Friday, March 6, 2015

Aligning Legal Strategy With Public Positioning

Two recent examples of failures to align litigation strategy with public positioning demonstrate the ease with which a seemingly sound legal position can cause reputational harm.

The first example involves Saks Fifth Avenue, a company that has long taken pride in its support for its lesbian, gay, bisexual, and transgendered employees. Since 2001, the retailer has offered a full range of health benefits to same-sex couples, and it partners with LGBT rights advocacy groups to help it promote a culture of inclusion.

Saks’ reputation for inclusion suffered severe damage because of its legal response to a lawsuit filed by a transgender employee. A trans woman who had worked in a Houston Saks store filed a lawsuit in Texas federal court alleging violations of Title VII of the Civil Rights Act, which prohibits discrimination in employment on the basis of race, religion, or sex. She claimed that although her managers knew about her gender identity, they pressured her to dress in a more masculine fashion and instructed her to use the men’s restroom. She also claimed that her coworkers refused to use feminine pronouns when referring to her and insulted her in front of customers. Her complaints about a hostile work environment, she alleged, got her demoted and eventually fired, even though she was a successful salesperson.

In response, Saks’ legal counsel filed a motion to have the case dismissed, arguing that Title VII does not protect transgendered individuals from employment discrimination, and therefore she had no case. The motion read in part that “[a] prohibition against discrimination based on an individual’s sex is not synonymous with a prohibition against discrimination based on an individual’s sexual identity disorder or discontent with the sex into which they were born.”

While Saks’ may have had a sound legal position, as courts have come down on both sides of the question of whether transgendered individuals are protected by Title VII, the motion nevertheless was a self-inflicted wound to the company’s reputation for inclusion. A Bloomberg Business article on the filing captured the perception the motion generated: “Saks Claims It Has the Right to Discriminate Against Transgender Employees.” In 2014, Human Rights Campaign, which promotes civil rights for the LGBT community, had scored Saks 90 out of 100 on its Corporate Equality Index. As a result of the motion to dismiss, the organization announced that it was suspending Saks’ rating.

Although Saks initially stood by the motion to dismiss, eventually it relented and withdrew the motion, stating that it would fight the case on its merits.

The second example involves Cleveland, Ohio, and the city’s response to a civil rights case filed in federal court by the family of Tamir Rice, a 12-year-old boy who was fatally wounded by a Cleveland police officer who mistook the boy’s toy gun for a real one. In response to the lawsuit, the city asserted twenty defenses, one of which was that the boy died because of his own actions and not because of police department errors: “[Tamir’s] injuries, losses, and damages complained of, were directly and proximately caused by the failure of [Tamir] to exercise due care to avoid injury,” and that Tamir’s injuries “were directly and proximately caused by the acts of [Tamir], not [the City of Cleveland].”

A headline from a CBS News report captured the perception the filing generated: “Tamir Rice caused his own death, city of Cleveland argues in court doc.” As a result of the anger that grew over the filing, Cleveland Mayor Frank G. Johnson called a news conference to apologize for the filings “poor use of words,” further stating that: “We used words and phrased things in such a way that was very insensitive.”


In both examples the lawyers failed to appreciate how the legal defenses they were asserting would damage their clients’ public position. In cases like Saks’, where a company may be relying on local counsel for its defense, it falls upon the in-house counsel who supervise outside counsel to review all the pleadings to make sure that they are consistent with company policy and do not cause harm to the company’s reputation. In a case like Cleveland’s, which is being handled in-house, it falls upon the city’s chief counsel to make sure that the pleadings are sensitive to the larger issues that might be impacted.

Thursday, January 15, 2015

Can The Internet Kill Your Lawsuit In One Day?

Lagunitas Files Legal Action Against Sierra Nevada


Yes, if you are a craft brewer with a large and vocal following. On Monday, January 12, 2015, Lagunitas Brewing Company filed a trademark infringement claim against Sierra Nevada Brewing Company over the alleged similarity between the lettering on Lagunitas' IPA and the labels of Sierra Nevada’s forthcoming Hop Hunter IPA.

