Man Wins $289 million in lawsuit, will get roughly $20 million after taxes

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So Dewayne Johnson, who got cancer, alleged it was caused by Roundup and sued Monsanto. He won $289 million dollars as a result. Good for Dewayne..... but he gets to keep roughly one-tenth of that amount after taxes. Why? Because America is a Corporatocracy. The math is provided below:

ohnson was awarded $39 million in compensatory damages, and $250 million in punitive damages. The combined contingent fees and costs Mr. Johnson pays might total 50%. If so, he gets to keep half, or $19.5 million of the compensatory award. Since it is for his claimed non-Hodgkin's lymphoma, that part should not be taxed. Of the $250 million punitive award, $125 million goes to legal fees and costs, and $125 million to Johnson. So before taxes, his take home is $144.5 million. What about after taxes? The $250 million in punitive damages are fully taxable, with no deduction for the fees to his lawyer. At 37%, Johnson would lose $92.5 million to the IRS. That makes his after-tax haul from a $289 million verdict only $52 million.

The state of California also would take a cut of Johnson's award. State taxes of as much as $30 million would leave leave him with $20 million or less. While still a substantial sum, that would amount to less than one-tenth of the original award.

Meanwhile, as outlined by Slate a plaintiff who won a smaller award could conceivably lose money after paying taxes and legal fees

Monsanto can deduct the full $289 million, as well as its lawyers' fees, from its tax bill.

full article: https://www.cbsnews.com/news/monsanto-lawsuit-verd...
Thoughts?

Comments (35)

Aug 17, 2018

guarantee this gets overturned and Monsanto doesn't end up paying near as much, if anything

    • 1
Aug 17, 2018

I can see the amount of his settlement being reduced, but that isn't really the point of my post.

Aug 17, 2018

yeah either way, quite mind blowing on how the math works

Aug 17, 2018

Full disclosure I'm not a lawyer (also not a Doctor), but I believe punitive damages are more a penalty for the person who actually caused the damage - like a we want to do more than let you off the hook with whatever the lifetime treatment of this patient is gonna cost - bc in reality the defendant could cut the $39MM check and keep doing what they're doing. The $250MM penalty (which will ultimately be reflected in Bayer's bottom line) is bad for them and the negative publicity arguably as damming. I don't really know what point I'm trying to make here, but punitive damages don't generally get forwarded to the victim in anywhere close to the full amount since they're not enacted to in this specific case to fund the lifetime cost of treatment for the person that was wronged.

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Aug 17, 2018

So the damn govt. should pocket the $? It's ridiculous. Possible negative awards... cmon.

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Aug 17, 2018

Oh I don't like it (or to be more accurate I don't like what very little I know about it) in the slightest. From an accounting standpoint I assume that the Govt picks up the taxes on the damages/award bc the company is able to deduct them from their own tax base (i.e. the Govt misses out on that corporate tax revenue).

Aug 17, 2018

If the purpose is to make up for lost tax revenue, why wouldn't they just do away with punitive damages and fine the company directly?

Aug 17, 2018

My friends at LegalZoom Oasis tell me that's where their salaries come from.

Aug 17, 2018
dr_mantistoboggan_MD:

Full disclosure I'm not a lawyer (also not a Doctor)

lol

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

Funniest
Aug 17, 2018

Republicans passed a law that made it harder for the average person to sue a corporation? Oh my. What a shocker.

What's next? They're going to lower taxes and increase the deficit?

    • 7
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Aug 17, 2018

Considering the US Government values 1 human life at roughly 10 million USD (value of statistical life), and many private companies far, far less (some as low as $300k), this guy definitely got lucky with his cancer. Hell, he would've won out even if he died.

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Aug 17, 2018

You are starting to sound like those unintelligible spam bots that every-so-often post complete garble at like 3am from India. Lay off the drugs.

