Friday, August 27, 2021

As Elizabeth Holmes Goes To Trial, The Issue of David Boies' Attorney-Client Privilege Looms


Elizabeth Holmes

What Other Firms Can Learn From Boies Schiller's Role in the Elizabeth Holmes Saga, August 21, 2021

An attorney-client privilege dispute between Elizabeth Holmes and Boies Schiller Flexner looms over the Theranos founder’s criminal fraud trial set to kick off Aug. 31, but attorneys say the saga also serves as a cautionary tale for the legal community.

In a trial expected to last about 13 weeks in the San Jose courtroom of U.S. District Judge Edward Davila of the Northern District of California, lawyers from Williams & Connolly and a San Francisco solo practitioner are set to defend Holmes against the government’s allegations that the former executive defrauded investors, doctors and patients with faulty blood-testing technology.

David Boies

David Boies
, Boies Schiller’s managing partner and chairman, and partner Heather King could also be central players in the courtroom drama. Boies and King, Theranos’ former general counsel, are listed as possible witnesses in court documents. A magistrate judge found that 13 emails on the government’s exhibit list were not protected by Holmes’ attorney-client privilege with the firm.

Some lawyers say the haziness of the high-profile firm’s relationship with Holmes has caused the rest of the industry to sit up and stress the fundamentals. Schiff Hardin partner Adam Diederich in Chicago said the attorney-client privilege dispute certainly got the attention of attorneys, who expect the advice and information they provide clients to remain confidential.

“It’s pretty clear something fell through the cracks, but it’s not directly known exactly what happened here,” Diederich said. “So I think most law firms and lawyers who are aware of this are going to be more careful, with this in mind, to document the scope of the relationship.”

Holmes argued that Boies—who also served on the defunct company’s board of directors—and his firm had acted as counsel not just to the company but to Holmes in an individual capacity. She claimed they had represented her starting in 2011 in an intellectual property dispute, according to case filings. In a 2018 interview in the U.S. Attorney’s Office in San Francisco, Boies told federal investigators he represented solely the company up until the summer of 2016, according to a memo on the docket.

Boies represented Theranos as it came under fire from reporting by The Wall Street Journal’s John Carreyrou, who unwound the alleged scheme at the center of the government’s case against Holmes and Theranos’ former president and chief operating officer, Ramesh “Sunny” Balwani, who is set to stand trial beginning Jan. 11.

Federal prosecutors asserted that Holmes could not pass the circuit court’s test to show that counsel was communicating to her in an individual capacity or that the communications’ dealt with matters particular to Holmes instead of the general affairs of the company, whose assignee had waived Theranos’ corporate privilege to specific documents.

Noticeably absent from the record is a Boies Schiller engagement letter—with Theranos or Holmes. Boies himself had told investigators he was “virtually certain” that there must be an engagement letter establishing the legal relationship with Theranos, as required by the firm. Holmes has admitted in court documents that she has no knowledge of an engagement letter directed toward her or Theranos, or one delineating or limiting Boies’ representation to Holmes or the company.

In a June order, U.S. Magistrate Judge Nathanael Cousins of the Northern District of California found Holmes was “unable to point to any documents supporting this allegedly obvious joint representation.”

Emily Ward, a white-collar associate at Smith, Gambrell & Russell in Atlanta, said if she were to merely speculate about the possible effects of the 13 emails on the trial, the communications—which have been described in filings as related to Theranos’ response to the media, investors and regulators—it’s possible the testimony of Boies and King could speak to the intent or aspects of the alleged scheme to defraud.

“If there were any sort of false or misleading omissions in communications to investors and regulators, that could be part of the prosecution’s case, but of course, we’re just guessing until we know what’s in those emails,” Ward said.

Ward said the lack of any engagement letter is a little surprising, “especially for parties that are as sophisticated as one of the more preeminent law firms in the country and Theranos.”

On the other hand, she said, not having an engagement agreement with regard to each specific area in which a law firm is offering advice is not that surprising. “When senior executives or officers within a company have a question, they might just run down the hall to their in-house counsel or call up their friend who’s the outside counsel, and there’s not going to be an engagement agreement for each one-off situation where legal advice is given,” she said. “So you can see how something like this may have organically developed, but it is definitely a risk to not have an engagement agreement when you do have both the corporate and personal legal interest at issue.”