The complaint alleged, in part, the following:

The unique “IPA” lettering used in the Lagunitas “IPA” Family of Trademarks has a distinctive serif font, distinctive kerning (or letter spacing), between the “P” and the “A”, slightly aged or weathered look, with uneven areas on each of the letters, and the elimination of any periods between the letters. These elements together are unique to the iconic design of the Lagunitas IPA.

According to the SF Gate, “The similarities are so great, Lagunitas argues, that the new Sierra Nevada beer will either harm Lagunitas’s brand or look like a collaboration. The company is seeking a temporary restraining order against the release of Hop Hunter, as well as financial compensation.”

As could be expected, Sierra Nevada strongly objected to the allegations:

The Complaint alleges that Sierra Nevada’s Hop Hunter IPA design will create confusion among consumers between the Lagunitas IPA and Sierra Nevada’s new Hop Hunter IPA, and we intend to vigorously dispute that any consumer could possibly confuse our Hop Hunter packaging with anything that Lagunitas has.

The Internet agreed with Sierra Nevada, and let Lagunitas know of its disagreement with the legal action. So one day later, Tuesday, January 13, 2015, Lagunitas announced that it was withdrawing the lawsuit. Lagunitas' founder and owner, Tony Magee, went into full damage control mode, sending out tweets about the decision to drop the lawsuit and granting interviews to media such as the Chicago Tribune and Paste Magazine. Magee used the following tweet as his mea culpa:

Today was in the hands of the ultimate court; The Court of Public Opinion and in it I got an answer to my Question; Our IPA’s TM has limits.

Monday, November 19, 2012

You Win Or You Die

Helping a client win in the court of public opinion requires that the legal issues be framed in a way that the public can easily relate to and understand.  Tried and true methods of getting the public on the client's side include casting the client as a victim of injustice, an underdog, or a David fighting against Goliath.  The lawyers representing two food truck operators who have sued the City of Chicago have produced a video that masterfully invokes these sentiments in a clever and creative way.  They have used imagery derived from the Emmy Award winning title sequence of HBO's Game of Thrones to frame the lawsuit as the Game of Food Trucks, a game (or lawsuit) that their clients must win to survive.

Chicago, like most major cities, has always had food trucks.  It is common to see them parked outside of construction sites, surrounded by workers buying a doughnut for breakfast or a sandwich for lunch.  In Chicago, the hours of operations of these catering trucks were limited, and they were prohibited from serving food prepared on the truck.  Therefore, the operators would prepare or buy the food at a brick-and-mortar facility, load the truck, and drive to a location where they would find customers.

A few years ago, entrepreneurs in Chicago began to operate gourmet food trucks, which had become popular in cities such as Los Angeles, Portland, Oregon, and Austin, Texas.  These trucks operated in the same way as the traditional catering trucks; the operators would prepare the food at a brick-and-mortar facility, load the truck, and drive to a location.  As they developed a following, they would use social media to alert their customers to the time and place where they would be located.  As their numbers grew, some of the entrepreneurs formed the Illinois Food Truck Association, and petitioned the City of Chicago to ease its restrictions to allow more hours of operation and the preparation of food on the trucks.

In July the Chicago City Council passed an ordinance that allowed food trucks to roam the streets from 5 a.m. to 2 a.m. and to serve food prepared on the truck.  However, the ordinance prohibited a food truck from parking within 200 feet of a restaurant, and required the trucks be outfitted with a G.P.S. device so that the truck movements and locations can be monitored.

The lawsuit challenging these restrictions was filed November 13, 2012.  Here is the video the lawyers produced that accompanied the filing of the suit:



Is something like this effective?  The lawyers from the Institute for Justice included a link to the video in their press release announcing the suit had been filed.  The local PBS outlet, WTTW, produces a program where a panel of journalists recap the week's news.  On the November 16, 2012 show, they begin a discussion of the food truck ordinance and the lawsuit at the 12:20 mark. Chicago Tonight: The Week in Review: 11/16 | Chicago Tonight | WTTW.   Judge the effectiveness for yourself.

