Elon Musk Is Having A Very Litigious Week

Episode Notes

Transcript

[Music]

Joe Patrice: Welcome to another episode of Thinking Like A Lawyer, I’m Joe Patrice from Above the Law. I’m joined by Chris Williams. We are here to talk about the, you know, like, we usually do the big legal stories of the week. In this case, of the two weeks, since we were not around for the Independence Day in the U.S. holiday. So we’re back and ready to go and we’ll have some small talk now, which we always introduced with a little bit of fanfare.

All right. Hey, welcome back to the country.

Chris Williams: This is nice. It was nice to land, that’s usually the best part of coming back in the States when you’re on a plane.

Joe Patrice: I mean better than crashing.

Chris Williams: Yeah. At least in theory. I thought so until I saw the prices and I realized I wasn’t ready, everything costs at least three or four times more than in respectable countries like Cambodia because in those these are shithole prices in the States, I already miss not being here, but really that’s nice.

Joe Patrice: Yeah, no. So yeah, it’s good to be back. I haven’t left so I don’t have any problems with the prices. I know people complain about inflation, but I also track the real numbers and see that it’s mostly leveled off and stopped. So we don’t really have too much bad going on on that front, but don’t worry, they’re more people got jobs last month so they’re going to jack up interest rates anyway. Because they’re not going to stop until they trigger a recession.

We’ll see when that happens, how that impacts law firms though so.

Chris Williams: Oh one other small talk thing, in the week that I’ve been back in the states, there have been more mass shootings here than in the five months that I was in Cambodia. So it’s good to know that that didn’t change. It was a warm welcome.

Joe Patrice: Yeah, that is definitely going to be the case. Yeah, bad, bad news all the way around. We had some flash flooding here yesterday but seems like everything’s returned to normal, but just a massive amount, the deluge, yeah, anyway so.

Chris Williams: I like the less little the little LSAT word there, SAT word, deluge.

Joe Patrice: No yeah.

Chris Williams: Very fancy. We just say shit time where I am from.

Joe Patrice: I write for a living. Actually that is a thing on that note actually I got a fan letter, but with a snarky side where somebody was corrected, just was thanking me for an article. But pointing out that I used a word wrong and I was like yeah I but it got me, it was like, you should look up the difference between these two words.

And I am like well I understand the difference, I’ll let you, I don’t understand why people thought the mistake was because I didn’t know the difference as opposed to I typed it up over the course of 30 minutes because it was breaking news and I used the wrong word. I don’t know why people would jump to the conclusion that I must not know basic SAT words despite the fact that I have a law degree. But –

Chris Williams: Listen, when you see the people that practice, it’s hard to be surprised.

Joe Patrice: Yeah. And again, I’m not like I thought it was great that this person pointed out because we rely on that sometimes because we are churning out content so quickly that it’s difficult to keep a top of the editing. It’s not like writing a law firm brief where you go over it four or five times word by word to make sure everything is right before you file like this is a lot faster.

So I appreciated that somebody pointed it out to me but it’s not that we don’t know the words. Anyone, you are cool. Is that –

Chris Williams: Yeah, that was enough small talk for me.

Joe Patrice: Let’s get on it.

So let’s open up with the article that had that word problem actually, well and it was part of a bunch of articles that we’re writing about this subject. So let’s go back to talking about Elon Musk and his Twitter misadventures. For those of you who have been following this all along this all began with his attempts to buy Twitter which seems like a tech story, but it’s really a legal story because he ended up having to buy Twitter as we covered at the time because he didn’t listen to his own lawyers and made a bunch of incredibly stupid giveaways in the merger agreement that forced him then to go through with the deal when they sued.

The most recent run of issues though are a couple of legal problems, which was last week, he sent a very mean-spirited his letter, technically Quinn Emanuel, his attorneys sent very mean letter to Meta, the artist formerly known as Facebook, accusing them of stealing Twitter intellectual property in developing their new Threads app, which is being touted as a Twitter killer to the extent there is such a thing other than Musk himself.

(00:05:07)

So have you, were you tracking this one? Do you have any thoughts on this?