Kevin Allen, of Eckert Seamans Cherin & Mellott in Pittsburgh, said the lack of an engagement letter was uncommon but not unheard of. “To the extent that it happens, it’s my experience, typically, just a delay, where the engagement letter would just catch up to the actual engagement,” he said. “A firm may be doing work for some finite period of time without an engagement letter yet having been issued, but I think particularly in larger law firms and prominent law firms that have systems in place, in my experience, it’s unusual.”

Allen said that Boies’ role on the board and the “multiple hats” he wore in connection to Theranos further complicated the privilege issue. “Then the question becomes, ‘OK, person who holds a law degree but is on the board of directors, when you were talking and there were communications with you, which hat were you wearing?’” he said. “It doesn’t mean that a lawyer who is on the board can never have confidential, privileged communications, but it just makes it more complicated.”

To maintain clear lines of communication when an attorney is acting both as a business adviser and legal representative, Ward suggested keeping a separate email account or only discussing certain personal matters when that person is physically in their law office.

Ward said prior to its representation of Theranos, Boies Schiller was regarded as one of the top law firms in the country—and still is—but it has lost more than hundred attorneys since.

“I think this is a cautionary tale because it’s just a quick reminder that whether it’s the most powerful law firm in the country, or a solo practitioner that hung up their own shingle, all types of lawyers and all types of law firms need to make sure that they are documenting everything having to do with attorney-client privilege and making sure their clients understand who they represent, especially when you’re talking about a corporation that has founders, executives and other employees,” she said.

When a company is built around a founder, as was the case with Theranos, it can be even more difficult to have a clear demarcation between individual representation and the company, Ward said.

“I think that that’s something that we will continue to see litigated over the next 10 or 20 years with all of these dot-com and app companies,” she said. “There’s going to be a question as these companies grow: When did lawyers start representing the company as opposed to the founders who were just trying to make it work?”

Friday, August 13, 2021

Dominion Voting Systems File Lawsuits Against Conservative Media Outlets Accusing It Rigged the 2020 Presidential Election Against Donald Trump


In this Jan. 4, 2021, file photo a worker passes a Dominion Voting ballot scanner while
setting up a polling location at an elementary school in Gwinnett County, Ga.
                                           (AP Photo/Ben Gray, File)

minion files $1.6B lawsuits against Newsmax, OAN, former Overstock CEO

Dominion files $1.6B lawsuits against Newsmax, OAN, former Overstock CEO

Dominion files $1.6B lawsuits against Newsmax, OAN, former Overstock What You Need To Know

  • Dominion Voting Systems on Tuesday continued its suing spree against conservative media outlets and other prominent figures it says spread baseless claims about it rigging the 2020 presidential election against Donald Trump

  • The Denver-based voting machine company filed three separate defamation lawsuits against the cable TV networks Newsmax and One America News and against former CEO Patrick Byrne

  • Citing lost profits and other damages, the lawsuits each seek more than $1.6 billion

  • Dominion says its reputation has been damaged so badly by the false claims that it has lost at least $70 million in profits as a result of contracts that have been canceled or not awarded since the presidential election

Dominion Files $1.6B Lawsuits Against Newsmax, OAN, former Overstock CEO

PUBLISHED 2:38 PM ET AUG. 10, 2021

Dominion Voting Systems on Tuesday continued to file lawsuits against conservative media outlets and other prominent figures it says spread baseless claims about it rigging the 2020 presidential election against Donald Trump.

The Denver-based voting machine company filed three separate defamation lawsuits against the cable TV networks Newsmax and One America News and against former CEO Patrick Byrne. Citing lost profits and other damages, the lawsuits each seek more than $1.6 billion.

"The defendants in today's filings recklessly disregarded the truth when they spread lies in November and continue to do so today,” Dominion CEO John Poulos said in a statement. “We are filing these three cases today because the defendants named show no remorse, nor any sign they intend to stop spreading disinformation. This barrage of lies by the Defendants and others have caused—and continue to cause—severe damage to our company, customers, and employees. We have no choice but to seek to hold those responsible to account."

The Newsmax and OAN filings borrow much of the same language. In them, Dominion’s lawyers wrote that the networks “helped create and cultivate an alternate reality where up is down, pigs have wings, and Dominion engaged in a colossal fraud to steal the presidency from Donald Trump by rigging the vote.”

Dominion alleges the networks “manufactured, endorsed, repeated,  and  broadcast  a  series  of verifiably  false  yet  devastating  lies  about Dominion.” The claims included that Dominion’s software and algorithms manipulated vote counts to help Joe Biden, that the firm is owned by a company founded in Venezuela to rig elections for the late dictator Hugo Chavez and that Dominion was involved in voting irregularities in cities where its machines are not even used.

