Activision Blizzard’s Labor Woes Grow on Union Complaint to NLRB

Josh Eidelson
Tue, September 14, 2021


(Bloomberg) -- A union has filed a federal labor board complaint against Activision Blizzard Inc., opening a new front in the legal battle over workplace rights at the video game maker.

The U.S. National Labor Relations Board complaint, filed by the Communications Workers of America, accuses Activision of violating federal labor law through coercive rules, actions and statements.

“The employer has threatened employees that they cannot talk about or communicate about wages, hours and working conditions,” according to a copy of the complaint obtained through a public information request. The document also accuses Activision of illegally telling staff they can’t discuss ongoing investigations; threatening or disciplining employees because of their activism; deploying surveillance and interrogations targeting legally protected activism; and maintaining a social media policy that infringes on workers’ rights.

The agency’s docket shows that CWA’s complaint was filed Sept. 10. Activision didn’t reply to requests for comment Tuesday.

Activision Blizzard, which creates games like Call of Duty and World of Warcraft, is embroiled in controversy over its treatment of employees. California’s Department of Fair Employment and Housing sued Activision in July, alleging the company fostered a “frat boy” culture in which female employees were subjected to sexual harassment, pay inequality and retaliation. Days later, an employee walkout drew hundreds of demonstrators to the sidewalks of the company’s corporate campus in Southern California.

In a July email to employees, Activision’s chief compliance officer, who served as Homeland Security Advisor to President George W. Bush, called the California agency’s claims “factually incorrect, old and out of context.” Activision has also said that the picture painted in the lawsuit “is not the Blizzard workplace of today” and that the company values diversity and strives to “foster a workplace that offers inclusivity for everyone.”

Complaints filed with the labor board are investigated by regional offices and, if found to have merit and not settled, can be prosecuted by the agency’s general counsel and heard by administrative law judges. The rulings can be appealed to NLRB members in Washington, D.C., and from there to federal court. The agency can require remedies such as posting of notices and reversals of policies or punishments, but has no authority to impose punitive damages.

CWA, which has increasingly focused in recent years on organizing non-union video game and tech workers, said in an emailed statement that it was “very inspired by the bravery” of Activision employees and that it filed with the labor board to ensure that violations by the company “will not go unanswered.”

Activision Blizzard workers accuse company of violating federal labor law

Jon Fingas
·Weekend Editor
Tue, September 14, 2021


Activision Blizzard is facing still more legal action over its labor practices. As Game Developer reports, Activision Blizzard workers and the Communication Workers of America have filed a complaint with the National Labor Relations Board accusing the game developer of using coercion (such as threats) and interrogation. While the filing doesn't detail the behavior, the employee group ABetterABK claimed Activision Blizzard tried to intimidate staff talking about forced arbitration for disputes.

Companies sometimes include employment clauses requiring arbitration in place of lawsuits. The approach typically favors businesses as arbitrations are often quicker than lawsuits, deny access to class actions and, most importantly, keep matters private. Work disputes are less likely to reach the public eye and prompt systemic change. Tech firms like Microsoft have ended arbitration for sexual harassment claims precisely to make sure those disputes are transparent and prevent harassers from going unchecked.

It's not clear how Activision Blizzard intends to respond. We've asked the company about the complaint. The NLRB has yet to say if it will take up the case.

The gaming giant has taken some action in response to California's sexual harassment lawsuit, dismissing three senior designers and a Blizzard president after they were referenced in the case. It has so far been reluctant to discuss structural changes, though. The NLRB complaint might intensify the pressure for reform, and certainly won't help Activision Blizzard's image.



Activision Blizzard Hires Disney’s Julie Hodges as HR Chief in Wake of Sex Harassment Scandal

Todd Spangler
Tue, September 14, 2021



Activision Blizzard has hired Julie Hodges, a 32-year veteran of the Walt Disney Co., as its chief people officer.

Hodges joins the games giant effective Sept. 21, replacing Claudine Naughton, whom Activision Blizzard said is “leaving the company.” The change in HR leadership at the company comes two months after it was hit with a lawsuit from the California Department of Fair Employment and Housing, alleging that Activision Blizzard allowed a “pervasive frat boy workplace culture” to thrive that resulted in women employees being continuously subjected to sexual harassment and being paid less than men.

Other senior execs who have exited Activision Blizzard in the wake of the lawsuit included Blizzard Entertainment president J. Allen Brack, who was named in the California DFEH complaint as among company leaders who were allegedly aware of the misconduct and — despite repeatedly being informed of the problems — “failed to take effective remedial measures in response to these complaints.”

In announcing Hodges’ hire, Activision Blizzard CEO Bobby Kotick said that “Julie is the seasoned leader we need to ensure we are the most inspiring, equitable and emulated entertainment company in the world.”

Meanwhile, on Sept. 10, the Communications Workers of America’s Campaign to Organize Digital Employees (CODE-CWA) filed a complaint with the National Labor Relations Board against Activision Blizzard on behalf of company employees, alleging it illegally used “coercive tactics” to try to prevent workers from organizing a union following the California DFEH lawsuit, per Protocol.

