Devastating Lawsuit Targets Bank of America, Credit Suisse, and Bayer Board Members and Executives Over Disastrous Monsanto Acquisition

A series of blockbuster cases against some of the very biggest names in European business haven’t gotten the attention they warrant, in part due to Covid-19 throwing a lot of sand into the judicial machinery. Deutsche Bank, UBS, Credit Suisse and Volkswagen are part of this legal march to the sea. But we’ll focus on the case filed first, Haussmann v. Baumann, a derivative lawsuit over Bayer’s disastrous acquisition of Monsanto. The original filing was in early March; we’ve attached the new amended complaint below. We’ll use it to discuss the legal approach all these suits take. We’ll then turn to the lurid facts of the Bayer-Monsanto deal, which even to connoisseurs of corporate governance train wrecks, is quite the spectacle.

Each suit targets an epic level of value destruction, but they are not shareholder suits. They are derivative lawsuits, in which a shareholder steps in to act on behalf of a company that has been done wrong, typically by key members of its management and board. Important advisers may also be targets.

The Novel Legal Angle: Using New York Courts for Derivative Cases Against Major European Companies

The novel feature in these cases is suing in New York state court but using the parent company’s governing law, which for Bayer is the German Stock Corporation Act as the basis for asserting causes of action.1 The abstract from a 2015 article by Gerhard Wagner, Officers’ and Directors’ Liability Under German Law: A Potemkin Village:

The liability regime for officers and directors of German companies combines strict and lenient elements. Officers and directors are liable for simple negligence, they bear the burden of proof for establishing diligent conduct, and they are liable for unlimited damages. These elements are worrisome for the reason that managers are confronted with the full downside risk of the enterprise even though they do not internalize the benefits of the corporate venture. This overly strict regime is balanced by other features of the regime, namely comprehensive insurance and systematic under-enforcement. Even though the authority to enforce claims against the management is divided between three different actors – the supervisory board, the shareholders assembly, and individual shareholders – enforcement has remained the exception. Furthermore, under the current system of Directors’ and Officers’ (D&O) liability insurance, board members do not feel the bite of liability as they are protected by an insurance cover that is contracted and paid for by the corporation. Thus, the current German system may combine the worst of two worlds, i.e., the threat of personal liability for excessively high amounts of damages in exceptional cases, and the practical irrelevance of the liability regime in run-of-the-mill cases.

Notice here the low bar for misconduct: simple negligence, plus the managers and board members bear the burden of proof that they behaved well! So the linchpin of these cases is getting a non-captured court to measure corporate conduct against these standards.

Also observe another key feature: extremely generous D&O policies. That is serving as one of the deep pockets for this litigation. From the filing:

Large D&O insurance policies customarily include what is called an “insured versus insured” exclusion, intended to exclude from the insurance coverage claims by one insured, i.e., the corporation, against another insured, i.e., a corporate Supervisor or Manager or employee. Thus, were the company, an insured under such a policy, to bring the claims asserted herein, the insurer will deny coverage based on the exclusion. Purchasing this type of insurance where the premiums measure in the millions of dollars and are paid by the company is in itself a breach of the Supervisors and Manager’s duties of due care and prudence as policies without those exclusions are available and could have been purchased. The presence of an “insured versus insured” exclusion in the D&O policies means this derivative lawsuit — which does not fall within any such exclusion — is the legal vehicle best available to realize on this corporate asset for the benefit of the corporation, which after all paid 100% of the premiums.

The other deep pockets are the investment banks, Bank of America and Credit Suisse. As the suit explains, they too have duties defined under German law, yet they failed abjectly in acting as independent advisers because they were hopelessly conflicted. In addition to acting as merger advisers, they were also providing financing, since Bayer, to avoid needing to get shareholder approval, did an “all cash” deal. That in turn led to Bayer engaging in over a dozen financings, including pricey bridge loans. That meant the banks had huge incentives to see the deal close, which resulted in them not looking at the Monsanto garbage barge very hard.

The pleading describes how Bank of America, whose investment banking operations were flagging, was particularly desperate to book the income from the Bayer-Monsanto deal. The suit seeks a clawback of what it asserts are hundreds of millions of dollars in fees, plus punitive damages.

The Bayer suit has an additional hurdle that looks feasible to surmount, in that its shareholders’ agreement requires shareholder suits be brought in its home town of Leverkusen, Germany, where anyone adverse to Bayer has zero chance of getting a favorable hearing However, the shareholders’ agreement enumerates three types of action that must be brought to court in Leverkusen, and the grounds for litigation here fall well outside them.

Bayer’s Desperate, Disastrous Monsanto Deal

Even if you have been paying attention to the business press, it is hard to appreciate how appallingly bad the Monsanto deal has been for Bayer, not just in conception but also in execution. Please skim the vividly-written suit; it’s not possible in this post to convey fully how ugly the picture is.

It isn’t simply that Bayer-Monsanto has replaced AOL-Time Warner in most press reckonings as “the worst deal of all time”. Yes, nearly every penny of the $66 billion that Bayer paid for Monsanto has gone poof. Yes, Bayer is the first time in German corporate history that a public company got a majority vote of no confidence from its shareholders. Yes, Bayer is at risk of bleeding out over seemingly endless Monsanto-related liability claims (Roundup has so taken the center stage that what would ordinarily be a big-deal litigation drain, Dicamba, is treated as an afterthought). Unlike any other company ever facing similar litigation, Bayer has neither taken Roundup off the market, nor reformulated it, nor put a cancer warning on it. It looks like Bayer will eventually declare bankruptcy.

