Thanks to the internet and social media, today’s news cycle is fueled by a constant flow of real-time information. The reporting of legal battles is no different. Companies finding themselves in the trenches of litigation today are bombarded early and often by tweets, posts, and online articles often based on a one-sided view. That news can severely damage a company’s reputation—and for public companies, their stock price—long before the company gets the opportunity to tell its side of the story in the courtroom. Thus, more than ever before, companies are forced to consider whether and how to fight back outside the courthouse.
Currently, there are 313 million active Twitter users in the world and two-thirds of all Twitter users in the United States receive their news from Twitter. There are 1.7 billion worldwide Facebook users, with studies showing that 44 percent of all U.S. adults access their news on Facebook. And publications are seeing that traditional hard copy circulation numbers are dwindling. In 2016, the New York Times has a weekday circulation of 590,000 hardcopy papers but a Twitter following of 30.9 million.
Because of this market demand for instantaneous news, many more judges, in the spirit of an open court system, allow reporters to live-tweet hearings and trials. The Wall Street Journal Law Blog tweets about high profile cases to over 108,000 followers. And nearly every major publication across the country utilizes social media to push out legal news. “Reporters have to use Twitter to show they are abreast of the big stories, to keep up with what their competitors are doing, and to promote their own work,” said Ed Crooks, U.S. Industry and Energy Editor at the Financial Times. “If a case is important enough, that will certainly include tweeting from the courtroom.”
The effect on legal reporting is clear. Previously, a journalist might sit through an entire day of testimony before drafting an article which likely would cover both the plaintiff’s and defendant’s witness examination. Today, given the need for speed and the 140-character limitation, a tweet often reflects only one party’s version of the facts. Those tweets are tied up later into online articles with “click-worthy” headlines. But by then the story, in the minds of the short-attention span social media audience, already has largely been told.
So what’s a company to do? Studies show that 78 percent of Fortune 500 companies have Twitter accounts and Facebook, Google, and Starbucks lead the pack with over 10 million followers each. In addition, 74 percent of the 2015 Fortune 500 companies have Facebook pages. And regulators like the U.S. Securities and Exchange Commission have recognized the legitimacy and significance of these outlets in reaching companies’ stakeholders. Companies therefore have the power to try to stem the tide during times of legal crisis by simply sending a tweet, posting a message on Facebook, or uploading a blog to their company website.
All of this is making it much more difficult for companies to remain silent. Ellen Moskowitz, a partner with the Brunswick Group who advises companies in legal crisis, believes those that prioritize the outside world have a better chance of weathering the litigation storm. “It used to be that litigants arrived in court with armies of lawyers and stacks of briefs but with nothing more than a terse ‘no comment’ for constituents beyond the courtroom,” said Moskowitz. “It is critical to contextualize the legal arguments within a narrative that speaks to the concerns of investors, employees, and the general public to ensure that while you’re winning the legal battle, you’re not also losing the reputational war.”
To Tweet or Not to Tweet
For the lawyers representing these companies, it is a thorny issue. Certainly companies have First Amendment rights to defend themselves, but often such engagement creates more problems. The court may have local rules or impose gag orders restricting media engagement that carry severe contempt risks. These statements might be considered admissions at trial. And there is always the risk that a media statement or tweet made in the heat of the moment does not later align with a sometimes ever-evolving legal strategy.
But there are also significant ethical considerations. Rule 3.6 of the Model Rules of Professional Conduct prohibits a lawyer from making an extrajudicial statement known or reasonably should be known to “have a substantial likelihood of materially prejudicing an adjudicative process.” Attorneys can, however, make non-prejudicial statements, recite information in the public record (including the claims and defenses of the parties), and respond to any third-party claim that the lawyer reasonably believes will prejudice the client.
But what about when it is the client making the statement, and not its lawyer? Rule 8.4 of the Model Rules states that “a lawyer or law firm shall not violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another.” Some courts have interpreted that to mean that a lawyer who simply advises a client in connection with making an extrajudicial comment to the press which the attorney herself could not make, may be deemed to have committed an ethical violation.
In Maldonado v. Ford Motor Co., for example, the Michigan Supreme Court upheld the dismissal of a lawsuit where the plaintiff and her counsel, in the face of prior warnings from the court, engaged in extensive pretrial publicity by disclosing evidence that had been ruled inadmissible. The court cited Michigan’s version of Rule 3.6, but also cited Rule 8.4(a) in dicta, taking the lawyers to task not only because they made public statements themselves, but also because they “failed to restrain plaintiff from repeatedly and intentionally publicizing [the excluded evidence] in order to taint the potential jury pool and deny defendants a fair trial.” The Massachusetts Bar Association Committee on Legal Ethics reviewed a similar issue in a 2003 opinion where it stated that a lawyer who drafts a newspaper advertisement for a client about pending litigation runs “a substantial risk” of violating Rules 3.6 and 8.4 “where the lawyer concludes that placing the same advertisement under her own name would violate Rule 3.6.”
Accepting the New (Virtual) Reality
As the media world evolves, we can expect courts to be faced with the new realities of what it means to have an open, transparent, and fair justice system. Companies accused of wrongdoing are also faced with the real possibility of inaccurate or incomplete tweets and posts materially affecting their reputation and financial wellbeing for months or even years before the judge or jury makes precedential findings.
The pressure to “litigate in the media” is strong. It behooves clients to receive reasoned legal advice from their lawyers as to whether, when, and how to communicate. Careful attention should be paid to ethics rules and rules of the court in doing so. But as the U.S. Supreme Court noted in the 1991 case of Gentile v. State Bar of Nevada, attorneys “cannot ignore the practical implications of a legal proceeding for the client.” Now more than ever, as the Court noted, “[a]n attorney’s duties do not begin inside the courtroom door”—they extend well into the Twittersphere.
Lauren Casazza is a partner at Kirkland & Ellis in New York, where she developed a Crisis Communications and Management Practice Group that focuses on counseling clients on internal and external communications in high-profile litigation, investigations and crisis situations. Sara Winik is a litigation associate with the firm.
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