In The Court of Public Opinion

Media Savvy and Litigation Department of the Year

2012-01-03T13:57:00.002-05:00

So what does it take to be named the law firm "Litigation Department of the Year?" Well, according to American Lawyer in its profile of this year's winner, Gibson, Dunn & Crutcher, media savvy is a key ingredient. AmLaw puts it this way:

The most important battles can't be won solely with legal filings orcourtroom arguments. Gibson, Dunn partners strongly believe that publicperception can shape the outcome of a case. So its litigators aren't shy whenit comes to engaging the media. Take the firm's successful challenge toProposition 8, the California statute outlawing gay marriage. In the daysleading up to the trial of Perry v. Schwarzenegger , partnerTheodore Olson penned a 3,000-word cover story for Newsweek , entitled"The Conservative Case for Gay Marriage." And Olson estimates thathe, along with his cocounsel David Boies, has participated in scores ofinterviews to explain the team's advocacy for marriage equality.

The profile of Gibson Dunn goes on to describe the firm's public perception savvy in other cases as well:

Gibson lawyers are just as adept at shaping the public dialogue in casesthat are more technical and abstract. Case in point: the firm's representationof the U.S. Chamber of Commerce and the Business Roundtable in their challengeto the SEC's "proxy access" rule, which would have made it easier forshareholders to nominate directors. Partners Eugene Scalia and Amy Goodmanparticipated in the press conference announcing the lawsuit in September 2010.They also compiled critical comments about the rule from current and former SECcommissioners that were posted on the groups' Web sites. And Scalia says hefielded dozens of phone calls and e-mails with reporters.

In July the D.C. Circuit invalidated the proxy access rule, deliveringScalia his fourth victory in six years challenging SEC rules. It's impossible,of course, to gauge the impact of the media campaign. But to Gibson, Dunnclients, the firm's media savvy is just one more way these litigatorsdistinguish themselves. "It's a very special skill set [that Gibson, Dunnhas]," says Robin Conrad, executive vice president at the litigationcenter of the Chamber of Commerce.

The other finalists in the annual competition included Boies, Schiller & Flexner, Mayer Brown, O'Melveny & Myers, Sidley Austin and Wachtell, Lipton, Rosen & Katz. Honorable mention went to a slew of litigation departments at top-line law firms, including Baker & McKenzie, Cravath, Swaine & Moore, Davis Polk & Wardwell, Hughes Hubbard & Reed, Jenner & Block, Jones Day, Kirkland & Ellis, Munger, Tolles & Olson, Orrick, Herrington, Paul, Weiss, Quinn Emanuel, Sullivan & Cromwell, Weil, Gotshal & Manges and Wilmer. A full list of the winners in all categories can be found here (subscription, I believe, is required).

The Mark Hurd Saga Continues

2012-01-03T10:46:00.002-05:00

Last week the Mark Hurd case was back in the news. And the lesson for readers of In The Court of Public Opinion is this: assume everything is going to come out... eventually. And that someone will be to cover it. This is especially true in the age of the Internet, of video phones, iPads, PACER, Twitter and TMZ.

Hurd, the former CEO of Hewlett Packard – he’s now president of Oracle – was accused of sexual harassment by Jodie Fisher, a former event planning contractor for HP. Last week, a letter from Ms. Fisher’s attorney, Gloria Allred, was ordered to be made public by a court in Delaware.

The Delaware Supreme Court ruled that the information contained in the letter is only "mildly embarrassing" to Hurd, and therefore is not protected from public disclosure. It didn't contain trade secrets HP, or non-public financial information. Rather, it contained details of Hurd's alleged sexual pursuit of Fisher.

The letter came from celebrity lawyer Gloria Allred.

An HP investigation did not find any evidence to support the harassment claim, but instead uncovered inaccurate expense reports relating to Fisher. This was enough to force Hurd out in August 2010.

According to the letter, Hurd made it clear to Fisher that he was seeking a sexual relationship.

Allred also claimed that Hurd made several sexual advances toward Fisher, which Fisher rejected.

The letter alleges that, as a result of her rejections of his sexual advance, Hurd was not hired for any future HP events.

Hurd's attorney, Amy Wintersheimer, said his lawyers had requested that the letter be kept confidential because "it is filled with inaccuracies (it should be noted that Fisher herself in a subsequent letter disavowed some of the contents of this letter, saying it was inaccurate and distortion and that she never meant to hurt Hurd).

Hurd’s attorney released a statement last week that said, in part: "The truth is, there never was any sexual harassment, which HP's investigation confirmed, and there never was any sexual relationship, which Ms. Fisher has confirmed.”

Just another example of a legal battle being simultaneously fought out in the court of public opinion – at it seems stories like these crop up every week.

Yes.... Judges are Affected by Public Perception (Part 2)

2011-12-27T10:49:00.000-05:00

Here's another example of the extent to which Judges are affected by public pressure. According to Adam Liptak of The New York Times, the U.S. Court of Appeals for the 11th Circuit recently reversed itself on a highly controversial decision it made last year when it decided that there were no racial overtones when a a white manager at a Tyson chicken plant in Gadsden, Ala., called adult black men working there “boy.”

Why? It appears the judges did an about face in reaction to public outcry over the decision, and subsequent brief filed by some of the top names in civil right history. According to Liptak:

The decision prompted Mr. Clemon and 10 other civil rights leaders to file a brief. Among the signatories were giants of the civil rights movement like the Rev. Fred L. Shuttlesworth, who survived beatings and bombings in Alabama and who died in October, and Andrew Young, a former mayor of Atlanta and ambassador to the United Nations.

The brief urged the court to reconsider, making the case that “boy” retains its venom. For evidence, the brief drew on personal experiences, history, literary classics like “To Kill a Mockingbird” and “Native Son,” and the writings of the Rev. Dr. Martin Luther King Jr.

“Boy,” the brief said, is either a proxy for or “at the very least a close cousin” of the most charged racial epithet.

* * *

Stephen B. Bright, the president of the Southern Center for Human Rights, was less magnanimous than Mr. Clemon. He said the case demonstrated “how judges manipulate facts and law to make a case come out the way they want it to.”

“The new opinion flatly contradicts the first one in several places,” Mr. Bright said.

The new decision followed unflattering news coverage of the earlier one and might have been prompted by the possibility of a rebuke from the full 11th Circuit.

Again, like my prior post on former Illinois Governor Rod Blagojevich (from an interview I gave to The Wall Street Journal), this points to the fact that judges are not sitting in ivory towers shut off the world around them. Extrajudicial forces can have an enormous impact on the law and on justices -- and lawyers and parties that understand this will ultimately be more successful in reaching their legal, business and personal goals.

Will Barry Bonds One Day Sue The Hall of Fame?

2011-12-20T11:24:00.000-05:00

Check out the most recent episode of my In The Court of Public Opinion radio show on the VoiceAmerica Radio Network for updates on two Sports Law cases making news: the Penn State/Jerry Sandusky sexual assault case and the Barry Bonds sentence.

Key question I ask attorney Mike Agnello, an owner of the SportsShouting.com blog: Will an athlete one day sue a Hall of Fame, alleging RICO, antitrust or some other illegal conspiracy to keep them out of the Hall of Fame?

Sounds crazy, right? But given the amount of money that flows to those elected to the Baseball Hall of Fame in endorsements, memorabilia, autographs, etc., it's -- regretably -- bound to happen.

You heard it here first...

Commenting on Blago in The Wall Street Journal

2011-12-13T11:08:00.000-05:00

Here I am in today's Wall Street Journal, commenting on the sentence handed down against former Illinois Governor Rod Blagojevich.

Relevant section for In The Court Of Public Opinion readers:

Might Mr. Blagojevich have been able to get an even better deal by 'fessing up sooner? Experts seemed to think so.

"In my mind, there's no question that the more excessive aspects of Blagojevich's performance over the past several years brought him to where he is today," said James Haggerty, a legal-communications strategist in New York. "Nothing in our legal system occurs in a vacuum. Judges are affected by a defendant's public antics just like the rest of us."

How To Apologize

2011-12-07T11:44:00.000-05:00

This week, I'm on an apology kick.

My column today in American Lawyer's Corporate Counsel magazine looks at Judge Rakoff's recent high-profile rejection of a proposed $285 million settlement between Citigroup and the Securities and Exchange Commission over the allegedly fraudulent marketing and sale of Collateral Debt Obligations (CDOs). In my opinion, had Citi just been a little more apologetic, the settlement might have gone through.

And yesterday on my In The Court Of Public Opinion radio show on the VoiceAmerica Radio Network, we looked at the How To Apologize, with PR guru Ken Makovsky of Makovsky & Company (who publishes an interesting blog called "My Three Cents") and John Kador, author of "Effective Apology: Mending Fences, Building Bridges and Restoring Trust."

I think you'll enjoy both offerings -- and if not, I and heartily sorry!

Occupy Wall Street: The Root Causes

2011-11-22T12:25:00.000-05:00

The latest episode of my In The Court Of Public Opinion radio program looks at the Occupy Wall Street movement. A week after the protestors were removed from Zuccotti Park in Lower Manhattan, we look at how the strange legal status of "Publicly Owned Private Spaces" like Zuccotti Park allowed the movement to take up permanent residence. We also talk bank bailouts with the former Inspector General of the federal government’s TARP program, and look at the way student loan debt has contributed to the movement.

Guests include Harvard Professor Jerold Kayden, author of the definitive book on Public Owned Private Spaces; Neil Barofsky, the former Treasury Department Inspector General overseeing TARP; and Jenna Ashley Robinson of the Pope Center for Higher Education Policy.

Happy listening!

Penn State and Hubris

2011-11-15T11:52:00.000-05:00

My latest column for American Lawyer's Corporate Counsel magazine looks at the Penn State sexual assault scandal... and why we let high performers get away with -- not just indiscretions, but crimes!
An excerpt follows:

...in my years as a communications consultant in crisis and litigation situations, I've seen it all before. Whether it's financial firms breaching their fiduciary duty to clients by selling products they know will fail, pharmaceutical companies ignoring illegality in the marketing of their drugs, or law firm partners tolerating inappropriate behavior by big rainmakers, it is a pattern repeated again and again. Successful institutions begin to believe their own hype, that they can do no wrong, that economic achievement in their specific field of endeavor leaves them above the concerns of mere mortals, renders them—in the oft-used cliché—above the law.

Thus, the transgressions of high-performing "stars" in these organizations are tolerated because of the success—and enormous profits—they bring. The money coming in blinds the institution to its own increasingly risky behavior in condoning bad behavior. "Looking the other way" becomes cover-up; "keeping it quiet" becomes obstruction. Lawyers are consulted, whose default position is often to say nothing and do nothing, lest any words or actions become a tacit admission that may one day be used in a court of law. Such advice fits just fine with what the organization has been doing all along. The moral and ethical give way to the strictly legal.

Then it all explodes, and no one is prepared. Because they fooled themselves into believing it never would.

If the allegations are to be believed, this is exactly what happened in the Penn State case. Jerry Sandusky, who is alleged to have perpetrated the horrible acts of child sexual abuse, was a star defensive coordinator credited with playing a key role in the Nittany Lions' national championships of 1982 and 1986. This success, predictably, brought huge financial rewards: the Penn State football program is said to have generated a stunning $50 million profit in 2009, on $70 million in revenue. No one at the institution had the fortitude to kill a goose that lays such golden eggs.

And so, the alleged cover-up, and the inability to face head-on the incredible moral, legal, and reputational consequences of their silence.

My New Radio Show

2011-11-09T12:43:00.002-05:00

In the Court of Public Opinion radio is now on the air! I've launched a radio program on the VoiceAmerica network similar to my blog, column and book.

Here is the press release announcing the program. Hope you listen and enjoy the program!

___________________________________________

"In The Court Of Public Opinion" Radio Show Launches on VoiceAmerica Radio Network

Interview program by attorney, author and communications consultant James F. (Jim) Haggerty will explore areas where law, media and public perception collide

NEW YORK, Nov. 8, 2011 -- James F. (Jim) Haggerty, author of the acclaimed book In The Court Of Public Opinion: Winning Strategies for Litigation Communication (2nd Edition, American Bar Association Publishing, 2009), has launched an "In The Court Of Public Opinion with Jim Haggerty" radio program on the VoiceAmerica Business Radio Network.

The Internet-based program runs each Tuesday at 12:00 pm Eastern Time (9:00 a.m. Pacific Time) atwww.voiceamerica.com/channel/247/voiceamerica-business. Each episode will feature interviews with leading attorneys, reporters, consultants and other experts on a wide variety of legal, policy, media and public perception issues. Episodes are archived on the VoiceAmerica website and also available on iTunes and in MP3 format.

In The Court Of Public Opinion has its own webpage at: http://www.voiceamerica.com/show/1996/in-the-court-of-public-opinion

Haggerty is President and CEO of The PR Consulting Group (PRCG), an internationally known public relations firm specializing in litigation and crisis matters.

Haggerty's first guests In The Court Of Public Opinion were Richard Aborn, President of the Citizens Crime Commission of New York and Tom Goldstein, renowned Supreme Court litigator and publisher of SCOTUSblog. Aborn discussed how New York State is about to become the only state in the nation that still handles 16- and 17-year-old nonviolent offenders as adults. Aborn also talked about the Crime Commission's new counterterrorism database. Goldstein discussed the upcoming Supreme Court term and his award-winning SCOTUSblog, which covers the Supreme Court.

The next episode, which will air on November 8, 2011, at 12 noon EST, will examine public relations in high-profile litigation, with Harlan Loeb, U.S. Director of Issues, Crisis & Risk Management at Edelman PR, Robert Bork, Jr., head of Bork Communications Group in Washington, D.C., and Harvey Englander of Englander, Knabe & Allen in Los Angeles.

In addition to his book and radio show, Haggerty is also a columnist for Corporate Counsel magazine, published by American Lawyer Media, where his "In The Court Of Public Opinion" columns have covered issues such as the Occupy Wall Street protests, banking and mortgage litigation and Rupert Murdoch's appears before a parliamentary committee in the infamous News Corporation phone hacking scandal.

"With my new In The Court Of Public Opinion radio program, I hope to explore all of the ways technology, media and public perception are affecting the practice of law and public access to our legal system," Haggerty said.

###

Herman Cain's 9-9-9 Plan

2011-11-02T13:09:00.002-04:00

My latest column for American Lawyer's Corporate Counsel magazine, here, looks at the lessons in messaging we can derive from the Herman Cain's 9-9-9 plan.
There are particular lessons for the attorneys out there: "Lawyers are masters of making the merely complex seem completely indecipherable. In my experience, this not necessarily because the actual material is so difficult, but rather because lawyers are... well, trained to sound like lawyers."

OWS and Message.