In a statement to Spectrum News, Newsmax said it had not yet reviewed Dominion’s complaint but asserted that the network “simply reported on allegations made by well-known public figures, including the President, his advisors and members of Congress.”

“Dominion’s action today is a clear attempt to squelch such reporting and undermine a free press,” the statement said.

The OAN lawsuit also names as defendants Herring Networks CEO Robert Herring and President Charles Herring, as well as reporters Chanel Rion and Christina Bobb. Herring Networks is OAN’s parent company.

OAN has not responded to an email from Spectrum News seeking comment.

Byrne is accused of bankrolling false “forensic” reports that claim Dominion’s machines were intentionally designed to create systemic fraud and influence election results. Dominion says he also enlisted and promoted conspiracy theorists and misrepresented their credentials.

Byrne, who has previously said he did not vote for Trump, has not commented publicly on the lawsuit.

Dominion says its reputation has been damaged so badly by the false claims that it has lost at least $70 million in profits as a result of contracts that have been canceled or not awarded since the presidential election, a trend the company predicts will continue to play out over the coming years. Dominion claims some election officials have told its representatives that the company is losing business “because of the ‘Dominion’ name.”

The lawsuit against Newsmax was filed in state court in Delaware, while the other two cases were filed in the U.S. District Court for the District of Columbia.

Trump and some of his prominent supporters continue to push false claims that widespread election fraud cost him re-election in November. 

All but one of the more than 60 legal challenges filed by Trump and his allies have failed in the courts, including two tossed out by the Supreme Court.

The Department of Homeland Security's Cybersecurity and Infrastructure Security Agency and the National Association of State Election Directors described the election as "the most secure in American history.” And before resigning in December, Attorney General William Barr said the Justice Department found no evidence of widespread voter fraud that could have changed the outcome of the election.

Dominion says it’s impossible to program its voting software to switch votes because the machines print a paper ballot, which is reviewed by the voter and can be used to audit election results.

The company has previously filed a number of other $1 billion-plus defamation lawsuits against those who have accused it of working to fix the election, including Fox News, lawyers Rudy Giuliani and Sidney Powell, and MyPillow CEO Mike Lindell.

In a call with reporters Tuesday, Dominion attorney Stephen Shackelford did not rule out suing Trump, Reuters reported.

"We are still exploring options as to how to hold other participants in the campaign of lies accountable," Shackelford said.

Ryan Chatelain - Digital Media Producer

Ryan Chatelain is a national news digital content producer for Spectrum News and is based in New York City. He has previously covered both news and sports

FILE - Sidney Powell, right, speaks next to former Mayor of New York Rudy Giuliani, as
members of President Donald Trump's legal team, during a news conference at the Republican
National Committee headquarters on Nov. 19, 2020, in Washington.
                                           (AP Photo/Jacquelyn Martin, File)

Judge rules Dominion case can proceed against Trump allies

Judge Rules Dominion Case Can Proceed Against Trump Allies
PUBLISHED 10:46 PM ET AUG. 11, 2021

WASHINGTON (AP) — A federal judge cleared the way Wednesday for a defamation case by Dominion Voting Systems to proceed against Sidney Powell, Rudy Giuliani and Mike Lindell, allies of former President Donald Trump who had all falsely accused the company of rigging the 2020 presidential election.

U.S. District Judge Carl Nichols ruled that there was no blanket protection on political speech and denied an argument from two of the defendants that the federal court in Washington wasn't the proper venue for the case.

“As an initial matter, there is no blanket immunity for statements that are 'political’ in nature,” the judge wrote in the 44-page ruling.

While courts have recognized there are some hyperbolic statements in political discourse, “it is simply not the law that provably false statements cannot be actionable if made in the context of an election,” Nichols wrote.

The judge also rejected Powell and Lindell’s arguments that Dominion had failed to meet a legal burden that their statements were made with “actual malice.”

He outlined several instances where the trio made outlandish and blatantly false claims, including when Powell stated that the company was created in Venezuela to rig elections for the late leader Hugo Chavez and that it can switch votes.

In allowing the lawsuit to go forward, Nichols said Dominion had adequately proved that Powell made statements that could lead to a lawsuit "because a reasonable juror could conclude that they were either statements of fact or statements of opinion that implied or relied upon facts that are provably false.” Dominion has sought $1.3 billion in damages from the trio.

