Nasir and Matt talk about Facebook’s lawsuit against DLA Piper and other law firms accused of furthering a fraudulent lawsuit. The guys also answer, “Can I ban e-cigarettes in the workplace?”
Full Podcast Transcript
NASIR: All right. Welcome to our podcast where we cover business in the news and answer some of your business legal questions. This is Nasir Pasha.
MATT: And this is Matt Staub.
NASIR: And don’t forget, you can also send in your questions to ask@legallysoundsmartbusiness and dotcom is also necessary.
MATT: And, sometimes, I put the reflection in different parts of my name. So, I went up towards the end of it for some reason today.
NASIR: I didn’t even notice.
MATT: Stay tuned for what’s going to happen on Friday. Who knows?
NASIR: All right. So, we get to talk about some other law firms here and some other attorneys.
MATT: Yeah, you love this type of story because you love every time that bad things happen to lawyers.
NASIR: That is definitely partly true, I think, but – I don’t know – I think I’m going to be defending them in this case so go ahead.
MATT: Yeah. So, we see Facebook get sued or threatened to get sued all the time. This is the opposite. I guess it’s the exact opposite because it’s Facebook’s suing DLA Piper and other firms and attorneys. This was just filed this week, right? Yeah or I guess last week. It’s a very fresh lawsuit.
NASIR: Fresh off the press, and DLA Piper – everyone should know – is a very large law firm, by the way.
MATT: Well, DLA Piper, they’ve been in the news a lot the last year, too. They’ve kind of been dropping, shutting down offices, laying off a lot of mid-level attorneys.
NASIR: That’s probably true. I mean, a lot of these big firms – since 2008 – have gone through massive downsizing and then upsizing and then downsizing again so that wouldn’t be surprising. But I know they were in the news quite a bit when this whole Facebook lawsuit came up because this guy, Paul Ceglia, he claimed that he owned a majority interest of Facebook.
NASIR: And was able to secure representation from DLA Piper and three other law firms, or I think eventually other law firms and other attorneys, but long story short is that this guy was a complete fraud, apparently – which is not too surprising, I suppose.
NASIR: So, then these guys at Facebook – after everything was said and done – were obviously not too happy about the lawsuits and, this last week, they turned it around and sued these attorneys for basically representing this Paul Ceglia because they basically conspired with the fraud that he was trying to extort money out of Facebook.
MATT: Yeah, what they’re saying is, you know, once information was discovered and that’s a certain point that they were acting in that conspiracy of the fraud that this guy was trying to impose against Facebook. So, once they found out about it, then they’re part of the deal, too. I mean, I kind of like Facebook going after these firms because, if they knew about it and they were just furthering the fraudulent actions of this guy, then why not? They should have to be responsible for their actions.
NASIR: Yeah, you don’t often hear about attorneys who file frivolous lawsuits being sued against, especially in such a publicized manner – in this case, a very well-known national law firm – but I haven’t read the complaint and I wish – in fact, I could read it right here. Let’s just pause here for a half-hour and let me read this.
MATT: You can do a live reading.
NASIR: Okay. I’ll just start reading here.
MATT: Start from the caption.
NASIR: It’s still loading. Otherwise, I would have. I’m going to bring up the lawsuit here because, okay, it’s Facebook Inc. and Mark Elliot Zuckerberg.
MATT: Who is that?
NASIR: That’s the CEO of Facebook. The reason I’m looking this up is I want to understand the causes of action. Okay. So, it’s basically for filing a frivolous lawsuit, et cetera. And so, in this case, the lawyers, when they represent clients, they should be given some leeway because they don’t necessarily know whether their clients are telling the truth or not.
NASIR: In fact, there’s a saying, the first time your client calls you with some kind of legal problem, their story and how they present it is about as good as it can ever get because, from there on, it’s downhill because you’re going to find out other facts that may be incorrect of what your client told you, maybe contrary, and then other few facts that are basically bad for your case. And so, in the same way, even when they found out that it may not have been a true lawsuit or true facts behind this case, they still have an obligation to represent their client, too. So, it’s a very strange kind of balancing act that they have to make because, obviously, they can’t contribute to malicious prosecution or filing a frivolous claim but, if they believe and have a reason to believe that their client has some truth to it – maybe not necessarily 100 percent truth – I don’t think the attorney should be liable for such a thing.
