Thursday, March 31, 2011

March Litigation Madness, Part Two

As March rolled on, so did the negotiations between the National Football League owners and the players union over a new collective bargaining agreement. On Friday, March 11, 2011, the negotiations broke off. The owners locked out the players, and the players decertified their union so that individual players could file an antitrust complaint against the league. The plaintiffs named in the 52 page complaint include some of the league's most famous players, such as quarterbacks Tom Brady, Peyton Manning, and Drew Brees. Because the complaint names the players in alphabetical order, the case will be known as Brady v. N.F.L. Here is a New York Times article discussing the breakdown in the negotiations and the filing of the lawsuit, and an article analyzing why the case was filed in federal district court in Minneapolis.

The NFL had revenues of $9.3 billion last year, and the players and the owners have been unable to decide how to divide this staggering amount of money. In "Everything You Need to Know About the NFL Antitrust Lawsuit," the Wall Street Journal asked Michael McCann, a sports law professor at Vermont Law School, a series of questions about the issues dividing the players and owners, including whether either side deserved any sympathy. "It's hard to be overly sympathetic with either," said McCann. "We're talking about millionaires arguing with billionaires." The first court date is April 6, and it will be interesting to see how each side presents its case in the court of public opinion.

As March was drawing to a close, the perjury trial of home run king Barry Bonds was beginning in federal court in San Francisco. Mr. Bonds was indicted in 2007 on charges that he lied to a federal grand jury in 2003 when he testified that he had never knowing used performance enhancing drugs. This is a case where Mr. Bonds needs a win in both the court of law and the court of public opinion, since the outcome will determine his legacy as baseball's home run king and whether he loses his freedom.

The trial, now in its second week, has already produced its share of notable moments, including the testimony and cross-examination of Mr. Bonds' former mistress, Kimberly Bell. Here is a New York Times article profiling Mr. Bonds' defense team, and one from reporting on the cross-examination of Ms. Bell.

Lastly, there are the two sexual harassment suits filed in March by former American Apparel sales associates against Dov Charney, the company's founder and chief executive officer. One case was filed in state court in Brooklyn, New York by Irene Morales, who alleges that Mr. Charney forced her to engage in sexual acts for eight months. The second lawsuit was filed in state court in Los Angeles, California by four former sales associates, one of whom, Kimbra Lo, alleged that Mr. Charney tried to have sex with her when she went to his house to discuss a job. Here is a New York Times article reporting on the lawsuits. American Apparel has launched a vigorous defense of Mr. Charney in the media. The company claims that the four women in the California lawsuit are friends who are trying to shake down Mr. Charney and the company. As reported in an article in the Los Angeles Times:
"At the company's downtown headquarters Thursday, Charney and his advisors showed Times reporters sexually explicit emails, photos and text messages from some of the women who sued the company this month. The photos showed some of the women posing nude in suggestive positions, in one case with Charney. In many of the texts and emails provided during the meeting, the women asked Charney to pay for airfares and provide them with money."
One of the problems Mr. Charney faces from a litigation communications standpoint is that he seems to like to live on the edge. As reported in the New York Times article, Mr. Charney has been sued at least four times since the mid-2000s, "accused of creating what some women said was a sexually charged, hostile environment."
"Mr. Charney has said he often holds meetings in his bedroom. In a 2010 American Apparel ad, he was depicted in bed alongside two female employees. Employees regularly stay at his home in the Silver Lake neighborhood of Los Angeles when they are in town on business. And Mr. Charney has spoken openly about having sexual relationships with some of his workers."
It will be interesting to see how these lawsuits develop.

Wednesday, March 30, 2011

March Litigation Madness, Part One

"March Madness" usually refers to the NCAA Men's and Women's Basketball Tournaments, both of which will be settled on the court over the next few days. However, the month of March also saw a spate of high profile trials and lawsuits, in which both sides jostled for position in the court of public opinion.

First was the insider trading trial of Galleon Group hedge fund founder Raj Rajaratnam, which began with jury selection on March 8, 2011. Mr. Rajaratnam, a one-time billionaire and a native of Sri Lanka, has been charged with five different conspiracies to commit securities fraud and nine substantive counts of securities fraud for alleged insider trading on the stock of Goldman Sachs Group, Inc. and other entities. The New York Law Journal had an excellent summary of the charges and the defense strategy in an article published on the eve of trial. Reuters has a website, Galleon Insider Trading Trial, which contains an accounting of each court session.

Then, on March 10, came the $100 million lawsuit filed by Charlie Sheen against WB Studio Enterprises Inc. and Chuck Lorre Productions Inc. over his firing from the Warner Bros. sitcom "Two and a Half Men." Mr. Sheen's eccentric behavior over the past few months has been well-chronicled, and his lawsuit contains an interesting twist as well. In his complaint, Mr. Sheen purports to sue on behalf of the cast and crew of "Two and a Half Men" under a provision of California Labor Code 2699 that allows him to assert claims on behalf of others as a "private attorney general." A lawyer quoted in the National Law Journal speculated that by invoking the Labor Code, it makes the dispute more than about Charlie Sheen and perhaps makes him more sympathetic: "What he's purporting to do is say there's been a Labor Code violation here as to everybody who works on this show because they improperly terminated the show. Everybody who is supposed to be working on the show has a claim for their lost wages and benefits." You can read the entire article here.

More "March Litigation Madness" tomorrow . . .