In addition, Activision Blizzard on Tuesday said Sandeep Dube, formerly SVP of revenue management at Delta Airlines, will become chief commercial officer, effective Sept. 27. He is filling the role left vacant after Armin Zerza was promoted to CFO earlier this year.

“These two outstanding leaders from companies with exceptional reputations will help us achieve our goal of becoming the best company to work for in the entertainment industry while growing our reach, engagement and player investment,” Kotick commented.

In her 32 years at Disney, Hodges led HR for Walt Disney Parks and Resorts, the company’s Talent Acquisition Center of Excellence, HRBP for Worldwide Operations, and Disney University/Learning and Development, Organization Development and Cast Research. Hodges earned a bachelor’s degree from the University of North Carolina in Chapel Hill.

At Activision Blizzard, Hodges will be responsible for the company’s global talent organization, with the mission of making the company “the destination for top talent.” In her role, she will lead all aspects of human resources, including diversity, equity and inclusion, talent acquisition, employee experience, learning and development, compensation and benefits, and workforce planning.

The Next South American Oil Giant







Editor OilPrice.com
Tue, September 14, 2021

The COVID pandemic has wreaked considerable damage on the economies of South America’s smaller fiscally fragile countries, with the former Dutch colony of Suriname hit especially hard.

During 2020 the impoverished South American nation’s gross domestic product shrank by 13.5%, the continent’s worst performance after Venezuela. A deeply impoverished Suriname now finds itself mired in a severe economic crisis that is threatening an already fragile state that only emerged from an intense political impasse during July 2020.

The depth of Suriname’s economic problem is reflected by the former Dutch colony defaulting on scheduled debt service payments for $675 million of sovereign debt during 2020. Since then, Paramaribo has been negotiating with creditors to cure the default. That resulted in international credit agencies Fitch Ratings and S&P Global Ratings downgrading Suriname’s credit rating.

President Chan Santokhi, who won the tiny South American country’s top office in the July 2020 election, is battling to resurrect a flailing economy and cast off the corruption as well as the malfeasance of the Bouterse administration. Like in neighboring Guyana, Santokhi’s government plans to exploit what appears to be Suriname’s considerable offshore petroleum wealth to revitalize the economy, bolster government finances and return the former Dutch colony to growth.

Despite Suriname only possessing oil reserves of 89 million barrels, the tiny South American nation possesses enormous oil potential. The impoverished country shares the Guyana Suriname Basin, which the U.S. Geological Survey estimates contains up to 35.6 billion barrels of undiscovered oil resources. Already, neighboring Guyana is experiencing a massive oil boom that saw its GDP expand by an exceptional 43% during 2020.

Exxon’s slew of quality oil discoveries in the Stabroek Block offshore Guyana, with the latest at the Pinktail well, point to even greater petroleum potential. Exxon along with partner Malaysian national oil company Petronas, which is the operator, found the presence of hydrocarbons at the 15,682-foot Sloanea-1 exploration well in offshore Suriname Block 52. The 1.6-million-acre Block 52 and neighboring 1.4-million-acre Block 58 are believed to lie on the same hydrocarbon fairway as the prolific Stabroek Block.

That proposition is supported by the five quality oil discoveries made by Apache and TotalEnergies, the operator, in Block 58 where they both hold a 50% interest.

Investment bank Morgan Stanley in 2020 announced that it had modeled the oil potential for Block 58 and determined that it could contain oil resources of up to 6.5 billion barrels.

Industry consultancy Rystad Energy estimates that the five discoveries made in offshore Suriname up until the end of June 2021 hold recoverable oil resources of up to 1.9 billion barrels of crude oil.

At the June 2021 Suriname Energy, Oil and Gas Summit Apache’s Vice President Global Geoscience and Portfolio Management Eric Vosburgh stated; “What I would say is that the ultimate scale of the resource and production potential is big. I think I need a word bigger than big, but it’s big.”

Apache and partner TotalEnergies are committed to developing Block 58. At the start of 2021, Apache announced that most of its annual $200 million exploration budget will be directed toward drilling in Suriname. TotalEnergies set a 2021 exploration budget allocated $800 million with the energy supermajor devoting a third of its exploration appraisal activities to Block 58.

While plans to develop the block have yet to be released TotalEnergies and Apache are expected to make their final investment decision during mid-2022 and work toward first oil by 2025. Suriname’s national oil company and industry regulator Staatsolie has the right to farm into Block 58 and take up to a 20% stake, which would see it liable for $1 billion to $1.5 billion in development costs. Paramaribo is also focused on attracting further energy investment in Suriname recently awarding three shallow-water blocks to foreign energy supermajors. TotalEnergies and partner Qatar Petroleum won Blocks 6 and 8, which are adjacent to Block 58, and Chevron was awarded Block 5. That region is underexplored and thought to possess considerable petroleum potential.