Aug 18, 2018

He's not wrong. The man doesn't deserve $289mil, hell, not even $28.9 million. His lawyer was the one took all the responsibilities - it doesn't matter than the victim was Dewayne Johnson, it could even John Doe. Pay the guy enough to treat his cancer, buy a lambo (and a gold chain/Jordans, considering his culture), and sustain his future families (assuming they don't blow it all on gold chains and shoes, which is quite likely). 20 million is more than enough for that task. The rest of the money can go towards legislation and helping others prevent similar future occurences

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Most Helpful
Aug 18, 2018

Between the shitty premise and the coded racism this is one of the worst posts on this entire website.

    • 9
Aug 18, 2018

How do you know what "his culture" is?

Looking through your post history- please go to talk to a liberal in finance, a black person, and a girl. And lay off Reddit. Sheesh

Aug 18, 2018

It should be pretty obvious I was making a generalization - you were too.

The average Black income per capita is only $18000. Out of all the ethnic groups in the US, Blacks have the highest marginal propensity to consume by far, spending their new income on shoes, apparel, jewelry, cars, guns, drugs, etc.

Some even withdraw massive amounts of cash simply to pose with stacks of bills for Instagram pictures, "flexing on yo ex like a real n*****," as they so eloquently put it.

Given that information, and based on the premise that this guy just received $20m, tell me the outcome.

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Aug 17, 2018
michigan10483:

It should be pretty obvious I was making a generalization - you were too.

The average Black income per capita is only $18000. Out of all the ethnic groups in the US, Blacks have the highest marginal propensity to consume by far, spending their new income on shoes, apparel, jewelry, cars, guns, drugs, etc.

Some even withdraw massive amounts of cash simply to pose with stacks of bills for Instagram pictures, "flexing on yo ex like a real n*****," as they so eloquently put it.

Given that information, and based on the premise that this guy just received $20m, tell me the outcome.

You are obsessed with black people, shit is weird. Pls stay on topic (the tax law).

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Aug 17, 2018

.

Aug 18, 2018

Tbf, Im almost positive that the law firm representing him was being paid on the contingent of a win. This is fairly typical for big law firms that specialize in these types of cases. If they lost, Dewayne wouldn't have had to pay a dime. The cancer sucks and he should be compensated, but he was essentially freerolling for a chance at multigenerational wealth.

Aug 17, 2018

Please tell me what this has to do with the government's ridiculous tax system that can cause possibly negative damages as the result of winning a law suit. Way too many ppl not discussing the topic of the post.

    • 1
Aug 18, 2018

Does the govt care how you make money? Guy won $250. If he represented himself he would have kept all of it. He didn't.

I hate taxes and government as much as any patriot, but you pay taxes on what you gross, not what you net when it comes to personal income.

The parasite needs to feed bro. Don't deny the cancer healthy cells. You should also be enraged as that income will be taxes multiple times as well.

Aug 18, 2018

Do you just enjoy arguing with me for no reason? I wasn't even being snarky in my initial response, but rather giving a perspective that should be included when discussing such a case.

Yes, the gov tax system can be ridiculous, and yes, negative damages are a thing, but you picked a poor case to try to discuss this topic. Dewayne Johnson would never ever ever have to pay anything (even post-tax) in this type of case, nor would the plaintiff in any other similar case. Most every law firm that specializes in these types of cases have a clause stating as much. I've taken classes taught by lawyers at top firms specializing in these exact type of cases. Slate is a rag and they're writing for laymen in order to get a sexy story/headline and get more eyeballs.

Just think about what would happen if BIG LAW ended up winning this type of case for little John Q. Public, and John Q. end up owing money after all is said and done? BIG LAW would almost certainly never get another client for a case like this and their entire practice would go down the shitter while clients moved to other law firms with better deal structures. Like I said before, Dewayne was free rolling and good for him.

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Aug 17, 2018

@Pmc2ghy and @TNA ill address you both here. Pm, no I don't enjoy arguing with you. I'd like you to keep focus on the subject tho. I'm not discussing the merits of his victory, or whether the guy is free-rolling. the point of my post is to question whether ppl think the current tax structure, as passed in the recent tax cuts, is appropriate. Idc whether he would've payed anything to the law firm had he lost, that's totally beside the point. TNA, the govt does, in fact, care how you make money. That's why we tax capital gains and income at different rates, for example. Comment on the specific context of this recent tax cut making it harder for the avg Joe to sue corporations, thanks.