It is that unlike AOL-Time Warner, initially hailed as a brilliant tie-up but quickly went a cropper when the dot-com mania ended, virtually all major analysts and shareholders hated the idea of the deal from the date it was announced, and the business press was just as critical. Monsanto was already recognized as being dependent on Roundup when more and more consumers and experts were concerned about glyphosate risks.

And most important, the deal went ahead for the worst possible reason: Bayer management wanted to bulk up so as not to be acquired. The real motive was to keep current management in place to preserve their lofty pay and high status.

Monsanto was the only major candidate left standing, for the obvious reasons. Both the chemical and the pharma industries had seen decades of consolidation, and Bayer was a tempting target by having little debt and not having kept up with the agglomeration game. When Pfizer’s bid for Allergan fell apart due to an adverse tax ruling,2 long-standing and highly regarded CEO Marijn Dekkers, who had long opposed the idea of Monsanto deal, suddenly retired. The “two Werners,” Chairman Werner Wenning and the surprise new CEO, Werner Baumann, both of whom had long pushed to buy Monsanto, were in charge and moved forward rapidly with their plan.

Except they couldn’t, save tying an anchor to Bayer in the form of a $2 billion breakup fee. Bayer could do only limited due diligence on Monsanto due to the fact that they were competitors and the acquisition was subject to anti-trust review in the US and Germany. Those assessments usually take months; this one took 24.

In the meantime, Bayer out of obstinancy or ignorance chose to ignore signs that the evidence of glyphosate’s cancer risks were becoming solid enough to kick off a tidal wave of suits. Recall that the transaction closed in June 2018. From the filing:

After the WHO concluded in March 2015 that Glyphosate was “probably carcinogenic to humans” (especially to those exposed to spraying) in September 2015, the EPA of California — a huge agricultural state and market for Roundup — issued a Notice of Intent to list Glyphosate as a chemical “known to cause cancer.” The California EPA formally classified Glyphosate as “a known carcinogen” in July 2017. Individuals alleging personal injury due to Roundup exposure now had a greatly enhanced ability to sue, as such findings provided support for the causation element necessary for the Roundup cancer suits to succeed.

Do not forget that the surfacatnts in Roundup increased its cancer risk. Oh, and as part of the anti-trust review, Bayer had to sell its non-glyphosate herbicide, Liberty, making it dependent on Roundup.

The litigation has gone as badly for Bayer as it possibly could have. Rather than try to settle cases, Monsanto allowed them to go to trial and Bayer did not attempt a last-ditch volte-face. The first case delivered an enormous verdict, a $289 million judgment, with $250 million of that punitive damages. Bayer fared just as badly in appellate court:

To make matters worse — if that was possible, in July 2020 Bayer then lost its appeal in the key first case of the Roundup litigation war — a devastating decision that rejected all the legal/scientific arguments Bayer’s executives promised would defeat and stop the suits. The opinion upheld the factual findings and a punitive damages award based on Monsanto’s conduct vis a- vis Roundup, i.e., “malice and oppression.” On July 20, 2020 Law 360 reported:

Monsanto Loses Cancer Liability Fight in 1st Roundup Appeal:

A California appellate court on Monday affirmed a jury’s finding that Monsanto Co. is liable for a former school groundskeeper’s cancer in the first case to go to trial over Roundup’s alleged links to cancer…

A unanimous three-judge Court of Appeal panel rejected arguments by Bayer … that plaintiff DeWayne “Lee” Johnson failed to prove liability and causation, and that Johnson’s failure-to-warn claims are preempted by federal law. … Monsanto challenged the trial court’s findings on a number of legal fronts…

“None of these arguments are persuasive,” the opinion said.

As the filing explains in much more detail, Bayer’s efforts to reach a global settlement have simply resulted in the company paying $13 billion but not stopping all of the current cases, let alone future ones. Remember, Bayer is continuing to sell the same dangerous Roundup, with no change in formulation and no cancer warning. That’s a prescription for yet more suits, particularly when facts like this are already part of the record:

The trials also made public internal documents in which Monsanto admitted Glyphosate is “geno-toxic” (i.e., causes cancer) and that Monsanto had provided strict warnings to their own employees to wear chemical goggles, boots and other safety protection when exposed to Roundup, and an internal study in which its scientists recommended people wear gloves and boots when using the company’s lawn and garden concentrate.

Finally, you might ask, who is behind this campaign? The lead attorney is Clifford Roberts of Roberts & Roberts, a boutique New York firm specializing in complex corporate litigation. Famed criminal defense lawyer Benjamin Branfman is also part of the team, which seems an odd choice. Michelle Lerach’s firm Bottinni & Bottinni rounds out the roster. The similarity of the writing style of this filing to the Kentucky Retirement System case Mayberry v. KKR (more informal, more narrative, and much more factual backup than the norm) says the Lerachs are providing a lot of the muscle.

So pass the popcorn. If this case gets past the jousting over using New York courts to get at German companies, it will expose even more ugly, self-serving behavior.
_____

1 A May 2020 motion and order in a derivative suit filed in New York court, In Re Renren Inc., is a very helpful precedent for this litigation strategy, see below.