MATT: Yeah. I mean, I agree with that. Something to keep in mind here is DLA Piper actually withdrew its representation during the lawsuit.
MATT: Facebook had filed a motion for expedited discovery, claiming that the contracts and emails submitted by – how have you been pronouncing his name?
MATT: Ceglia – were all forgeries. So, like I said, it depends on how much they knew and what it is. I mean, this guy’s got a criminal case going against him so that’s obviously bad.
NASIR: Keep in mind, too, even the act of withdrawing could disclose to others – including the other party – that you don’t believe in the case and that may even actually be disparaging to your client and there may be some ethical implications with that. So, again, it’s a very subtle thing to do but, to all of a sudden extend this malicious prosecution claim to the attorneys automatically, especially DLA Piper which seems to have withdrawn – whether they withdrew early enough or not – I think is of minimal consequence.
MATT: So, after DLA Piper withdrew, there was a local San Diego attorney that took over the representation of this guy.
NASIR: Yes, correct. I do remember that as well.
MATT: And he’s promoting it on his About Me page – like, one of five cases. I mean, I don’t know how that ended up but I would guess bad since there’s a criminal case going against him, right?
NASIR: Yeah. I don’t know the exact procedure of it, but I’m sure it was just missed or what-have-you.
NASIR: I’m sure it’s not around anymore. I don’t think they settled.
MATT: I’d think probably not but maybe dismissed with prejudice.
NASIR: Oh, actually, here. “Ultimately, after Facebook removed the case to federal court, the court dismissed the lawsuit on the ground that it was a fraud. The court held that it was…” I don’t think they said that exactly. Let’s see. “The court held that it was ‘highly probable’ that the contract in which Ceglia relied in supporting emails ‘were fabricated for the expressed purpose of filing the instant action.’” So, it seems like this guy went to such an extent of forging an actual agreement and emails but, okay, again, maybe they found that out. But, if your client presents you with all that evidence, why not file a lawsuit? And then, they go to another attorney, right?
NASIR: And this San Diego attorney.
MATT: Well, there’s another one after that.
NASIR: “Well, you know, DLA Piper dropped me because they don’t believe in my case. But here’s all the evidence.” They’re like, “Well, yeah, this is a good case. Let me take it on, too.” Of course, Facebook says, “Well, we warned them. We told them that this was fraud.” But that’s the opposing party – of course they’re going to say that. So, as an attorney, I’m not going to be like, “Oh, I guess I should trust you since, you know, we’re the ones suing you, right?” I think it’s bad press and obviously we don’t know all the facts of the case but just from the smell test perspective, something doesn’t seem right about it.
MATT: A year later, after the San Diego attorney came on board, I guess there’s some sort of withdrawal there and another five attorneys came into the picture. It was dismissed later on.
NASIR: Think about it like the San Diego attorney – whoever he is, I don’t know who he is – I’m sure it was very exciting for his firm to have a case against Facebook that not only he could actually win but have some notoriety and publicity for his firm, and then now he’s wrapped up into this lawsuit. In a way, his name’s been a little trashed by this lawsuit.
MATT: Yeah. Well, I think we talked about that enough.
NASIR: See, I like attorneys – a little bit.
MATT: Yeah, you actually stuck up for him.
NASIR: I guess I’m attacking the attorneys of Facebook, I suppose, for that.
NASIR: But anyway…
MATT: You hate Facebook, too. So, I don’t know. You’ve got to side with somebody.
NASIR: That’s true. I’m not a big Facebook fan.
MATT: All right. Question of the day.
“Can I ban e-cigarettes in the workplace?” This comes from San Diego, California.
NASIR: Hmm. Have you ever tried smoking?
NASIR: Me neither. I don’t get it myself. But the e-cigarette, there seems to be conflicting claims whether it’s safe to use. But, for some reason, to me, it just seems okay. But I guess people are saying otherwise.