2011-10-18T12:24:00.000-04:00

Here's my latest column from American Lawyer's Corporate Counsel magazine, dealing with Occupy Wall Street. Critics of the OWS protests say the movement lacks a coherent message, but I'm not so sure. And where are the coherent messages and smart crisis management strategies on the other side?

Help, My Lawyer is a Dominatrix

2011-09-27T16:39:00.002-04:00

My most recent column for Corporate Counsel magazine is here.

Favorite line: "some might argue that [being a dominatrix] is actually not a bad quality to have in your lawyer—indeed, I've known more than one successful litigator over the years who seemed just a leather outfit and riding crop away from full membership."

Second favorite: "At a certain point, the best you can do from a public perception standpoint when confronted with employee behavior that harms the reputation of the organization is to follow your policy properly, communicate it effectively, take your lumps (if you'll pardon the pun) and move on."

Sensational Cases

2011-07-28T17:10:00.002-04:00

In my role as columnist at Corporate Counsel magazine, I've been focusing on some of the recent, sensational legal news stories that have occupied public attention this summer, including those surrounding Dominique Strauss Kahn (here) and Rupert Murdoch's News Corporation phone hacking scandal (here). Why? Well, for one reason, they're more interesting than writing about patent disputes and employee benefit cases...and it is, after all, summer.

Beyond this, though, it has always been my belief that even the most sensational legal cases out there hold Litigation PR lessons for everyone. For one thing, most rules of effective message delivery are the same, whether you're facing a single wire service reporter in the back of a courtroom or a bank of cameras outside the courthouse door. In addition, the ebb-and-flow of media attention in even the most high-profile of cases tends to follow courtroom action in the same way it does in lower-profile legal dramas.

And while your patent or employee benefits case may not be of interest to The New York Times, if your customers primarily read Electrical Engineering Times, it doesn't matter. Similarly, if you're based in St. Petersburg, Florida, the Tampa Bay Business Journal may be just as important to you as The Wall Street Journal.

Bank of America Article In Corporate Counsel Magazine

2011-07-01T12:14:00.002-04:00

I recently signed up as a contributing writer to Corporate Counsel magazine, the leading publication reaching lawyers in corporate America, published by American Lawyer Media.

My first piece, “Did Bank of America's Aggressive PR Posture Hurt or Help?” discusses the recent 8.5 billion dollar Bank of America settlement, and whether BOA's aggressive public posturing helped or hurt their cause.

Did their initial approach ultimately do more harm than good? Find out here.

Appearance on The Today Show

2011-06-20T10:25:00.007-04:00

While I'm more often involved in crisis and litigation matters of a corporate variety, last week I appeared on the Today Show discussing, of all things, Anthony Weiner.

With a disgraced exit from Congress, will the former congressman ever be able to rebuild his image and regain his career in the spotlight? Though it’s been done (Elliot Spitzer and Bill Clinton come to mind), it’s neither a quick nor an easy task. Recovering from such a humiliating public scandal can take years. You have to show (not tell) that you've learned from the mistakes you made and have truly changed. If you think it's all about celebrity rehab, a trip to Oprah's couch and book deal... well, the odds are against you. It may work for Paris and Lindsey, but we're talking about regaining the public's trust, which even in this celebrity-driven age, is a little different.

Legal Publicity Forces Trump out of Presidential Race

2011-05-17T04:47:00.001-04:00

Well here's a first in the annals of law, media and public opinion: negative publicity of legal matters has apparently forced a candidate from the 2012 Presidential race.

On Monday May 16, Donald Trump announced his withdrawal from the 2012 campaign, just days after The New York Time’s Michael Barbaro wrote this article, providing details of litigation in which The Donald has become embroiled. Trump's unofficial campaigning for the 2012 presidential bid brought heat from journalists about his own business practices, especially his involvement as a party in over 100 different lawsuits involving Trump-branded condo developments.

In the article, which highlights Trump’s most recent involvement in litigation as a defendant to suits brought on by Florida real estate buyers, Barbaro writes:

"But regardless of whether Mr. Trump ultimately seeks the presidency, his attempt to promote himself as a savvy financial manager who can lead America out of its economic rut is bringing new scrutiny to his own business practices."

As is to be expected, The Donald is fighting back against the bad publicity (as seen here), but in terms of his presidential bid, the Florida litigation and ensuing media coverage seems to be the straw that broke the camel's back. Trump himself admitted here that "nobody said it was going to be easy, but I had no idea I would get hammered in the way I've been hammered the past few weeks."

"And so," he added, "I'm fired!"

(Ok, I added that last bit).

[Editor's Note: Due to a technical glitch, this post was delayed for several weeks].

Lesson 1: Don't Give The Media The Finger

2011-05-12T03:45:00.003-04:00

Did I forget to mention Rule #1 when communicating during court cases: Don’t tell the media to f*** off… figuratively, or (as in this case) literally? Especially when the cameras are rolling. There's no surer way to make a reporter's day, make a non-event into a story -- and ultimately, make yourself look guilty.

So after Raj Rajaratnam, formerly CEO of Galleon Group was found guilty on all fourteen counts of securities fraud and conspiracy, his attorney, John Dowd, immediately protested his client's innocence and promised to appeal those convictions. Moments later, he was caught on camera blowing off his frustration on a CNBC news crew, who had simply asked for comment (here's thevideo).

Point to be made: while we'd all occasionally like to give the media the finger, it is best, from a perception standpoint, to resist the urge, point out that a trial loss is just the first round of the battle, and behave as if you firmly believe you will prevail.

[Editor's Note: Due to a technical glitch, this post was delayed for several weeks].

Egypt, Crisis Management, and Communications

2011-02-03T10:26:00.023-05:00

Companies and organizations of all shapes and sizes are confronting myriad business and communications challenges in the wake of the crisis in Egypt. Securing employees, assets and operations in multinational settings can be challenging in the best of times. The current unrest, along with the unprecedented cut-off of Internet and cellular communications, have created an environment as-of-yet unseen in this modern, media-driven age (click here for an interesting CNN piece on the Egyptian shutdown -- and whether such a shutdown could happen in the U.S.).

Employees, of course, are priority number one, and it's not just companies with large operations in Egypt who are at risk. Given the size of Egypt's economy, consider business travelers dispatched to Egypt around the time of the crisis (click here, for example, for an interesting take on issues related to securing employees). While energy company Apache Corporation is by far the largest U.S. investor in Egypt, others -- such as ConAgra, AD, Cargill, Boeing, Lockheed Martin, Northrup Grumman, General Dynamics and Raytheon -- all have major business connections in the country (for a recent Fortune story on companies at risk in Egypt, click here).

From a communications standpoint, some of the major elements of effective crisis response include the following:

Have a crisis plan and a crisis team in place well before a crisis ever occurs. And make sure it is updated regularly to ensure you are prepared for current realities, technologies and communication needs.

Alert and assemble the crisis team at the earliest possible moment, so that the crisis plan can be put into effect at the outset of the event.

Secure access points for communication flowing from your organization to prevent unwanted leaks or other unauthorized communication.

Assemble all the facts, to ensure that accurate information is flowing to the media, to employees and their families, to stakeholders and to interested third parties. Don’t speculate about what you don’t know… and assume initial reports may be inaccurate or only capture half the picture.

Have designated, well-trained spokespeople ready to communicate. In extreme crises, the CEO should be the public face of the company, to show the level of concern and the importance with which the company is taking the matter.

Harness the power of modern communication – including the Internet, Facebook, and Twitter feeds – to effectively communicate with affected audiences through their platforms, not just yours.

Liaise effectively with third parties to ensure your flow of information is accurate, and to otherwise coordinate a comprehensive, cohesive response. In the Egyptian crisis, such third parties would likely include the State Department, legislators and other governmental “influentials,” business partners, airlines and outside security consultants.

Review, refine and adapt quickly and effectively as the crisis progresses.

In the end, I fall back on the Boy Scouts' motto: Be Prepared. It may cost an organization a bit more at the front end, but in the heat of a crisis you don’t not want to be making it up as you go along (and believe me, all too often, that’s when the first call comes my way). When crisis strikes, effectively communications risk planning usually proves itself to be among the best investments a company can make.

Law Firm Unveils Crisis Management Specialty

2011-01-11T17:06:00.007-05:00

My friends at The Wall Street Journal Law Blog put together a fascinating post last week, here, that further highlights the growing intersection of law and public perception.

Covington & Burling, one of the most prominent law firms in Washington, D.C., has launched a "Strategic Risk and Crisis Management Practice." Senior members of the group include (according to the Covington press release) former Homeland Security Secretary Michael Chertoff; Ambassador Stuart Eizenstat; former DC Attorney General Peter Nickles; former NFL Commissioner Paul Tagliabue; and Thomas Williamson, former U.S. Solicitor of Labor.

Mr. Nickles, identified as leader of the Covington team, said: "Covington has scores of lawyers with deep experience in government and internal investigations, contested transactions, and with other issues that pose significant financial, reputational and legal risk."

And significantly for our purposes is a quote from Mr. Williamson: "Managing the media, litigation and investor issues arising out of class action claims and even employment controversies surrounding individual senior executives will continue to be an important boardroom concern in the coming years.” (a link to the Covington press release is here).

This integration of legal practice and crisis management is something I have been preaching for years, including in my book, In The Court of Public Opinion, which is now in its second edition. In the media age, services traditionally offered by public relations firms (like my firm, PRCG) are now increasingly integrated with the practice of law.

The Covington announcement comes on the heels of other legal practitioners -- usually in Washington, D.C. -- who have endeavored to specialize in the management of reputation and other elements of corporate risk during legal crises. These have included Lanny Davis, who was at Orrick and McDermott Will and now has his own firm, offering "Law, Media and Legislative/Political Strategies." And for years, Washington Superlawyer Robert Bennett has practiced a unique brand of legal/public relations for high-profile clients, first at Skadden, now at Hogans Lovell (consider a blog post of mine from 2008, here, with a link to Mr. Bennett's appearance on the Today Show to promote his book, In The Ring: The Trials of A Washington Lawyer).

Ashby Jones at the Law Blog calls the recent law firm interest in crisis management a "boomlet," and with the magnitude of recent legally-tinged reputational crises befalling the likes of Toyota, BP, Johnson & Johnson, Hewlett-Packard, Goldman Sachs and others, it's no wonder. The Law Blog makes the following excellent point:

The move by Covington (and other firms) strikes us as more a marketing move than a substantive one. But we don’t mean that in a negative way. To the contrary, actually.

We can’t imagine that as “litigation partners,” (as they used to be called), lawyers of Craig and Chertoff’s stature would decline to help a client-in-crisis come up with a media or investor strategy, for example. No, they were likely performing those tasks as well as a host of others that went beyond drafting briefs and taking depositions. All the firms are doing now is recasting (likely in a more accurate light) what their most star-studded lawyers actually do.

In our mind, this is the rare law firm “branding” move that actually makes sense. We can envision a company that suddenly gets blamed for, say, an oil spill, wanting to turn to to a law firm that can offer not only the litigation firepower to handle the flood of lawsuits that arise, but can offer guidance on agency and congressional inquiries, work behind the scenes to manage the political fallout, and the like.

Well put. But I have to wonder at the absence of any mention of strategic communications expertise among this highly talented group of high profile lawyers. It is a rare combination of skills, to be sure, but vital to the success of such a venture. Hopefully, they know where to find me...

Is the Madoff Trustee Using Publicity To Turn Up Heat On Mets' Owners?

2010-12-08T10:45:00.004-05:00

Last year I blogged on the PR aspects of Madoff Trustee Irving Picard's work (click here). In recent days, he has filed a flurry of very high-profile lawsuits to recover money from various individuals who facilitated and/or benefited from the massive Ponzi Scheme.

Yesterday, he filed a lawsuit of particular note, against Sterling Equities and several members of the Wilpon family (owners of my beloved New York Mets). What is interesting for our purposes is the fact that Picard appears to be using a pretty sophisticated Litigation PR tactic: filing an incendiary complaint "under seal" as a negotiating tactic -- putting pressure on the other side to make the lawsuit go away before full details are unsealed. Here's a relevant passage from The New York Times' "Dealbook" (full Dealbook post is here):

In a press release, Irving L. Picard, the trustee, said that he was engaged in “good-faith negotiations” to settle the claims with Sterling and the other defendants...

“In light of the ongoing negotiations between the Sterling defendants and the trustee, and consistent with Court orders, we have filed the complaint under seal,” said Fernando A. Bohorquez Jr., a colleague of Mr. Picard at Baker & Hostetler, the law firm overseeing the dissolution of the Madoff firm. “Under those circumstances, we will not move to unseal the complaint and exhibits at this time.”

This is "good-faith negotiations?" I'd hate to see Picard acting in bad faith.

Sterling Equities responded with a "no comment," citing the ongoing negotiations. I can only assume they were blindsided by the tactic, which I've seen used over the years in a handful of high-profile cases.

To be fair, Picard is under a deadline -- he must file any "clawback" claims against third parties by Saturday, December 11 (an excellent WSJ Law Blog post, here, details the recent filings). But why not let the Wilpon negotiations run their course? My Spider-sense tells me Picard felt the additional pressure of a potential public battle might move Wilpon and Sterling Equities in the right direction.

Now perhaps I'm reading tea leaves here. And whether it works or not (and what information is contained in the filing) is yet to be seen. But one element of a public fight would work in the Wilpons' favor: a clawback fight might once-and-for-all put an end to the rumors that the Mets' owners lost so much money in the Madoff fraud that their baseball operations are in trouble (click here for an example). An October 2009 filing by Picard showing that a Mets account actual made some $47 million did little to quell these rumors as Mets' ownership showed a tight pocketbook in recent free agent and draft markets. Ultimately, knowing the full extent of the Wilpons' Madoff losses (or profits) might be a good thing for the team going forward -- offering peace of mind to Mets' fans worried about their team's continued ability to be competitive (bearing in mind, of course, that peace of mind to a Met fan is a relative concept to begin with).

Insider Trading and Public Perception [UPDATED]

2010-11-22T10:30:00.001-05:00

In August, I noted the increased frequency of high-profile insider trading cases (click here for details). Today, The Wall Street Journal reports on a "vast insider trading probe" examining whether...

"...nonpublic information was passed along by independent analysts and consultants who work for companies that provide "expert network" services to hedge funds and mutual funds. These companies set up meetings and calls with current and former managers from hundreds of companies for traders seeking an investing edge."

Some of the firms mentioned in the Journal article include small, specialized analysts and consultants with names like Primary Global Research LLC and Broadband Research LLC, along with top hedge funds such as SAC Capital Advisors LP and Citadel Asset Management, and mutual-fund firms like Janus Capital Group, Wellington Management Co. and MFS Investment Management. And of course, Goldman Sachs... it would hardly be a financial news story without 'em.