2 In 2002, there were rumors that Pfizer was considering a bid for Bayer.

00 Bayer Amended
00 In Re Renren Inc.
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60 comments

  1. Andrew Cockburn

    Wow. “Monsanto admitted Glyphosate is “geno-toxic” (i.e., causes cancer) and that Monsanto had provided strict warnings to their own employees to wear chemical goggles, boots and other safety protection when exposed to Roundup, and an internal study in which its scientists recommended people wear gloves and boots when using the company’s lawn and garden concentrate.”

    So what about the oceans of Roundup dumped on the Colombian peasantry over many years? Rand Beers, Obama’s Assistant Secretary of State for Latin America, told ’60 Minutes’ that it was “no more toxic than baby shampoo.”

    1. Yves Smith Post author

      If you have time, the filing is very readable and you can skip over the legal sections (like who all the defendants are) and the extensive documentation of what bad guys Bank of America and Credit Suisse are. The parts related to Roundup/Glyphosate are probably only 1/4 of the total text and have lots of quotes from the press to substantiate the claims. So this isn’t an onerous read if you focus on the bits that interest you.

      Originally I found this a curious approach to a complaint (white shoe law firm filings in the US tend to be far more spare and less colloquial in their writing style), and there is some repetition across the document, but that may be intentional to hammer key points. But upon reflection, this has been a successful formula for Team Lerach and may be necessary to overcome the tendency among judges to be deferential to Big Companies You Heard of.

      More specifically, to the damage done outside the US, the filing points out that more and more countries have woken up and are imposing restrictions on Roundup:

      France revoked approval of Bayer’s Glyphosate products, effectively banning Roundup sales in France. In June 2009 Scientific American published an article detailing how surfactants in Roundup’s “proprietary mixtures,” increase the toxicity of sprayed Glyphosate, which is deadly to human cells. In July 2019 Austria banned the sale of Glyphosate-based herbicides. In August 2019, sales of Roundup in Brazil were banned. In September 2019, Germany announced restrictions on the use of Glyphosate — banning its use in gardens and parks and imposing stricter rules concerning its use in agriculture, and announcing Germany would ban its use outright at the end of 2023 — which will almost certainly result in a Glyphosate ban throughout the entire European Union. Mexico has banned the import of herbicides using Glyphosate. Costco — the giant U.S. retailer — has discontinued carrying Roundup. And the first Roundup cancer suits have been filed in Australia, a precursor to the worldwide spread of these suits.

      1. Billy

        Had Bayer executives even taken the time to read 30 plus years of the environmental and progressive press, Grange literature, home grown gardeners’ websites, the testimony of scientists like Dr. Don Huber, Professor Emeritus of Plant Pathology, Microbiology, and Soil-borne Disease Control **,popular books like Genetic Roulette, which outlined the dangers of Monsanto profit centers like G.M.O.s, not even mentioned here,—they would have known what a liabilityshitsandwich they were buying.

        They ignored this as well:
        “Public knowlege about a Monsanto hired troll army was revealed during the on-going lawsuit against them over the cancer-causing properties of their herbicide Roundup. The lawyers wrote:
        “Monsanto even started the aptly-named “Let Nothing Go” program to leave nothing, not even Facebook comments, unanswered; through a series of third parties, it employs individuals who appear to have no connection to the industry, who in turn post positive comments on news articles and Facebook posts, defending Monsanto, its chemicals, and GMOs.”

        “The legal brief also points out that, “Monsanto quietly funnels money to ‘think tanks’ such as the ‘Genetic Literacy Project’ and the ‘American Council on Science and Health,’ organizations intended to shame scientists . . .”

        https://newspunch.com/monsanto-troll-army-negative-comments/

        What’s wrong with Roundup, for the uninitiated:

        **Video by Dr. Huber
        https://www.youtube.com/watch?v=xKcjT5QK3Lg

        Radio interview
        https://tucradio.org/podcasts/newest-podcasts/prof-don-huber-the-impact-of-gmos-and-the-herbicide-roundup-on-crops-animals-people-and-the-environment-part-two-of-two/

        “In this part of his talk he reports on the findings of his lab at Perdue University. GMO plants sprayed with Monsanto’s Roundup that contains glyphosate are less drought tolerant, have smaller root-balls, need more irrigation, lack in important minerals, are susceptible to disease, and can damage the liver and reproductive capacity of animals fed with them. Also glyphosate persists much longer in the soil than claimed by Monsanto.”

      2. shinola

        I’ve only read section I “Introduction and Overview of Allegations” and will be setting aside some time to read more. It is fascinating in a “can’t take your eyes off the approaching train wreck” sort of way.

        Minimal legalese – very readable for a layman such as myself.

      3. E. Yates

        Thanks for this posting. So important. The EU takes harmful products off the market because they have public health care systems in place and they don’t want their citizens getting sick. A decent effective public health policy is a win win for citizens and for the environment – leaving aside the ethical and moral considerations that should have guided Monsanto. Also points out the importance of impartial judges. So bad for the US, the recent stacking of the courts by the GOP/trump administration.

    2. Ignacio

      Think of dilution of the compound. Long ago I read some papers about the life cycle and glyphosphate residues in the environment but I forgot the conclusions that I should refresh.

      1. drumlin woodchuckles

        ” Dilution is the solution for pollution.”

        Oh yeah? well, biological reconcentration is the negation of dilution.

  2. PlutoniumKun

    Thanks for this – I’ve occasionally come across articles on this and wondered what the hell Bayer were thinking. I sort of assumed that maybe there was some sort of grand design behind the takeover, something only apparent to smart insiders, but it seems not.