The medium and light crude oil found in Block 58 has similar characteristics to the Liza grade crude oil being pumped from the neighboring Stabroek Block. When that is combined with a low estimated breakeven price of around $40 per barrel Brent it is easy to see why offshore Suriname is especially attractive for international energy companies.

As further petroleum discoveries are made, oilfields developed and infrastructure built the breakeven price for offshore Suriname will fall to under $40 per barrel, making the region competitive with neighboring offshore Guyana and Brazil.

The downgrades to Suriname’s credit rating will make it difficult for Paramaribo to raise urgently needed capital including that required by Staatsolie to exercise its farm in option for Block 58.

International ratings agency Fitch in April 2021 announced it had downgraded Suriname to restricted default (RD) after the government failed to make $49.8 billion of payments on its 2023 and 2026 notes. That event according to the ratings agency was Suriname’s third default since the pandemic began in March 2020.

Those events highlight why Paramaribo must resolve the negotiations with creditors and the potential for a sovereign debt default if it is to build further momentum for the exploitation of Suriname’s vast offshore petroleum resources.

The current economic crisis coupled with the economy shrinking by nearly 14% last year emphasizes why Paramaribo must attract further investment from foreign energy companies so it can experience a massive economic boom like the one underway in neighboring Guyana. It is French oil supermajor TotalEnergies which is positioned to become a leading player in Suriname’s emerging offshore oil boom.

By Matthew Smith for Oilprice.com

BHP Spent Just Half a Day’s Profit Looking for Copper Last Year

Thomas Biesheuvel
Tue, September 14, 2021,


(Bloomberg) -- Copper might be BHP Group’s most prized metal, but the world’s biggest mining company spent little more than it earned in an average 12-hour period last year exploring for new deposits.

The company spent just $53 million looking for the metal last year, when it posted record profit of $37.4 billion. In total it spent $516 million on exploration, with more than two-thirds directed at oil and gas, a business it’s in the process of exiting.

The world’s biggest miners are universally bullish on copper, expecting a surge in demand as the global economy decarbonizes, while long-term supply looks constrained by the lack of new mine development. Yet part of the reason copper is so favored by miners and investors alike is because new deposits have been so hard to find.

Still, BHP does have growth plans in copper, but from buying into smaller developers rather then spending a fortune on exploration.

The company has built a stake in SolGold Plc, which is developing Ecuador’s Cascabel project, potentially one of the biggest copper mines in the world. BHP is also in the process of trying to buy Noront Resources Ltd. to gain control of a nickel project in Canada.

The company expects its total exploration spend to jump to $800 million this year.

BHP handing unexpectedly small $3.9 billion clean-up tab to Woodside in oil merger

BHP's logo is projected on a screen during a round-table meeting with journalists
In this article:

Sonali Paul
Mon, September 13, 2021


MELBOURNE (Reuters) - BHP Group will transfer a smaller-than-expected $3.9 billion in oil and gas decommissioning liabilities to Woodside when it merges its petroleum business with the independent Australian gas producer.

Woodside's shares jumped 6.5% after the figure was disclosed in BHP's annual report on Tuesday, outperforming gains of around 4% among its peers.

"The long awaited BHPP (BHP Petroleum) abandonment provision number has been released, coming in below what we feared it could be," Credit Suisse analyst Saul Kavonic said in a note.

BHP said in its annual report that as of June 2021, its petroleum assets included "property plant and equipment and closure and rehabilitation provisions of approximately $11.9 billion and $3.9 billion, respectively".

When the merger was announced in August, investors had raised concerns as Woodside declined to reveal the rehabilitation liabilities that were assumed in setting the deal terms with BHP's petroleum business to create a global top-10 independent oil and gas company.

The oil and gas rehabilitation provisions, which are estimates of the cost of removing platforms and pipelines and cleaning up sites at the end of their lives, make up about one-third of BHP's total closure and rehabilitation provisions of $11.9 billion for all its assets.

Kavonic said he had assumed Woodside might inherit as much as $5 billion to $7 billion in decommissioning liabilities in the merger with BHP's petroleum arm, which comprises assets in Australia, the Gulf of Mexico, Trinidad and Tobago, and Algeria.

Citi had estimated BHP's decommissioning liabilities in Australia's Bass Strait alone at $3.4 billion.

Once tax offsets are taken into account, the actual decommissioning cost may be below $1 billion, Kavonic said, adding that those costs could be deferred through reusing sites for activities such as carbon capture and storage or offshore wind in the future.

Capital One Testing Buy-Now, Pay-Later Option to Battle Affirm

Jenny Surane
Mon, September 13, 2021



(Bloomberg) -- Capital One Financial Corp. will test a new buy-now, pay-later service as consumers flock to the options that let them split up a purchase and pay it off over time.

The company will begin beta testing the product with some of its existing customers at select merchants later this year, Chief Executive Officer Richard Fairbank said Monday at an investor conference. He declined to share more beyond saying the new offering wouldn’t be linked to the firm’s private-label credit-card business.