Chris Williams: My thoughts on Threads is what I think everyone’s thought is there was a TikTok and it was like, find me on Bluesky, find me on Macedon, find me on Threads and it’s like, I’m out of it. I can’t do this anymore. I can’t do this anymore. I just need to be on one thing and stick to it.

Joe Patrice: On that note actually on the Legaltech Week Journalist’s Roundtable, which I’m a panelist on where we talk about tech stuff, we actually did talk about some, some more broadly tech folks who are taking the sense that this whole microblogging thing is over. It worked because there was one. The benefit of a monopoly. It worked because Twitter was the only one doing it. But now that it’s not, it’s just never going to — that community is just never going to coalesce again, which was an interesting take.

Chris Williams: Well, to the point, I mean, I do think it is interesting that as they hit a point where everything became everything like Snapchat used to be interesting because you would have stories that last 24 hours and then Instagram adopted that and then Facebook used to be interesting because you can have a little pole. Twitter was interesting because you can have like little photo character posted. Even before Threads, Instagram had this feature where it was like a little story thing like you could say, like a short little thing.

So I think that we already hit a phase of saturation where the really thing that’s different is just like what the user interface looks like. But we hit a point where like maybe like for a couple of years now they’ve all been kind of the same thing.

Joe Patrice: Well, I mean, I just think that they – again, this is a field of — I just feel like it’s the audience was the actual money, the user base being ubiquitous and now that it’s getting fractured in two different places, it’s going to be a problem. But anyway, get back to the complaint, the accusation is that Facebook stole IP.

When you read this actual letter though, there’s not really what you would assume to see, you would assume you would see in a letter from a big law firm actually threatening a major corporation for stealing their intellectual property. There’s no actual specificity here. It’s a bunch of vague claims that they don’t think Facebook could have been, a multi-billion dollar corporation, would have been able to build something that allows someone to type in 140 characters without the deep, deep help of a bunch of former Twitter employees.

Chris Williams: So did Elon write himself?

Joe Patrice: Which, of course, were all on the market because Elon fired everybody because he said, none of them were good engineers and he didn’t need any of them. So it’s interesting that now his comeback is these deeply vital people to the company’s IP are now switching sides with Facebook, which, of course, there’s no real articulation of what they would be doing wrong even if they did go over there to the extent that they stole documents or something that would be bad, but there’s no real indication that they did anything like that.

What they took was their talent there. But California doesn’t really love non-compete agreements that prevent people from performing their profession and they really don’t like non-compete agreements when you’re the one firing them.

So, with all of that, there’s not really much to suggest that this is real. I assume Facebook’s lawyers laughed heartily when they receive this and will soon reply with an equally snarky response depending on who they hire. But that’s where we are. I mean Elon today says that he wants to have a public dick measuring contest with Mark Zuckerberg. So I guess of things that none of us want to see this lawsuit is the better of the two, I guess.

Chris Williams: So was that metaphorical for the MMA fight or is this literal at this point because I am not sure?

Joe Patrice: Oh no, no, now he has gone literal. Because remember he wanted the MMA fight but his mommy wouldn’t let him do it. So now –

Chris Williams: He is about, he is trying to post meat on main.

Joe Patrice: Yeah, I got to be honest. It is tough talk to be doing this after your mommy stopped you from getting in a fight so I don’t really know why –

Chris Williams: His mom will see this.

Joe Patrice: Oh I mean yeah. Well I mean the thing is we assume Zuckerberg has already seen this because like he has access to everyone’s post.

Chris Williams: Its known. It’s known.

Joe Patrice: He already knows anyway but and unlike Muck, Zuckerberg probably does due diligence.

Chris Williams: Wait, Musk knows that like photoshop exist, right, like if he pose any meat, even if he has gargantuan schlong, the photo edits that will come out will make this horrible for like no PR team will be able to scrub this from the Internet.

(00:10:04)

Joe Patrice: I wonder if he saw the Meta demo and thought that Zuckerberg really doesn’t have any legs. They are like he really is just a floating, maybe that’s his logic, I don’t know. Anyway, so with that we have this fight going on. We also have a slightly more serious fight, I shouldn’t say slightly, a more serious, but probably not really a big deal fight.