    Given Bayer’s history, its hard not to think that this couldn’t happen to a nicer bunch of people. I just hope it takes Glyphosate with it, its the lynchpin chemical of so many terrible policies, from cheap urban landscaping to soil erosion.

      1. TimH

        It’s funny how everyone loves to mention Zyklon B for chemical weapons, but Dow Chemical and Monsanto manufacturing Agent Orange used on civilian populations in Malysia (by the British), Cambodia, Laos, Vietnam seems to skip scrutiny. And there’s whoever makes white phosporous which is banned as a weapon…

        1. Alex Cox

          And then there’s the Americans’ favorite chemical weapon, Napalm, now rechristened as an ‘area denial munition’.

  3. Samuel Conner

    It would seem that Glyphosate cannot remain on the market much longer. I would think that would be the end of “roundup-ready” GMO crops, as well, assuming that there is no non-toxic replacement that has the same mechanism of action and could be substituted at short notice.

    I have the impression that RR seeds are pretty important to US industrial scale crop production. If they can no longer be used, does that create a crisis in US food production?

    1. Bob

      Perhaps some clever person could compare U.S. crop production vs Glyphosate use to estimate the impact of Glyphosate on production.

      After Glyphosate wasn’t always available so at sometime in the past U.S. crop production was not impacted by the use of Glyphosate.

      And if there is some reduction in say corn production there could be a positive impact on commodity costs i.e. we might be able to raise prices for corn sold. Note that this approach has been used in the past for tobacco, cotton, and so forth.

      1. PlutoniumKun

        I can’t find the link at the moment, but I do recall seeing a comparison study indicating that crop yields in France (where GMO’s, and hence roundup ready seeds) were banned were consistently higher than in comparable areas of the US over the period of their intruduction. There may other confounding factors accounting for this, but I think so much of glyphosate use is about increasing the scale and efficiency of production (i.e. lowering costs), rather than increasing yields.

        Years ago I was doing reading on this as part of a research proposal in England (which never got off the ground) looking at using waste generated compost as a winter cover on arable lands, as an alternative to the use of glyphosate for early weed suppression. Its not my expert area (I was more looking into the economics of compost rather than agriculture), but everything I’d read indicated that the use of physical mulching for weed control led to more sustainable crop growth and in particular prevented soil erosion.

        The reason farmers weren’t doing it was because of all the jigsaw pieces that had to go together for mulch to be used. They needed a guaranteed source over the long term at a reasonable price in order to justify the high capital investment (storage, spreading machinary, etc). In the absence of this, using glyphosate was just easier and cheaper.

  4. Zamfir

    I am morbidly amused that Bayer managed to buy a company whose reputation does great harm to that of Bayer.

    1. NIx

      Bayer have form, too. For years they knowingly sold HIV-contaminated blood products to haemophiliacs, thousands of whom later died of AIDS.

  5. John A

    I confess I could never understand why Bayer wanted to acquire Monsanto and it always seemed to me to be a crazy move. Now thanks to this article I see why: to keep current management in place to preserve their lofty pay and high status. That makes perfect sense in these greed is the only good end times.

  6. tegnost

    I’ll add to the list of people wondering what bayer was thinking…from a cultural perspective the global elite don’t care if a poor gets cancer, they have invested their ill gotten gains in the health sector and are doing very well there, thank you. I have spent most of my adult life as an enhanced landscaper (over the course of a year I will be doing other things to get paid, but landscaping continues to be a staple, today is mowing…) so did spray roundup for a customer in the ’90’s, but it was more like twice a year for two or so years, can’t recall as they fly by so fast now. Originally I worked at a bamboo farm and could always tell when people had tried to kill the bamboo with roundup. The plant would shoot out lots of tiny leaves in response, and bamboo being segmented as it is the round up only killed one node, it rarely killed the plant, I’d hate to think about the volume of roundup that would take. I could tell even then it was a strange product but still trusted the regulatory regime in the US, which is now in tatters. I doubt I have used it in 20 years, but that’s a long time, allowing a lot of exposure. And don’t forget americans tendency towards “more is better”. If those bamboo actually died did the property owner dump an entire gallon on it, draining inevitably into salmon spawning streams? Probably. I feel that the pro GMO set laughed off concerns about roundup just as they laugh off the risk of GMO products. This puts the US in a strange place. As Samuel Conner above alludes… How does factory farming deal with no roundup or dicamba?

  7. Brian (another one they call)

    Thanks you Yves; I notice, or notice a lack of notice, about this matter in the news by corporation.
    But then again they used to advertise it.

  8. Will

    Glyphosate is a generic pesticide made and sold by like 50 different companies worldwide.

    Monsanto is a seed company.

    Glyphosate is one of the safest pesticides on the market. Anyone involved in the industry would tell you the same thing. It’s as simple as the toxicology.

    Bayer is a victim of the radical anti-pesticide flat-Earthers.

    1. Samuel Conner

      I’m reading through the lawsuit, and IMO it looks dire for Bayer, not to mention the trouble the defendants are in.

      They never tested the carcinogencity of their proprietary “Glyphosate + surfactants” combination, branded “Roundup”.

      Glyphosate by itself might be only mildly genotoxic (I don’t know enough to opine, but the lawsuit points to Bayer’s internal assessment that Glyphosate is indeed genotoxic), but surfactants can function as membrane permeabilizers, promoting the uptake of both the surfactant and any accompanying substances into the interior of target cells — possibly part of why Roundup is so effective against plants; its proprietary formulation may more readily deliver the herbicide to the interior of plant cells. The nucleus of eukaryote cells is also membrane bound, but could be permeabilized by surfactants as well. Roundup could be orders of magnitude more carcinogenic than Glyphosate is by itself.