Buy-now, pay-later options -- with names such as Afterpay Ltd. and Affirm Holdings Inc. -- have swelled in popularity in recent years, especially among younger consumers looking to pay off purchases over time and often without interest. The offerings make most of their money by charging merchants a fee each time a consumers uses the product at checkout.

“We’re watching this product closely and certainly not taking this growth lightly, especially as many of these buy-now, pay-later providers form new financial relationships with a large number of consumers and merchants,” Fairbank said.

Capital One has been eyeing ways to juice loan growth in recent months. The McLean, Virginia-based firm has spent more on marketing in an effort to add new customers and has begun gradually increasing credit lines for existing clients. The lender’s latest move in the buy-now, pay-later business marks a bit of a reversal, though: last year, it barred customers from using Capital One credit cards for buy-now, pay-later options.

“Competitors are amassing at the border, and it’s possible they will bid down the level of the merchant discount,” Fairbank said. “As there is a drop in margins, it could alter how the business works -- who pays for the loans, and which customers ultimately choose the product.”

ALL THAT IS OLD IS NEW AGAIN DEPT.

AFTER WWII AS THE ECONOMY GREW INTO THE 1960'S THE LAYWAY PROGRAM WAS YOUR BEST WAY TO BUILD CREDIT AND A CREDIT SCORE. GOOD CREDIT WAS KEY TO MY PARENTS GENERATION GROWING UP IN THE GREAT DEPRESSION.

BY THE NINTIES AND THE 000'S CREDIT WAS EASILY AVAILABLE AND SHOWED THE DOMINANCE OF FINANCIAL CAPITAL GROWING OVER ALL OTHER FORMS OF CAPITAL.

AND IT HAS REMAINED SO UNTIL IT IS NOW PART OF A GIG EXCHANGE...LAY AWAY RETURNS WILL RENT TO OWN COME BACK NOW TOO

Chinese delivery giants Meituan, Ele.me pledge to not force drivers to register as independent businesss

Wed, September 15, 2021

SHANGHAI, Sept 15 (Reuters) - China's online food delivery giants Meituan and Ele.me both said this week they will not force couriers who do work for them to register as independent businesses, a bone of contention amid ongoing scrutiny of the food delivery sector.

The promise comes as part of a broader push from regulators to improve conditions for 'gig-economy' workers, and during ongoing public scrutiny towards tech companies treatment of said drivers.

In August, several Chinese regulatory bodies met with a number of Chinese food delivery companies to call for better labour safeguards.

Many drivers for food delivery or ride-hailing apps are hired indirectly by the platform and do not receive basic social or medical insurance

This past week, a social media account covering labour law published an article alleging some drivers working for Meituan and Ele.me were operating as individual businesses, as opposed to employees of the platform company or a third-party company, thereby reducing the platform company's legal obligations to the driver. The piece spread widely across China's internet.

In a social media post published late on Tuesday evening, Meituan wrote that, "Drivers are important partners of Meituan. When it comes to protecting drivers' labour rights, we must make more improvements and need to do better."

The company said that following the publication of regulations targeting food delivery workers last July, it had formed a work group to examine its employment practices. It said this month it issued a document to over 1,000 delivery partners and held a video conference stating it prohibits forcing couriers to register as independent businesses.

The company added that it aimed to improve its treatment of riders in aspects such as income, social security, and health and safety. On Monday, Meituan said it would change its algorithm be more accommodating towards its drivers when facing tight delivery times.

On Wednesday morning, Ele.me published a statement also pledging not to force drivers to register as independent businesses. 

(Reporting by Josh Horwitz; Editing by Kenneth Maxwell)

Is Toyota Pivoting Away From Hydrogen Fuel Cells?


Editor OilPrice.com
Mon, September 13, 2021

Toyota is finally trying to get in on the electric vehicle (EV) revolution. The Japanese automaker has been dragging its feet for years, investing its time, money, and attention to lobbying against the spread of EVs while its rivals gave up the ghost and dove in. Now, Toyota is way behind and trying to catch up with a new investment of more than $13.6 billion into EV batteries.
Toyota To Embrace The Electric Vehicle Boom

Toyota is the world’s biggest automaker, but even their colossal industry sway couldn’t slow the changing of the tides away from gas-powered engines. But they sure tried their hardest to do so. Toyota execs have downplayed or disparaged all-electric vehicles for years, and have yet to launch a single EV outside of China. Instead of focusing on battery-powered cars, Toyota has historically promoted hydrogen fuel cells and hybrids. This new investment thereby marks the end of an era for Toyota, and stands as a major victory for the EV industry.

The company is investing 1.5 trillion yen (or $13.6 billion, as previously mentioned) into battery supply and research to be carried out by 2030. Investing in a reliable battery supply chain is paramount, as the EV industry is currently plagued by a shortage and the threat that the sector will run out of batteries entirely is a very real and present danger. In fact, it’s projected to happen by just 2020 if some major changes aren’t made in the immediate term, due to the increasingly rapid adoption of EVs and skyrocketing demand for lithium-ion batteries. A Bank of America Global Research report released in July announced: “Our updated EV battery supply-demand model suggests the global EV battery supply will likely hit [a] ‘sold-out’ situation between 2025-26, with its global operating rates reaching above 85%.”