Twitter’s parent company is X, of course, now that it’s privately held and X is suing Wachtell. Their argument being that Wachtell received $90 million as a fee at the end of the days of Twitter because Wachtell is the firm that Twitter hired to force Musk to buy Twitter when Musk tried to ignore the contractual obligations he had put himself in by ignoring his own lawyers.

Wachtell secured a $90 million fee for that. They are now being sued by X in California courts arguing that that success fee should be clawed back on the grounds that the people running Twitter at that point did not have Twitter’s best interests at heart because they knew they were all going to be fired by Musk.

So somebody is trying to get money away from Wachtell that never works, but we’ll see if – you don’t come between Wachtell and money in my experience. But, you know, we’re talking about the most profitable firm by margin of the last 20, 30 years. So —

Chris Williams: Yeah no major player.

Joe Patrice: Yeah.

Chris Williams: Is this what Elon had in mind when he was looking for his hardcore lawyers.

Joe Patrice: Yeah, right. So, well, I mean his hardcore lawyers he’s hired, it’s interesting speaking of that for almost everything he’s done for the last year, he’s utilized Quinn Emanuel, but it is a little telling that in this case he is not employing Quinn Emanuel. I thought that was a little weird given their relationship.

He’s got Reid Collins doing this so interested to see what that means. Quinn Emanuel obviously is a litigation powerhouse and has been doing everything. So, it’s an interesting switch of horses midstream especially when Quinn Emanuel was writing the nasty letters last week, but, whatever.

Anyway, so yeah, breaking down this complaint, it’s interesting. It seems like there was a success fee. It’s unclear other than I mean it seems like there’s a lot of hindsight being imputed here. Musk is claiming that all of these executives authorized this payment knowing they were about to be fired by him, there’s no indicate — it’s true that he fired bunches of people but there wasn’t really an indication but they were going to be fired by that.

There’s not really a good reason why this fee is totally crazy, success fees exist in this world and in this case this was a success fee for making the shareholders $44 billion, 90 million doesn’t seem like it’s that crazy in that context. I mean if you think of contingency fees often being around a third of the recovery, this is .2%. So not really all that egregious, it’s going to be interesting.

They do have some claims about the propriety under California law of how success fee arrangements have to be structured and that this one to the extent it wasn’t put in writing at the beginning of the representation, shouldn’t be allowed whatever. So there’s some technical arguments that could be interesting to watch play out. But yeah so Wachtell is the latest person that Eon is trying to beat in court given his recent track record.

Yeah, good luck. I think it’s the right answer there.

[Music]

Jared Correia: They say the best things in life are free, which either means The Legal Toolkit podcast is pretty awesome, or we’re totally committed to the wrong business model. You’ll just have to tune in to find out which it is. I’m Jared Correia, and each episode I run the risk of making a total ass of myself so that you can have a laugh, learn something new, and why not, maybe even improve your law practice. Stop believing podcasts can’t be both fun and helpful. Subscribe now to the Legal Toolkit. Go ahead. I’ll wait.

[Music]

Sharon Nelson: As a lawyer, keeping up with developments and information security, cyber threats and e-discovery is a never-ending process. Fortunately, the Digital Detectives Podcast does the hard work for you. I’m Sharon Nelson and together with John Simek, we bring on industry experts to discuss the latest tech developments that help keep your data secure. Only on the Digital Detectives Podcast.

(00:15:12)

[Music]

Joe Patrice: All right, so we — it’s been a couple weeks now. So mercifully, you might have scrubbed some of these stories from your brain. But if you haven’t, while we were gone, we weren’t able to talk about the last, the last few days of the Supreme Court term it ended as one would expect in a hail of rough decisions and then subsequent gaslighting but we did get at the end of the term as expected, kind of the end of affirmative action, the end of the student loan deal.

So yeah, so let’s talk about the affirmative action one first here just because I think that’s — that one ties to more of our stories. So the affirmative action case, the conservative majority of the Supreme Court determined that affirmative action was unconstitutional in college admissions. Their argument, they try like courts tend to do to claim that, oh no, this isn’t really stopping in other contexts. But obviously, we understand how incremental legislate, litigation works. This is the first step in an ultimate delegitimizing of it across the board.

With that said, as soon as it happened, you wrote a story about a move being made by former Trump ghoul Steve Miller to already expand this to another area of education.