Looks like WSJ did an amazing job breaking this story, which is likely to dominate business news in coming days. One interesting point is that, according to the Journal, the alleged insider trading ring "reaped illegal profits totaling tens of millions of dollars." While tens of millions are nothing to sneeze at, in the context of our multi-billion dollar (if not multi-trillion dollar) financial system, these profits are by no means "vast." Makes you wonder what else is out there...

But the enormity of the alleged insider trading is not the point, particularly for our purposes. Rather it's the fact that "insider trading" is hot right now... and when an issue moves to the front-burner of public consciousness, regulators and prosecutors inevitably follow.

As I stated in my August blog post:

Extrajudicial forces exert enormous influence on legal matters, be they civil or criminal... the actions of regulators are inevitably intertwined with what is considered important, meaningful or otherwise "hot" at a given moment in time.

In the white collar criminal context, therefore, what gets investigated and who gets charged -- with what and when -- are to a large extent dependent on what's considered important from a public or political standpoint. Equal application of the law it is not.

Here's what is really happening, I think: having missed out on some of the more sophisticated frauds of the past decade -- including the Madoff Ponzi scheme, of course, but also some of the CDO-style financial engineering that occurred -- regulators are now looking to score points with some "low hanging fruit." And that leads directly to good old-fashioned insider trading. Unlike a fraud in the marketing of some arcane synthetic credit instrument, insider trading is easy for the public -- and regulators -- to understand: (1) I get inside information; (2) I trade on it before it becomes public; (3) I make profits I shouldn't have. An easy story, and an irresistible story for a regulator or prosecutor (perhaps with a Guiliani-esqe perp-walk for the cameras to boot).

One problem: in the media age, when we are all awash in information, what exactly is "inside information?" The line is becoming blurrier -- we no longer have Wall Street's Bud Fox posing as a cleaning man.

And where the line is blurred, decisions regarding what, and whom, to pursue can be based as much on the "court of public opinion" as the court of law. As I wrote in my book, In The Court of Public Opinion (2d Edition, ABA Books, 2009), "prosecutors are not just building a case, they're building their careers. They tend to gravitate towards the targets that offer the best chance to score points publicly, and shy away from defendants who prove they can play the PR game as deftly as they do."

Lance Armstrong's High Public Profile

2010-09-15T11:55:00.000-04:00

I was interviewed recently for ESPN on the subject of Lance Armstrong maintaining a high public profile -- including through his foundation and it's star-studded "Stand Up To Cancer" telethon -- despite being under federal investigation for allegations of organized doping and fraud (for the full article, click here).

The question: shouldn't Armstrong be "ratcheting down" his public appearances until this crisis blows over?

My answer, from the interview:

Experts in crisis communications say that by going about his normal business and not ducking the spotlight, Armstrong is proceeding in exactly the way they would expect -- indirectly trying to influence public opinion, and by extension, perhaps even prosecutorial discretion.

"Anything else would send the wrong message,'' said Jim Haggerty, president and CEO of the PR Consulting Group in New York, which advises clients on communications strategies in high-profile lawsuits.

"From a perception standpoint, anything that might make you look guilty... makes you guilty.''

Insider Trading Moves "Front Burner"

2010-08-17T09:46:00.008-04:00

Law doesn't just happen. Extrajudicial forces exert enormous influence on the course and conduct of legal matters, be they civil or criminal. Indeed, in the media age, the actions of plaintiffs, defendants, prosecutors and regulators are inevitably intertwined with what is considered important, meaningful or otherwise "hot" at a given moment in time.

In the white collar criminal context, therefore, what gets investigated and who gets charged -- with what and when -- are to a large extent dependent on what's considered important from a public standpoint. Equal application of the law it is not.

Which brings us to insider trading. In the past several weeks, we're seeing an enormous uptick in insider trading stories, including related to Deloitte & Touche, BP, the Wyly Brothers in Texas and Mark Cuban (owner of the Dallas Mavericks, whom I've blogged about in the past, here, here and here). To say nothing of the Galleon case which has dominated the legal news space for months (for the latest, see this Wall Street Journal article).

So have insiders been illegally trading more over the past several months, compared with years past? Likely not... rather, it's pretty reasonable to suggest the uptick is related directly to the renewed urgency felt by prosecutors and regulators -- which, of course, is itself stoked by renewed public interest in corporate fraud and malfeasance.

It's as simple as this: Public officials know which side their bread is buttered on. And if the public craves enhanced enforcement on the financial front... give 'em what they want. As I related in my 2009 book, In The Court of Public Opinion (ABA Books, 2009):

What's "hot" right now is one of the key variables that will influence whether a case receives media interest... We are currently working with a shareholder fraud attorney who is on CNN and CNBC twice a week regarding the cases he's involved with. In the go-go markets of the last decade, we couldn't have booked him on public access cable. No one was doing corporate malfeasance or fraud stories then. Now you can't get away from them... These days, it's all corporate malfeasance, fraud and Ponzi schemes all the time. White collar perp walks are where it's at.

Corporate lawyers, clients and PR personnel should recognize that, after a decade of mortgage fraud, financial self-dealing and purloined investments, public interest in white collar crimes that were, in the past, considered a bit "ho-hum" (if they were considered at all), have now moved to the front burner -- of prosecutorial attention, and media and other public interest.

Reputation and the Mark Hurd Matter

2010-08-09T09:25:00.016-04:00

One of the more interesting aspects of the firing of HP's CEO Mark Hurd is the fact that it may have been done not for any particular legal or ethical violation per se, but rather solely for public relations purposes.

According to Monday's New York Times (which has comprehensive details on the firing):

After H.P.’s board learned of the sexual harassment charges, it began the investigation and hired the consulting firm APCO to evaluate the damage such a revelation could cause if made public, according to people with direct knowledge of the situation.

A debate subsequently erupted over whether Mr. Hurd needed to disclose the charges against him publicly, according to a person close to Mr. Hurd. APCO told the board that the company would most likely endure a devastating public relations hit if Mr. Hurd stayed on as chief executive, according to that person.

APCO is not actually a "consulting firm" (in the manner of McKinsey, for example), but rather one of the nation's major independent public relations firms. APCO is a well-known (and well-regarded) firm in a number of areas, including in the fields of public affairs and litigation communications (where, I hear, they've had good instructional materials over the years).

So this raises an interesting question: In the wake of a series of corporate missteps -- including former CEO Carly Fiorina's departure and the infamous pretexting scandal -- did HP rely too heavily on public relations advice when deciding to dismiss one of the most successful CEOs in its history? According to published reports, there was no sexual harassment, nor a sexual relationship. Rather, the dismissal was purely on the basis of purportedly erroneous expense reports (which, according to the Times piece, were not personally submitted by Mr. Hurd).

What is clear is that HP made this decision while facing the threat of a publicly fought legal battle launched by celebrity attorney Gloria Allread, who represented Mr. Hurd's accuser -- although, at this point, it is still unclear what she was actually accusing him of (Allread, for her part, has recently become the go-to lawyer for the high-profile woman scorned -- a good article from The New York Times profiling her practice is here).

So if you'll pardon the pun... were the expense reports simply pretext? After all, it is one thing to integrate public relations concerns into decision-making related to legal or operation issues (indeed, as readers of this blog well know, I believe it is essential). It is quite another to let perception concerns trump all other, in a knee-jerk fashion, allowing questionable claims to result in the dismissal of a successful CEO for fear of PR blowback.

I suspect we'll learn more about this story in the days to come, since this would appear to be the type of corporate action that makes a story bigger, rather than makes it go away.

Syracuse Remarks on Law, Politics and Media

2010-05-06T13:38:00.007-04:00

Last week, I spoke at the Syracuse University College of Law as part of their "Law, Politics and the Media" lecture series. I was happy to be invited back for a second year to the event, discussing the increasingly critical role policy and public opinion play in protecting legal rights during high-profile litigation.

The prepared text of my remarks are above. Video of my speech should also be available (for those who are interested) in the coming weeks.

Toyota's Crisis Managment

2010-04-08T17:41:00.006-04:00

Two fascinating looks at the way Toyota is handling the management of its sudden acceleration crisis.

The first, by Richard Tedlow, a professor at Harvard Business School and the author of Denial: Why Business Leaders Fail to Look Facts in the Face. His commentary just appeared in BusinessWeek (you can find it here). A key quote:

What on earth were they thinking? Did they believe that the failure of this most public of products would pass by unnoticed?

I believe I know the answers to these questions. Toyota's top people were in denial, just as the public was. By denial, I mean that they stopped being honest with one another. And they stopped being honest with themselves. If Toyota's products were as fatally flawed as they were, that would be too awful to be true. Therefore, the awful truth was brushed away. I've seen this happen in so many companies that I was compelled to write a book about it.

Second, from Modern Healthcare (registration may be required for this one), comes from an unlikely source: the hospital industry. David Shulkin, a professor of medicine at the Albert Einstein College of Medicine in New York, argues here that Toyota could learn a thing or two from the way hospitals have learned to handle mistakes:

Hospitals have worked in recent years to create new systems for the rapid identification of problems when they occur. Healthcare workers are encouraged to report both errors and potential errors, using incident reports and other reporting systems. Medical staffs use peer review processes to examine safety concerns or deviations from standard practices. Insurers have begun “pay for performance” systems that work with hospitals to monitor quality data and change payments based on improvements in quality data. Data on hospital quality is now increasingly reported to the public through government and private initiatives and is accessible on the Web through numerous commercial companies...

As we have learned in healthcare, introspection, accountability and transparency of information is the best path toward healing. Sometimes, making a mistake, learning from it and implementing changes to make the system better is just what the doctor ordered.

Both articles offer fascinating takes on where Toyota went wrong, and what it should be learning from this mess. Give their recent public posture, however, one wonders if Toyota is truly listening.

Goldman and Communication Risk Management

2010-03-02T06:56:00.005-05:00

Next up in the continuing intersection of legal and regulatory issues with media and public opinion: adverse publicity as a financial risk. According to this story in The Wall Street Journal, none other than Goldman Sachs declares in their most recent regulatory filing:

"adverse publicity" could have "a negative impact on our reputation and on the morale and performance of our employees, which could adversely affect our businesses and results of operations."

Goldman lists adverse publicity as one of 12 "risk factors" that might impact the firm's financial performance.

Seems logical enough, a risk like many others (consider "political instability," for instance, or "increased regulatory scrutiny"). Yet, like so much that happens in the court of public opinion, actually listing such a risk in a filing is unusual enough to warrant news coverage. Consider this comment in the article, by Professor Charles Elson at the University of Deleware:

[Elson] couldn't recall a previous instance where a company cited bad publicity as a risk to its business. "It's reflective of the rather bizarre political climate in which we operate."

Elson, it should be noted, knows a thing or two about both corporate regulatory filings and publicity -- he is likely among the most quoted law professors in the nation on the subject of securities law. He also uncorks the most interesting quote in the article, stating: "Goldman has become one giant pinata to whack..."

(As an aside, many moons ago, Professor Elson was my Corporations professor in law school).

Ultimately, the Goldman folks have once again spotted a trend well before others: i.e., the undeniable importance of communications risk management in the information age. Again, from The Wall Street Journal article:

Goldman has long viewed its communications department as a risk-related function, meaning executives realize that a misstep in how it deals with the media or an issue could cause unnecessary damage to the company's brand name... "Press coverage and other public statements that assert some form of wrongdoing, regardless of the factual basis for the assertions being made, often results in some type of investigation by regulators, legislators and law enforcement officials or in lawsuits," the filing said.

Couldn't have said it better myself!

Do Clichéd Statements Make You Look Guilty?

2010-01-08T13:15:00.017-05:00

I think so.

I don't have any particular data to back this up, but I am of the opinion that clichéd responses to allegations during legal disputes just make you look guilty, in the same way "No Comment" does.

And the cliché increasingly favored these days is:

"This lawsuit is without merit and we will vigorously defend ourselves."

Indeed, a quick Nexis search reveals that that phrase was used some 600 times in the past year by litigants in various cases (granted, some of these may be quoting the same response).

At the very least, responding in a rote, clichéd manner makes a corporate defendant or litigant look more guilty than it should. With a little thought and a little finesse, a litigant can put together a response that might actually make people believe that the lawsuit just filed is without merit.

Consider this example of how not to respond, from a recent New York Times story on a lawsuit against Credit Suisse Group and Cushman & Wakefield over a failed property investment in Colorado. In two separate paragraphs in the story, we find the following:

[a] Credit Suisse spokesman... said Monday that "we believe the suit to be without merit, and we'll defend ourselves vigorously."

...and:

A Cushman & Wakefield spokesman said: "The allegations are completely without merit, and we will defend ourselves vigorously."

Hmmm. So well coordinated and wooden a response makes me wonder if there isn't something to this lawsuit (and PS -- why does CS find the lawsuit without merit, whilst C&W only finds the "allegations" without merit?).

Part of the problem is the fact that lawyers are trained to answer a legal complaint in court in a very rote manner, i.e.:

ANSWER
1. Denied.

2. Denied.

3. Admitted to the extent my name is, indeed, James F. Haggerty, otherwise denied.

This may be an efficient way of responding to a complaint, but the same technique does little to advance the ball when responding to public reaction to a lawsuit. In a way it reminds me of the old Baltimore Catechism that we parochial schoolchildren all grew up with:

Q: Do you believe this lawsuit is without merit?

A: We believe this lawsuit is without merit and will defend it vigorously.

But what's wrong with this sort of a response, hackneyed though it may be? Well consider another kind of response, from a well known case I've blogged about recently (here and here): the lawsuit by AT&T against Verizon.

Verizon, when faced with an AT&T lawsuit over their "there's a map for that" series of ads, could have responded with a standard cliched statement. Instead, they said something sharper and more interesting, in both court filings and in public:

AT&T did not file this lawsuit because Verizon’s “There’s A Map For That” advertisements are untrue; AT&T sued because Verizon’s ads are true and the truth hurts… AT&T now is attempting to silence Verizon’s ads that include maps graphically depicting the geographic reach of AT&T’s 3G network as compared to Verizon’s own 3G network because AT&T does not like the truthful picture painted by that comparison.

Under intense public attention, AT&T's lawsuit was subsequently withdrawn (see a nice description of the debacle from Seeking Alpha, here).

Now, clearly, particularly at the onset of litigation or when allegations are otherwise first revealed, there is precious little you can say. As famed litigator Ted Wells put it in the new edition of my book In The Court Of Public Opinion, in the early stages of a legal matter "[m]uch of our time is spent dressing up 'No Comment' as a comment."

But that doesn't mean you can't do it well (I blogged about one example of responding well, here).

More on this topic to come...

Replacing Your Attorney for PR Value?

2010-01-05T11:22:00.027-05:00

One interesting story in financial and legal circles this week is that the wife of hedge fund mogul Steven Cohen has replaced the attorney in her divorce case, just weeks after the case was filed. As The New York Times reported on Sunday (here):

Ms. Cohen approached Ms. Kachroo soon after her case was filed in mid-December in United States District Court for the Southern District of New York. “She felt her case wasn’t getting the attention it required,” said Ms. Kachroo, who is not a litigator but is a corporate lawyer with her own practice.