In fact, the lithium-ion battery sector is bogged down by a litany of problems that could eventually have very real and problematic geopolitical ramifications. These batteries are reliant on rare earth minerals, such as lithium and cobalt, which are finite resources only found in certain areas of the world. As it stands now, China controls up to 90% of the market for some of these essential ingredients. As the world’s hunger for EVs grow, China’s chokehold on this essential part of the supply chain only intensifies, and Beijing has already shown that it is not afraid to use that power to sway international politics and diplomacy. It has even been speculated that we are headed for a clean energy resource war if superpowers -- most notably the United States and China -- don’t play nicely.

In the meantime, companies like Toyota are snapping up as many batteries as they can get. The company’s chief technology officer Masahiko Maeda has said that Toyota’s goal is to secure a supply of 200 GWh of batteries before the end of the decade. “We are assuming that we will go beyond the 180 GWh worth of batteries that we are currently considering and will ready 200 GWh worth of batteries or more if the dissemination of BEVs is faster than expected,” he was quoted by EV news outlet Electrek. According to their reporting, “at an average of 60 kWh per battery pack, it would be enough for the annual production of more than 3 million electric cars per year.”

This is a huge change in tune for a company that has been outright antagonistic to battery-powered electric vehicles. In fact, even as Toyota moves forward with EVs, making a late bid to become competitive in a largely developed market, the company is concurrently lobbying the United States government to slow down the production and adoption of electric vehicles. Despite Toyota’s best efforts, the Biden administration is continuing to push electric vehicles as a key part of its platform and as a central tenet of the infrastructure agreement and spending bill. On Friday U.S. Democrats announced a plan to significantly expand tax credits for EVs, with especially lofty subsidies for union-made models assembled domestically in a move that favors the nation’s Big Three automakers. It’s no wonder that Toyota sent an executive to protest in the U.S. senate as it looks like they will once again fall behind in the overseas EV revolution.

By Haley Zaremba for Oilprice.com

UH OH 

BACKWARDS TO THE FUTURE, FORWARD TO THE PAST

Japan’s Nikkei 225 Returns to Bubble-Economy Level Seen in 1990

Naoto Hosoda and Komaki Ito
Tue, September 14, 2021





(Bloomberg) -- Japanese stocks advanced for a third day, lifting the Nikkei 225 Stock Average to a level last seen during the nation’s bubble economy more than three decades ago.

The blue-chip gauge closed at 30,670.10 in Tokyo, surpassing this year’s previous peak in February to end at the highest since August 1990. KDDI Corp. and Fanuc Corp. were the largest contributors to the Nikkei’s 0.7% gain. Electronics makers and car companies gave the biggest boosts to the broader Topix, which advanced 1%.

Japan has been the world’s best-performing major stock market over the past two weeks amid hopes for new leadership, an acceleration of vaccinations and a reshuffle in the Nikkei 225 that will add heavyweights Nintendo Co., Keyence Corp. and Murata Manufacturing Co. Crucially, foreign money is returning, with JPMorgan, Baillie Gifford and BNP Paribas Asset Management among investors who say they’re becoming more positive on Japan.

“Global allocations to Japanese equities remain limited, suggesting room for investors to add exposure,” Goldman Sachs strategists including Christian Mueller-Glissmann wrote in a note. “The rebound in Japanese equities comes after a prolonged underperformance vs. the S&P 500 and other major indices since Q2.”

Hideyuki Ishiguro, a strategist at Nomura Asset Management Co. in Tokyo, said Japan’s progress against the pandemic has been supportive for the market. On Tuesday, Japan overtook the U.S. in the proportion of those of have received first doses of Covid-19 vaccine with 63.6% having received their first shot. More than 51% of Japan’s population is now fully vaccinated.

Japan Overtakes U.S. on Vaccination After Starting Months Later

“Japan’s vaccination rate has topped 50% and is on a similar level to that of the U.S.,” Ishiguro said. “Japanese equities had been showing unstable performance relative to U.S. and European equities because of political uncertainties and a delayed vaccination process but with the two factors having been resolved, investors’ moves to unwind their previous positions will continue.”

The Nikkei 225 is now up about 12% for the year, with the Topix up 17%. That compares with a 19% gain for the S&P 500 Index and 17% advance for the STOXX Europe 600 Index.

The rally in Japan’s equity market is lifting a broad spectrum of stocks. The share of Topix members trading above their 200-day moving averages has climbed to 74% -- the highest since April -- an indication of strong market breadth. “It’s good that the gains seen recently aren’t targeted to a narrow group,” Nomura Asset’s Ishiguro said.

