Dominic Strauss-Kahn PRs Up

Earlier this week, Reuters reported that Dominic Strauss-Kahn's legal team is consulting with Washington, DC firm TD International for public relations advice. "Strauss-Kahn's team consults ex-CIA officers' firm." This event has lead to some unfortunate, though not surprising, speculation concerning how Mr. Strauss-Kahn's lawyers are planning to defend him. "DSK public relations strategy kicks into high gear."

Lance Plays Hardball

Update: On February 3, 2012, the United States Attorney's office in Los Angeles announced that it had closed the investigation into Lance Armstrong's alleged use of performance enhancing substances. Justice Department Puts Brakes on Lance Armstrong Investigation. The US Attorney for Los Angeles, Andre Birotte Jr., took the highly unusual step of issuing a press release announcing the investigation had been closed, saying the release "was warranted by numerous reports about the investigation in media outlets around the world."

In September 2010 I blogged that Lance Armstrong had added legal and communications consultant Mark "master of disaster" Fabiani to his team in order to try to limit the damage to Mr. Armstrong's reputation caused by the federal government's performance enhancing substance investigation. "Lance Armstrong Hires Litigation Communications Consultant." In the wake of a recent "60 Minutes" story wherein Tyler Hamilton, a former teammate, alleged that Mr. Armstrong used banned substances, you can see evidence of Mr. Fabiani's aggressive style of litigation communications at a new website, "Facts 4 Lance." For example, Mr. Fabiani posted the following statement in regards to Mr. Hamilton:

Tyler Hamilton is a confessed liar in search of a book deal – and he managed to dupe 60 Minutes, the CBS Evening News, and new anchor Scott Pelley. Most people, though, will see this for exactly what it is: More washed-up cyclists talking trash for cash.

In addition, Mr. Armstrong has supplemented his legal team by retaining Robert Luskin of the Washington, DC firm Patton Boggs. Among others, Mr. Luskin is known for having represented Karl Rove during the Valerie Plame investigation. "Patton Boggs' Luskin Takes On Armstrong Accusers."

Finally, with the goal of adding some balance to this post, here's an interview with Mr. Hamilton's lawyer explaining why his client agreed to appear on "60 Minutes." "Q&A: Cyclist Tyler Hamilton's Lawyer On Why His Client Came Clean."

Taco Bell's Victory Lap

In an earlier post, "Where's The Beef?", I discussed how Taco Bell started off slowly, but eventually developed an effective public relations response to a class-action lawsuit claiming that there was little beef in the restaurant's tacos. With the announcement earlier this week that the lawsuit had been voluntarily withdrawn, today Taco Bell really put the hammer down, demanding an apology in full page ads in the Chicago Tribune, Los Angeles Times, New York Times, USA Today and the Wall Street Journal. "Taco Bell demands apology after lawsuit withdrawn."

The dismissal of the lawsuit is a victory for Taco Bell, and the ad is very effective at conveying that point. However, I continue to have problems with Taco Bell's assertion, repeated in this ad, that "[W]e've ALWAYS used 100% USDA-inspected premium beef." First, the issue in the lawsuit was not so much what Taco Bell started with, but what ended up in the tacos. In this regard, Taco Bell itself asserted that its tacos contained 88 percent beef and 12 percent seasonings, spices, water and other ingredients. Second, the term "100% USDA-inspected" is largely meaningless because United States Department of Agriculture inspection of beef is mandatory. In fact, a USDA official has to be on-site whenever a meat processing plant is operating. Therefore all beef is USDA inspected, not just Taco Bell's. Third, the use of the term "premium beef" can also be misleading, because beef can also contain minor amounts of bone, blood vessels, cartilage and nerves, according to the USDA, and ground beef, in particular, is often made from the less-desirable parts of the steer.

Perhaps my quibbles will be seen as minor compared to the overall strength of Taco Bell's eventual response to this litigation. However, given the totality of its litigation and public relations victories, there was no need for it to take a chance and leave open the possibility of criticism.

National Be Kind To Lawyers Day

Today is National Be Kind To Lawyers Day. Please feel free to leave me a comment telling me how you will be observing the day.

Web: www.BeKindToLawyers.com.

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 law.com 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.

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 . . .

This Is Getting Nutty

In my last post, "Where's The Beef?" I chronicled how, after an initially tepid response, Taco Bell eventually presented a strong and effective response to a lawsuit alleging that there is very little beef in the fast food chain's tacos, and therefore it should be prohibited from advertising the tacos as containing "seasoned ground beef or seasoned beef."

Lawsuits claiming a consumer product is falsely advertised threaten damage to the brand and its reputation. This is even more true when the lawsuit involves a food product, as many consumers have become more discerning of the ingredients in the products they eat. I believe that a company's response to such lawsuits cannot await the litigation process; instead the company is best served if it responds swiftly and directly in the court of public opinion.

A number of companies have taken a "wait and see" attitude towards these lawsuits, seeking to calibrate their response to the amount of publicity. However, as I have previously noted in "Reputation Management in the Digital Age," hoping a controversy will quiet down can lead to disastrous results.

Notwithstanding the foregoing, it does appear that Ferrero USA Inc., the company that produces Ferrero Chocolates and Tic-Tac breath mints, has initially weathered the publicity concerning a lawsuit over the ingredients in its hazelnut spread, Nutella. Earlier this month, a San Diego solo practitioner filed a consumer class action in U.S. District Court for the Southern District of California, alleging that Ferrero USA is in violation of California consumer protection laws by representing that Nutella is a healthy, nutritious and balanced breakfast for children. The lawsuit alleges that the name plaintiff, Athena Hohenberg, the mother of a four-year-old child, bought Nutella after she saw advertisements showing mothers serving their children the product and declaring that the spread was a healthy and nutritious breakfast. According to the complaint: "Nutella, however, contains 70% saturated fat and processed sugar by weight. Both of these ingredients significantly contribute to America's alarming increases in childhood obesity, which can lead to life-long health problems." The complaint alleges that Ms. Hohenberg was "shocked" when she learned that Nutella was not healthy and "was the next best thing to a candy bar."

Ferrero USA's first official response to the lawsuit was exceedingly tepid. According to a story on AFP, when asked for comment, Elise Titan, a spokesperson for Ferrero USA, said the company stands by the wholesomeness of its product:

"What we can say right now is that we stand behind the quality of ingredients in Nutella hazelnut spread and advertising for our product," she said.

"It's really early in the case and we are really not in position to discuss the case any further," she said.

Fortunately for Ferrero USA, numerous bloggers have ridiculed the lawsuit, likening it more to the mother who sued McDonald's over its Happy Meal than to the lawsuit concerning the amount of beef in a Taco Bell taco. However, there may be some merit in the lawsuit. As reported in the Washington Post, ads touting Nutella as part of a healthful breakfast were challenged on similar grounds and withdrawn in the United Kingdom in 2008. Therefore, Ferrero USA may not be totally out of the woods yet, and further proceedings in the lawsuit may put more pressure on the company to defend its product and its advertising in the court of public opinion.