MATT: Yeah. I mean, I would think that there’s probably definitely some negative health effects of these and that it’s just not known yet or not well-known yet. There’s no way that it’s just, like, safe. Well, I mean, first of all, you’re still inhaling something, right?
NASIR: Yeah, but I think it’s without tar or something. Well, I hope we can at least say that, compared to smoking regular cigarettes, I would hope it’s better. I mean, I don’t know if people are saying it’s even just as bad or worse so I think there’s a danger though of people going to e-cigarettes, like, instead of starting with regular cigarettes, they start with e-cigarettes. To me, hopefully, people are going from cigarettes to e-cigarettes instead of, you know, vice versa. Okay. So, back to the question instead of the… Can you ban e-cigarettes? You know, e-cigarettes were just banned in Los Angeles, I believe, right?
NASIR: And they’ve been banned – there’s this little PDF, I don’t know if you want to do a link or not but there’s about three or so states that have actually banned it in public places and then about a hundred-plus cities across the nation that have some kind of restriction on it.
MATT: How many of those are in the south? Zero? All cities in North Carolina, Tobacco Road?
NASIR: No. Actually, you’d be surprised because I think some of these – you know, you’re right – there’s not a lot in the south. But, looking at it, it looks like a lot of it’s like, a lot of these cities, they have a law that prohibits cigarettes but in conjunction because of the language itself also prohibits e-cigarettes. So, maybe it talks about smoke or whatever. So, back to the workplace issue, I don’t know about you but I would analyse it the same way as a cigarette in the sense that no one has a right to do those types of things whether, you know, you can restrict eating and drinking too within the workplace – of course, notwithstanding issues of disability and so forth that they may need it, et cetera. But, yeah, I mean, you can ban e-cigarettes just as you can ban cigarettes.
MATT: I think it’s just a matter of time before they’re banned inside. It’s eventually going to happen but, I mean, obviously, you can’t smoke inside – well, in very rare instances, I suppose.
NASIR: Which I think a lot of people are frustrated because they’re like, “Okay, I’m trying to quit smoking so I go to this e-cigarette. And now, basically I’m being treated the same way as if I was smoking a regular cigarette even though it’s “just vapor” and it doesn’t even smell. I don’t think it does. I know it doesn’t smell as cigarettes do. I just realized, I feel like I’m pro e-cigarette though I don’t know much about it.
MATT: Pro e-cigarette for no reason.
NASIR: For no reason. It seems pretty cool. I feel like I should try it, just for fun, but I won’t.
MATT: I feel like I see people walking around and it looks like kind of silly.
NASIR: It does look kind of goofy.
MATT: Like, when they first came out, I was just so confused what was going on because I would just see these people, like, instead just look like they were blowing smoke and I’m like, “What? What is it? This is illegal, right?”
NASIR: Both literally and figuratively, right?
MATT: So confusing. This isn’t Europe.
NASIR: But, you know, cigarettes are definitely a taboo in California and other states as well, especially in the workplace. I think the big problem, as an employer, is that, if your employees are taking a bunch of breaks just to smoke, that’s a lot of productivity that’s lost.
NASIR: I’m talking about beyond what is the minimal breaks that are required in California and in other states. So, I think, at the least, you can prohibit them from doing it within the workplace. You can even prohibit them from taking more than the minimum number of breaks to have a smoke break or an “e-smoke” break.
MATT: That’s something I always thought about, too. You know, say you work with a group of ten people and two of them are taking cigarette breaks every fifteen minutes and you’re not, it’s like, basically, you’re doing more work than them and getting paid the same price. I always thought that was kind of unfair, but I don’t have to worry about that, I just think about it. I’m sure that’s been some episode on TV or a movie where, like, people take up smoking just so they can take breaks – like, there’s an incentive to do it.
NASIR: At least a sitcom episode, I’m sure.
MATT: All right. Well, I think that’s it.
NASIR: Oh, okay. We’re just going to end the episode? That’s it?
MATT: Yeah. Well, you can say stuff then. I always close so…
NASIR: Oh, that’s true. Well, thanks for joining us, everyone, and that’s it, I guess. All right. Take it away!
MATT: Keep it sound and keep it smart.