JPMorgan Chase & Co. strategists led by Marko Kolanovic advise adding to Japanese stocks. The resignation of Prime Minister Yoshihide Suga paves the way for a stable ruling party, a scenario that the firm says has historically produced better equity returns, they wrote in a client note. Taro Kono, a popular candidate among foreign investors, is the favorite among the public to replace Suga as the leader of the ruling party, according to a poll by Nikkei and TV Tokyo.

Foreign investors bought a net 662.7 billion yen ($6 billion) worth of Japanese equities and futures in the week through Sept. 3, the day news unexpectedly broke that Suga would not seek for another term as LDP leader. It was the most in a single week since February.

WEAPON OF ECOCIDE
Syngenta, Chevron Could Face Billions in Claims Over Weed Killer

Jef Feeley
Mon, September 13, 2021


(Bloomberg) -- Yet another popular weed killer used by American farmers for decades is becoming a costly liability for the companies behind the chemical.

Over the past seven months, new lawsuits have been filed almost every day claiming farmers or field workers contracted Parkinson’s disease from their exposure to Paraquat, a highly toxic herbicide developed by Syngenta AG and sold in the U.S. by Chevron Corp.

The surge in complaints comes as another company, Bayer AG, has set aside as much as $16 billion to resolve thousands of current cases and prepare for future suits tied to Roundup, the best-selling U.S. weed killer. While it’s still early days in the Paraquat litigation, personal-injury lawyers are blanketing radio, television and social media with ads seeking new clients who could demand billions of dollars in compensation.

“Even if there aren’t the kind of Roundup-level number of cases, I can see these companies offering several billion dollars just to make it go away,” Richard Ausness, a University of Kentucky law professor who specializes in product-liability cases, said of the Paraquat lawsuits. “Parkinson’s disease has a long, expensive tail that will drive up the cost of settling these cases.”

Syngenta has already started settling. The company disclosed in August that it agreed on June 1 to pay $187.5 million to resolve an undisclosed number of cases “solely for the purpose of bringing to an end these claims.”

What Bloomberg Intelligence Says

“Syngenta’s statement that it settled certain cases for $187 million in June could mean top-end exposure totals billions of dollars.”
-- Holly Froum, Litigation Analyst. Click here to see report.

Paraquat has been used on many U.S. crops since the 1960s, but it’s banned in more than 30 other countries over alleged ties to Parkinson’s, a brain disorder that leads to shaking, stiffness and balance problems. In the U.S., the chemical must be sprayed by a licensed applicator.

At the start of 2021, only a handful of lawsuits over Paraquat were making their way through state and federal courts in the U.S. Since February, there have been more than 400 new complaints filed in federal courts alone.

Thousands more are possible after a court panel in June consolidated all federal cases under a judge in Illinois, and the success of the Roundup litigation created an incentive for plaintiffs’ lawyers to find more Paraquat clients. Attorney Michael Miller, who sued Chevron and Syngenta, said there may eventually be as many as 35,000 cases.

Disputing Claims

The companies have steadfastly disputed the claims Paraquat causes the nervous-system disorder.“There is no credible evidence Paraquat, which has been widely used for more than 55 years, causes Parkinson’s disease,” said Saswato Das, a spokesman for Switzerland-based Syngenta. “No peer-reviewed study, including the largest study which involved 38,000 farmers, has ever concluded Paraquat causes Parkinson’s disease.”

Syngenta was acquired in 2017 for $43 billion by China National Chemical Corp., which combined it with other seed and fertilizer businesses. ChemChina disclosed in July it was seeking to raise $10 billion (65 billion yuan) in a Shanghai listing of shares that represent a 20% stake in Syngenta.

Chevron spokesman Tyler Kruzich said in an email the company didn’t believe it caused the plaintiffs’ injuries and “will vigorously defend against the allegations.”

The number of Paraquat lawsuits isn’t likely to be anywhere near as many as the claims against Bayer and Roundup, which is widely used by American farmers, landscapers and home gardeners. The global market for glyphosate, the active ingredient in Roundup, may reach $13.3 billion in 2027, according to estimates from researcher Reports and Data.

Paraquat’s market share is much smaller -- estimated by 360 Research Reports at about $100 million last year -- because it can only be used under a license. It’s mostly sprayed on corn, soybean and cotton fields, Syngenta says on its website.

Paraquat Pot

Paraquat also has been used in the long war on drugs. From about 1975 to 1978, the U.S. sought to reduce the flow of marijuana from Mexico, the biggest supplier at the time, by encouraging defoliation techniques the American military used during the Vietnam War. The U.S. spent about $30 million a year to aid Mexico’s spraying of Paraquat on the illegal crops, according to the American Journal of Public Health. A few years later, government agencies proposed spraying Paraquat on pot farms in California and Florida.

The litigation against Roundup “has set a massive precedent,” Garry Mabon, an analyst and founding partner at Scotland-based researcher AgbioInvestor, said in an email. But a key difference between the chemicals is that Paraquat is well understood as being a possible carcinogen, while the key ingredient in Roundup isn’t, he said. “As such, the weight of evidence would seem to be against Paraquat in any litigation.”

