two and a half times that number is by making
Speaker 1: an s in that of all of the cases that
Speaker 1: have not been filed but that could be filed or
Speaker 1: will be filed at some point in the future. Some
Speaker 1: buyer's point of view as well, we don't really know
Speaker 1: how to estimate that number. That's a guess. Uh sure
Speaker 1: it's going to be more than fifty two thousands. But
Speaker 1: the number we know for sure is is the number
Speaker 1: that has actually been filed. In the Bloomberg story, did
Speaker 1: it refer to some lawyers not filing cases under an
Speaker 1: agreement with buyer? Yeah, Timlow had a good story, Jeffiel,
Speaker 1: We had a good story that I saw in the terminal.
Speaker 1: So apparently there is an agreement, and this is not uncommon,
Speaker 1: an agreement that while settlement is going on, everybody who
Speaker 1: had not everybody, but you know, the people who agree
Speaker 1: to this, don't just keep wasting your money and our
Speaker 1: money filing lawsuits. If there's a settlement, you will be
Speaker 1: included in it, but you don't have to go to
Speaker 1: the expensive filing the lawsuit. We don't have to go
Speaker 1: to the expense of answering it. That will need to
Speaker 1: actually more money on the table for settlement. So it's
Speaker 1: not a bad IDEA Buyer is still going forward with
Speaker 1: appeals of early cases. It lost. Is that usual in
Speaker 1: a settlement like this, Well, they can't abandon their appeals. Um.
Speaker 1: They have to show the other side that if there
Speaker 1: is no settlement, um, we are going to put you
Speaker 1: through the appeals process every time you win a case.
Speaker 1: So that's part of buyer showing its strength uh to
Speaker 1: the plaintiff's attorneys. So that's part of the everybody kind
Speaker 1: of posturing to show the other side the consequences of
Speaker 1: not reaching a settlement. So Buyer has set aside reportedly
Speaker 1: ten billion dollars for this altogether eight billion for these
Speaker 1: current cases and two billion for future With all these
Speaker 1: ifs and cases outstanding and lawyers nuts uddling, is it
Speaker 1: possible that Buyer won't be able to come in at
Speaker 1: that number. It is possible. It's possible that the number
Speaker 1: won't make sense to both sides. It's possible that when
Speaker 1: you split eight billion dollars or ten billion dollars amongst
Speaker 1: all of the cases, that there are too many cases
Speaker 1: that will get too little money to get those people
Speaker 1: to agree to a settlement. And then they would say, well, pious,
Speaker 1: you've got to put in more money. And buyer could say,
Speaker 1: all right, we're putting another billion dollars or another two
Speaker 1: billion dollars, as I could say, never mind, because for
Speaker 1: another billion dollars we can litigate every one of these
Speaker 1: cases forever. So the eight billion or the ten billion
Speaker 1: dollar may not be found, but it's a clear signal
Speaker 1: of the range. It's a clear signal to plaintiffs when
Speaker 1: this gets split up, don't be expecting twenty billion dollars. Now,
Speaker 1: why settle If you're going to keep round up on
Speaker 1: the market, it's going to continue to be sold without
Speaker 1: safe d warnings. That is the weirdest part of the
Speaker 1: settlement stories On the plaintiff side, If you're really worried
Speaker 1: about people getting cancer, and you really believe that round
Speaker 1: up causes the cancer, why would you agree to a
Speaker 1: settlement along the lines of yeah, keep selling it without
Speaker 1: the warning. Our complaint is that it's unsafe. Our complaint
Speaker 1: is that you failed to warn people. But as long
Speaker 1: as you pay us, we're okay with you continuing to
Speaker 1: do that. From the buyer side, it seems like, well,
Speaker 1: if they exercise that right and keep selling it without
Speaker 1: a warning, seems us if they're asking for another whole
Speaker 1: batch of new cases from people making the same claims.
Speaker 1: So that part of the rumored settlement thing is a
Speaker 1: real head scratcher from both points of view. You talked
Speaker 1: about how the CEO, you know, the company wants to
Speaker 1: put this behind them, and the stock has gone down
Speaker 1: so much. Explain what's been happening with the c go
Speaker 1: through this. So the CEO has had some ups and downs. Um,
Speaker 1: he is the Uh, he's the architect of this acquisition. Uh.