      (as an aside — membrane permeabilizing adjuvant medications are probably a way that certain kinds of antibiotic resistance will be overcome in future — making it easier for the antibiotics to get inside the target bacteria, especially Gram-negative bacteria, which have a protective outer membrane. Roundup is sort of like one of these “combination therapies”, except that the agent that is potentiated is not lifesaving, but evidently cancer causing)

      I would say that Bayer is a victim of collosal self-interest and conflict of interest on the part of its governers, senior managers and financial advisors.

      Sadly, the damages that I expect to be awarded will merely serve as a warning to others, as well as justice served on the malefactors. There is no way to collect enough to make the company whole again.

    2. KLG

      Glyphosate is not a pesticide. It is a herbicide. Roundup is the proprietary, now off-patent, formulation sold by Monsanto, with glyphosate as the active ingredient. As noted above, the surfactants in Roundup likely contribute to its very real animal toxicity.

      Yes, Monsanto is a seed company; its major seed products are “Roundup-Ready” commodity crops: soybean, corn (maize), rapeseed (canola), sugar beets, cotton, alfafa.

      I attended the first International Conference of Plant Molecular Biology in 1985 in Savannah [Google will take you to a report in Current Science 55(6), March 1986]. The beginning of such biotechnology was all the rage then, as recombinant DNA technology was extended to plants. It was an interesting time. Few had heard of Vandana Shiva, but it was clear to those not working for Monsanto, DuPont, and similar companies that these interventions were little more than “elegant” technical fixes for problems that didn’t really exist, emphasis on elegant, as one heard time after time during the presentations. Profitable though, to those doing the science and those paying for it.

      Agriculture is not amenable to industrialization, period, but the negative externalities, they do keep piling up. Roundup-ready seeds have not improved yields proportionate to the hype, and independent studies have have shown actual decreases in yields, perhaps due to diminution of fitness caused by alteration of the genome. Their indiscriminate use has selected for “super-weeds” resistant to glyphosate, however, not unlike spraying DDT from planes, which primarily “produced” DDT-resistant mosquitoes. Golden Rice has not and will not alleviate vitamin A deficiency in Asia. Bt corn is also a wash at best, as are other Bt seeds. But, Monsanto and several other seed companies have made a “killing” with their spurious uses of (then, 20-35 years ago) fairly sophisticated molecular biology.

      A little light reading:
      https://source.wustl.edu/2016/06/genetically-modified-golden-rice-falls-short-lifesaving-promises/

      1. EoH

        “Agriculture is not amenable to industrialization, period.”

        That might come as news to some of the largest companies in the world.

        1. KLG

          I didn’t write that it isn’t done. Or that it is not profitable for some, negative externalities unaccounted for as always. But industrial agriculture is just another failed attempt to force an engineering ideal into a biological and cultural domain where it cannot work to the benefit of all, big Ag schools, ADM, ConAgra, and so-called economists notwithstanding…CAFOs and antibiotic resistance, chicken “farmers” stuck in vertical scams, the obesity epidemic, soil loss, the dead zone attached to the Mississippi River delta, Harvest of Shame (now 60 years old IIRC), the Green Revolution that wasn’t.

          1. EoH

            I agree with the criticism, just not with the general statement. As you say, Big Ag is the dominant American model, despite the penalties it imposes on everyone except Big Ag. It’s a model the US works hard to export worldwide. It’s one reason I’m fearful about the upcoming US-post-Brexit Britain trade talks. Franken-seeds and chlorinated chicken coming to the High Street near you.

            1. KLG

              How about “industrial agriculture is a category error”? In retrospect that seems to be a better description.

              And yes, a major hope for food sanity has been the European Union, France-Italy-Spain-Greece in particular, from this side of the pond.

            2. EoH

              Big Ag or industrial Ag exists and is harmful to many. You may consider the descriptor a contradiction in terms, but that does not affect its existence.

      2. EoH

        Monsanto’s business model regarding Roundup is a three-legged stool: Roundup herbicide, proprietary herbicide resistant seeds, rapacious IP enforcement.

        It’s all or nothing, or find a new business model. That might be one reason Bayer has not modified Roundup’s formula, added cancer warning labels for farmers and others, or pulled it from the market. If it does that, the stool collapses. It has to double down or admit that the Monsanto deal was staggeringly bad judgment.

        When Bayer files bankruptcy, I hope the courts, for once, dismiss the plea that Bayer must retain and overpay the executives that forced it into bankruptcy, on the absurd notion that they are the only ones who can drive the car back onto the roadway from the bottom of the ravine they drove it into.

    3. Late Introvert

      Bayer is a self-owned victim of reasonable anti-cancer round-Earthers. Fixed it for ya.

    4. Hireling? Is That You?

      :
      “Public knowlege about a Monsanto hired troll army was revealed during the on-going lawsuit against them over the cancer-causing properties of their herbicide Roundup. The lawyers wrote:
      “Monsanto even started the aptly-named “Let Nothing Go” program to leave nothing, not even Facebook comments, unanswered; through a series of third parties, it employs individuals who appear to have no connection to the industry, who in turn post positive comments on news articles and Facebook posts, defending Monsanto, its chemicals, and GMOs.”

