Before I get started on today's blog, I want to thank Ms. S.H., Mr. G.L.R., and many others, who sent various versions of the following three articles.
So, with that said, down to business (not to coin a pun):
Shortly after Dewayne Johnson was awarded $289,000,000 in his lawsuit against Mon(ster)santo, Bayer, Mon(ster)santo's new owner, promised it would appeal. It did. And won. Or lost. Or sort of. ... Well, it depends on which side of the fence you're looking at the whole situation from:
Now, here's the interesting part:
Monsanto says it will appeal the verdict.
“Today’s decision does not change the fact that more than 800 scientific studies and reviews -- and conclusions by the U.S. Environmental Protection Agency, the U.S. National Institutes of Health and regulatory authorities around the world -- support the fact that glyphosate does not cause cancer, and did not cause Mr. Johnson’s cancer,” Monsanto Vice President Scott Partridge said in a statement.
Appeal they did and today the verdict came down.
San Francisco superior court judge Suzanne Bolanos had suggested in an initial written ruling this month that she was considering granting a new trial, but her final ruling today largely sided with Dewayne “Lee” Johnson, denying Monsanto's request to overturn the verdict.
As Bloomberg reports, a California state judge rejected Bayer’s arguments that the jury didn’t have any basis to conclude that the herbicide caused an ex-school groundskeeper’s cancer.
However, she has ruled to reduce punitive damages from $250m to $39m, noting in her ruling Monday that if Johnson did not accept the lower punitive damages, she would order a new trial for Monsanto.
"The punitive damages award must be constitutionally reduced to the maximum allowed by due process in this case -- $39,253,209.35 -- equal to the amount of compensatory damages awarded by the jury based on its findings of harm to the plaintiff."
In a recent interview, Johnson told the Guardian that he wanted to see his case have a long-term impact, including new restrictions and labeling for the herbicide.
"I hope [Monsanto] gets the message that people in America and across the world are not ignorant. They have already done their own research,” he said, adding:
“I’m hoping that it snowballs and people really get the picture and they start to make decisions about what they eat, what they spray in their farms.”
This ruling opens Bayer to considerably higher damages as thousands of plaintiffs across the country have made similar legal claims, alleging that glyphosate exposure caused their cancer or resulted in the deaths of their loved ones.
In other words, while it may look like a victory for IG Farbensanto - and regarding our nickname for the GMO cartel, Bayer, of course, was one of the component companies that went to form the notorious IG Farben cartel, along with BASF and Hoechst - it isn't: they would have preferred to walk away from the verdict by having the entire case completely overturned. That would have sent a message to the other litigants lined up to go after them. But now they're in a pickle: they lost their appeal, and if Mr. Johnson decides not to accept the new award, another trial will most likely result in his favor anyway. Either way, it's not good for IG Farbensanto, because the message has been sent, and there's no retracting it.
For IG Farbensanto, here's the problem:
The problem is that after the judge's announcement on just this one case, Bayer's stock plunged. Now, imagine the announcements for all the cases waiting in the wings. It adds up to this:
The good news is that this ruling affirms the company’s liability for causing illness from their product, and opens the door for more lawsuits and stricter regulation of agrochemicals in the future. Ian Hilliker, an analyst at Jefferies LLC in London, estimated in a note to clients that based on a class action lawsuit involving 8,700 plaintiffs believed to have cancer as a result of glyphosate exposure, Monsanto’s liability could reach $800 billion dollars. To put this in perspective, the original Bayer-Monsanto buyout offer was $57 billion dollars. Clearly, this no longer looks like an "asset" to Bayer and its stockholders.
...a German analyst points out that Bayer's Monsanto acquisition may have precipitated the largest destruction of market capitalization in German stock market history, standing at about 57.7 billion Euros in losses thus far. (Emphasis added)
In other words, Mon(ster)santo's purchase by Bayer has now meant that Bayer has had to pay for it's purchase approximately twice, once, with the original $57 billion, and now, again, with the loss of about 57 billion euros in market value, and it is now exposed to a potential $800 billion in damages from lawsuits. And the bad news is not just coming from across the pound from American and Canadian courts. Bayer has but to look across the Rhine to France to hear more bad news:
In case that isn't enough to convince all but the hardened skeptic that Bayer is in huge trouble, there are many countries that used Mon(ster)santo's products: India, Argentina, Brazil... the list goes on and on. And don't forget Vietnam. You'll recall that one outcome of Mr. Johnson's case was that Vietnam was thinking about preparing a lawsuit for continuing damage to that country's population from after-effects of the use of agent Orange in the Vietnam War. And here's the kicker: some American veterans of that war have claimed similar things, thus raising the bizarre and ironic possibility of a class-action suit by American and Vietnamese families.
There's a big question hovering over all of this, and it's one that is seldom asked, but I simply have to ask it: What in the name of sense was Bayer thinking when it bought Mon(ster)santo? What made the purchase seem like such a sweet deal? The lawsuits were already under way; the company's record and dubious hard-handed practices were being exposed in books, blogs and media from India to South America. No financial analyst worth his salt could have been unaware of these things, nor of the potential risks to Bayer. Does this mean that Bayer thought it could "handle" these problems by the usual means with which such large corporations handle such things, when they don't get their way in courts, or when someone is standing in their way on the road to becoming a monopoly and a trust? Hire a few thugs, create a few accidents, blackmail a few judges... that sort of thing. Think Rockefeller and Standard Oil here. Maybe, but for a company like Bayer with its own past associations with IG You-know-who, such standard tactics could be very risky. Which leaves another possibility: Was Bayer simply grossly incompetent? Well, occasionally humans do really stupid things, and thus, so do corporations ("New Coke" anyone? or was that simply a clever marketing gimick to make people want the "Old Coke"?). Was Bayer thus blinded by the potential to become IG Farbensanto once again, and thus rushed into the purchase in order to expand its own corporate power? Well, maybe. Or, lastly, was the purchase engineered by "agents" perhaps infiltrated into one or the other or both corporations? How better to unload a troublesome company and its looming legal problems, than to dump it into the lap of a foreign corporation with its own murky past, and so much the better if - and it's a big if - there are little indicators of some sort of economic war taking place between the two home countries of both corporations to begin with? And if you're a certain small country in the Middle East, you might be thinking that Bayer needs to pay a higher price for being involved with IG You-know-who a few decades ago, and you might be wanting to help out with those infiltrations and little indicators of economic warfare.
Just a (high octane speculative) thought.
See you on the flip side...