Finally, in case you have not seen it, here is the title sequence from Game of Thrones:

Thursday, September 6, 2012

Never Mind

Has U.S. District Court Judge Alsup gone from channeling Toto to channeling Emily Litella?  In my last two blog posts, "Pulling Back The Curtain," Part I and Part II, I wrote about the orders Judge Alsup had entered in the Oracle v. Google lawsuit, demanding the names of any "print or internet authors, journalists, commenters or bloggers" who had been compensated by the parties and written about the case.  Judge Alsup issued an order Tuesday, in which he denied Google's motion for judgment as a matter of law, or in the alternative for a new trial.  Judge Alsup used the order as an "opportunity" to notify the parties that he would "take no further action regarding the subject of payments by the litigants to commenters and journalists." Perhaps Judge Alsup was concerned that by demanding the information, he might have revealed that he closely followed how the case was covered in the media, and realized that a question could be raised asking whether he had been influenced by that coverage.  Therefore, he used the order to state further that he "reassures both sides that no commentary has in any way influenced the court's orders and ruling herein save and except for any treatise or article expressly cited in an order or ruling."  Thus, in the immortal words of Gilda Radner as Ms. Litella: "Never mind."

Tuesday, September 4, 2012

Pulling Back The Curtain, Part II

Pulling Back The Curtain, Part I, can be found here.

In response to Judge Alsup's order, Google filed its supplemental disclosure on August 24.  It reiterated its previous statements and asserted that it did not pay any authors, journalists, commentators, or bloggers to report or comment on its trial against Oracle. However, it did disclose the names of twelve individuals and six organizations who commented on the case and had in the past received money from Google.

Of the twelve individuals on Google's list, the one who has drawn the most attention is Mark Lemley, a well-known professor at Stanford Law School.  Google revealed that Professor Lemley "serves as outside counsel" on "unrelated cases." One commenter was skeptical of the line Google was attempting to draw: "That's a pretty fine distinction: regardless of whether Google retained Lemley for the Oracle case or not, he's still Google's lawyer, and he's almost always quoted as a Stanford professor, not 'Google outside counsel.' "  Another noted that his research found that:
"Lemley was ... cited and quoted in at least three news items or articles related to the Google-Oracle litigation. ... his relationship to Google was not revealed in any of those stories.  As I quickly read those articles I found no explicit pro-Google bias. While it’s a bit of a gray area, as an attorney Lemley probably should have disclosed and explained his relationship to Google. He probably would still have been quoted. However his retention by Google isn’t mentioned."  
However, more than one commenter felt that the journalists who quoted Professor Lemley share the blame for not disclosing his relationship to Google:
"Professor Lemley is known as a controversial figure -- a legal professor whose profession is not patent law, but who has published journal papers attacking he current mire of patent law. And his page on [the] Durie Tungri [website] does mention he represented Google. So the SF Chronicle and Mercury News (Silicon Valley) should arguably have known what they were getting into when they Google searched (irony) his name."
In his August 20 order requiring Google to supplement its initial submission, Judge Alsup stated why he was requiring Oracle and Google to make the disclosure:
"Just as a treatise on the law may influence the courts, public commentary that purports to be independent may have an influence on the courts and/or their staff if only in subtle ways.  If a treatise author or blogger is paid by a litigant, should not that relationship be known?"
In the context of high stakes litigation, public relations is used to influence public opinion, not the judge or the judge's staff. Nevertheless, Judge Alsup has put the litigants that appear before him on notice that they may be required to reveal whether any authors, journalists, commenters, or bloggers who report or comment on his cases have received money from the party or its counsel.  It will be interesting to see whether other judges follow his lead.

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Thursday, August 30, 2012

Pulling Back The Curtain, Part I

Has a federal district court judge found inspiration in Toto, Dorothy's dog in The Wizard of Oz?  While a great deal of attention has been paid to the patent infringement trial pitting Apple against Samsung, which resulted in a $1 billion jury verdict in Apple's favor at the end of last week, recent events in a case involving another patent infringement trial, this one featuring Oracle against Google, have caught the attention of the legal and public relations communities.