    5. pricklyone

      You are kidding, right?
      Monsanto, in the St, Louis area, is and always was, described as a large chemical company.
      Many of my contemporaries fathers worked there when I was young.
      >>”Monsanto’s roles in agricultural changes, biotechnology products, lobbying of government agencies, and roots as a chemical company, resulted in controversies. The company once manufactured controversial products such as the insecticide DDT, PCBs, Agent Orange, and recombinant bovine growth hormone”<>”Manhattan Project at Los Alamos with Robert Oppenheimer, but Thomas was reluctant to leave Dayton and Monsanto.[31] He joined the NDRC, and Monsanto’s Central Research Department began to conduct related research.[32]:vii To that end, Monsanto operated the Dayton Project, and later Mound Laboratories, and assisted in the development of the first nuclear weapons”

      You don’t need to go any further than Wikipedia, but you can do, it you think you can refute the history of Monsanto, chemical and pharma giant.
      I am 20 minutes from their old stomping grounds, Sauget, sister to East St. Louis, and worked next to the radioactive dump at Chain of Rocks road, outside St. Louis…

  9. DTK

    Dear Will,
    In case you are not being facetious;

    -lines one and two are true
    -sentence one of the third paragraph is probably not true (insecticidal soap, vinegar, neem oil, dormant oil, and garlic preparations form a very partial list)
    -sentence two of the third paragraph; The trials also made public internal documents in which Monsanto admitted Glyphosate is “geno-toxic”
    -sentence three of the third paragraph is a non sequitur but you could have replaced ‘simple’ with ‘complicated’
    -the last line is the crown; Bayer whose science discovered that Glyphosate causes cancer is a victim of those who despite the scientific and visual evidence, believe (among other things) that the earth is flat

  10. TMoney

    Glyphosate is one of the safest pesticides on the market. Anyone involved in the industry would tell you the same thing. It’s as simple as the toxicology and it’s only generic now because it’s gone off patent, which in no way affects how it works.

    Glyphosate is only “SAFE” because it is destroyed by UV light – sunlight – usually within 24 hours of application. The toxicity has nothing to with its “safety”.

    All pesticides and herbicides (Glyphosate is designed to kills plants not insects) are harmful to living system – that’s what they are designed to do. It’s toxicity to plants and people happens before it is broken down. Nothing you have said addresses this. Monsanto’s own documents do.

    1. Billy

      Fun fact:
      Gasoline is destroyed by UV light and evaporation. Don’t spray your food with it.

      Sunlight does not penetrate the soil, rootzone plant tissues or the the human liver, lymph nodes or the coffins of the people that Glyphosate eventually kills.

      Paid per post, or, by the hour?

      Search term “Monsanto Troll Army”

      1. WobblyTelomeres

        I’m pretty sure TMoney is quoting Will, above, in that first paragraph. Wish that the quote was a bit more obvious.

        1. Yves Smith Post author

          The problem is that repeating the original claim in order to debunk it reinforces the false claim. And more than half of his remark did that. This is not helpful, no matter what the intent.

    2. drumlin woodchuckles

      And of course when it is down in the soil where the UV light can’t reach it, it doesn’t break down. And also of course when it has chelated itself to one of its favorite target metallic cations . . . it can’t break down because it is now part of a super-stable chelated complex which won’t break down.

  11. Andrew Thomas

    Good luck to the plaintiffs. The federal courts in New York are obviously not the place to go if you are an aggrieved class of people who are poor, brown natives of Ecuador. Or their lawyer. And, from the moment the Bayer buyout of Monsanto was mooted, it seemed to me that it would have been completely insane to not set aside a huge amount of the purchase price in escrow for this already known and potentially catastrophic product liability litigation. I assumed that Bayer’s insistence on it- which was the only rational position to take- would kill the deal. I look forward to the piece by piece explanation of why it happened anyway coming out. If it ever does.

    1. Billy

      The courts in New York seem to work against German corporations when they rule for holocaust victims.

  12. Felix_47

    I am a scientist and live in Germany. I also used to own quite a bit of Bayer stock. This pleading is interesting and I thank Yves for bringing it to our attention. Naked Capitalism is wonderful. I think the pleading is rather contentious and it is convincing. Regarding Roundup I think Bauimann as a graduate of the German educational system made a fatal misjudgement based on his impression that US law is like any other. In Germany causation issues such as cancer and Roundup are decided for the court by a Gutachter who is an expert certified by the state. There is no war of dueling opinions in front of a jury selected for their lack of education. I can’t imagine a worse place to try a scientific case than Oakland California with the plaintiff mentioned. Coinsidering reasonable medical probability it is more likely than not that Roundup is safe. It is a plant product and not an animal product. It is for weeds and not pests. For convincing causation one cannot use vague correlation but one has to be able to show a mechanism of injury. Using Ewing’s postulates regarding causation of cancer Roundup is benign. Problem is that Baumann thought that US courts respected Ewing’s postulates. They do not. Baumann bet the house that science would win out in a US court in Oakland with billions on the line. A bad bet. Long term the US will have to address its out of control tort system or suffer continuing economic deterioration. I would not be too optimistic. Roundup was a great idea that helped a lot of people, decreased tilling and fuel usage and did a lot for the environment. But tort law in the US is what it is.

    1. Billy

      “It is a plant product and not an animal product. It is for weeds and not pests.” The same way lead in paint is a mineral and is for windowsills, not humans.

      “Dr. Huber is a professor emeritus of agriculture specializing in botany and plant pathology at Purdue. He has a large number of published peer-reviewed journal articles on the subject to his credit.”