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Aug 18, 2018

So you want a special IRS rule that taxes net gains from lawsuits? Fine, I'm cool with that. But don't make this a Corp issue. This is a nuance with the personal income tax code. One of the thousands that make that make taxes endlessly complex and creates an industry because of this.

Aug 17, 2018

It is a corporate issue. Republicans have passed a law that makes it more difficult to sue corporations, which is often the only recourse that the average citizen has against multi-billion dollar entities. All the while corporations can still deduct their losses. In my opinion, this is representative of the direction this country has been going towards since citizens united and we need to address it before corporations complete the take over.

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Aug 18, 2018

Seriously Bob, wtf are you talking about? The USA is far and away the most litigious nation in the world and it's easier to sue anyone or anything, including globocorps, here than damn near anywhere else. I don't even know why you felt a need to take a shot at Republicans in this discussion like always, but you're way off base and clearly don't understand the US legal system. We mostly don't have a "loser pays winner's legal fees" system here, which is the case in many other first world nations, and that right there incentivizes a ton of lawsuits.

Study after study has actually shown that the excessive amount of litigation in the US, with so much being frivolous, is extremely costly to the economy. This is why there is so much legalese and ass covering when signing damn near anything these days, and why there are armies of in-house do-nothing lawyers in every corporation. If John Q. has a legitimate case against BIG CORP, and many times even when he doesn't, it's still fairly easy to find a firm that will take his case on contingent.

Edit: I do agree that corporations have way way too much power in the US, but not for the reasons you listed.

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Aug 17, 2018

Thank you for finally addressing the subject. I will ignore the other items in your post as they are filler (you clearly know wtf I am talking about). BTW, I didn't "take a shot at Republicans" - I objectively cited reality. The law makes it more difficult to sue corps, that's a fact. You can argue that you agree with the law making it more difficult to sue corps (which sounds like what you are saying) because the U.S. is already too litigious. That's fine. I disagree. I think we should make it harder to sue INDIVIDUALS for petty grievances but I don't think laws should be passed that further protect corporations from litigation.

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Aug 18, 2018

Dude, what are you on?

Tier reform is a good thing. Republicans were correct in passing this. What you are upset about is a nuance in our taxation system.

I repeat, Uncle Sam doesn't care how much it cost you to win a lawsuit. The guy got representation on the condition he gives the law firm a large chunk. The government doesn't give a shit. He won 250MM, he pays taxes on his winnings. His personal obligations are his business.

Aug 17, 2018

The government used to give a shit, this is a new caveat brought about by Republican tax reform.

Aug 18, 2018

should have agreed on 50% to law firm post taxes, not pre (if thats ever a thing).

Aug 18, 2018

Tax policy is messed up in many places in this country but the issue here sounds like the 50% pre-tax fee to the lawyers. Lawyers getting half is not a legal requirement, right? I bet a new payment structure w/ attorneys comes out of this. If 50% is the industry standard at the moment you could argue that the ability to deduct this payment lead to it being inflated in the first place. Not sure of its history tho.

Aug 18, 2018

Conservatives:

"Taxation is theft!!!!!!!!"

Black man wins lawsuit against Monsanto

michigan10483:

He's not wrong. The man doesn't deserve $289mil, hell, not even $28.9 million. His lawyer was the one took all the responsibilities - it doesn't matter than the victim was Dewayne Johnson, it could even John Doe. Pay the guy enough to treat his cancer, buy a lambo (and a gold chain/Jordans, considering his culture), and sustain his future families (assuming they don't blow it all on gold chains and shoes, which is quite likely). 20 million is more than enough for that task. The rest of the money can go towards legislation and helping others prevent similar future occurences

    • 4
Oct 23, 2018

Compensatory and punitive damages serve different purposes... On one hand compensatory damages are to restore the loss/harm the victim has suffered, punitive damages are to punish bad companies in a way $30m would not

Aug 17, 2018
Oct 23, 2018