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Howard Levitt: For lawyers, the media is an unruly horse that must be ridden with care – Financial Post

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2 years ago

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Here’s what cases employers should realistically worry will attract media scrutiny

Lawyers commenting on cases, if not careful and knowledgeable in the law, can find themselves on the wrong side of a libel case.
Lawyers commenting on cases, if not careful and knowledgeable in the law, can find themselves on the wrong side of a libel case. Photo by Getty Images/iStockphoto

Writing in these pages twice weekly with a critical editor, I have learned which employment lawsuits are likely of interest to the press. And how media coverage impacts litigation.

I have had too many employer clients over the years concerned that their lawsuits will publicly explode, causing personal embarrassment and brand damage and affecting their customers, remaining employees and even their ability to raise capital. Mostly, I disabuse them with the assurance, “Sorry, you are just not that interesting,” hoping that they are more relieved than affronted.

What cases should employers realistically worry will attract media scrutiny?

Those with salacious facts, high-profile parties, public institutions or those with novel issues and far-reaching impact. Examples of the latter are the Seneca College case, in which the school sought to enforce its vaccine mandate, and the initial dismissal cases determining whether being fired during COVID-19 (when jobs were hard to secure) increased wrongful dismissal damages.

Cases involving private parties and institutions generally will be of little interest to others unless they ring with the zeitgeist, playing on current themes, or are patently outrageous. The Jessica Yaniv case, in which a trans woman took immigrant Muslim aestheticians to the British Columbia human rights commission for refusing to wax her male genitals, fits both those categories.

I often have lawyers and publicists send me cases hoping for coverage because they realize that, in some cases, media coverage places intense settlement pressure on their opponents.

I recall one very large company which had a stinging sexual harassment court judgement against it, damning it for its treatment of the woman in question. Fortunately for the company, the media missed it. After all, there are many trials a week and reporters no longer have the time or budget to be sitting in the courthouse reading through rulings. It was lucky.

But rather than quietly paying the judgment and licking its wounds, the company decided to appeal. Now there are far fewer appeals than trials and a much greater chance that they will come to public attention. Not only did this company lose its appeal but the B.C. Court of Appeal’s judgement was widely disseminated, with the decision all over the papers and talk shows. The cost to this company in lost customers and public goodwill was incalculable relative to the comparatively insignificant cost of simply paying the judgement. Rather than thinking about that before appealing, it let the bruised egos of its lawyers and executives who ran the losing trial make the foolish decision to appeal.

If a case has legs, the employer indeed acted reprehensibly and the employee is a truly innocent, sympathetic victim, media coverage can result in settlements far greater than anything that a court would award and that is something smart employee lawyers must consider.

Every case has a narrative and I always think, from the moment any case comes through the door through to the end of any trial, how to construct the most sympathetic narrative for my client. It is not only employees who that applies to. Often employers are the comparatively innocent victims of grifters or fraudsters.

The case then has to be developed with that underlying theme and all of its elements combined to convince the court that that is what occurred. It is not a great leap then to tell that same story more publicly when a case warrants that. If there is a possibility of any coverage, the pleadings should be written in a manner with soundbites accessible to reporters.

In such a case, ignoring the media is not an option as the other side’s comments might then define your case. Dan Abrams, chief legal correspondent for NBC News, once rebuked a lawyer reluctant to comment and be seen as a “media whore” that there has to be something between whoring and abstinence.

Generally, the risk of litigation publicity should be capitalized upon through obtaining a settlement before a case becomes public. Once public, the bargaining power of potential publicity is usually lost. But not always. It is one thing to have a one-day news cycle but yet another to have a widely publicized case where the company is pilloried, day after day, while the trial is ongoing and new revelations are coming out. But even before that potentially ruinous trial, as the case drags on, there can be ongoing coverage and the death by a thousand cuts to the party who is seen to have acted wrongly. Continual coverage of such a case puts pressure on the parties to make progress in resolving the issue before trial.

There are precautions one should take. Subtlety is your friend. Explicitly threatening to go to the media unless money is paid is extortion. There are also limits on the conduct of lawyers in how they deal with the other side and the media imposed by the Law Society’s Rules of Professional Conduct. As well, although reporters enjoy legal privilege in much of what they can write, lawyers and their clients do not.

Lawyers commenting on cases, if not careful and knowledgeable in the law, can find themselves on the wrong side of a libel case. That is true even though the court document they may be reciting is privileged. A good case is that of the libel decision involving the Church of Scientology, in which one of the largest defamation awards in Canadian history was levied against a lawyer who read a statement of claim on the courthouse steps. The claim was privileged but reading it publicly was not.

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If a case is going to be publicized, clients must be agreeable. They have to remember that few cases will have coverage which is entirely positive. And if someone becomes a media “saint” other reporters will look for skeletons to bring them down. Many people simply don’t have the stomach or disposition to be publicly written about, even if the commentary is entirely favourable.