After reviewing the documents and learning of new facts that were not included in the original lawsuit, Ms. Kachroo said she decided to accept the case. “I think we have a very strong case, especially in light of the facts that we’ve uncovered,” she said. She declined to elaborate on those facts, but said they would be included in a new or amended complaint.

From the reporting (along with my experience in these sorts of cases), I suspect Ms. Cohen was more unhappy with the public attention the divorce proceedings have garnered thus far.

While the case garnered publicity, some of it was quite skeptical over Ms Cohen's motives and the veracity of her claims. The New York Observer, for example, called the RICO allegations in her filing a "bizarre racketeering suit." And The New York Times reported:

In a lawsuit filed Wednesday, Ms. Cohen claims her ex-husband hid millions of dollars from her — a common enough complaint as big-money divorces go.

But here the story takes an odd turn. Some of those millions, Ms. Cohen claims in her suit, were reaped through insider trading in the 1980s.

***

If Ms. Cohen’s claims are shocking, her motive is perhaps less so. She wants money — lots of it

And consider this, from the Business Insider, in a post titled "Patricia Cohen Probably Hired The New Lawyer To Scare Steve Cohen":

Kachroo, a corporate lawyer who specialized in emerging markets in India and Southeast Asia, seems an odd choice. But, thanks to her experience with Markopolis, she now has a reputation as a fighter against financial fraud and plenty of media experience. If the strategy is to uncomfortably increase public scrutiny of the intensely private hedge fund manager, this might be a perfect hire.

With that in mind, two thoughts: first, replacing your attorney just because you don't like the first round of publicity is, to put it lightly, not ideal. All litigants feel aggrieved, and this is particularly true in divorce cases, where emotions run high to begin with. But looking for a knockout punch in the first round is a good way to get floored. Successfully bringing your case to the public is a nuanced undertaking, and sometimes emotion can cloud strategic thinking. Or as a well-known litigator puts it in the new edition of my book In The Court of Public Opinion: "Trying to be your client's media consultant is serious business and I suspect malpractice insurance doesn't cover it. So it's probably good to have someone in the room who knows how to operate heavy machinery."

That said, in many of these high-profile divorce cases where one of the parties holds most (if not all) of the power, public attention is all you have to fight with. And as a general matter, it's not a great strategy to file a high-profile lawsuit in the midst of the holiday season if you want a full review of the facts. Assuming there are no legal limitations, better to wait until after the New Year.

Actor Sues Wikipedia "Vandal"

2009-12-11T12:56:00.002-05:00

Here is an interesting piece from Wired: the actor Ron Livingston, who starred in the very good 1999 movie Office Space, is suing an as-of-yet-unknown Wikipedia editor for changing his Wikipedia entry to indicate Mr. Livingston is gay (even though he was married to a woman in November). Livingston believes the same hacker has been posting fraudulent MySpace pages in Livingston's name.

Livingston did not sue Wikipedia or Facebook directly, since the Communications Decency Act of 1996 has been adjudged to provide protection to web hosts against legal claims for information written by third parties. But, according to Wired:

...that does not mean the anonymous person or persons who wrote the allegedly defamatory statements are immune from being outed and hauled into court.

Livingston’s lawsuit against “John Doe” will likely give him the power to subpoena Wikipedia and Facebook to find out the real perpetrator or perpetrators.

The lawsuit raises all sorts of issues privacy, the Internet, and even what it means to call someone "gay" in a time when homosexuality, if not gay marriage, is becoming more and more accepted. Fascinating issues, from both a legal and communications context.

For both individuals and those in a business environment, this raises another point: assume everything you say and do is traceable and could be subject to discovery at some point. "Transparency" is a corporate cliche that over the years has lost all meaning, and in my business I am approached all the time by clients who want me to "anonymously" do this or that to further their public interests. My advice: in the media age, there is precious little "anonymously" left. Better to be quite open about what you're trying to accomplish, which allows you to work from a position of strength, both in the court of public opinion and, ultimately, the court of law.

[PS - Mr. Livingston delivers a line from Office Space that I'm reminded of when having a bad day: "...ever since I started working, every single day of my life has been worse than the day before it. So that means that every single day that you see me, that's on the worst day of my life." ]

[PSS - in the interest of transparency, I should disclose that I am only getting around to posting this on January 5, 2010!].

Bruno Works the Press

2009-12-03T07:19:00.014-05:00

So is former New York State Senate Majority Leader Joseph Bruno crazy... or crazy like a fox? Bruno, on trial for public corruption at the federal courthouse in Albany, New York, has been serving as his own personal spin doctor at the courthouse each day, as detailed in today's New York Times:

For the last several weeks, Mr. Bruno, the irrepressible 80-year-old former Senate majority leader, has offered a running commentary on his own federal public corruption trial from the courthouse steps, playing both defendant and pundit to throngs of cameras and tape recorders.

He winks, he smiles, he gives thumbs up, at times seeming to glide through his trial with a stick of gum in his mouth and a quip on his lip.

So you wonder: is he doing it just because he can't help himself (old political tricks die hard), or is there another motive here? The jury after all (based on this story, anyway) is not sequestered:

U.S. District Judge Gary L. Sharpe told the jurors he doesn't plan to sequester them, but he repeatedly insisted they not discuss the trial with anyone or follow media coverage.

But surely jurors don't disregard such instructions. Oh wait... they do. See, for example, this article concerning a Florida case earlier this year:

When U.S. District Judge William Zloch recently learned last week that a juror in a big federal drug trial in Florida had been doing Internet research, in violation of the court's instructions, he was shocked.

But the judge was even more amazed to find out, when he then questioned other jurors, that eight others had been doing Web research on the case, too, reports the New York Times. At that point, the judge had no choice but to declare a mistrial.

So while Bruno may just be crazy, or nervously desperate, it is naive to think jurors aren't catching at least some of the coverage.

And since I've been lacing my posts all week with quotes from prominent attorneys interviewed for the new edition of my book, In The Court of Public Opinion (American Bar Association, 2009), here are two more, germane to this discussion:

Joseph Cheshire, who was one of the lead defense lawyers in the Duke lacrosse rape case:
"The conventional wisdom during a court case is that you should never say anything. But you are doing a great disservice to your client... [w]e live in an age of immediate and total information. Jurors, judges and law enforcement officials can't help but be impacted by that flow of information. If you're not influencing, you are losing the fight."
Trial lawyer W. Mark Lanier: "We can't assume the judge and jury have blinders on, when everything in our culture strips them of those blinders."

In both cases, well put.

UPDATE: AT&T Drops lawsuit

2009-12-02T13:43:00.006-05:00

Just found out that, after a torrent of negative publicity that seemed to do nothing but hurt the company's cause, AT&T has withdrawn its misleading advertising lawsuit against Verizon (see my earlier post, here, and a MacWorld story on the lawsuit being dropped, here).

Not surprised, although the classic PR technique would have been to bury the story by withdrawing the suit, say, the day before Thanksgiving, as the feds did with the indictment against Miami lawyer Ben Kuehne (just blogged about that yesterday, in fact, here).

Baby steps... baby steps.

Prosecutors and Fighting Back

2009-12-01T07:24:00.017-05:00

Prosecutors and government regulators always seem to have an edge in the public arena... and, increasingly, they know how to use it. Consider this quote from famed trial lawyer Ted Wells of Paul Weiss Rifkind Wharton & Garrison, from an interview he gave for the new edition of my book In The Court of Public Opinion:

"Twenty-five years ago, an indictment was a legal document. You read an indictment these days -- that's the prosecutor's press release right there," Wells said. "It has a huge negative impact on a defendant's ability to get a fair trial."

And while government lawyers like to press their case publicly as hard as possible, they tend not to like defendants trying to do the same (as another well-known lawyer once told me: "Prosecutors don't like to see their cases in the press... unless they leaked it."). Worse, conventional wisdom is that if you put up too much of a public fight against the government, you'll pay -- even if prosecutors or regulators are out there in the media every day proclaiming your guilt. Among other tactics, they'll try to use a vigorous public defense as evidence of lack of contrition when it comes time for sentencing.

So in recent years, a common defense strategy for criminal defense lawyers has been to let the prosecutors have their day in the court of public opinion, keep their clients' mouths shut, then quietly work to see what kind of deal you can cut.

But there is increasing evidence that, if you are indeed wrongfully accused, there may be value in fighting it out publicly, matching the government's PR machine blow-by-blow.

Consider the case of prominent Miami lawyer Ben Kuehne. He had been charged by the U.S. Department of Justice with money laundering for advising another prominent defense lawyer, Roy Black, that it was o.k. to receive $5.4 million in legal fees to defend an accused Columbia drug lord, after Kuehne concluded that the money used to pay the legal fees was not, itself, tainted.

Rather than roll over, Kuehne fought back, both in court and in the court of public opinion. And
just last week, the U.S. Department of Justice dropped all charges against Kuehne (see the Miami Herald story, here).

One of the ways Kuehne won his case was to stage a very public defense against the charges, as detailed in the Herald:

His case came to symbolize the legal struggle between a defendant's right to a lawyer and the U.S. government's power to limit it. Hundreds of lawyers -- including a former chief justice of the Florida Supreme Court -- rallied behind him, donating hundreds of thousands of dollars to his legal defense.

"You have to give them a lot of credit for seeing a mistake like this and having the courage to correct it," said Kendall Coffey, a longtime colleague of Kuehne's, who served as the U.S. attorney in Miami during the 1990s.

So perhaps fighting back publicly is should be part of the defense attorney's arsenal in beating back such charges... if you are in fact innocent, that is.

For further examples of this, consider my prior posts on Mark Cuban (here and here), who successfully beat back SEC charges of insider trading by being very public about his defense. Or former AIG CEO Hank Greenberg's epic -- and very public -- battles with the SEC and the New York State Attorney General's office (another excellent WSJ Law Blog post is here). Food for thought when considering the public elements of your legal defense strategy..

PS -- As a final example of the government's skilled knowledge of the court of public opinion, consider the timing of the U.S. DOJ's dropping the Kuehne case -- the dismissal was signed by a U.S. District Court judge when prosecutors knew few would be watching: 3:30 p.m. on the day before Thanksgiving.

Bestseller

2009-11-30T07:43:00.004-05:00

I am pleased to announce that the second edition of my book, In The Court of Public Opinion, is now a bestseller on the American Bar Association website.

Tiger By The Tail

2009-11-30T06:18:00.010-05:00

What to make of the Tiger Woods situation? As a public relations advisor, I thought his statement was measured and credible. But will it work?

Well, there are several problems. First, the statement certainly should have come earlier. His initial silence created its own storyline, making the story all-the-bigger. A great quote in this regard comes from a New York Times article on the topic, from a fellow crisis communications practitioner, Michael Paul:

“My advice to Tiger is pretty simple,” Paul said. “Own it, say it yourself, say it yourself with full conviction and responsibility and get it out of the way.

“You have an opportunity to change rumor and innuendo into truth. Moving past fear and doubt — that’s something they did not do well during the first 24 hours.”

Then there is the fact that -- depending on what you believe -- Woods has continually postponed, and then canceled altogether, interviews with the Florida Highway Patrol. Mistake. This feeds another storyline, i.e., "Why won't Tiger meet with police?" (one example, here). Granted, part of the problem may be that he's a bit pissed at the whole bunch of them, since some of the public statements from local police department -- including that Tiger's injuries were "serious," when he had already been released from the hospital -- helped to feed the initial media frenzy.

Advice: put emotions aside. Meet with them even if you don't have to, even if you're not required to by law. Put that storyline behind you. Sometimes you have to take proactive steps beyond what is legally required to satisfy the court of public opinion.

Finally, there is the most troubling cloud on the horizon for Tiger: the supposed other woman in an alleged affair, Rachel Uchitel. She has denied anything went on between them -- and has vowed in the past that she's not the "kiss-and-tell" type (Daily News story, here). But for some inexplicable reason, she flew from New York to Los Angeles on Sunday to meet with... celebrity lawyer Gloria Allread.

Seeking legal counsel itself is not the odd part: she's entitled to representation just like anyone else, particularly if she is being defamed in the National Enquirer and elsewhere. But if you're trying to keep your head down and protect your legal rights, do you hire a L.A. attorney best known for her television appearances? In my business, the first thing we do is check out the media savvy of opposing counsel to get a sense for how the other side might handle the public aspects of a high-profile legal issue. Uchitel's motives may be totally pure, but it may also be the case that she realizes her "window of infamy" won't be open forever, and is looking for advice on how to cash in.

(Which, by the way, would be another sad example of how our reality show chickens have come home to roost. Tiger should hope the Real Housewives of New Jersey crash President's Obama's speech on Afganistan this week -- in a balloon -- to knock his story right out of the headlines.)

But seriously, some additional advice to Tiger: prepare for Uchitel looking for ways to keep herself in the public spotlight, and "game-out" a plan to manage the resulting public attention. You don't have to respond to every allegation, and you don't have to say much... but you do have to have a strategy to respond.

Just because you can file a lawsuit...

2009-11-19T10:37:00.015-05:00

...doesn't mean you should. This is something I've been advising for years (see my 2003 Oped in USA Today, for example, here, along with a 2008 blog post along the same lines, here).

I am reminded of this by today's very insightful column by Therese Poletti of MarketWatch on the recent lawsuit by AT&T against Verizon over Verizon's advertisements comparing coverage areas. The following passages give you a sense of her take on what is shaping up to be a PR debacle:

Did AT&T's top public-relations people have any input before the go-ahead was given to a highly-paid law firm to file this muddled request for a temporary restraining order?

****

According to Bloomberg News on Wednesday, Judge Timothy Batten said that while the ads, which use maps to compare the companies' third-generation networks, might be "sneaky" or "clever," they are "literally true."

AT&T's lawsuit so far is a clear admission of one thing -- Verizon's clever ads are hitting AT&T where it hurts.

* * *

Thanks to AT&T's suit, Verizon is now getting more attention for its snarky TV ads and its plain-speaking legal response to AT&T's lawsuit, with sentences like "AT&T may not like the message that the ads send, but this Court should reject its efforts to silence the messenger," another turn AT&T was probably not counting on.

Read the whole column, though, since those excerpts don't do justice to Poletti's brilliant analysis (again, the column is here).

Now I have no first-hand information on whether AT&T's PR folks had any substantive input on potential negative impacts of filing the lawsuit, but I can tell you that advice relating to the broader "court of public opinion" is often just plain ignored. A great quote on the subject comes from the Presiding Partner of Cravath Swaine & Moore in New York, Evan R. Chesler, interviewed for the new edition of my book In The Court Of Public Opinion: Winning Strategies for Litigation Communications (American Bar Association, 2009):

"As trial lawyers, we are often unaware of the fact that we're not the only brain or mouth in the room," Chesler warned, "and what we think about the problem is not necessarily the best way for the client to view or solve the problem.

