Lawsuits, Litigation, Attorneys and the Media

Transcription

1 Lawsuits, Litigation, Attorneys and the Media MCLE For Lawyers/General Counsel Accredited by the State Bar of California By David Silver CEO, Silver Public Relations

2 Qualifications Studied law at Washington University in St. Louis. Masters of Law in Legal Studies. Law Clerk in the City Attorney s Office in the housing/ litigation division, Practicing litigation and crisis public relations for 23 years. Award-winning investigative reporter.

3 Eight Points for Lawyers and General Counsel How to manage risk for your clients internally and externally -- in a crisis or litigation. The rise of third-party litigation funding and how plaintiffs are now going after corporations and their law firms. The financial media, law firms and general counsel. Translating complex legal arguments for reporters. Trial publicity, California Rules of Professional Conduct Case Studies: Toyota, BP Oil, Chevron v. Donziger, J-M Manufacturing v. Phillips. The global rise of fake news. Benchmarking the case for the financial media.

4 Client Risks Businesses are facing more lawsuits. Third-party litigation funding by plaintiffs are changing the nature of high-stakes lawsuits. The rise of fake news is making the media more aggressive and combative. There will be an need for outside law firms to help general counsel manage risk from the lawsuits. The media is covering lawsuits more aggressively to fit the 24-hour global news cycle.

5 Case Study: Toyota Hundreds of claims submitted by injured parties. The global media made this issue a page-one story. It still a live story. What does that mean? Toyota is still the subject of a number of investigations, both civil and criminal for not acting on a safety problem that cause sudden acceleration in its vehicles that was known internally for more years. Toyota s no comment media strategy cause reputational damaged and allowed plaintiffs to frame to story in the media. It hurt the bottom line for years.

6 Lawsuits: Risk Management Not a legal issue or communications issue. It is a client risk-management issue. No comment is a disaster for your law firm and your clients, it just makes reporters more aggressive in their coverage against your client. General counsel need to educate senior management and on the negative consequences of not responding to the media. This also means telling the media that there are issues that cannot be discussed, which is fine. The opposite side in the lawsuit will try to use the media as leverage to bargain with your client.

7 Trial Publicity California Rules of Professional Conduct Use a spokesperson to handle the media, not the attorney involved in the lawsuit or litigation. What can you discuss? The claim, offense or defense involved, and except when prohibited by law, the identity of the persons involved. The information contained in a public record. The scheduling or result of any step in litigation. A request for assistance in obtaining evidence.

8 Third-Party Litigation Funding 1. Hedge Funds are fronting money to plaintiffs lawyers to fight corporations. 2. From a PR perspective this has great appeal to the media who see monolithic corporations as bullies. 3. Media sees high-price lawyers defending corporations, this is a problem for defense lawyers.

9 Public/Private Advocacy Prepare campaign to gain public opinion advantage with the following audiences. Tell your story to your audiences. Shareholders/stakeholders Institutional investors SEC and other regulatory agencies Company employees Vendors Analysts Boards of directors and senior management The Financial Media

10 Media Goals: Lawyers Before: Prepare media with your clients position with fact sheets, research points, past rulings. Make the media your friend not adversary. During trial: Help translate complex legal arguments and important points in regular English for the media. After trial: Maintain open communications with media on other similar cases and become the expert for the media interviews when you are not involved. There are reputational dividends for lawyers.

11 General Counsel General counsel needs help in preparing a case and defending the company. Law firms are key players. General counsel needs to understand that a lawsuit and litigation is an important risk management issue. Law firms need to become trusted advisors to general counsel. Prepare PR media and legal strategies on case facts for senior management and boards of directors. General counsel is always looking for guidance on legal and media matters in distressed situations.

12 The Rise of Fake News: A Crisis The 2016 Presidential Campaign highlighted the rise of Fake News. Pepsico was a victim when a fake news article appeared where it stated that CEO Indra Nooyi told Trump supporters to take their business elsewhere, which was false. They also stated that this comment cause the company s stock to drop five percent. False. Facebook and Google are trying to come up with online solutions to detect and fight fake news. Fake News is a growing crisis for firms.

13 How to Fight Fake News Develop relationships with media influencers, reporters and editors at the Financial Media. Monitor social media, and traditional media. Legal action may have little impact. By the time a law suit is filed, it will take time and lots of money. The court of public opinion will already be battling fake news. Automated monitoring and measurement systems software may not detect what fake new really is But human analysts with strong media backgrounds will be crucial in this fight. Paid News wires like Business Wire can be of help.

14 Fake News and Social Media In 2013, $130 billion in stock value was wiped out in a matter of minutes following an Associated Press tweet about an explosion that injured President Barack Obama. AP stated later that its twitter account was hacked into. Even the media is vulnerable, that is why Fake News is a major story in the media social or traditional. Although stock prices recovered shortly thereafter, this instance shows how news on social media can be manipulated to impact high-frequency trading algorithms that rely on text to make investment calls. This was reported in Forbes.