The lawsuits were assigned to U.S. District Judge Nancy Rosenstengel in East St. Louis, Illinois, because the state’s farmers are among the biggest Paraquat users and Rosenstengel already had 20 cases before her. The first trial of those cases is set for late next year. Suits also are being filed in state courts, including California and Illinois, according to Miller, the plaintiffs’ attorney.

Rosenstengel, appointed by President Barak Obama in 2014, will manage pre-trial information exchanges and test trials. It’s her first time overseeing a so-called multi-district litigation. “Its my job to bring this case in for a landing, whether that be trials or settlement,” Rosenstengel said at the initial status hearing in June. She didn’t respond to requests for additional comment.

The case is In Re: Paraquat Products Liability Litigation v. Syngenta Crop Protection, LLC, 21-md-3004, U.S. District Court for the Southern District of Illinois (East St. Louis)

Dem Plan Would Cut Taxes for Most, Hit Top Earners Hardest: Analysis


Yuval Rosenberg
Tue, September 14, 2021

The tax changes proposed by House Democrats this week would lower taxes for most Americans, at least in the near term, while hitting top-earning households with sizable increases, according to estimates released Tuesday by the bipartisan congressional Joint Committee on Taxation (JCT).

The Democratic plan, which is being debated again this week by the House Ways and Means Committee, calls for restoring a top marginal individual income tax rate of 39.6%, up from the current 37%. It also includes a host of other changes to individual, capital gains and corporate taxes that, combined, would raise more than $2 trillion for the U.S. Treasury over the next 10 years, according to the JCT.

The congressional tax scorekeeper estimated that households making less than $200,000 a year would see lower tax bills through at least 2025, largely as the result of the expanded child tax credit, while those making at least $1 million a year would face a 10.6% increase in federal taxes in 2023 and a 12.1% increase by 2025. The average federal tax rate for those top-earners would climb from 30.2% now to 37.3% in 2023 and 38.1% by 2027.

The JCT estimates don’t include Democrats’ proposed increase in the estate tax, meaning that the tax hit on wealthy households would be even higher.

“We are taking a significant step toward leveling the playing field,” House Ways and Means Committee Chair Richard Neal (D-MA) said Tuesday. “No one likes raising taxes, but thanks to the strength of our economy, we can afford to do this.”

A problem for President Biden? The JCT estimates show that households making between $200,000 and $500,000 a year face an average tax increase of 0.3% in 2023. They also show that if lawmakers allow temporary changes to the tax code to expire as scheduled, including the expansion of the child credit, households making between $30,000 a year and $200,000 a year would see their taxes go up slightly, on average, by 2027. Households making $30,000 to $40,000 a year would see their average tax bill rise by 0.1% while those earning between $100,000 and $200,000 would face a 1.5% average increase.

The House budget plan would extend the credit for four years and many Democrats want to make the new child tax credit permanent, but others have expressed concerns about doing so. Most notably, Sen. Joe Manchin (D-WV) is pushing for a new requirement that parents work in order to be eligible for the credit. “Tax credits are based around people that have tax liabilities. I’m even willing to go as long as they have a W-2 and showing they’re working,” he told Insider.

With the long-term fate of the credit unclear, the JCT estimates factoring in its expiration after four years opened the door for Republicans to claim that the plan violates President Biden’s pledge not to raise taxes on people making less than $400,000 a year.

“You’ll hear today that President Biden doesn’t break his pledge on taxing Americans making less than $400,000, but that’s false as well,” said Rep. Kevin Brady of Texas, the top Republican on the Ways and Means Committee.

Republicans oppose the tax plan and have warned that it will hurt the middle class as well as businesses large and small. Brady on Tuesday argued, as many economists do, that the corporate tax increase would be felt by individuals, too: “As you know, businesses don’t pay taxes, they collect them. And those burdens land on their workers, lands on their customers, lands on the retirees whose retirement depends on their success, and it lands on the communities that they live in.”

Warren Asks Fed to Break Up Wells Fargo After Regulatory Hit

Hannah Levitt
Tue, September 14, 2021


(Bloomberg) -- U.S. Senator Elizabeth Warren urged the Federal Reserve to force Wells Fargo & Co. to separate its traditional banking and Wall Street businesses, after the lender was handed fresh regulatory action and a $250 million fine this month.

In a letter to Federal Reserve Chair Jerome Powell, Warren called on the Fed to revoke Wells Fargo’s status as a financial holding company in order to effect a separation. The Fed should order the company to develop a plan to ensure its customers are protected through the transition, the Massachusetts Democrat said.

“Every single day that Wells Fargo continues to maintain these depository accounts is a day that millions of customers remain at risk of additional negligence and willful fraud,” Warren wrote. “The only way these consumers and their bank accounts can be kept safe is through another institution—one whose business model is not dependent on swindling customers for every last penny they can get. The Fed has the power to put consumers first, and it must use it.”

The New York Times earlier reported the contents of the letter. A representative for the Fed confirmed it received the letter and said it planned to respond.