Oracle had sued Apple, alleging that elements of Apple's Android operating system contained misappropriated items from Oracle's Java code.  Early in May, 2012, the jury found that Apple had infringed Oracle's copyrighted program, but the jury deadlocked on whether Apple's infringement fell within the "fair use" doctrine.  The jury later found that Google had not infringed two Oracle patents.

On August 7, 2012, U.S. District Court Judge William Alsup, who had presided over the trial, issued an order requiring the attorneys on both sides to file a statement by August 17th "identifying all authors, journalists, commenters or bloggers who have reported or commented on any issues in this case and who have received money (other than normal subscription fees) from the party or its counsel during the pendency of this action."

Judge Alsup's order was procedurally and substantively unusual.  As to procedure, the order came two months after the trial had ended, and neither side had requested the issuance of such an order.  Judge Alsup issued the order on his own volition, saying that he was "concerned that the parties and/or counsel herein may have retained or paid print or internet authors, journalists, commentators or bloggers who have and/or may publish comments on the issues in this case."  Judge Alsup justified the order by stating that it would be useful for the appellate court to know "whether any treatise, article, commentary or analysis on the issues posed by this case are possibly influenced by financial relationships to the parties or counsel."

The substance of the order, that a judge wanted to know whether bloggers and others were being paid by the parties to comment on the case, caused both the legal and public relations communities to speculate on what led to its issuance.  One thought was that the disclosure in April by Florian Muller, a prominent blogger who had been critical of Google, of his financial ties to Oracle may have led Judge Alsup to wonder whether there were other undisclosed relationships between bloggers and the parties.  Another thought was that a July 27th San Jose Mercury News article had brought attention to the "vast shadow army of law firms, public relations specialists, trade organizations, pundits, think tanks and academics [that] has emerged to dominate the debate over Google," and the fact that "many of them are paid for their opinions."  The article began with a specific example:
"Scott Cleland hates Google for a living.  For the past five years, the McLean, Va.-based analyst has churned out an endless stream of anti-Google papers, memos, research, testimony -- even a book: 'Search & Destroy: Why You Can't Trust Google Inc.' While his views that Google is a dangerous monopolist once seemed like a fringe theory, it has now drawn the attention of antitrust and privacy regulators throughout the world.  'I feel less lonely,' Cleland said. 'I have a strong belief that the wheels of justice turn slowly, but they turn truly.'  But as Cleland's crusade has gained popularity it has also gained funding -- to a degree that he won't disclose -- from Google's competitors, including Microsoft. While he insists that his influential views remain his own, the financial connection begs the very real question of whether he is a hero or a paid corporate hit man -- and whether the debate he pushes is a legitimate intellectual discussion or a commercial enterprise."
Members of the legal community also questioned the scope of the order, whether Judge Alsup had the power to issue it, and whether it was constitutional.  See, for example, "Alsup Goes Fishing With Wide Net."  However, since neither Oracle or Google challenged the order, the issues of power and constitutionality were unlikely to be addressed.  Similarly, questions as to the scope of the order would have to wait until Judge Alsup reviewed the parties' submissions to see whether they had complied.