"I know that's hard for lawyers to accept. It has taken me decades and I'm not cured yet. But it is nevertheless true."

There's much more great stuff like that, by the way, in the new edition of my book, from Chesler and other top litigators -- including Ted Wells and Mark Lanier, among others. If you have an interest in the topic, you should get a copy (click here to order)... even if you don't work for AT&T.

The Use of Celebrities

2009-11-16T11:35:00.005-05:00

The use of celebrity to advance your cause in the court of public opinion is often decried, with observers questioning the value of celebrity endorsers on... well, virtually everything.

But from Clooney in Darfur to Damon on clean water, y'know what? It works.

An article in today's New York Times, here, offers further proof, courtesy of John Slattery, James Gandolfini, Jennifer Connelly and other celebs who are lending their voice to a local New York City issue -- an attempt to change a city's plans to place a large garbage truck depot on Manhattan's west wide. The TriBeCa Community Association, in fact, has filed a lawsuit to stop the new garage from being built. Interestingly, the city's plan come as a result of a 2005 settlement in another lawsuit over the placement of these garbage truck garages lodged by another community group, the Friends of Hudson River Park (almost seems a bit Life of Brian-esque, eh?).

For my perspective, the point is this: when a legal dispute touches on a matter of public interest, elements that raise the story above the everyday din can have a huge impact on the case and its ultimate resolution -- particularly when the court of law may not be the most important actor in that resolution (pardon the pun).

To wit: from the Times article, a quote from a community organizer trying to get a meeting with New York City Mayor Bloomberg on the garbage depot issue:

We couldn’t get an entree into the mayor’s office until Gandolfini got involved, and suddenly the door was open,” Mr. Barrett said.

Texting, twittering and the Bear Stearns trial

2009-11-11T18:32:00.000-05:00

One of the more interesting quotes from the recent acquittal of two former Bear Stearns traders on fraud charges came in The New York Times coverage of the verdict, courtesy of a quote by John Hueston, who prosecuted Enron’s former top executives, Jeffrey K. Skilling and Kenneth L. Lay:

“The texting, twittering, BlackBerry-toting jurors of today understand that an e-mail capturing a concern, doubt or momentary distress does not reflect thought over time, much less a vetted public statement."

If Mr. Hueston's right, the consequences of this phenomenon extend not just to the courtroom, but to the court of public opinion as well -- where presumably the public also will understand that such electronic communication can be taken out of context. The ramifications for reputation management are self-evident.

PS -- Beyond the substance, that's a heck of a quote, by the way. Wish I'd come up with it!

Litigation PR in Germany

2009-11-04T07:27:00.002-05:00

Late last month, I was invited to speak a German Litigation PR conference that highlighted "best practices" both in Germany and the United States. Although I could not attend in person, I supplied video remarks regarding our particularly American approach to both litigation and effectively communicating during legal disputes.

After the video, I took questions from the audience live via telephone from New York. The German audience seemed particularly intrigued by our American culture of settlement (as is widely reported, 95% of lawsuits settle before trial).

It was an honor and I thank the organizers for the opportunity to present.

A link to a German blog post, complete with my video presentation, is below.

1. Deutscher Litigation-PR-Tag - Beitrag von James F. Haggerty, PRCG from Valentin Heyde on Vimeo.

Kerik Goes To Jail For Leak

2009-10-21T07:23:00.008-04:00

Here's an interesting story about how former New York City Police Commissioner Bernard Kerik was sent to jail pending three federal criminal trials he faces on corruption and other associated charges. He had been out on bail. The judge said he leaked confidential information to a New Jersey lawyer who was not part of the defense team. The lawyer then sent the information to the Washington Times in an effort to disparage prosecutors.

The terms of Kerik's bail required him to keep all sealed information confidential. Kerik, for his part, denies he knew the lawyer would send the information to the newspaper.

According to the Times, the lawyer in question has been described by Kerik's defense team as "someone who occasionally provides free legal advice to Mr. Kerik." He had been previously described by the judge in the case as "a propagandist and chief fundraiser" for Kerik's legal defense.

There are several lessons here:

First, just because you are a lawyer, doesn't mean you are part of the legal team -- and judges will take that into consideration when ruling on issues of privilege, access to confidential information, etc.;
Second: there are ways to tell your story effectively in the "court of public opinion," but don't violate court orders. It will always come back to haunt you. Some defendants -- and their lawyers -- are two clever by half, especially in the age of electronic communications, when everything is traceable.

Now to be clear: in the old days (say, ten years ago), if you wanted to get information to a reporter "without fingerprints," you'd throw it in a plain envelope without a return address and drop it on a reporter's desk (for security, among other reasons, those days are gone). But even then, you wouldn't send information filed under seal. Even if there were no fingerprints, the judge could easily figure it out -- i.e., if it hurts one side, it probably was leaked from the other.

So there are better ways to do things without running afoul of the law or the judge. To quote trial lawyer Mark Lanier, from the new edition of my book In The Court of Public Opinion: "...certain documents were sealed by the court, so we couldn't give them out. But we could send the media to others who had the same information."

There is a bigger issue of what a judge puts under seal (and what prosecutors file under seal) and whether it is done in the interest of justice... or the interest of leverage (see my prior post, here).
More on that to come.

The New Phone Book's Here! The New Phone Book's Here!

2009-10-01T15:19:00.009-04:00

I am pleased to announce the publication of a new edition of my 2003 book, In The Court of Public Opinion: Winning Strategies for Litigation Communications. The Second Edition is published by American Bar Association Publishing, and can be ordered here.

As readers of my writing know by now, In The Court of Public Opinion examines the role of media and public perception on the course and conduct of legal crises and disputes, and offers practical tips for managing legal communications in the media age. The 2003 edition of the book was one of the bestselling legal hardcovers of the year, and received some nice accolades – Financial Times, for example, called the book “…the perfect handbook for this age…” Other positive mention of the first edition came from places like New York Law Journal, the Boston Herald, American Lawyer, O'Dwyers Public Relations Report, and the Holmes Report.

The new edition has been substantially revised, and features new chapters on the use of the Internet, blogs and other social media in communicating legal issues, and the availability of attorney-client privilege for public relations activities. The book also contains revealing interviews with six of the nation’s top litigators:

Joseph V. Cheshire IV, defense lawyer in the Duke lacrosse rape case. (“The last person I saw shake a finger at the media like this was Bill Clinton. And look where that got him.”)
W. Mark Lanier, renowned trial lawyer who won the first Vioxx trial. (“So don’t laugh… I thought about buying the newspaper that very night to make sure the story never saw the light of day.”)
William S. (“Bill”) Ohlemeyer, former Associate General Counsel at Altria Group, now at Boies, Schiller & Flexner. (“If your teenage daughter comes home late… and you say, ‘Where have you been?’ and she says, ‘No Comment,’ you’re going to form some impressions about what is going on.”)
Theodore V. (“Ted”) Wells, Jr., perhaps the nation’s most prominent trial lawyer, who has represented Citigroup, AIG and I. Lewis (“Scooter”) Libby. (“Twenty-five years ago, an indictment was a legal document. You read an indictment these days—that’s the prosecution’s press release right there.”)
Evan R. Chesler, presiding partner of Cravath Swaine & Moore. (“Trying to be your client’s media consultant is hazardous business and I suspect malpractice insurance doesn’t cover it.”)
Ronald M. Green, co-founder of Epstein Becker & Green and one of the nation’s most prominent employment defense attorneys. (“Sometimes… boldness can be an employer’s ally.”)

In The Court of Public Opinion: Winning Strategies for Litigation Communications is available at bookstores or on the ABA website, at http://www.abanet.org/abastore/index.cfm?section=main&fm=Product.AddToCart&pid=1620407

This is the type of spontaneous publicity that makes people.

Polanski and Public Relations

2009-09-30T18:50:00.007-04:00

Think what you will about Roman Polanski, this case is--and will be--all about public relations.

It would appear, in fact, that the arrest itself was motivated by PR considerations. This breaks down into two areas: (a) blowback from a highly influential 2008 documentary on the case, Roman Polanski: Wanted and Desired, which alleged prosecutorial and judicial misconduct; and (b) just a plain-old desire for publicity, which has helped many a prosecutorial career over the years. Michael Wolff makes a good argument, here; somewhat counteracted by a post in the LA Times, here, that punches some holes in the theory, to wit:

There are a few holes in Wolff's theory, especially since I'm not so sure that the current inhabitants of the D.A.'s office are really so invested in defending the actions of their long-ago predecessors, especially since the documentary's most damning revelations involved the sitting judge, not the prosecutors.

In the end, though, I agree with Wolff -- this is all about PR for the DA's office. And the effort will go on, running the gambit from attempting to affect (and change) perceptions in the media, to quiet lobbying to influence the highest levels of the US State Dept. and the Swiss government (neither a stranger to the swells of public opinion, by the way).

And as Wolff points out, let's not kid ourselves -- they could have gotten him at any time. It's only the documentary (and, more specifically, the appeal spurred by the documentary's appearance, which is going to be argued in the coming weeks) that moved the authorities to act.

Stay-tuned: this battle is going to have more twists and turns than one of Polanski's movies (indeed, note the sudden appearance of Marcia Clark, LA prosecutor of O.J. Simpson fame, described here by the ever-reliable WSJ Law Blog). A bruising battle, indeed.

Handling Tough Questions

2009-07-27T14:31:00.003-04:00

Here is a fantastic example of properly handling the tough questions relating to a lawsuit: an interview with Eli Lily CFO Derica Rice The interview is primarily about the company's performance, but at the end, CNBC reporter Mike Huckman sneaks in a question about the NAACP supporting and racial discrimination lawsuit against the company. Without missing a beat, Rice responds:

It is unfortunate that the NAACP has chosen to get involved in this matter. We do not believe that the allegations have any merit. We fully investigated those. The allegations are not consistent with the company that I've known in the 19 years that I've been at Eli Lilly & Company, starting as a financial analyst. So, we believe that the way we treat our employees is around respect, integrity and excellence. And that's been the environment I've seen in my 19 years with Lilly.

Here's what you'll note about his response: (1) It doesn't stop at "we will fight this on the merits;" (2) it is direct and personal (now Mr. Rice may be helped a bit by the fact that he is African-American, but that doesn't make the point any less valid); and (3) it is not a banal cliché of the type that makes the audience's eyes roll. Here's the rub: at the end of his answer, you kind of believe him -- and that, I think, is the test of the success of his response.

Floyd Abrams in the Court of Public Opinion

2009-07-18T14:51:00.003-04:00

Floyd Abrams is perhaps the best-known First Amendment lawyer in the nation, but in today's New York Times, he takes his case to the court of public opinion, defending the much-maligned ratings agency, Standard & Poors.

The results are mixed in an article that was clearly designed to begin salvaging the reputation of the company. Indeed, Abrams admits that such rehabilitation is clearly part of his charge:

“Look, for the client’s interest, I very much hope that we can get rid of these litigations on motions for dismissal,” he says. “But from a personal point of view, I look forward to the chance to defend them against those charges in court. If we have a real trial, people would say terrible things about them and I would be very happy to show that those things aren’t so.”

It takes a moment to realize what Mr. Abrams is saying here: he doesn’t simply want to defend the ratings of S.& P. He wants to rehabilitate their reputation. The word “quixotic” doesn’t seem to capture how quixotic this sounds.

That said, were he to succeed, his S.& P. work would rank with any other odds-beating moment of his life. It would deserve its own chapter in the biography, would it not?

We pose this question, and Mr. Abrams thinks it over for a moment. Then he grins like a man who has just placed a huge roulette bet and is eager for the wheel to start spinning.

“We’ll see,” he says.

The difficulty, of course, lies in the fact that the case may settle and Abrams will never get the chance to clear his clients name in court. As with most civil litigation, the ultimate arbiter of guilt or innocence, therefore, would be... (wait for it)... the court of public opinion.

Update: Mark Cuban's SEC case dismissed

2009-07-17T17:12:00.001-04:00

This just in: the SEC complaint against Mark Cuban has been dismissed. An excellent analysis of the case from Bloomberg News reporters Thom Weidlich and David Scheer, click here.

The SEC can certainly refile, but it's clear that, for the moment, Cuban's very public protestations of innocence have had the desired effect (see my prior post on the subject, here). Cuban's efforts have created a pretty good playbook for publicly fighting the efforts of aggressive regulators -- if you have both the resources and the intestinal fortitude to keep pushing the ball down court, rather than just playing defense (forgive the basketball analogies -- he does own the Dallas Mavericks, after all).

Madoff Trustee's PR Work

2009-07-11T07:07:00.010-04:00

Irving Picard, trustee in the Bernard Madoff bankruptcy case, and his law firm (Baker & Hostetler) have filed fee requests in the case totaling approximately $14.7 million for the law firm, and $759,228.75 for Mr. Picard as trustee. There is a very good post on the fee application by Amir Efrati of The Wall Street Journal, on the site of the WSJ law blog (click here).

Of interest to this blog: Of the 1088.50 hours logged by Mr. Picard, 36.7 fall under the category of "Press Inquiries and Responses," for a total of $28,442.50 at Mr. Picard's hourly billing rate of $750. According to the filing, "this section relates to time spent by the Trustee responding to press inquiries, preparing and issuing press releases, and holding press conferences relating to BLMIS [Bernard Madoff Investment Securities], Madoff, customer claims and the recovery of funds."

If my math is correct, this works out to approximately 4% of Mr. Picards time, which is certainly not unreasonable given the high-profile nature of the case. I'm not sure if there was a PR firm working on the effort, but presumably they would also submit a request for fees.

Interestingly, the B&H filing makes no explicit mention of similar activities on the part of other attorneys at the firm, but it is likely they fall under the such activities as "monitoring of third party actions outside of the Bankruptcy Court, both domestically and internationally," or "discussion and conferences regarding litigation strategy," or under general categories of handling customer claims.

Henning on Cuban and the SEC

2009-06-18T17:13:00.004-04:00

From The Wall Street Journal Law Blog (one of my favorite reads, by the way) comes this: a guest post by Peter Henning, a law professor from Wayne State University, discussing the battle between Dallas Mavericks' owner Mark Cuban and the SEC. Henning makes some great points about the ability of a billionaire to fight off questionable SEC charges -- where a defendent with less $$ might have a hard time. But he also makes some great points about the impact of an SEC investigation on reputation, and why Cuban doesn't really seem to care about either reputation or potential remedies:

Defendants in civil fraud actions often have to worry about the reputational effect of the case, and potential remedies that could be imposed. An individual may be barred from the securities industry or prohibited from serving as an officer or director of a public company if there is a violation. That happened to Martha Stewart when she settled the insider trading case the SEC filed against her. Thus, many SEC cases settle, always without an admission or denial of liability, to mitigate the potential harm from an adverse judgment.