Lawyers must never speak to the media about their cases without the client’s full consent or they could find themselves sued, for example, for breach of solicitor-client privilege or for revealing confidential information. Social media is particularly toxic and clients in high-profile cases should avoid reading Twitter or the comment section or risk being emotionally unable to continue with the case. It is also almost always a bad idea for clients, untrained in libel law, to be providing media interviews.

Although the media can, in some cases, be a useful vehicle for advancing one’s position, particularly in public interest litigation, it is an unruly horse which must be ridden with caution, lest the rider find him or herself quickly bucked to the ground.

Howard Levitt is senior partner of Levitt Sheikh, employment and labour lawyers with offices in Toronto and Hamilton. He practices employment law in eight provinces. He is the author of six books including the Law of Dismissal in Canada.

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Trump could cash out his DJT stock within weeks. Here’s what happens if he sells

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3 weeks ago

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August 23, 2024

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Former President Donald Trump is on the brink of a significant financial decision that could have far-reaching implications for both his personal wealth and the future of his fledgling social media company, Trump Media & Technology Group (TMTG). As the lockup period on his shares in TMTG, which owns Truth Social, nears its end, Trump could soon be free to sell his substantial stake in the company. However, the potential payday, which makes up a large portion of his net worth, comes with considerable risks for Trump and his supporters.

Trump’s stake in TMTG comprises nearly 59% of the company, amounting to 114,750,000 shares. As of now, this holding is valued at approximately $2.6 billion. These shares are currently under a lockup agreement, a common feature of initial public offerings (IPOs), designed to prevent company insiders from immediately selling their shares and potentially destabilizing the stock. The lockup, which began after TMTG’s merger with a special purpose acquisition company (SPAC), is set to expire on September 25, though it could end earlier if certain conditions are met.

Should Trump decide to sell his shares after the lockup expires, the market could respond in unpredictable ways. The sale of a substantial number of shares by a major stakeholder like Trump could flood the market, potentially driving down the stock price. Daniel Bradley, a finance professor at the University of South Florida, suggests that the market might react negatively to such a large sale, particularly if there aren’t enough buyers to absorb the supply. This could lead to a sharp decline in the stock’s value, impacting both Trump’s personal wealth and the company’s market standing.

Moreover, Trump’s involvement in Truth Social has been a key driver of investor interest. The platform, marketed as a free speech alternative to mainstream social media, has attracted a loyal user base largely due to Trump’s presence. If Trump were to sell his stake, it might signal a lack of confidence in the company, potentially shaking investor confidence and further depressing the stock price.

Trump’s decision is also influenced by his ongoing legal battles, which have already cost him over $100 million in legal fees. Selling his shares could provide a significant financial boost, helping him cover these mounting expenses. However, this move could also have political ramifications, especially as he continues his bid for the Republican nomination in the 2024 presidential race.

Trump Media’s success is closely tied to Trump’s political fortunes. The company’s stock has shown volatility in response to developments in the presidential race, with Trump’s chances of winning having a direct impact on the stock’s value. If Trump sells his stake, it could be interpreted as a lack of confidence in his own political future, potentially undermining both his campaign and the company’s prospects.

Truth Social, the flagship product of TMTG, has faced challenges in generating traffic and advertising revenue, especially compared to established social media giants like X (formerly Twitter) and Facebook. Despite this, the company’s valuation has remained high, fueled by investor speculation on Trump’s political future. If Trump remains in the race and manages to secure the presidency, the value of his shares could increase. Conversely, any missteps on the campaign trail could have the opposite effect, further destabilizing the stock.

As the lockup period comes to an end, Trump faces a critical decision that could shape the future of both his personal finances and Truth Social. Whether he chooses to hold onto his shares or cash out, the outcome will likely have significant consequences for the company, its investors, and Trump’s political aspirations.

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Arizona man accused of social media threats to Trump is arrested

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3 weeks ago

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August 23, 2024

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Cochise County, AZ — Law enforcement officials in Arizona have apprehended Ronald Lee Syvrud, a 66-year-old resident of Cochise County, after a manhunt was launched following alleged death threats he made against former President Donald Trump. The threats reportedly surfaced in social media posts over the past two weeks, as Trump visited the US-Mexico border in Cochise County on Thursday.

Syvrud, who hails from Benson, Arizona, located about 50 miles southeast of Tucson, was captured by the Cochise County Sheriff’s Office on Thursday afternoon. The Sheriff’s Office confirmed his arrest, stating, “This subject has been taken into custody without incident.”

In addition to the alleged threats against Trump, Syvrud is wanted for multiple offences, including failure to register as a sex offender. He also faces several warrants in both Wisconsin and Arizona, including charges for driving under the influence and a felony hit-and-run.

The timing of the arrest coincided with Trump’s visit to Cochise County, where he toured the US-Mexico border. During his visit, Trump addressed the ongoing border issues and criticized his political rival, Democratic presidential nominee Kamala Harris, for what he described as lax immigration policies. When asked by reporters about the ongoing manhunt for Syvrud, Trump responded, “No, I have not heard that, but I am not that surprised and the reason is because I want to do things that are very bad for the bad guys.”

