class-action, Bayer’s settlement policy was cited to show that Bayer made some effort to provide relief.
MFNs, in contrast, remain somewhat controversial because they
accurately perceived as tying the hands settlements that otherwise would occur.
of the defendant to reach One federal judge rejected
explaining, “Because plaintiffs favored-nations agreements with strong public policies favoring
are ‘straight-jacketed’ by the most- certain prior settling defendants, the complete settlement … are being
Similarly, the Manual for Complex Litigation (1977)
warned that “the complications and even inequitites which ‘most favored
nations’ clauses almost always generate make their use undesirable.”
Other commentators have also criticized MFNs (Spier, 2003).
extent this creates doubt that they will be enforced, this may undermine
their effectiveness as commitment tools.
Interestingly, the Bayer strategy has exactly the same characteristic that the use of MFN is criticized for: “straight- jacketing” Bayer from reaching settlements with later plaintiffs that
otherwise would have been rational.
less apparent, grounds.
Yet probably because
this effect on those
Proof of Causation of Injury Was Relatively Direct
The relatively direct connection between cerivastatin and rhabdomyolysis aided the adoption of this commitment strategy.
34 Incidentally, the earlier plaintiffs lost with the court finding that the outcome was a “judgment” rather than a “settlement” and therefore did not trigger the MFN (Spier, 2003).
35 In Re Chicken Antitrust Litigation, 560 F.Supp. 943, 947 (Ga. 1979).
As Spier notes, the latest version of The Manual for Complex
Litigation states “[MFN] clauses can provide an incentive for early
settlement as well Complex Litigation
as an obstacle to later settlement.” Manual