Speaker 1: It was a big acquisition, over sixty billion dollars. Widely concerned,
Speaker 1: who have considered you've been a failure? Um, people wonder
Speaker 1: how could you have bought all of these liabilities? Didn't
Speaker 1: you do due diligence? Well, June, of course they did
Speaker 1: due diligence. They took on the risk. They just didn't
Speaker 1: expect it to blow up like this. So this has
Speaker 1: not been good for him. He's been under a lot
Speaker 1: of pressure recently, it's eased a little bit. Um. The
Speaker 1: company as a whole buyer has done reasonably well. Uh
Speaker 1: Monsanto has done reasonably well other than this litigation. But
Speaker 1: the stock price bumped up um when the stories ran
Speaker 1: this week about the potential settlement, and the rumors are
Speaker 1: that the CEO, gentleman named Herman, has regained more support
Speaker 1: of the equivalent of his board of directors by telling
Speaker 1: them that he is committed to settling these cases. Does
Speaker 1: this put his strategy of pairing pharmaceuticals, consumer health, and
Speaker 1: agriculture to the test. It does put it to the test,
Speaker 1: although if you look at it from an investment point
Speaker 1: of view, you can you can tell two stories. One
Speaker 1: is these are all good areas. Agriculture isn't going away.
Speaker 1: We need improvements in agriculture globally. Consumer health good field,
Speaker 1: pharmaceuticals also a good field. Three good lines of business.
Speaker 1: The question about the strategy is, if you're an investor,
Speaker 1: do you need all three of them in the same company? Well,
Speaker 1: couldn't you just buy shares of a farmer company and
Speaker 1: then shares in a different consumer health company and shares
Speaker 1: it a different cultural company um and and get the
Speaker 1: same results. And if you're actually not industry and agriculture,
Speaker 1: then you would just buy Farma and the Summer help. So, uh,
Speaker 1: all three of them are good areas to be in
Speaker 1: going forward. But his strategy brings up the constant strategy
Speaker 1: question of the scope of the firm, the constant investor
Speaker 1: question of wait a minute, wait a minute, unlock the value.
Speaker 1: Break these things up, because we can always put them
Speaker 1: back together by the way we construct our portfolio by
Speaker 1: buying stock in three different companies. But some of us
Speaker 1: just want to be in Parma and we would value
Speaker 1: your farming division, we would value it higher if it's
Speaker 1: stood alone. So that question will continue to haunt the
Speaker 1: CEO and Eric, whose approvals are needed at the company
Speaker 1: and in the courts for these deals to go through,
Speaker 1: for the settlement to go through. So that's a tricky
Speaker 1: question because at the courts you have the the federal level,
Speaker 1: there is the big multi district litigation proceeding going on
Speaker 1: in California in front of Jocabra, and then they're also
Speaker 1: are state courts. The suits we've seen have been in
Speaker 1: California and are sort of gathered under California's version of
Speaker 1: multi disciation to speeding. But there there are cases all
Speaker 1: over in different states, so the mechanics of this settlement
Speaker 1: will will not be easy. This is true in all
Speaker 1: of these mass torts types of things. The mechanics are
Speaker 1: difficult and will take some time. So it will probably
Speaker 1: see if there is a settlement. Progress is an announcement
Speaker 1: of a settlement in principle. I'm emphasizing in principle because
Speaker 1: then there's still a lot of hard work to put
Speaker 1: together the details. And finally, does this settlement remind you
Speaker 1: of any other mass towards settlements in the past where
Speaker 1: it's sort of it seems a lot of piecemeal stuff.
Speaker 1: The most recent one I can think of is the
Speaker 1: opioid settlements, where the opio settlement or non solment, where
Speaker 1: you have states, you have cities, you have counties filing suits,
Speaker 1: you have private people filing suits, lots of different moving parts,
Speaker 1: including people who don't talk to each other. Because the
Speaker 1: city of Chicago had anything to do with the state
Speaker 1: of Arizona typically not. So that's the other recent one
Speaker 1: where the mechanics of blocking that down very very difficult.
Speaker 1: Thanks Eric, that's Eric Gordon, a professor at the Raw
Speaker 1: School of Business at the University of Michigan. And that's
Speaker 1: it for this edition of Bloomberg Law. Remember you can
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