This incident marks the latest in a series of threats against political figures during the current election cycle. Just earlier this month, a 66-year-old Virginia man was arrested on suspicion of making death threats against Vice President Kamala Harris and other public officials.

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Trump Media & Technology Group Faces Declining Stock Amid Financial Struggles and Increased Competition

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3 weeks ago

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August 20, 2024

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Tech News in Canada

Trump Media & Technology Group’s stock has taken a significant hit, dropping more than 11% this week following a disappointing earnings report and the return of former U.S. President Donald Trump to the rival social media platform X, formerly known as Twitter. This decline is part of a broader downward trend for the parent company of Truth Social, with the stock plummeting nearly 43% since mid-July. Despite the sharp decline, some investors remain unfazed, expressing continued optimism for the company’s financial future or standing by their investment as a show of political support for Trump.

One such investor, Todd Schlanger, an interior designer from West Palm Beach, explained his commitment to the stock, stating, “I’m a Republican, so I supported him. When I found out about the stock, I got involved because I support the company and believe in free speech.” Schlanger, who owns around 1,000 shares, is a regular user of Truth Social and is excited about the company’s future, particularly its plans to expand its streaming services. He believes Truth Social has the potential to be as strong as Facebook or X, despite the stock’s recent struggles.

However, Truth Social’s stock performance is deeply tied to Trump’s political influence and the company’s ability to generate sustainable revenue, which has proven challenging. An earnings report released last Friday showed the company lost over $16 million in the three-month period ending in June. Revenue dropped by 30%, down to approximately $836,000 compared to $1.2 million during the same period last year.

In response to the earnings report, Truth Social CEO Devin Nunes emphasized the company’s strong cash position, highlighting $344 million in cash reserves and no debt. He also reiterated the company’s commitment to free speech, stating, “From the beginning, it was our intention to make Truth Social an impenetrable beachhead of free speech, and by taking extraordinary steps to minimize our reliance on Big Tech, that is exactly what we are doing.”

Despite these assurances, investors reacted negatively to the quarterly report, leading to a steep drop in stock price. The situation was further complicated by Trump’s return to X, where he posted for the first time in a year. Trump’s exclusivity agreement with Trump Media & Technology Group mandates that he posts personal content first on Truth Social. However, he is allowed to make politically related posts on other social media platforms, which he did earlier this week, potentially drawing users away from Truth Social.

For investors like Teri Lynn Roberson, who purchased shares near the company’s peak after it went public in March, the decline in stock value has been disheartening. However, Roberson remains unbothered by the poor performance, saying her investment was more about supporting Trump than making money. “I’m way at a loss, but I am OK with that. I am just watching it for fun,” Roberson said, adding that she sees Trump’s return to X as a positive move that could expand his reach beyond Truth Social’s “echo chamber.”

The stock’s performance holds significant financial implications for Trump himself, as he owns a 65% stake in Trump Media & Technology Group. According to Fortune, this stake represents a substantial portion of his net worth, which could be vulnerable if the company continues to struggle financially.

Analysts have described Truth Social as a “meme stock,” similar to companies like GameStop and AMC that saw their stock prices driven by ideological investments rather than business fundamentals. Tyler Richey, an analyst at Sevens Report Research, noted that the stock has ebbed and flowed based on sentiment toward Trump. He pointed out that the recent decline coincided with the rise of U.S. Vice President Kamala Harris as the Democratic presidential nominee, which may have dampened perceptions of Trump’s 2024 election prospects.

Jay Ritter, a finance professor at the University of Florida, offered a grim long-term outlook for Truth Social, suggesting that the stock would likely remain volatile, but with an overall downward trend. “What’s lacking for the true believer in the company story is, ‘OK, where is the business strategy that will be generating revenue?'” Ritter said, highlighting the company’s struggle to produce a sustainable business model.

Still, for some investors, like Michael Rogers, a masonry company owner in North Carolina, their support for Trump Media & Technology Group is unwavering. Rogers, who owns over 10,000 shares, said he invested in the company both as a show of support for Trump and because of his belief in the company’s financial future. Despite concerns about the company’s revenue challenges, Rogers expressed confidence in the business, stating, “I’m in it for the long haul.”

Not all investors are as confident. Mitchell Standley, who made a significant return on his investment earlier this year by capitalizing on the hype surrounding Trump Media’s planned merger with Digital World Acquisition Corporation, has since moved on. “It was basically just a pump and dump,” Standley told ABC News. “I knew that once they merged, all of his supporters were going to dump a bunch of money into it and buy it up.” Now, Standley is staying away from the company, citing the lack of business fundamentals as the reason for his exit.

Truth Social’s future remains uncertain as it continues to struggle with financial losses and faces stiff competition from established social media platforms. While its user base and investor sentiment are bolstered by Trump’s political following, the company’s long-term viability will depend on its ability to create a sustainable revenue stream and maintain relevance in a crowded digital landscape.

As the company seeks to stabilize, the question remains whether its appeal to Trump’s supporters can translate into financial success or whether it will remain a volatile stock driven more by ideology than business fundamentals.

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