      “Among the topics discussed in the Dave Asprey interview was the ability of glyphosate to kill off a wide variety of beneficial microorganisms in the soil, thus allowing the toxic mold Fusarium to grow in an unchecked manner.
      Like Stachybotrys mold, Fusarium makes trichothecene toxins that have a wide variety of negative effects on the health of humans and other mammals.”
      https://paradigmchange.me/huber/

      As a scientist you will enjoy the search term
      “Dr. Don Huber”, for the many technical articles and videos it will result in which can further inform.

    2. drumlin woodchuckles

      The correlation between the rise of incidence of several kinds of cancer and other diseases rising in close synchrony with the rising use of glyphosate of all brands is beginning to attract the attention of other people beyond just Professor Emeritus of Plant Pathology Don Huber at Purdue University. He has been assembling the relevant papers and findings of hundreds of researchers over time about glyphosate’s effect on various things.

      Here are a few of the images I find by an image search for layfolk like myself on the subject.
      https://images.search.yahoo.com/search/images;_ylt=A2KLfSNe2U1fOSIAS_VXNyoA;_ylu=Y29sbwNiZjEEcG9zAzEEdnRpZANDMDkzNF8xBHNlYwNzYw–?p=cancer+trends+and+roundup+trends+images&fr=sfp&guce_referrer=aHR0cHM6Ly9zZWFyY2gueWFob28uY29tL3NlYXJjaDtfeWx0PUF3ckV6ZWQzMEUxZlM1b0FULjFERFdWSDtfeWxjPVgxTURNVEU1Tnpnd05EZzJOd1JmY2dNeUJHWnlBd1JuY0hKcFpBTldTbkIyTlU5TllWUktiVXgwV0ZVelZEbHhVRFJCQkc1ZmNuTnNkQU13Qkc1ZmMzVm5ad014Qkc5eWFXZHBiZ056WldGeVkyZ3VlV0ZvYjI4dVkyOXRCSEJ2Y3dNd0JIQnhjM1J5QXdSd2NYTjBjbXdEQkhGemRISnNBelE1QkhGMVpYSjVBMk5oYm1ObGNpVXlNSFJ5Wlc1a2N5VXlNR0Z1WkNVeU1ISnZkVzVrZFhBbE1qQjBjbVZ1WkhNbE1qQnBiV0ZuWlhNRWRGOXpkRzF3QXpFMU9UZzVNemMwTXpnLT9mcjI9c2ItdG9wLXNlYXJjaCZwPWNhbmNlcit0cmVuZHMrYW5kK3JvdW5kdXArdHJlbmRzK2ltYWdlcyZmcj1zZnAmaXNjcXJ5PQ&guce_referrer_sig=AQAAANo9limJsrPeYvf-iFcGOpb1HciOUwpEb1oEgf4InFMeFJ329F2MTS69JkSYKKqL2eOlINImqjQe2iH9euoNdM-FWfOcsfTyRt1oNSsa38Z-DNTHt7IVkOiBO155W5V5yi3e9NvqNpskjGNzyGEqx7et5N9D0LR_4vm_-DTrg0Lh&_guc_consent_skip=1598937477

      It would appear that your attempt to intimidate people by blinding them with “SCIENCE!” may not work as well as you hoped. It may be that a jury in Oakland has a better understanding of science, truth, and fact than your precious Dr. Ewing.

      But if you are still convinced of the safety of glyphosate, you could show your support for the makers of glyphosate by making sure to eat foods which contain glyphosate residues. The higher the residue, the more glyphosate was used, perhaps. So you should be eating the highest-glyphosate foods ;you can find. Get out there and show the makers of glyphosate how much you love them and have their back.

      By the way, numerous organic and semi-organic farmers, including thousand-acre-operators, decrease their tillage and fuel usage without any glyphosate at all. You should make sure to BOYcott their product, because by NOT using glyphosate, THEY!! . . . are showing their CHURLish NON-support for glyphosate. And you wouldn’t want your food-budget money to go towards nasty flat-earth farmers who DEcrease their tillage AND reDUCE their FUEL use withOUT using ANy GLYphosate, would you? Of course not.

      1. drumlin woodchuckles

        ( By the way, I will give you a free shot-back by noting after the fact that all the images I linked to turn out to have nothing to do with anything. I just assumed the search term cluster I used would bring me the images I want. No such luck.

        So if you deMAND that I proDUCE the RELevant images, which I KNOW I have seen, I will certainly attempt to comply).

  13. ChrisPacific

    Unlike any other company ever facing similar litigation, Bayer has neither taken Roundup off the market, nor reformulated it, nor put a cancer warning on it. It looks like Bayer will eventually declare bankruptcy.

    And most important, the deal went ahead for the worst possible reason: Bayer management wanted to bulk up so as not to be acquired. The real motive was to keep current management in place to preserve their lofty pay and high status.

    Oh, and as part of the anti-trust review, Bayer had to sell its non-glyphosate herbicide, Liberty, making it dependent on Roundup.

    These are the points that stood out the most for me from the filing (quoting Yves’ summary as cut/paste looks to be disabled). I’m not even touching on the part where the CEO made a secret trip to Monsanto HQ ten days into the job with $60 billion in cash burning a hole in his pocket. If you wanted to deliberately destroy a multinational business, you could hardly do better.

    I’d call it a dumpster fire, except that I don’t think $60 billion cash would fit in a dumpster.

