STAFF NEWS & ANALYSIS
The Roundup Stickup: The difference between Blackmail and Extortion
By Walter E. Block - May 26, 2020

The long and the short of this interesting tale is that Timothy Litzenburg, a lawyer, offered the Nouryon chemical company a deal. He would protect that company from lawsuits when and if it was charged with promoting cancer, because it supplied the Bayer company, creator of the weed killer Roundup, with raw materials.

How would Litzenburg accomplish this task? He would defer future potential plaintiffs by creating a transcript asking softball questions, and being purposefully demolished by Nouryon’s toxicology experts. This would ward off any other law firm seeking to sink Nouryon into the morass of Bayer’s Roundup.

Nouryon would pay Litzenburg $200 million for this little service. If the company refused the modest proposal, the lawyer would drown Nouryon in “a parade of horribles that has been the Roundup litigation for Bayer/Monsanto.” This was no empty threat since the latter company had already suffered penalties imposed against it amounting to no less than $2.4 billion. True, these were subsequently reduced, but to a still very hefty $189 million, and there were still 42,700 plaintiffs to be faced.

What are we to make of all of this?

To begin with, we must distinguish between blackmail and extortion. Both consist of a threat and a demand for something of value (usually money, but it could include a demand for sexual services, to refrain from competition, etc).

But there is a crucially important distinction to be drawn between the two. In blackmail, the threat consists of engaging in an entirely legal act. For example, engaging in free speech, and gossiping: “If you don’t fork over the money, I’ll tell everyone you cheated on an exam, engaged in adultery, plagiarized, etc.”

In extortion, the threat involves something that is patently illegal: “If you don’t pay me off, I’ll kidnap your kids, murder you, break your knees, etc.” The demand might well be for the exact same compensation, but the very sharp difference between the types of threat makes all the difference. Thus, blackmail should be legal, but certainly not extortion.

We often engage in blackmail, even though most of us hardly recognize it for what it is. It is an everyday occurrence. When I purchase shoes, I implicitly “threaten” the store owner that unless he hands over the footwear, I’ll refuse to pay. He reciprocates “against” me: If I don’t cough up the gelt, I’ll have to wear my old shoes out of the store.” That is blackmail, whether we like it or not, whether we recognize it or not. It is a demand, coupled with a threat, just like extortion.

So, what did Litzenburg do? Did he blackmail Nouryon, or did he extort this company? Clearly, the former.

Yes the lawyer threatened the chemical company, but the menace was to do something which should be considered entirely legal: register a lawsuit against it. The deal was sweetened with an offer to protect it from future plaintiffs with a concocted transcript (also not per se a crime). In sharp contrast, when the criminal gang offers to “protect” a victim, it is against violence initiated by this extortionist. That is, and should be, against the law.

What about the original case against Bayer/Monsanto for Roundup? Even if it did lead to cancer (my prudential judgment on that is that no evidence, none, has been adduced in that direction) they should still be considered innocent, given caveat emptor.

The same analysis applies to the tobacco company plaintiffs, and for the law firm Chalik and Chalick which is now suing the Princess Cruise Line over CD-19; what’s next, blaming hotels, grocers, ball parks and airlines for the coronavirus? Sleazy? Yes, to be sure. Criminal? No.

The British concept of heavy penalties for frivolous lawsuits ought to be imported into this country. That ought to settle the hash of Mr. Litzenburg, the Chaliks and their colleagues at the plaintiff bar.

But, still, fair is fair. They are only “guilty” of blackmail, a non-crime, not extortion.

Walter E. Block is Harold E. Wirth Endowed Chair and Professor of Economics, College of Business, Loyola University New Orleans, and senior fellow at the Mises Institute. He earned his PhD in economics at Columbia University in 1972. He is the author of more than 600 refereed articles in professional journals, two dozen books, and thousands of op-eds (including the New York Times, the Wall Street Journal and numerous others). Prof. Block counts among his friends Ron Paul and Murray Rothbard. He was converted to libertarianism by Ayn Rand. Block is old enough to have played chess with Friedrich Hayek and once met Ludwig von Mises, and shaken his hand. Block has never washed that hand since.  So, if you shake his hand (it’s pretty dirty, but what the heck) you channel Mises.

Posted in STAFF NEWS & ANALYSIS
loading