Maintaining Privileges

In my last post, "Martha Talks," I discussed how Martha Stewart was the first to use a personal website as part of her litigations communications strategy. Stewart's use of public relations to help maintain her image and brand as the ImClone scandal unfolded also yielded one of the first written opinions addressing the issue of whether communications with PR professionals are covered by the attorney-client or work-product privileges, In re Grand Jury Subpoenas, 265 F.Supp.2d 321 (S.D.N.Y. 2003).

Before charges were filed against Ms. Stewart, her lawyers hired The Brunswick Group ("Brunswick"), a New York public relations firm, "out of concern" that:

"unbalanced and often inaccurate press reports about [Stewart] created a clear risk that the prosecutors and regulator conducting the various investigations would feel public pressure to bring some kind of charges."

Not surprisingly, the government subpoenaed witnesses and documents from Brunswick regarding its representation of Ms. Stewart. Brunswick employees declined to appear or provide the subpoenaed documents on the ground that the information sought by the grand jury had been generated in the course of Brunswick's engagement by Ms. Stewart's lawyers, as part of their defense of Ms. Stewart, and were therefore protected by the attorney-client privilege and constituted attorney work product.

The court declined to completely enforce the subpoenas, concluding that communications between Ms. Stewart and Brunswick, both in and outside the presence of her attorneys, were protected by the attorney-client privilege insofar as such communications were directed at giving or obtaining legal advice. The court observed that during a high profile grand jury investigation, Ms. Stewart and her defense team were faced with efforts by the media, prosecutors, and law enforcement personnel to "color public opinion." It noted its awareness that such activities are often engaged in, "certainly to the detriment of the subject's general reputation but also, in the most extreme cases, to the detriment of his or her ability to obtain a fair trial." The court found that efforts to counteract this reality must take into account potential legal ramifications, and that this was a situation in which the lawyers needed outside assistance, since, as the court observed, "dealing with the media in a high profile case probably is not a matter for amateurs." Thus, the ability of lawyers to perform

"some of their most fundamental client functions - such as (a) advising the client of the legal risks of speaking publicly and of the likely legal impact of possible alternative expressions, (b) seeking to avoid or narrow charges brought against the client, and (c) zealously seeking acquital or vindication - would be undermined seriously if lawyers were not able to engage in frank discussions of facts and strategies with the lawyers' public relations consultants."

According to the court,

"there is no practical way for such discussions to occur with the public relations consultants if the lawyers were not able to inform the consultants of at least some non-public facts, as well as the lawyers' defense tactics, free of the fear the consultants could be forced to disclose those discussions."

Thus the court held that it would find the following communications to be protected by the attorney-client privilege:

1) Confidential communications

2) Between lawyers, the client, and public relations consultants

3) Hired by the lawyers to assist them in dealing with the media in cases such as this one

4) That are made for the purpose of giving or receiving advice

5) Directed at handling the client's legal problems

Applying this test, the court protected all but two conversations between Ms. Stewart and Brunswick - one where Ms. Stewart asked Brunswick for its opinion of a day's particularly heavy media coverage and the second when the discussion concerned a problem with a wire service story.

Despite what appears to be clear guidance in the court's decision in the Martha Stewart matter, whether the attorney-client privilege applies to communications between lawyers, clients and litigation communications consultants can be so fact specific that lawyers should not assume that they can indiscriminately hire consultants and assume that all communications will fall within the privilege. Below are links to two excellent articles that provide further analysis on the steps necessary to protect communications made to litigation communications consultants.

1) Attorneys and public relations consultants: privileged or perilous communications?

2) Preserving Privilege

Martha Talks

Last week I compared the litigation websites Viacom and Google have used during their legal tussle. Litigation websites have become a key weapon in the litigation communications arsenal. Some of the traditional communication tactics, such as interviews and op-eds, involve uncontrolled media and thus are subject to the vagaries inherent in using such media. Litigation websites, however, provide the individual or company on trial with a method of reaching stakeholders directly, with unfiltered, controlled messages.

Having established herself as a trend setter in many areas, it should come as no surprise that Martha Stewart was the first person to use a personal website as a tactic in litigation communications. The day after the Justice Department filed criminal charges against her for securities fraud and lying to investigators, she launched "Martha Talks" at www.marthatalks.com, a personal website on which Stewart posted an open letter "to her friends and loyal supporters," a legal segment on the facts of the case titled "Setting the Record Straight," and links to various press articles, editorials, and consumer letters that had been supportive of her during the ImClone scandal. In the site's first day, more than 2 million hits were logged and more than 20,000 visitors took the time to send messages of "support and encouragement." In assessing the website's impact, Global PR Blog Week commented:

"Martha Talks proved the effectiveness of the Web in crisis communications. ... Martha Talks tells Stewart's side of the story. It generates support and presents her as a normal person, not the uber-perfect home heroine her shows and the media make her out to be. The site is humble, subtle and presented in a way that communicates, while Stewart maintains her innocence, that she realizes the serious nature of her legal issues. Timely trial updates, statements from Stewart's legal team and a library of different op-eds written on her behalf populate the site. It's become a news source, getting Stewart's point across without her having to field interviews."