Cuban seems to be in a different position in this regard. He already has a reputation as a bit of a rabble-rouser – just ask NBA Commissioner David Stern – so a decision finding him liable for securities fraud would not be all that harmful. He is not an officer or director of a public company, so the SEC isn’t even seeking a bar from service in those positions if it wins. While the amount involved in the case, about $750,000, is pocket change to Cuban, the incentive to settle the case to avoid harmful publicity and future career damage doesn’t seem to be much of an issue.

* * *

Odd as it may sound, Cuban might be able to portray himself as the victim here of a government vendetta. He has a knack for generating good publicity in a bad situation, such as his stint working in a Dairy Queen after assailing the head of the NBA referees in 2002 as someone he wouldn’t hire to manage one of its restaurants. That comment cost him a $500,000 fine from the NBA, which isn’t much less than what the SEC is seeking as disgorgement in the insider trading case. I can’t wait to see how Cuban presents himself this time.

The full post is here.

I agree, by the way, with everything Henning writes, and he appears to have a good grasp on the interplay between legal and reputation matters. Perhaps I'll ask him to guest-post here some day...

In the meantime, it's worth considering whether more defendants should adopt the Cuban playbook when facing government investigation.

"Libel Tourism" and the First Amendment

2009-05-25T09:07:00.006-04:00

Ever wonder about the flood of libel cases in the U.K.? You can thank the Internet. We now have the concept of "libel tourism" -- where, for example, a Saudi businessperson might sue me in London for this blog post (authored in New York), simply because my writing was disseminated, via the Internet, worldwide.

But why sue in London, especially since the chances of ever collecting on a judgment there are close to zero? Because it's easier to win a libel claim in the British courts -- and the reputation-enhancing impact of a victory over a defamer is sometimes worth more to the litigant than the damages themselves.

Here's an interesting article from today's New York Times that highlights the phenomenon. A key paragraph:

British courts have always been friendlier to libel claimants than their American counterparts. Until recently that did not matter much to American authors or publishers. But now the Internet makes anything published in the United States almost immediately available in Britain, too.

As the article details, there is a push to bring U.K. media law more in line with the U.S., but I wouldn't expect major changes anytime soon. Besides strictly legal justifications, the reasons to preserve the status quo range from the practical (some parties like having such a ready venue to clear their name in public) to the economic (it is likely a boon to the U.K. legal economy, similar to the way patent cases have benefited certain local economies in the U.S. -- see a 2006 New York Times article on the phenomenon, here). Thus, it may also be the case that other countries put pressure on the United States to bring its own First Amendment in line with international norms (for a discussion of just how free the U.S. is compared to other jurisdictions, see Adam Liptak's excellent 2008 New York Times article, here).

So how can journalists, editors and bloggers navigate a worldwide web of media laws in a environment where you can be sued in any jurisdiction anywhere in the world? One good resource is Charles Glasser's International Libel and Privacy Handbook, 2d Edition, published earlier this year by Bloomberg Press (order a copy, here; for a 2007 article Charles and I co-authored on the topic for The National Law Journal, click here).

Say what you will about the excesses of our First Amendment, but there's little doubt it offers protections in the United States that simply do not exist in other legal systems. I'd submit that such protections may come under attack in years to come, but it is vitally important that we not allow a gradual chipping away at the freedom of speech that is at the core of the American concept of civil liberty.

Udpated: Syracuse Speech

2009-05-18T11:37:00.002-04:00

A video of the speech discussed below is now available here, for your viewing pleasure.

Original post follows.

JFH
______________________________________________________

Syracuse Speech

On April 6, I spoke at Syracuse University College of Law, as part of their "Law, Politics and the Media Lecture Series," which is jointly sponsored by the law school and the Newhouse School of Communications. I was quite pleased to present "on a field that exists somewhere between the practice of law and traditional public relations: Litigation Communications..."

For the full text of my remarks, visit the PRCG website.

Here's a snappy little excerpt:

I’ll give you just one example, and this comes courtesy of a friend of mine who is a top lawyer and has been involved in many high-profile cases. He put it like this:

If your teenage daughter comes home one night, late, on a school night, and you ask “Where have you been?” and she says “No comment”… well, you're going to make some assumptions about what's going on.

And if she walks in and says: “Well, let me get back to you. What's your deadline?” you’re going to form a different set of assumptions.

But if her response is: “Look, I made a mistake, I'm sorry. I think I know how to prevent it from happening again.” Those two sentences are going to change the whole tenor of the conflict.

It sounds simple, and it is. But doing it well in the course of a billion-dollar lawsuit – well that’s where the art and science of litigation communications comes in. It’s like Willie Mays playing the outfield: a lot of hard work goes into making it look so easy.

Speech at Syracuse University.

2009-04-16T08:10:00.004-04:00

On April 6, I spoke at Syracuse University College of Law, as part of their "Law, Politics and the Media Lecture Series," which is jointly sponsored by the law school and the Newhouse School of Communications. I was quite pleased to present "on a field that exists somewhere between the practice of law and traditional public relations: Litigation Communications..."

For the full text of my remarks, visit the PRCG website.

Here's a snappy little excerpt:

I’ll give you just one example, and this comes courtesy of a friend of mine who is a top lawyer and has been involved in many high-profile cases. He put it like this:

If your teenage daughter comes home one night, late, on a school night, and you ask “Where have you been?” and she says “No comment”… well, you're going to make some assumptions about what's going on.

And if she walks in and says: “Well, let me get back to you. What's your deadline?” you’re going to form a different set of assumptions.

But if her response is: “Look, I made a mistake, I'm sorry. I think I know how to prevent it from happening again.” Those two sentences are going to change the whole tenor of the conflict.

It sounds simple, and it is. But doing it well in the course of a billion-dollar lawsuit – well that’s where the art and science of litigation communications comes in. It’s like Willie Mays playing the outfield: a lot of hard work goes into making it look so easy.

Animation in Litigation

2009-03-05T13:51:00.006-05:00

From YouTube: the best animation I've seen of Flight 1549's landing in the Hudson River, complete with audio, here. Heartstopping (granted, they are a client of my PR firm).

The animation is a certified viral video hit, with more than 1.2 million views already on YouTube.

Scene Systems (website: www.scenesystems.com) is a UK-based company that prepares animation for litigation, investigations and other legal matters. They are just entering the US market -- and they've done so with a splash (pardon the pun). The amazing thing is, this animation was actually prepared in about 2 days time for a legal technology conference in New York. Scene Systems has the technology and understanding to create litigation animation that is fast, cost-effective and extremely flexible.

The Wall Street Journal took notice, posting the video on its “Middle Seat Terminal” and Law blogs. The Journal called the animation a “remarkable recreation” of Flight 1549’s landing. The animation was also featured on Wired, and MSNBC, among others.

To my lawyer clients and friends out there: use this company! Their work would make a huge difference on cases of all size.

Blogo takes the airwaves

2009-01-26T12:18:00.003-05:00

In a remarkable turn of events, embattled Illinois Governor Rod R. Blagojevich has taken to the airwaves this morning in an attempt draw the public spotlight away from his impeachment trial in the state legislature, which begins this morning.

Here's the New York Times article on the media barrage.

The key point of the early article:

Legal and political analysts said Mr. Blagojevich’s decision to skip representation in the impeachment trial here and instead take to the airwaves suggested that he had given up on remaining in office and was now looking ahead to federal criminal charges — and potential jurors — he faces. In the impeachment hearing, removal seemed all but certain; but on television, these analysts said, Mr. Blagojevich could try to write his own narrative.

Will it work? Stranger things have happened, and there have been legal analysts who've questioned just how good a case the U.S. Attorney has against the well-coiffed conspirator.

If nothing else, a fascinating attempt to use public opinion to change the course of legal proceedings.

Stay tuned...

Resolution Without Resolution

2008-10-30T07:28:00.006-04:00

One of the more interesting aspects of Google's recent settlement of a lawsuit by book authors alleging vast copyright infringement (see coverage of the settlement in The Wall Street Journal and The New York Times) was the absolute refusal by Google to publicly acknowledge the settlement resolved any of the key copyright issues at stake.

It is common, of course, for parties in a settlement to refuse to admit liability, but Google really seems to have taken it up a notch. Consider the following quote from the New York Times, relaying Google's position on the issue at the heart of the dispute:

“There is no acknowledgment that we had to have permissions to scan or show snippets,” David Drummond, Google’s chief legal officer, said in an interview.

They settled, Google says, solely for business reasons. Few believe it, and I personally think it rings kind of hollow, given the concessions in the settlement. Which goes to show you, even in the age of spin, you have to ground your message in some sort of reality for it to stick. Or, put another way, you bend the truth too much, it breaks.

At another level, I think the settlement is an example of the slow chipping away at Google's hegemony. Like Microsoft a decade before them, Google seemed to have assumed an air of superiority when it comes to legal issues – as if they were, if not above the law, then perhaps too smart to be bound by its rather antiquated concepts. Copyright is a prime example, but look also at privacy issues, censorship in China, and all of the other high-profile legal debates Google has found itself at the center of these days.

Eventually, I think, the law catches up with even the most arrogant… if there are opposing parties willing to go the distance. With that in mind, pay close attention to Google’s continuing case with Viacom over the posting of videos on the YouTube website. Note this comment by Michael Fricklas of Viacom, again from the Times post:

“The publisher agreement is, at last, acceptance of what’s obvious to everyone but Google,” said Michael Fricklas, general counsel of Viacom. “Copying and distributing copyrighted works requires permission from the copyright owner."

If Viacom is indeed willing to press on with its claims – making a disciplined, compelling case both in the court of law and in the court of public opinion – you’ll begin to see further weakening in Google’s position. And like Microsoft before them, they’ll begin to realize that you may think you're smarter than the law, but you still have to obey it.

Here come the lawsuits

2008-10-28T13:26:00.012-04:00

A fascinating column by Dennis K. Berman in The Wall Street Journal this morning (here) highlights just how quaint the Enron-driven financial crisis of the early part of this decade appears in the wake of the current market tsunami. Berman really drives home the story by landing quotes like this:

"Enron was a gnat compared to what's going on," said Sidney Powell, a Texas attorney for former Merrill Lynch & Co. employees.

Too true. And it's no coincidence that the above commentary comes from an attorney representing Merrill employees caught in post-Enron legal quagmire. Remember, next to images of Enron and Arthur Anderson employees being thrown out on the street, the defining characteristic of this earlier era was the resulting litigation. Thus, expect a tidal wave of legal and regulatory activity in the wake of the financial meltdown over the past several weeks... all played out (and played to the hilt) on CNN and CNBC, in the pages of Newsweek, and BusinessWeek and People. Lehman, Bear Stearns, AIG and Countrywide? I suspect Enron and Worldcom and Martha Stewart are going to seem tame by comparison.

But will the legal battles really be as fierce as those surrounding the Enron/tech bubble battles? I have no doubt, but some wonder is the true liability is really out there (see, for example, this Bloomberg article from earlier this week). Also consider another key quote from the Berman column in the Journal:

"These are necessarily going to be very close cases," said University of Illinois law professor Larry Ribstein, a critic of some Enron prosecutions. Should Mr. Fuld "err on the side of panic, or state the risk pessimistically, he's got a full-scale bank run. If he gets optimistic, it's bordering on fraud."

Again, very true -- but I'm of the belief that the Captain Renaults out there are going to be looking to "round up the usual suspects," particularly if Democrats take control of the White House, Congress, the SEC and U.S. Attorneys offices across the land. Passion will take the place of legal nuance as courts across the country are flooded with prosecutions, regulatory actions and private lawsuits.

Thus, in the midst of economic turmoil, a pretty good time to be a lawyer working on white collar criminal, regulatory, restructuring or bankruptcy work.

And, perhaps, not a bad time to be a litigation communications consultant either. I'll let ya know.

...And Rearrange a Few Deck Chairs While You're At It

2008-10-01T11:13:00.002-04:00

The financial crisis has altered the playing field in ways large and small, and I believe the ramifications will impact American business -- and how we think, feel and communicate about business -- for decades to come. One small example comes from an article I was quoted in this morning in The New York Times. The takeaway:

The Big Board says it has plenty of ready ringers. The job, after all, is supposed to be an honor, or at the very least a photo opportunity. But at a time when the markets are unsettled, some public relations types wonder: Who wants to ring in — or out — the next black day on Wall Street?

“Right now, it can be a little bit like being asked to blow the foghorn on the Titanic,” said Jim Haggerty, chief executive of the PR Consulting Group, which advises companies on communications strategies.

The Slow Reveal...

2008-08-07T17:12:00.003-04:00

While, some still doubt the interplay between communications and modern litigation, here's an example of a brilliant technique that uses public attention to force defendants to the settlement table: the "slow reveal" of the names of defendants previously only identified by pseudonyms in a high-profile defamation lawsuit.

The backstory: two female Yale law students were smeared on the web forum "AutoAdmit." They sued at least 39 posters on the site for defamation. The names of the defendants, previously unknown, were discovered through subpoenas issued to the defendants' ISPs (so much for online anonymity).

An amended complaint filed by the famed litigation firm Keker & Van Nest -- certainly one of the most prominent litigation boutiques in the country -- revealed the name of a single defendant in the case... with the promise of others if settlements are not reached.

Talk about your veiled threats:

“Plaintiffs are seeking to resolve their claims against these defendants,” says the complaint. “Therefore, at this time, Plaintiffs continue to identify these defendants by their AutoAdmit pseudonyms.”

A nice summary of the latest developments can be found in the Yale Daily News, here.

I have actually seen this technique used in various cases in the past -- particularly where a complaint is filed under seal, with the plaintiffs stating (and I'm paraphrasing for effect here):

"We know the defendants would be highly embarrassed if the facts of this case were to come to light. Therefore, we're giving the plaintiffs two weeks to settle this matter to our satisfaction, or we'll unseal this filing for the world to see."

Sometimes it's hard to tell where the Court of Public Opinion ends and the court of law begins.

Crisis in the Financial World

2008-07-21T13:13:00.000-04:00

The crisis atmosphere roiling the financial markets over the past several weeks has been as much about rumors as liquidity, a point I made this week in an interview with Stuart Varney on Fox Business News (click here to view).

Part of the problem lies in the companies' crisis response -- in my view, most companies are still working from a crisis communications playbook written in the days before the Internet and email, before blogs and message boards, before 24-hour cable news. In an era of instant information, rumors and gossip become market-moving media events long before they reach the pages of The Wall Street Journal or The New York Times. Response needs to be proactive, aggressive and void of the kind of vacuous banalities that have dominated corporate communications for decades. Rather than thinking "How little can I say to get this crisis behind me...," companies and their counselors ought to be asking: "What can I do to win?"