Wells Fargo was fined this month over its lack of progress addressing long-standing problems, the first such sanction under Chief Executive Officer Charlie Scharf. The penalty adds to the more than $5 billion in fines and legal settlements the bank paid over the last five years tied to a series of scandals that began with fake accounts in its branch network.

The latest order, from the Office of the Comptroller of the Currency, cited deficiencies in Wells Fargo’s home-lending loss mitigation practices -- the steps firms take to avoid foreclosure -- that have prevented the bank from being able to “fully and timely remediate harmed customers.”

“Meeting our own expectations for risk management and controls — as well as our regulators’ — remains Wells Fargo’s top priority,” the bank said Tuesday in a statement. “We are a different bank today than we were five years ago because we’ve made significant progress.”

Fresh Questions

Warren cited the Bank Holding Company Act, which requires that banks are well capitalized and well managed. If a financial holding company falls short of these, the Fed is required to give a notice for the institution to correct its deficiencies.

Should the bank fail to remedy those within 180 days, the Fed can ask the company to divest control of any subsidiary depository institution -- or the bank can choose to cease to engage in activity that isn’t permissible for a bank holding company.

The latest sanctioning raises fresh questions about whether the bank meets the Act’s requirements that it be well managed, and whether the board and Scharf are capable of effectively running the lender, Warren said.

Progress Signs

Despite the regulatory hit, Wells Fargo has made progress under Scharf. A Consumer Financial Protection Bureau order tied to the firm’s sales practices levied in 2016 expired this month while in January, the bank was freed from a 2015 regulatory order over violations of anti-money-laundering rules. The Fed also confidentially accepted a plan for overhauling risk management and governance at the bank, Bloomberg reported earlier this year.

More broadly, Warren has also been pushing for executives of companies that don’t follow the rules to face personal consequences, she said in an interview with Bloomberg News.

“I am pushing hard for more personal liability,” Warren said. “These executives want to drag in the big bucks for running these companies, then they should be responsible when they preside over big companies that are breaking the law and cheating American consumers.”

Ex-Wells Fargo execs square off with U.S. regulator in trial over phony account scandal

Jody Godoy and Chris Prentice
Mon, September 13, 2021,

FILE PHOTO: A Wells Fargo logo is seen in New York City


By Jody Godoy and Chris Prentice

WASHINGTON (Reuters) -The civil trial of three former Wells Fargo & Co employees over their alleged roles in a scandal involving phony accounts kicked off on Monday, a rare public confrontation between a top U.S. banking regulator and former high-level bank executives.

The Office of the Comptroller of the Currency (OCC) is squaring off against executives it says are partly culpable for the San Francisco lender's misconduct before an in-house OCC judge in Sioux Falls, South Dakota, in a hearing expected to last at least two weeks.

The long-running scandal over Wells Fargo's pressurized sales culture that led staff to open millions of unauthorized or fraudulent customer accounts has cost the bank billions of dollars in civil and criminal penalties and has badly damaged its reputation.

The OCC alleges that Wells Fargo's former risk officer, Claudia Russ Anderson, former chief auditor David Julian and former executive audit director Paul McLinko failed to adequately perform their duties and responsibilities, contributing to Wells Fargo's "systemic sales practices misconduct" from 2002 to 2016.

The proceedings mark a significant step for a regulator that has been criticized in the past for being too soft on the banks and executives it oversees, said regulatory experts.

"It's an attempt at personal accountability for big-bank executives we have not seen in a long time, including in the aftermath of the 2008 crisis," said Jeremy Kress, an assistant business professor at the University of Michigan.

In testimony on Monday, OCC official Greg Coleman laid out the OCC's view that the three former Wells Fargo executives were responsible for the misconduct because they were the bank's key "lines of defense" against bad behavior and other risks.

Wells Fargo's "incentive sales program was implemented without risk-management controls, without proactive monitoring and it essentially incented the bank employees to open fraudulent accounts, to provide misleading information to customers, resulting in significant harm," said Coleman, OCC's senior deputy comptroller for large bank supervision and the first witness to testify.

The regulator brought https://www.reuters.com/article/us-wells-fargo-regulator-charges/u-s-bank-regulator-charges-ex-wells-fargo-executives-for-role-in-sales-scandal-idUSKBN1ZM2M2 civil charges last year against the trio, as well as other former Wells Fargo executives, and has demanded they pay nearly $19 million combined to settle the matter. The OCC is also seeking to bar Russ Anderson from the banking industry over the allegations.

Attorneys for the trio did not respond to requests for comment.

Matthew Martens, an attorney representing Julian, said during the hearing that the trio's attorneys had been blocked from gathering background information on OCC examiners and from calling OCC witnesses.

"We were stopped from calling four OCC examiners who would have provided testimony that we believe would be evidence of bias, incompetence" and credibility issues, he said.

A spokesperson for Wells Fargo declined to comment beyond a January 2020 statement in which CEO and President Charlie Scharf said the OCC's actions were consistent with holding the firm and individuals accountable for "inexcusable" sales practices issues.