As one would expect, Martha Stewart started a trend. On March 19, 2003, the Securities and Exchange Commission sued Richard Scrushy and the company he founded, HealthSouth Corporation, for "massive accounting fraud." Seven months later, on October 28,2003, Scrushy launched www.richardmscrushy.com, which included the following statement from his attorney:

“This website fulfills two immediate needs: First, people have been asking what Richard’s side of the story is, and second, people have wondered why misinformation has not been corrected. This website gives us a medium to help set the record straight and level the playing field. No longer will the public have to be content with a single, one-sided presentation of the facts filtered through and reflecting the personal prejudices of various news reporters. Those stories will be challenged and corrected.”

Michael Jackson, a trend setter in his own right, also became a follower in the use of litigation websites. Four days after his November 20, 2003 arrest on child molestation charges, he launched his website, mjnews.us, called "the official press room" to tell his side of the story. Jackson's website was relaunched on March 1, 2004 as mjjsource.com, and included more entertainment elements as well as more detail than the previous website.

A Tale Of Two Sites

On March 13, 2007, Viacom (the parent company of BET, Comedy Central and Paramount Pictures) filed a $1 billion lawsuit in federal court claiming that YouTube and Google, Inc. profited from the posting of thousands of unauthorized copyrighted clips. Viacom also claimed that YouTube did not do enough to keep copyrighted material off the site. On June 23, 2010, Judge Louis Stanton of the Southern District of New York granted YouTube’s motion for summary judgment against all of Viacom’s direct and secondary copyright infringement claims. Judge Stanton ruled that YouTube was entitled to the “safe harbor” protection of the Digital Millennium Copyright Act. The judge recognized Viacom’s claim that YouTube was generally aware of and even encouraged copyright-infringing material to be placed on its site, but he found that when YouTube was notified of specific infringing works, it took them down as required by the DMCA.

For three years the litigation had proceeded largely without any public comment because all of the legal documents had been filed under seal. That changed in March, 2010 when both sides agreed to make public their summary judgment motions and other related materials.

After the seal was broken, it is fascinating that the two large, content driven entities would use sharply contrasting litigation communications strategies to court public opinion. Viacom quickly launched a robust website dedicated to the litigation, and filled it with content, such as the pleadings, press releases, and Viacom’s perspective on its legal claims and YouTube’s defenses. On the other hand, YouTube’s employed a "less is more" litigation communications strategy. Its first communication of its public position appeared in a March 18, 2010 posting on its official blog, immediately after a March 17, 2010 posting inviting the submissions of questions for a James Cameron interview, and followed by a March 25, 2010 posting announcing the launch of YouTube Edu.

Even though it appeared to be buried on its website, the March 18, 2010 posting did garner media attention. This may have occurred because it was authored by YouTube’s chief counsel, Zahavah Levine, and it contained three attention getting messages: 1) that “YouTube and sites like it will cease to exist in their current form” if Viacom wins; 2) that Viacom “continuously and secretly uploaded its content to YouTube, even while publicly complaining about its presence there;” and 3) the lawsuit was motivated by sour grapes, in that before Google bought YouTube, Viacom had tried to buy it and negotiate a content-sharing agreement. Google and YouTube subsequently put up a dedicated website, which can be visited here, but it is not as user-friendly or as content rich as Viacom’s. However, the litigation was not mentioned again on YouTube’s official blog until this posting after Judge Stanton’s ruling.

Viacom has stated that it will appeal Judge Stanton's decision.

Westwood College Employs Litigation Communications To Protect Its Reputation

As I have noted in previous posts, one of the goals of litigation communications is to protect the client’s image during a lawsuit. A litigation communications specialist should understand the law, the legal process, and the media in order to be able to effectively work with the client’s legal counsel and ensure that the client’s positions are presented to the general public and all key stakeholders, such as shareholders, customers, and business partners, in a way that protects the client’s image without compromising its legal positions.

The widespread use of social media has raised the stakes even higher, such that in some instances the actual outcome of a case may be insignificant when compared to the reputational damage inflicted during litigation. As a result, an increasing number of general counsels are deciding to make litigation communications part of the response to lawsuits. For example, Corporate Counsel recently reported on the legal dispute between Westwood College, Inc., a for-profit college, and some of its former students who contend that the school violated consumer protection laws. The plaintiffs were allegedly recruited through a Facebook page, Warnings About Westwood, which was started by a law firm in Tampa, Florida. The use of social media to recruit the students and to spread word of the lawsuit led Westwood College’s general counsel, William Ojile, to decide to use litigation communications to protect Westwood’s reputation. The article, which can be read in full here, offered the following explanation for why Ojile decided to use litigation communications:

“The smear tactic and the use of social media have caused us to challenge traditional norms on how you respond to the portrayal of your company when you’re in litigation,” he said. Typically he doesn’t respond in the press when asked about a suit. But in this case he not only discarded the “no comment” approach, he hired a public relations firm to reach out to reporters. “You have to show your faculty and staff and students that you’re not just out there getting pasted,” he explained. The college created a Web site that responded to the allegations and anticipated students’ questions. “How does Westwood battle this? We battle it with transparency,” Ojile said. “Every school has complaints,” he added. “I don’t care if you’re Westwood or Harvard. We try to deal with complaints as they arise.”