Restoring Your Reputation After Crisis

2008-06-10T09:05:00.003-04:00

In the information economy, reputation can be an organization's most valuable asset.

That's why I think the article, here, from the Pittsburgh Post-Gazette is so interesting (and not just because I'm quoted). The story deals with the fallout from the resignation of the President of West Virginia University (WVU) over allegations that the university improperly granted a masters degree to the Governor's daughter. It does a great job of analyzing the steps WVU must now take to restore its reputation.

The takeaway: to properly restore reputation, you need to (1) react with candor and transparency; (2) make the right moves to re-establish confidence; and (3) move quickly to put the matter behind you.

As I point out in the article, the public will generally accept occasional mistakes and errors from large organizations. It's how the organization responds that determines long-term damage to reputation -- and ultimately makes the difference between successful, and unsuccessful, crisis response.

PR, Law Firms and Defamation

2008-06-06T11:07:00.008-04:00

Here is a story of the perils of issuing press releases -- lawyers and their PR counsel should take note (subscription may be required).

What happened, essentially, is a law firm partner, Jeremy Pitcock, moved from one law firm to another -- a fairly common occurence in the modern practice of law. When the new law firm issued a press release crowing about the latest addition to their ranks, his old firm wasn't happy. They sent out a press release of their own (here) stating he had actually been fired for engaging in "extremely inappropriate personal conduct."

Here's how American Lawyer describes "the rest of the story" (as Paul Harvey used to say):

According to Pitcock's complaint, that conduct was a "brief, consensual kiss" with an associate following drinking.

Pitcock lost his job at Morgan & Finnegan a few weeks later. At Kasowitz, Pitcock says he had a "substantial" book of business and earned more than $1.2 million annually. Now, with his reputation damaged, Pitcock is claiming he "simply cannot find another suitable legal job." His lawyer, John Balestriere of Balestriere Lanza in New York, says Pitcock interviewed with several firms, some of which had in the past offered him more than $1 million. But following the Kasowitz press release, Pitcock couldn't get hired.

The upshot is that Pitcock has sued his old firm -- and the public relations firm that issued the press release -- for $90 million. PR Firms should note: the disseminator of such public statements is as liable as the originator. So check those indemnity clauses.

For a general discussion of defamation, including liability for press statements, click here.

Telling Your Story

2008-04-04T07:50:00.003-04:00

Here's an interesting piece on storytelling during legal action. Just as in the public arena, the best lawyers learn to weave a story out of the facts of their case, rather than just throw a series of facts at judge and jury and let them decide.

Or as the author puts it:

“I sometimes wonder about contemporary law school education,” he said. “I’ve seen a number of young lawyers who seem to think that if you just put everything in a bag, shake it up and then pour it out in front of the judge and jury, they’ll put it together for you.”

“Maybe it’s because no one’s really reading or writing these days,” said Angus. “Young people don’t read books; they don’t read papers. And when they ‘write,’ they use computers to cobble together little snippets of information, have a spell-checker proof it, and even let the computer put in paragraph breaks.”

The Perils of Suing Your Critics

2008-03-29T14:09:00.023-04:00

We often think of the nexus between legal and communications issues as dealing with media coverage that results when (1) you sue or (2) you get sued. But what if the coverage comes first? Should you sue your critics?

From the standpoint of legal perception issues, in most cases the answer is no.

Herb Greenberg makes this point in the context of financial and investment coverage in his "Weekend Investor" column last Saturday in The Wall Street Journal (here, although a subscription may be required). Two great opening paragraphs sum things up quite nicely:

You would think that by now public companies that monkey with their numbers would get the hint: Suing critics almost always backfires.

If nothing else, lawsuits or other attempts to discredit short-sellers, bearish analysts and others -- including financial journalists -- are often, in an oddly backhanded way, confirmation that the critics will be proved right.

Greenberg then goes on to describe how Biovail, a Canadian drug company, sued a number of its critics, including Gradient, an independent research firm, for racketeering. Specifically, Biovail alleged Gradient was working with short sellers to spread negative information about Biovail's alleged accounting fraud. Biovail generated alot of publicity as a result of the lawsuit, and that caught the eye of the SEC, which opened an investigation of Gradient. The investigation was quickly dropped, but in the process, the SEC learned enough about Gradient's concerns with Biovail to sue Biovail for accounting fraud. Biovail recently settled the charges without admitting wrongdoing, by paying $10 million to the SEC.

Poetic justice, perhaps, but a lesson to companies looking to sue their critics as well.

As more proof, consider the case of Sharper Image (a good summary is here), whose 2003 lawsuit against Consumers Union, nonprofit publishers of Consumer Reports, just brought more attention to the fact that their franchise product, the Ionic Breeze air cleaner, didn't work. Sharper Image's case against Consumer Reports failed, and the company wound up paying Consumer Unions attorney's fees. Sharper Image declared bankruptcy in February, 2008.

All of this backs up a key refrain in my legal/public relations work: just because you can sue doesn't mean you should. A quick check of the recording industry's problems bear that out. Sure, there are myriad reasons why traditional recording labels are hurting, but they certainly didn't endear themselves to their fans by suing over the downloading of music -- even if they were in the right legally (see my 2003 USA Today piece on the RIAA's legal actions, here).

There are legitimate reasons to sue your critics, particularly over defamatory content. But before you do, think hard about: (1) the viability of your claim; and (2) the additional scrutiny the lawsuit will bring to your company and its own actions.

Confidentiality Agreements in Healthcare Settlements

2008-02-26T07:58:00.012-05:00

Confidentiality agreements during the settlement of civil lawsuits are, as you might expect, quite common.

But healthcare is special, isn't it. Unlike any other industry I can think of, healthcare is both an industry and a public good. Further, a large percentage of the costs are borne by public health plans (Medicare, Medicaid, etc.) -- ultimately, therefore, by the American taxpayer.

Should different rules apply? Should healthcare be treated differently just because it is healthcare?

Consider the article, here, from a recent edition of USA Today, detailing the use of confidential settlements by major U.S. pharmacies. The gist of the article can be summed up as follows:

Barry Furrow, director of the health law concentration at the Drexel University College of Law, says pharmacies have two major reasons to insist on confidential settlements. First, to avoid bad publicity in a field where public trust is important. Second, to keep potentially damaging information from plaintiff lawyers.

The problem, Furrow says, is such agreements make it difficult to detect patterns of errors at pharmacies, though it's in the public interest to know if they exist. Furrow, a law professor, writes textbooks on health law. "There's a whole world of research that's very hard to do," he says. "It is hard to find out much of anything, even if I talk to lawyers, because they can't tell me much. It's hard to spot patterns and see what's going wrong."

Others would argue that such agreements are standard across industries, and that healthcare companies shouldn't be singled out.

Michael Krauss, who teaches legal ethics at George Mason University Law School, says it's true confidentiality is agreed to "in the majority of tort suits," particularly when a company's or an individual's reputation is at stake, as in medical or pharmaceutical malpractice. "If you and I agree to make a contract, we can condition that contract on secrecy," Krauss says. "And that's all a settlement is, a contract. Remember, there is no (court) judgment — it is a voluntary payment."

From my perspective, the point of the USA Today piece is: confidential settlements in the health arena will be treated differently, whether the healthcare companies like it or not. Thus, precautions need to be taken during settlement considerations, for both plaintiffs and defendants, to ensure that the resulting settlement is seen as a resolution, not a cover-up.

More generally, it is important to remember that, confidential or not, the settlement of a legal dispute is a media moment just as surely as a jury verdict is. Often the parties and their attorneys are so relieved to resolve a lawsuit, they forget that the way a case is perceived in settlement can be as important as how it was perceived as it was actively litigated. Issues of winners and losers, what was gained and lost by each side, and -- as in this case -- the public good can all have a bearing on future reputation and future legal action, including copycat lawsuits, government investigation and regulatory action.

In any event, expect USA Today to return to this topic soon, since they're the first major media outlet to "plant the flag" on the issue.

Robert Bennett and the Court of Public Opinion

2008-02-19T13:55:00.003-05:00

A quick post: more and more "mainstream" lawyers are coming to the conclusion that what happens in the court of public opinion can be as important a part of legal representation as what happens in a court of law. For more proof, check out an interview on The Today Show by Matt Lauer with famed Washington power-lawyer Bob Bennett, here.

Clemens in the court of public opinion

2008-01-15T11:28:00.001-05:00

An article appeared in The New York Times on Sunday, here, regarding Roger Clemens' relative success or failure "in the court of public opinion."

It seems to me that the article, to a large extent, misses the point (and it's not just that I'm upset they didn't call me for comment).

Whether Clemens' PR is working seems to me to be dependent, in the final analysis, on whether he's guilty or not. If he did use steriods, he's taking a huge risk by being so public in his denials, since other shoes are bound to drop as this moves forward (or, as a lawyer for Clemens trainer, Brian McNamee, asserts of Clemens' attorney: “Rusty Hardin is walking Roger Clemens into jail.").

On the other hand, if he's actually, god forbid, innocent, he's doing exactly the right thing: working hard against considerable odds to sow the seeds of doubt with public and media audiences who, because of his personality, were predisposed against him in the first place (and, as a Mets fan, I count myself as a Piazza-loving Clemens-hater). In that case, it's a brilliant maneuver, akin to Joe Chesire's brilliant defense of the Duke lacrosse players against similar odds.

Part of the problem, of course, is that -- like Barry Bonds -- we all believe Clemens is guilty, particularly those of us who are achy and over 40. (for an article on the perils of such a viewpoint, see my Forbes opinion piece on Clemens and Bonds, here).

Point to be made: in a high-profile legal matter, PR and message choices are in large part dependent on the strength of your underlying case. Or, as the old saying goes: "When the law is on your side, pound the law. When the facts are on your side, pound the facts. When neither is on your side, pound the table."

It remains to be seen whether Clemens' PR tactics are just table pounding, or a brilliant effort to move conventional wisdom toward the truth.

Whatdya Say?

2008-01-13T10:57:00.000-05:00

Just a quick post, with no link, from the most recent issue of Fortune (it's apparently not on the web), from Fortune's "First" section:

"MY METRIC: Harvey Pitt, former SEC chief, now head of consultancy Kalorama Partners: When a company is subpoenaed by the SEC and says it is "cooperating fully," my instinct is to short the stock. Of course it's cooperating. Saying so just means trouble is probably coming."

To me, this is all about falling back on cliches when mired in a high-profile (and high-stress) investigation or dispute. And you could as easily substitute "we believe in the merits of our case," for Pitt's quote above, or "we'll fight these charges in the courtroom..."

Public Exposure and Settlement Strategy

2008-01-04T12:40:00.000-05:00

Part of my mantra is that lawyers, PR people and their clients need to start integrating communications and perception concerns into legal strategy at the earliest possible opportunity. Simply put, you just can't wait until The New York Times is on the story before considering the effect of such coverage on your company and your case.

Here is an example of a company that apparently believed that if it settled the case, they could head off a New York Times article already underway. The case involved a lawsuit brought by the Indiana Children's Wish Fund, a "make-a-wish"-type organization. The suit was brought against Morgan Keegan, a brokerage firm in Memphis, over a mutual fund from Morgan Keegan that had invested in mortgage securities that subsequently tanked. It appears that by the time the company got around to settling, the NYT reporter had already done considerable work on the story. And with such an interesting fact pattern, it was just too good a story to pass up, despite the settlement.

The lead to the New York Times piece gives you a sense of just how difficult the facts were against Morgan Keegan, regardless of any legal consideratons as to liability:

The Indiana Children’s Wish Fund, which grants wishes to children and teenagers with life-threatening illnesses, got an early Christmas gift nine days ago. Morgan Keegan, a brokerage firm in Memphis, made an undisclosed payment to the charity to settle an arbitration claim; the Wish Fund said it had lost $48,000 in a mutual fund from Morgan Keegan that had invested heavily in dicey mortgage securities.

Coming less than two months after the charity filed its claim, and as a reporter was inquiring about its status, the settlement is a rare consolation for an investor amid all the pain still being generated by the turmoil in the once-bustling mortgage securities market. Before the Wish Fund reached its settlement, its mortgage-related losses meant that nine children’s wishes would go ungranted.

Nine wishes to sick children ungranted? I'd suggest considerations of settlement should have been top-of-mind well before The New York Times started chasing the story.Just as bad facts make bad law, sometimes bad facts make for media coverage that far outweighs the culpability of the parties involved. Now I am not privy to all the circumstances surrounding this particular case, but I suspect Morgan Keegan may well have gotten a bit of a bad rap, given the turmoil that engulfed the industry as a whole. But this case is a lesson for anyone who belives that public attention ends when the lawsuit does. In the court of public opinion, the rules are sometimes quite different.

The Importance of Effective Media Response

2008-01-02T16:00:00.000-05:00

Originally posted 12/31/2007; Update appended

Two drug makers are sued in a bribery probe by European regulatory officials (The Wall Street Journal article is here). Only one, GlaxoSmithKline, decides to make a public statement (the other company is AstraZeneca). GSK is quoted in the Wall Street Journal article as follows:

"GlaxoSmithKline doesn't believe that its employees or its agents in Iraq knowingly engaged in wrongdoing regarding the oil-for-food program," the company said. "In fact, GSK went to considerable lengths to cooperate with U.K. government authorities responsible for the U.K. administration of the program, and to impose anticorruption measures when dealing with intermediaries in Iraq at a time when the environment was extremely volatile and difficult."

(the full statement is prominently posted on the GSK homepage).

However this plays out, the key point is that GlaxoSmithKline was certainly ready when the reporters came-a-calling, with a response that positions the company in the best possible light.

It will be interesting to see how their public response affects perceptions as this investigation moves forward -- and also, how it affects further action by fraud probers against the various companies, actions by plaintiffs lawyers, etc. My theory is that it is the "blood in the water" that attracts the sharks: if you fumble your media response, it emboldens the other side. Conversely, if you seem like a hard target publicly, the other side will lose interest, divert resources, and perhaps even move on to prey that seems less likely to put up a fight.

I'll continue to monitor and update as this moves forward.

(As an aside, the Associated Press is reporting that three companies are actually inluded in the fraud probe, the third being Eli Lilly. An interesting development that, I'm guessing, will likely see some of these stories changes in the days to come).

UPDATE 1/2/2007: In a later version of the Wall Street Journal story, Astra Zeneca did respond in more detail to the allegations:

When the fraud-office inquiry began in February, AstraZeneca said it had sent a consignment of medicines to Iraq under the oil-for-food program but denied "any allegation of unethical behavior on our part in our trading relationships with Iraq." It said all medicines were sent with relevant U.N. and U.K. documentation.

...still no inclusion of Eli Lilly, although many other news sources have named them as the third company under investigation (see, for example, here).