  14. mauisurfer

    This article fails to mention that glyphosate causes serious kidney failure among tropical farm workers, especially in central america.
    Please remember that glyphosate was originally approved as an antibiotic and also a metal cleaner, long before it was recognized as an herbicide.
    Also remember that it was Al Gore who called the leaders of France in support of legalizaton of roundup/glyphosate.

    1. drumlin woodchuckles

      I was at an Acres USA conference once where Professor Don Huber was a featured speaker. Among other things, he told us of his time private-consulting with sugar cane growers in Central America about how to eliminate the use of glyphosate from their sugar cane ( which they did in order to get it all to combine its simple sugars into sucrose, die and semi-desicate all at once for harvest).

      After extensive study, he determined that the cane plants were just a little short of the plant-physiology micro-nutrient boron, and how supplying the right amount of boron at the right time in the right way would get the cane to sugar-up just as much as the glyphosate, but without any glyphosate. So he has been helping to destroy the market for glyphosate one micro-market at a time, by finding better inputs and methods.

      ” Those who can, do. Those who can’t, teach” . . . eh? Prof. Huber can clearly do both.

  15. drumlin woodchuckles

    If glyphosate-contaminated farmland ever becomes unsellable or un-mortgageable or un-collaterizable, etc. etc. . . . . maybe the owners of that polluted-to-zero-value farmland will also start suing for their destroyed land value.

  16. drumlin woodchuckles

    Commenter Will up above told us how safe the generic chemical glyphosate is and how everyone in the industry ( who are all talking their book, by the way) will TELL you how safe it is.

    Will finished by saying . . . “Bayer is a victim of the radical anti-pesticide flat-Earthers.”

    If I had left a sub-sub-sub dependent-dent-dent comment in that sub-sub-sub thread, it might get lost and never seen. So I will leave a reply right here.

    Here is a little article with a lifetime curriculum vitae of one of the radical anti-pesticide flat-Earthers referenced by commenter “Will”.
    https://www.nvlv.nl/downloads/Dr_Huber_bio.pdf

    and here is another . . .
    https://web.ics.purdue.edu/~huberm/huber.cv.pdf

    radical anti-pesticide flat-Earther? Really? Let the readers decide, I guess.

    1. Felix_47

      No one is denying that there are many citations of people that claim Roundup causes cancer. There are many citations from people that claim that it does not. The question is whether it causes cancer to a level of reasonable probability. If it did there would be millions of people per year dying of NHL. The way to determine that would be to determine just what about Roundup causes non Hodgkin’s lymphoma only……and apparently no other type of cancer. One would have to show that one can predictably cause NHL in laboratory animals with exposure to Roundup. This was done with cigarettes using dogs who were addicted to cigarettes and smoked heavily. The problem is that Roundup use is ubiquitous and so there is always a correlation. Ewing, a pathologist, addressed the legal issue of pothole cancer (for a long time contusions to the chest caused by car accidents where a chest X-Ray showed a cancer were considered to be liability issues decided in favor of the plaintiff…..in other words that the trauma “lit up” the prior asymptomatic cancer or caused it) and focused on the need for causation. Ewing covers much of the territory of correlation being covered with Roundup. One really cannot decide these things with a jury trial, especially in Oakland of St. Louis. New York Academy of Medicine Ewing J. The Bulkley Lecture: The Modern Attitude Toward Traumatic Cancer*. Bull N Y Acad Med. 1935;11:281–333. The US could learn from Germany and perhaps develop special masters for technical and medical issues in trials. Not doing so simply makes things like medical malpractice and product liability claims like the Roundup litigation bad theater with bad results for society in general and great results for the plaintiff bar and the few lottery winner plaintiffs who one sympathizes with. The legal industrial complex in the US is acting as a huge brake on productivity and progress in medicine and other fields. That is why almost all new medicines and procedures are developed overseas.

      1. tegnost

        monsanto paid good money for those studies…

        https://citizentruth.org/investigators-find-proof-that-monsanto-pays-scientists-to-distort-science-in-their-favor/

        The problem is that Roundup use is ubiquitous and so there is always a correlation
        There is no alternative, besides glyphosate is now everywhere so how can you correlate cancer to glyphosate. That was certainly the plan, we’ll find out how it works out in court.
        I could give you a list of stupid things allegedly smart people have done. Smart really only means credentialed and really isn’t a distinction about intelligence.
        https://time.com/4993877/weed-killer-roundup-levels-humans/
        FTA…
        One trial from the UK, in which rats were fed low levels of glyphosate throughout their lives, found that the chemical contributed to a higher risk of nonalcoholic fatty liver disease, a condition in which fat accumulates in the liver and contributes to inflammation and scarring of the tissue. Mills says that the levels of glyphosate documented in the people in his study were 100-fold greater than those in the rats.

        When people test positive for glyphosate is isn’t broken down, so it is not harmless.

      2. drumlin woodchuckles

        Your worshipful reverence for “scientists” and “SCIENCE!” reminds me of a parable by Charles Walters Jr. I once read in Acres USA.

        During the Germanazi Occupation of Norway bunches of Norwegian peasants were drafted into forced labor. One day one of the peasants went missing for 2 days and then returned. The Germanazi overseer asked ” where were you?” The peasant said ” I was sick”. The Germanazi overseer asked the peasant ” are you a licensed Doctor?” The peasant said “no”. The Germanazi overseer replied . . . ” then how do you know you were sick?”

        1. drumlin woodchuckles

          Now that I think about it, I think Charles Walters’s literal words for the Germanazi overseer were . . . ” German officer”. Which is more elegant wording. But the parable is the same.

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