Chris Williams: Right. So the fancy name besides ghoul, the American First Legal, they sent out a threat of litigation to like 200 law schools in the US of course, we read they send them over to places in Britain. And they said that they had had to – the law schools had to immediately announce the termination of all forms of race, national origin, and sex preferences, which is weird for them to say you have to renounce national origin when you’re called American first.

But anyway, faculty hiring, Law Review membership or article selection, anything that uses affirmative action for those things in a way that was broader than what that actual opinion was, the opinion in making the restrictions on schools, using affirmative action in article selection or Law Review membership.

But it’s one of the things where it’s to be expected that if you give an inch, a mile, is the next time come to pass. And my thing is they then go on to say that any proxy actions will also be taken to court. So, if some law schools decide that they want to benefit applicants from this particular socio-economic background as a proxy for race that they will try that in court, and have that be viewed as affirmative action by some other means.

But the thing that I don’t think that they understand is this is going to bite them by hitting their funders’ children, right. It’s going to happen because let’s take for example, one of the other things that is currently being litigated affirmative action for white people, which is legacy admissions. Everyone knows that’s affirmative action for white folks like there was one point where sure, the Harvard for example, there was a point where they were taking white applicants and black applicants before very long time like say like 1950 or so, they were only getting like say 12 black students a year.

So just like if you look at with numbers just the amount of people that qualify for legacy admissions are overwhelmingly white, which makes sense when you factor in I like, say, 70% of Harvard’s legacy admissions are white. So it’s an affirmative action program for white folks. So if you want to look at this for impact, it’s a racial program. This Harvard and North Carolina, I think just was equally applied to that, you know.

Joe Patrice: Right. Well in this came up in the opinion, right because was it Gorsuch who like a wrote a thing about that oh well, Harvard says that this exists and if they got rid of legacy admissions, then this would allow, this would allow them to get back to the same diverse balance without the need for affirmative action. Basically blaming legacy admissions for why Harvard had to have affirmative action, which some people are pointing to as proof that as an argument that conservatives would not have a problem with diversity in admissions if legacies went away or at least some justices might.

It was a weird inclusion because while that may be true for Harvard, it doesn’t do anything for UNC, right, like it’s not like state schools have these extensive legacy programs that look in on the order of Harvard. It really weird inclusion but yeah, we’ll see. So it’s very interesting take there.

(00:20:02)

The other issues we had where we had, we had AV 303 Creative case where a company that had no business or clients or ever done anything managed to secure standing for itself for the purposes of the Supreme Court striking down protections for public accommodation law, public accommodation law protections.

If you start a business, you’re free to discriminate all you want as a person but when you start a business open to the public, you have to abide by anti-discrimination laws. The Supreme Court struck that down arguing that this company that had never actually been subject to any of these laws somehow got to make a court case out of it. It is bold and no real basis in that at least anything, any case law leading up to this but that hasn’t stopped some really disingenuous actors from trying to pretend it did.

I did see Ed Whalen who’s noted, who was not a very smart man, but still manages to write about law all the time anyway because no one stops him, he was trying to argue that the comparison — make a comparison with Roe v. Wade, saying, you know, she actually ended up having the baby so standing doesn’t, it’s the same thing which obviously is ridiculous to the extent.

Chris Williams: Never write that on the call logs and don’t do it.

Joe Patrice: Yeah. Well or just bother to read the opinion. A large chunk of Roe v. Wade actually deals with this specific issue because they are, unlike this court, they were very concerned about the idea that they were being seen as ignoring standing and talked about how in this instance, you had someone who had been pregnant and was never going to be able to get a case all the way up to the Supreme Court before they can no longer get an abortion at all.

So their argument was that given that this is a situation that could be repeated but never make it to the end of the line of litigation. We will make an exception for that. That is not an exception that would exist here, right, like, this is a situation where all she needs to do is find some client willing to, who she objected to and then she can be charged under it, and then she can bring her a case the normal way.

Now, that brings us to the next element of this that became an issue, which is, it turns out that the lawyers in this case tried to create a example of her being asked by a client to do something she objected to, and the new Republic did some digging and called up the person whose name, address, phone number and all are in the filings for this case and asked about when he asked for a same-sex wedding website and it turns out that this person is a heterosexual, who has been married for years and has no idea what they’re talking about.