Getting favorable media for clients, or neutralizing unfavorable media, is a large part of the public relations raison d'etre. Within the public relations community however, Judge Alsup's order revealed differing attitudes as to the propriety of paying bloggers.  PRWeek interviewed representatives of several agencies, and the consensus seemed to be that it is an acceptable practice to pay bloggers as long as the compensation is disclosed.  However, as I blogged about in "Social Media and Astroturfing," this is no more than the law requires.  Payments to bloggers for favorable reviews are required to be disclosed by the Federal Trade Commission, and the FTC has brought enforcement actions against companies that failed to make the required disclosure.  Hill + Knowlton Strategies expressly forbids compensation to bloggers.   Steve Barrett, a PRWeek editor,  wondered whether, even with disclosure, paying bloggers is appropriate:
"Am I the only one who feels extremely uneasy and uncomfortable about this whole paying bloggers debate?  . . .  [i]f a brand or an agency is paying these bloggers to write about brands, that has gone way beyond PR's traditional territory of earned media into the paid media environment - or, as it is also known, advertising.  That's an area that is fraught with danger in my opinion."
When the August 17th deadline for compliance arrived, Oracle confirmed in its submission that it had a paid consulting relationship with Florian Mueller.  As for Google, it notified Judge Alsup that the scope of his order created a group too large to list, but it assured Judge Alsup that it had not compensated anyone "to report or comment on any issues in this case" or otherwise struck a "quid pro quo" arrangement for favorable coverage.  In response, Judge Alsup issued a new order expressing his dissatisfaction with Google's submission:
"in the court's view, Google has failed to comply with the August 7 order.  . . .  Google suggests that it has paid so many commenters that it will be impossible to list them all. Please simply do your best but the impossible is not required. Oracle managed to do it. Google can do it too by listing all commenters known by Google to have received payments as consultants, contractors, vendors, or employees."
Judge Alsup required Google to supplement its filing by August 24, directing it to "disclose those commenters that can be identified after a reasonably diligent search,"  with the following clarification of  his original order:
"Payments do not include advertising revenue received by commenters. Nor does it include experts disclosed under Rule 26.  . . .  As for organizations receiving money, they need not be listed unless one of its employees was a commenter. Gifts to universities can be ignored."

Google filed its supplemental disclosure on August 24th.  I'll discuss what was in it, and the reaction to it, on Tuesday, September 4th.  Have a good Labor Day Holiday.

Monday, August 6, 2012

Proceed With Caution


“Litigation Support” is the term we use at Hill + Knowlton Strategies to describe how those of us who work in the legal communications space help lawyers, and their clients, meet the communications challenges posed by highly visible and newsworthy lawsuits.  Many lawyers, for good reason, are reluctant to “argue the case in the press,” but in today’s environment not having a communications strategy or not responding to media inquiries may not be an option.  Having someone experienced in public relations contend with the media is important to assure accurate reporting, as many stakeholders, such as vendors, customers, shareholders, analysts, and employees, may be following the lawsuit in news reports as it unfolds.    Because of the interests of stakeholders, the lawyer or the client may need to have a particular position communicated, and the pr professional can help craft the message.  In all instances, the pr professional must work closely with the lawyer to make sure that communications with the media are consistent with the lawyer’s legal strategy.  Finally, in communicating with the media, the lawyer and the pr professional must be cognizant of the ethical rules concerning trial publicity, especially if the case involves a jury trial.  For example, most jurisdictions have adopted a variation of ABA Rule of Professional Conduct 3.6, which provides in part that: 
"a) A lawyer who is participating or has participated in the investigation or litigation of a matter shall not make an extrajudicial statement that the lawyer knows or reasonably should know will be disseminated by means of public communication and will have a substantial likelihood of materially prejudicing an adjudicative proceeding in the matter."
When the patent infringement trial pitting Apple against Samsung resumed Friday, August 3, 2012, the judge presiding over the case, U.S. District Judge Lucy Koh, had to address the issue of whether a press release issued on behalf of Samsung shortly after the jury trial began, purportedly in response to media inquiries, crossed the line drawn by the California version of ABA Rule 3.6.  As has been widely reported, Apple has sued Samsung alleging Samsung has infringed on Apple’s patents by manufacturing smartphones and tablet computers that copy the look and feel of the iPhone and iPad. For those interested in a quick primer on the lawsuit, here is a segment of CNBC's Squawkbox that featured one of my former partners at Jenner & Block, Brad Lyerla, an experienced intellectual property lawyer. 

After discovery had been closed and evidentiary hearings had been held on the exhibits to be used at the trial, Samsung requested permission to add as exhibits a series of slides that it contended shows that Apple's iPhone design was derived from the Sony Walkman. According to news reports, Samsung’s request had been denied three times before the trial began with jury selection on Monday, July 30, 2012.