Baseball's Legal Season

2007-12-31T03:40:00.000-05:00

Here's an article I wrote in mid-December regarding the various steriod-induced legal battles enveloping our national pastime.

The summation, to spare you the suspense:

At his press conference, Sen. Mitchell spoke at great length about the lessons learned from mediating the Irish troubles. All good points. But in both the Bonds and Mitchell cases, we all must remember another lesson from Northern Ireland: What happens to justice when the basic elements of legal process are missing, such as the ability to examine the evidence against you and confront your accusers.

We'll have plenty of chances to do so in the coming weeks and months, of course, since it's likely neither story is going away any time soon.

What's next? Congressional hearings in mid-January, a possible lawsuit by Roger Clemens, and a possible defamation lawsuit by Clemens' former trainer. Stay tuned, this one's going extra innings...

Media and prosecutors

2007-09-12T12:31:00.000-04:00

Here's an interesting quote from a decision in the Wesley Snipes tax evasion case, courtesy of my friends at the WSJ Law Blog:

“Since the government lacks the means to investigate and prosecute every suspected violation of the tax laws, it makes good sense to prosecute those who will receive, or are likely to receive, the attention of the media.”

The link to the law blog posting is:

http://blogs.wsj.com/law/2007/09/10/judge-feds-prosecuting-wesley-snipes-cause-hes-famous-not-that-theres-anything-wrong-with-that/

Spinning in the age of access

2007-06-26T08:33:00.000-04:00

This is follow-up to my post of yesterday, when I wrote about the ways transparency can impact the way court cases are handled.

An article this morning on the Forbes website, here, details how cereal manufacturers in the 1990s thought they could convince the public of anything -- including that sugary cereals like Corn Pops and Fruit Loops were healthy for children. Last week, they decided to stop marketing these same cereals to children.

What happened? The world has changed, that's what:

Critics suspicious of the action were quick to point out that it only came 16 months after two small children's advocacy groups threatened them with a lawsuit. But why would a company with nearly infinite legal resources choose to voluntarily revamp their entire product line and marketing strategy and agree to kill off some of their most identifiable corporate brands (R.I.P. Toucan Sam) rather than using their legal muscle to fight off a nuisance suit?
Because Kellogg's seems now to realize an essential truth of 21st-century business: In a connected world, companies who value and create stronger connections with their customers will win. In today's cost-benefit analysis of fighting something in court vs. damaging your relationship with your consumers, relationships win.

The Celebrity Wire Service

2007-06-25T12:17:00.000-04:00

I'm becoming increasingly fascinated with the effect of blogs and bloggers on the course and conduct of litigation. Consider the following, from a New York Times article today on the internet celebrity news site tmz.com:

"Even Hollywood criminal lawyers concede that dealing with TMZ has now become part of their legal strategy. Shawn Chapman Holley, who represents Nicole Richie, acknowledges that TMZ’s ability to get information has affected strategic decisions in Ms. Richie’s drunken-driving case.

“When we approach the bench, what we know and when TMZ will know it is a factor discussed with the judge,” said Ms. Holley. “Miss Richie’s case would be set for a particular day and to throw off TMZ.com, I would go in a day before. Unfortunately, TMZ.com figured out my strategy and were there when I arrived. So now I’m trying to figure out some other strategy.”

The full article is here: http://www.nytimes.com/2007/06/25/business/media/25tmz.html?8dpc

To apply this kind of thinking to corporate disputes, just substitute the Wall Street Journal Law blog (or others) for TMZ. It's clear that the earlier and comprehensive posting of case-related material on the Internet is already having a huge impact on legal strategies, what lawyers say in court, and how in general, the legal system behaves (this is something I specualted on in 2003 in a column in USA Today on the RIAA lawsuits over the illegal downloading of music -- see http://www.usatoday.com/news/opinion/editorials/2003-10-01-haggerty_x.htm).

Blogging backfire

2007-05-31T15:00:00.000-04:00

We all know that blogging is becoming an increasingly important aspect of the modern court case. But have you ever heard of a defendant blogging, without his lawyers even knowing?

It's enough to make you want to "flea" the courthouse in disgust:

http://www.boston.com/news/local/massachusetts/articles/2007/05/31/blogger_unmasked_court_case_upended/

Also check out a pretty good WSJ Law Blog post on the same topic: http://blogs.wsj.com/law/2007/05/31/a-law-blog-first-defendant-blogs-his-own-trial/

(good to be back).

Jim

11 Lawyers file same motion nationwide.

2006-02-06T17:50:00.000-05:00

From the Phil. Inquirer:

Cheltenham lawyer Thomas Griffin has made the Caribbean nation his cause - in a controversial report and in his practice.
By Gaiutra Bahadur, Inquirer Staff Writer

It was more a PR stunt than a practical legal maneuver.

Attorneys in 11 cities filed the same sermonlike motion on Jan. 19, pleading with U.S. immigration judges to halt deportation of hundreds of Haitians on humanitarian grounds.

Thomas Griffin, the Cheltenham lawyer behind the campaign, knew the gambit was futile. Only the Department of Homeland Security has the power to grant "temporary protected status" to foreigners, and only if a natural disaster, ongoing armed conflict, or other extraordinary crisis has wracked their homelands.

But Griffin stage-managed the filings and emotional news conferences here and in Miami, New York and Boston - hubs for Haitians - for maximum effect in the run-up to elections tomorrow in the Caribbean nation.

(click above for full article)

Writer Says Ex-Chief of HealthSouth Paid for Positive Coverage

2006-01-19T15:20:00.000-05:00

Here's a fascinating glimpse into the underside of using communications during litigation. This appears to me to be the equiavalent of "walking around money" during a political campaign.

Can it be long before this sort of technique catches on -- manufacturing "grassroots" interest in a litigant the same way you would a political candidate or issue?
-------
BIRMINGHAM, Ala. (AP) -- Throughout the six-month trial that led to Richard Scrushy's acquittal in the $2.7 billion fraud at HealthSouth Corp., a small, influential newspaper consistently printed articles sympathetic to the defense of the fired CEO.

Audry Lewis, the author of those stories in The Birmingham Times, the city's oldest black-owned paper, now says she was secretly working on behalf of Scrushy, who she says paid her $11,000 through a public relations firm and typically read her articles before publication.

(Click the headline above for the complete article)

Defamation Claim Would Be An Uphill Battle For PRSA

2005-07-05T12:51:00.000-04:00

by James F. Haggerty

PRSA's pursuit of an anonymous staffer who criticized PRSA chief operating officer Catherine Bolton in an e-mail to the PRSA board, raises a remarkable number of legal, policy and PR issues.

According to details on the O'Dwyer's website, PRSA filed a petition against Time Warner's Road Runner Internet service for the release of information regarding the e-mailer's identity. The mystery e-mailer, called "John Doe" in court papers, filed a motion to stop PRSA from learning his name. On May 27, 2005, Bolton defeated his motion; the PRSA board, however, did not.

The reason for all this commotion? PRSA and Bolton have stated they intend to sue the mystery e-mailer for defamation, and they want to know who he (or she) is.

Defamation claims can be extraordinarily difficult to bring, even in the best of circumstances. But in this case, especially so. Consider, for example: (1) the likelihood that such a communication would be considered "opinion" protected by the First Amendment; and (2) the likelihood that PRSA and Bolton would most certainly qualify as "limited-issue public figures," for whom not mere negligence, but "actual malice" is the standard.

Also, while the element of damages may not prevent Bolton from stating a claim, it does directly relate to any possible award if her claim is successful. And what about the employment law implications of the fact that John Doe is a PRSA employee?

But let's back up. For PR counselors to understand exactly what is going on, some background on the law of defamation is in order.

Defamation is one of those terms that gets thrown around quite a bit in common parlance, with little understanding of the actual legal meaning. So let's start with the basics. Not incidentally, with all the sensitive information we disseminate as PR professionals, it doesn't hurt for all of us to understand defamation law on a more general basis (and tip for those plying their trade at PR firms: check those indemnity clauses!).

First, consider the difference between defamation, libel and slander, terms that are often thrown around interchangeably.

Defamation is a general term for libel and slander. Slander is spoken; libel is written (although libel includes, oddly enough, television and radio broadcasts, where, it is argued, a written transcript of the offending remarks can be made).

Defamation has historically been defined as the injury to reputation by words that tend to expose one to public hatred, shame, contempt or disgrace, or, to quote a seminal 1933 New York case against the New York Evening Journal, "to induce an evil opinion of one in the minds of right thinking persons and to deprive one of their confidence." The loss of reputation need only be with a small section of the community‹or as famed tort scholar Dean William L. Prosser put it, a defamatory statement must "tend to prejudice the subject in the eyes of a substantial and respectable minority of the community."

So that's defamation. But the real question here is: when is it actionable (a "tort") in the eyes of the law? For that, the statement must have four elements under New York law.

These elements are: (1) a false statement, (2) publication to a third party, (3) at the very least, negligence on the part of the person sending the message (but in the case of public figures, "actual malice"), and (4) the statement must either cause "special" damages (i.e., verifiable economic damage) or constitute slander or libel per se.

In the PRSA case, thus far special damages have not been alleged, so we must be talking about libel per se. Libel per se is best described as a communication so obvious in its defamation that any fool would understand that there’s going to be damage.

Some words, for example, are defamatory by their plain meaning: "thief," "cheat," or "murderer" come to mind. Such direct disparagements are so obviously defaming by their plain meaning that there can be no dispute as to their effect. Under New York law, however, the communication is taken as a whole when considering whether it is libelous per se. So it's not necessarily the individual words themselves that matter if through the overall intent and meaning it is obvious that the communication would "tend to prejudice the subject in the eyes of a substantial and respectable minority of the community" then it's libel per se.

One other element is important for PR counselors to note: by "published," what is really meant is "disseminated," so, for instance, if a public relations pro issues a defamatory press release to a room full of reporters and spectators (or even to one), it doesn't matter if no media outlet picks up the story. Disseminating the press release to even one person other than the plaintiff, is, in the eyes of the law, publication (as mentioned, in the PRSA's case, since it is not alleged that the offending e-mail went anywhere other than to the PRSA board, the court ruled that there was no publication, thus no defamation claim for the PRSA board).

So does the anonymous email, signed by John Doe as "Catherine Hater," qualify as libel per se as to Bolton? Well, in the May 27th decision, the judge decided that Bolton, at least, had sufficiently stated a cause of action for libel per se, enough to let her proceed in obtaining the information from the Road Runner service that will show who John Doe really is.

But non-lawyers must understand exactly what this means. The fact that Bolton was able to state a claim for defamation does not prove her case.

She would still have to go to trial, present evidence as to all the elements of defamation, and have a judge and jury weigh the law and the facts. What the court in the May 27th decision asked was this: if you assume all of the facts are in the Bolton's favor, could they conceivable make a case for libel? The court ruled "yes" – but that's a long way from proving your case in a court of law. Bolton just cleared the first hurdle – and a low hurdle at that.

Significantly, the PRSA itself did not clear the same hurdle. Since there was no evidence that the offending e-mail went anywhere else than to the board, there was no "publication" of the defaming message.

Now comes the hard part for PRSA and Bolton. They must prove all of the other elements required for a defamation claim. First, they must overcome the question of whether parts of the statement represent "opinion" – an honest expression of fair comment on matters of legitimate public interest (protected by both federal and New York State constitutions).

Then, there's falsity: to the extent the message is factual, it has to be a false communication to be defamation (truth does indeed set you free). Then there's the "public figure" problem. Under New York law, public figures can be two types: an individual who occupies such a position of notoriety that they are a public figure in all circumstances (Russell Crowe, for example), or a "limited issue" public figure – an individual who voluntarily injects him – or herself into public issues and thus becomes a public figure regarding those issues. It will be hard to argue that Ms. Bolton doesn't qualify as a public figure under the latter analysis.

And so, "actual malice" must be proven: that is, John Doe must be shown to have intentionally set out to defame, with malice in his heart‹or at the very least, with a reckless disregard for whether he would defame.

Finally, remember: just because you can sue doesn't mean you should. And that raises several questions, including: what are the real damages here?

How much could PRSA and Ms. Bolton possibly win, compared to the costs, distractions and embarrassment that would flow from exposing PRSA's various warts? And what about the policy implications of a professional nonprofit, dedicated to the public interest and (presumably) the First Amendment, suing to shut down the speech of one of its employees?

Apple Computer, a private company, can do anything within its legal power to control the flow of information, I suppose. But an organization dedicated to communication?

Put it all together, and, in the parlance of modern litigation, you've got the prospect of a very risky lawsuit with only a limited return on investment.

Smart organizations manage their litigation alternatives by taking into accounts the real costs of legal action. In the final analysis, therefore, perhaps the place for PRSA to repair any damage wrought by the mysterious John Doe is not in a court of law, but in the proverbial "court of public opinion."

Greenberg's Stock Transfer Questioned

2005-04-25T07:20:00.000-04:00

By Ben White, Washington Post

...beyond the legal ramifications, image experts said Greenberg's transfer of so much stock to his wife's name, disclosed the same day he invoked his Fifth Amendment right not to testify in the investigation, could significantly reduce his public standing.

"Transferring shares three days before stepping down seems to me to be something that was done without any sort of thought of how it would play with the public," said James F. Haggerty, an expert in legal media strategy and chief executive of the PR Consulting Group. "What they have to realize is that everything they do has two ramifications, one inside the [legal process] and one outside."

Legal Combat: Are enemies waging war in our courts?

2005-04-05T10:44:00.000-04:00

By Phillip Carter, SLATE:

Since the attacks of Sept. 11, a common refrain has punctuated the legal arguments offered by the Bush administration in support of its terrorism policies: America is fighting a new kind of war, against a new kind of enemy, who will use unconventional methods to attack our nation and way of life. Extending constitutional protections to these foes might give aid and comfort to the enemy or give them some strategic or tactical advantage. This is the theory of "lawfare..."

Celebrity trials and the people who love them

2005-03-29T10:40:00.000-05:00

From the MSNBC website:

On an overcast Friday morning last November, a few dozen people gathered, as they had for the past several months, outside the San Mateo courthouse in Redwood City, California.

There was a core group of 40 to 50 court watchers who showed up every day," said San Mateo County Sheriff Capt. Mark Hanlon. "After a while, they were on a first-name basis with each other."

The loyal crowd had followed every twist and turn in the Scott Peterson double murder trial. Within a couple of hours, they were joined by more than a thousand others, as word got out that a verdict was about to be read. Hanlon, head of courthouse security, was prepared. "We had implemented the security plan usually reserved for disasters."

Tide painting lawsuit lousy public relations

2005-03-29T08:01:00.000-05:00

From the Montgomery Advertiser:

Some of the best public relations the University of Alabama football team has gotten over the years has come from Daniel Moore's paintings of Crimson Tide victories. And some of the worst public relations the university will get this year will come from its lawsuit against Moore.