So it appears as though someone –

Chris Williams: He was today years old when he discovered that he was involved in a Supreme Court case.

Joe Patrice: Yeah. In fact, so now the Supreme Court got around this by just ignoring that you needed any kind of claim, any kind of case or controversy in just issuing an advisory opinion anyway, but it does show that the lawyers involved were attempting or at least someone had attempted that the lawyers did not at any point call this out for the court and that’s the candor part right.

Even if they weren’t involved in setting this up at some point, it came to their attention that this was an attempted fraud on the court and they have obligations at that point to share that an attempted fraud is happening upon the court, which they do not appear to have done at any juncture here. This is a fairly big deal.

There are people trying to downplay it saying well, but the Supreme Court decided not — they didn’t have to worry about that fact, which may well be true. That does not — there is not really a no harm, no foul when it comes to legal ethics like that, just because the Court decides not to indulge your attempted fraud does not actually mean that you don’t have problems trying to commit a fraud.

Chris Williams: This may be a bit of a jump, but I wonder to what degree the actions of this court will have on, like, multimillion-dollar or multibillion-dollar like contract disputes because like when we’re looking at contrast, you are like, okay do we meet at this, did we take this all the way the court. You tend to look at things like, oh, what are the facts? Who has standing to sue what have you?

It assumes a norm and like, the court isn’t abiding by any of that, they’re just ignoring facts when it comes to like Bremerton, they are ignoring standing and, like, the things that the constitution allows as far as, like, Article 3, like, how will this affect companies trying to determine what to do.

(00:25:03)

Joe Patrice: Well so no if you have a contract it will gear in a lot better shape, because there’s usually some sense that you’ve got something written down, which I mean, that’s not to say that there aren’t situations where you try to make arguments based on the anticipatory breach or declaratory judgments, stuff like that.

Chris Williams: Sure.

Joe Patrice: But there’s at least something to guide you. But you’re right. The Roberts Court has spent a long time at this point, nearly 20 years at this point, arguing that standing was the most important thing and people who you would normally think and the precedent had normally said had standing, he would slam the courthouse door in their faces saying no, you actually have to have a lot more before we’re even going to bother giving you access to the courts. This reversal is wild.

It tends, it comports with a change in the politics of the court when the court might have given these people relief, he was all about kicking things based on lack of standing, it seems as though now that the politics of the court have shifted, he’s willing to go along with blowing up the standard requirements that he had pushed for so long.

And you’re right, the spillover effect is going to be interesting, right because now, there’s not really any clear check on what it takes to bring a case to the courts. Other than you kind of think that it might be something that a super legislature of a right wing majority super legislature might endorse. It’s going to be interesting to see what comes out of this because someday, the court will change. But these precedents about what amounts to standing are still going to be there.

And what are we going to do, when that happens going to be very tricky and dicey, because very few guards are left on the floodgates here.

Chris Williams: And it’s wild, because it’s not only like what standing is actually but then also to what degree the court can interpret or add facts to their liking to create things.

Joe Patrice: Well, right. And in this case, they didn’t have to add any facts. They just ignored the one that was there because it turned out not to be true at all. But you’re right like you’re  referencing, of course, last year’s Supreme Court case about school prayer, where Gorsuch was called out specifically for the fact that most of the stuff — most of the facts cited to in his majority opinion were not reflected at all in the record and they were critical facts because they were the only justification for possibly making his opinion but they just weren’t there, just totally made up.

[Music]

Jud Pierce: Workers’ Comp Matters is a podcast dedicated to exploring the laws, the landmark cases and the true stories that define our workers’ compensation system. I’m Jud Pierce and together with Alan Pierce, we host a different guest each month as we bring to life this diverse area of the law. Join us on Workers’ Comp Matters on the Legal Talk Network.

Christopher T. Anderson: If you’re a lawyer running a solo or small firm and you’re looking for other lawyers to talk through issues you’re currently facing in your practice, join the Un-Billable Hour’s Community Roundtable, a free virtual event on the third Thursday of every month. Lawyers from all over the country come together and meet with me, lawyer and law firm management consultant Christopher T. Anderson to discuss best practices on topics such as marketing, client acquisition, hiring and firing, and time management. The conversation is free to join, but requires a simple reservation. The link to RSVP can be found on The Un-Billable Hour page at legaltalknetwork.com. We’ll see you there.