15 Chevron v. Donziger A PR Battle Plaintiff s lawyer wins $19 billion in a class action environmental lawsuit in Ecuador, reduced to $9.5 billion. Plaintiff s international PR campaign. Chevron sues plaintiff s lawyer Steven Donziger. Chevron determines never to settle and brings in Gibson, Dunn & Crutcher for aggressive defense. Plaintiff s major mistakes. Defenses major mistakes. Defense wins in U.S. District Court in New York, with Judge Kaplan ruling. Investigative journalist Paul Barrett writes book.

16 Chevron/Donziger Case Appeal case focused on the oil giant s use of antiracketeering law RICO Statute -- to fight a $19 billion award. On August 8, 2016, Chevron won on appeal in a unanimous decision by the 2 nd Circuit Court of Appeals. U.S. District Judge Lewis Kaplan had found in 2015 that multibillion-dollar award New York lawyer won against Chevron last year in Ecuador was tainted by bribery, that his team fabricated evidence and bribed an Ecuadorian judge to rule in their favor. He also ruled that Donziger could not profit from the award anywhere in the world or try to enforce it in the U.S. Gibson Dunn & Crutcher attorney, Theodore Olsen. stated in his appeal that without this court injunction to collect, Chevron s reputation would be severely harmed.

17 Cyber Breaches The risk of cyber security issues is one of the largest looming legal problems on the horizon. The financial media loves writing about the inept CEOs and senior management handling breaches. Mandatory cyber risk education for boards of directors. Legal issues should be addressed. Companies recently damaged in cyber attacks includes: Target, Home Depot, JP Morgan and Apple. A booming new area of business for law firms.

18 Developing a Story of the Case Plaintiffs are terrific at creating compelling story lines for the media. They fill a news hole that needs to be filled in the 24- global media cycle. Lawyers representing the defense, usually companies and corporations are walking around the court of public opinion with targets on their back for the media. No comment could destroy you and your client in the press. Be upfront and proactive. Set the media agenda with facts to the media, not emotion. Help reporters tell the story.

19 Educating the Fourth Estate Prepare media briefings and fact sheets on the lawsuit. Explain complicated legal points that are relevant to your client s case. There is an assumption of guilt in litigation. Ensure that regardless of the verdict, your messages in stories and interviews are read, heard and understood globally. Company actions can be misunderstood in the press. Company settles, so public assumes guilt. Be helpful as an advisor to the media, when appropriate. With the media, reputations are won or lost in a crisis or litigation. Ken Chenault, CEO American Express.

20 Editors Rule Not Reporters Editors and not reporters rule which stories go into newspapers, magazines, television and online stories. This is important when your client is involved in a litigation or lawsuit. Make friends with reporters and introduce yourself to editors. Monitor social media covering your client s case in a lawsuit. Identify the lead steer in the media or one or two key media people for commentary or stories. They will set the tone of the story for the rest of the media, especially of they are respected. No comment will destroy your credibility with editors, and hurt your reputation, but also your clients.

21 Case: BP Oil Case study of problems with the media from the beginning. Feeble responses from global executives. BP agrees to pay $18.7 billion in 2015 to settle federal and state claims arising from the 2010 Deepwater Horizon oil spill. Total cost including cleanup at $54 billion. Killed 11 crew members and over the course of 87 days oil gushed from the broken pipes and coated hundreds of miles of pristine beaches. Local economy suffered. Board of directors classic groupthink. Global stage fiasco, PR nightmare. Movie in 2016 bad PR. Negative press fuels lawsuits and politicians to act regarding damage rewards.

22 Case: J-M Manufacturing v. Phillips & Cohen Phillips & Cohen issued a celebratory press release following the verdict in false claims act litigation. The jury found that J-M had knowingly mispresented to the law firm s clients that its VC pipes has been manufactured and tested in a manner that assured it met industry standards. J-M sued Phillips & Cohen for defamation and trade libel. The trial court denied the law firm s special motion to strike to complaint under Code of Civil Procedure

23 Case: J-M v. Phillips & Cohen The trial court found that it was a question of fact for the jury to decide whether the press release was privileged as a fair and true report of a judicial proceeding within the meaning of Civil Code 47, subdivision (d). The 2ndDistrict Court of Appeal reversed, 2-1, and remanded the trial court with directions for a new order granting the motion and dismissing the complaint. The court s majority ruled that the press release falls comfortably within the permissible degree of flexibility and literary license afforded communications to the media concerning judicial proceedings.

24 Financial Media and Lawyers There is a reason the media creates Top 100 lawyers list in legal, financial and business press. It is read by clients. Trials are scrutinized by local, state and national legal and financial media for lawyers who try many cases. A great reputation for lawyers brings in business and more cases. Why, because senior management read and watch stories on cases in their industries. Wall Street Journal, Forbes, CNBC, Bloomberg, New York Times, Los Angeles Times, Dow Jones, Financial Times, USA Today, Barron s, Investor s Business, and social media. Ken Chenault, CEO of American Express: Reputations are won or lost during a crisis. Forbes interview.