Before opening statements began on Tuesday, July 31, 2012, John Quinn, managing partner in the firm representing Samsung, Quinn Emanuel Urquhart & Sullivan, LLP, asked Judge Koh to reconsider the decisions excluding the slides. Judge Koh denied the request, and after Mr. Quinn continued to argue the issue, threatened to sanction him if he persisted.  Although Mr. Quinn stopped arguing the matter in court, “Samsung has decided to make [its argument] in the court of public opinion.”  The sequence of events was chronicled by one reporter covering the trial: 
At 2:48 p.m., after openings were done and a suave Apple industrial designer was testifying, a Samsung press statement hit our inbox (along with those of other reporters) with a link to the excluded slides. (The linked material has since been removed, but All Things D snagged it.)” 
 The link to the disputed slides, which some reported came from a public relations firm, was accompanied by the following statement:
 “The Judge’s exclusion of evidence on independent creation meant that even though Apple was allowed to inaccurately argue to the jury that the F700 was an iPhone copy, Samsung was not allowed to tell the jury the full story and show the pre-iPhone design for that and other phones that were in development at Samsung in 2006, before the iPhone. The excluded evidence would have established beyond doubt that Samsung did not copy the iPhone design. Fundamental fairness requires that the jury decide the case based on all the evidence.
One reporter characterized it as “[a] brazen statement, particularly the last line which seems to express hope that members of the jury will see the excluded evidence.”  Another reporter asked “[w]hat was John Quinn thinking when he authorized a press statement . . . discussing exhibits the judge had specifically barred that very morning?

Later, after the jury had been dismissed for the day, Apple’s lawyers brought the matter to Judge Koh’s attention, arguing that the press release “was an intentional attempt to pollute the jury.”  Judge Koh was reported to have been angry, which was expressed to Samsung's lawyers:
" 'Call Mr. Quinn,' she told the Samsung legal team. 'I'd like to see him today.' When they told her he had already gone back to Los Angeles for an event, Koh ordered Quinn to file a declaration by Wednesday. 'I want to know who drafted the press release, who authorized it from your legal team,' Koh said, 'and I want Mr. Quinn's declaration as to what his role was.' "
Mr. Quinn filed his declaration Wednesday, August 1, 2012, and essentially doubled-down.  He asserted that he authorized issuing the slides to respond to media inquiries, that the information in the slides where already in the public record, and that he authorized the statement that accompanied the slides because “Samsung has every right to defend itself in the public domain from unfair and malicious attacks.”

Apple’s lawyers responded to Mr. Quinn’s declaration with a letter to Judge Koh asserting that “Mr. Quinn’s declaration does not address two of the Court’s questions: who drafted the statement and who released it.”  Apple’s lawyers followed up the letter with a motion seeking sanctions, arguing that the press release was “the latest in a string of litigation misconduct,” and suggesting that the proper sanction would be for Judge Koh to issue judgment in Apple’s favor by ruling that the patents at issue in the case are valid and infringed by Samsung.

It was highly unlikely that Judge Koh would summarily rule in Apple’s favor, so it was no surprise when she denied Apple's motion at the beginning of Friday's proceedings.  After saying that she would "not let any theatrics or any sideshows distract us from what we are here to do," Judge Koh separately brought each member of the jury into the courtroom to ask whether they had read anything about the case since it had recessed on Tuesday.  One juror said that he had seen headlines about the case on the internet, but had not read any of the stories.  After each juror assured Judge Koh that they could be impartial, witness testimony resumed.

That may not, however, be the end off the matter.  Judge Koh said the press release seemed like "a willful attempt to propagate excluded evidence," which she may investigate further at the end of the trial.  Mr. Quinn correctly stated in his declaration that the information was already part of the record.  In fact, it was contained in the trial brief Samsung filed the Saturday before the trial began.   That being the case, Judge Koh may be persuaded that the reporters seeking to understand the issue simply could have been provided a link to the brief.  I suspect that she may still want to know who drafted the press release, and who decided that it should be sent to reporters other than those requesting the information.