Joe Patrice: So real quick now we have a little bit of bar prep news. I don’t know how many of the graduated law students out there are still listening to us. They’re probably very hunkered down right now if they’re in the bar prep mode, which I understand. So you may not even be hearing this. But for everyone else’s benefit. It’s worth just kind of tossing out there that this has happened.

Themis, one of the major bar prep organizations out there has been struggling over the last few months with shutdowns in the middle of prep. We get a lot of angry examinees writing to us about it. We understand, we hear you at first I warned everybody it’s okay, it’s very early, you don’t need to stress about every single second, the test is two and a half months away, don’t worry about it.

But now it is not two months away. Now we are in the last couple of weeks and we had a shutdown again last week. So this is becoming a problem. You didn’t ultimately but you’ve considered taking the bar like how would this feel about as you were going through it?

(00:29:57)

Chris Williams: I mean, I would be, I’d be pissed. I mean I would ultimately just start using like the textbooks what have you like, but I feel like if I’m paying for the online service, and like being able to procrastinate easier by opening up, like opening up another tab and going on YouTube, then that’s what I want.

Joe Patrice: Well, that is certainly been a bit of my take too, and I feel bad about it. But I have also, I agree with you, I’ve kind of like they also send you a bunch of written materials and you also have taken notes of the lectures theoretically. If the website is down for a few hours, you can also read those things. I don’t know, maybe it’s a question of how studying works these days whether people just don’t do that anymore. I don’t know.

Chris Williams: But also, I’m like, I’m like, oh, fate has given me a study break, who am I to turn down good fortune, I would just go catch up on Netflix.

Joe Patrice: Well that was certainly, I mean, that was the crux of my article back in June. I feel like I’m a lot less sympathetic to that idea now. But it’s important to note that this isn’t just Themis’ fault. This seems to be a problem with bar prep courses generally when they happen to have too much capacity for the bandwidth. Because Themis has so many customers this year, reportedly, because BARBRI had a series of these shutdowns and failures last year, and a lot of people I see writing to us, a lot of people say they chose Themis because BARBRI had so many issues last year.

Chris Williams: I guess so Kaplan is looking at this in his —

Joe Patrice: That’s the meme of the rubbing, yeah. I mean, I don’t know. Like, I feel like it’s just going to fluctuate between the three of them over and over again for a while until everyone gets to the heart of this.

Chris Williams: Until Zuckerberg comes in with studies.

Joe Patrice: Studies, yeah. All right well, that is pretty much our time. Thanks for everyone for listening. You should be subscribed to the show to get new episodes when they come out. You should be writing reviews, say something, put some stars up, it always helps. You should be following folks on social media. I’m @JosephPatrice on Twitter to the extent that matters. I’m Joe Patrice on Bluesky, I think. I think I’m Joe Patrice on Threads. I can’t even remember.

Chris is @WritesForRent as in he’s writing on Twitter, and I assume Threads is what’s that for you?

Chris Williams: I have to make one.

Joe Patrice: What — I mean, what’s your Instagram, right, like, is it tied your Instagram?

Chris Williams: Yeah, I don’t have — I don’t have a work Instagram.

Joe Patrice: Oh okay, okay.

Chris Williams: People don’t need to be on my personal Instagram. They don’t need that. I don’t need that app.

Joe Patrice: Oh yeah. So you need to come up with a whole separate because that’s a thing, it’s all messed up because if you do tie it then yeah, anyway.

Chris Williams: See I missed the days of having a Finsta, you know about Finsta, fake Instagram so you know, where you keep your co workers off, you know, Threads kind of ruin that for people.

Joe Patrice: So the blog is @atlblog on Twitter and Threads I believe. So with that, all said you should be reading Above the Law. So you read here these and other stories before they happen, you should be listening to this show but also The Jabot, which Kathryn hosts. You should be checking out the Legaltech Week Journalist’s Roundtable, which I already cited, which I’m panelist on. You should listen to the other shows on the Legal Talk Network. And with all of that I think now we’re done.

Chris Williams: Peace.

[Music]

Continue Reading