The judge used similar language against Lindell, the founder and CEO of MyPillow, saying Dominion proved Lindell had "made his claims knowing that they were false or with reckless disregard for the truth.”

Powell and Giuliani, both lawyers who filed election challenges on Trump’s behalf, and Lindell, who was one of Trump's most ardent public supporters, made various unproven claims about the voting machine company. Many of those statements came at news conferences, during election rallies and on social media and television.

There was no widespread fraud in the election, which a range of election officials across the country, including Trump’s attorney general, William Barr, have confirmed. Republican governors in Arizona and Georgia, key battleground states crucial to Biden’s victory, also vouched for the integrity of the elections in their states.

Nearly all the legal challenges from Trump and his allies were dismissed by judges, including two tossed by the Supreme Court, which includes three Trump-nominated justices.

The judge’s ruling came just a day after the vote-counting machine maker filed defamation lawsuits against right-wing broadcasters Newsmax Media Inc. and One America News Network, as well as Patrick Byrne, a prominent Trump ally and former chief executive of

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

Sunday, August 8, 2021

Ninth Circuit Rules That Sharing Your Password in a Federal Crime

 I bet you didn't know that in  the Ninth Circuit ruling you cannot share your passwords is valid in:

It also has appellate jurisdiction over the following territorial courts:

Sharing Your Password Is a Federal Crime, 9th Circuit Rules

By Jonathan R. Tung, Esq. on July 12, 2016 6:59 AM

The final decision from the Ninth Circuit case of United States v Nosal II has finally been filed and should make casual users of this thing we call the internet a little nervous. Nosal II involved accusations that a former employee who'd used other current employees' password information to access company information had violated the Computer Fraud and Abuse Act. Sounds harmless enough and even intuitive. That is, until you listen to the judge's language. This has all the eerie import of Matish III.

This ruling has petition written all over it. In the short term, we doubt this means that anyone within the Ninth Circuit will have to worry about sharing their email passwords with their friends. But the faintest hint of precedent is enough to send a chill down our spines.

Clear Shenanigans Leads to Slippery Slope?

The facts of Nosal I/II have been outlined simply by Orin Kerr of Volokh Conspiracy, so we won't really go into great detail here. The relevant gist is that a former employee (Nosal) got tired of his job and wanted to create a competing company. But he wanted to bring some proprietary information with him, so he conspired with other current employees within the company to access information. Two techniques were employed: getting the current employees to do the dirty work for him, and then later asking them for their login and access information so he and other conspirators could access the company database themselves.

The issue of the case hung on the following issue: Who "authorizes" access as envisioned under the Computer Fraud and Abuse Act? Was it Nosal's employer who owned the database? Or was it the employee who foolishly said, "Sure, go ahead"? The dissent thought that the employees' consent cleaned Nosal's actions of fraud under the CFAA. Too bad the majority thought otherwise.

Brekka Revisited

The Ninth Circuit majority relied on a previous case it heard called Brekka in which it ruled that an account cannot be lawfully accessed again after the license to use it is revoked. It's Brekka all over again, the circuit said.

Obviously, the circuit anticipated what a lot of practitioners were thinking, so it got right to the point. Allowing after-access by a former employee would create havoc:

[A]n employee could willy nilly give out passwords to anyone outside the company -- former employees whose access had been revoked, competitors, industrious hackers, or bank robbers who find it less risky and more convenient to access accounts via the Internet rather than through armed robbery.

Intuitively, consumers understand this. This would be tantamount to having a key to an old building one has moved out of. There is a reason former tenants are required to return keys as a condition of their return-deposit.

But the opinion's less than clincher language still leaves open the disconcerting possibility that your use of your cousin's Netflix login information could be criminal under the CFAA. The Ninth Circuit addressed this, but didn't appear too worried. In its view, letting your roommate use your Prime account bore "little resemblance" to the admittedly more dastardly ex-employee scenario.

Related Resources:

Tuesday, August 3, 2021

Attorney Joseph George Costello Resigns After Practicing Law For 60 Years


Brooklyn Lawyer Who Practiced Nearly 62 Years Disbarred After Appeals Panel Accepts Resignation; Lawyer Said He Couldn't Defend Against Escrow Account Allegations, Jason Grant, August 2, 2021

An Appellate Division, Second Department panel wrote that the professional misconduct investigation arose from a client’s complaint, and that allegations included veteran lawyer Joseph George Costello’s alleged failure to safeguard funds as a fiduciary held on behalf of an estate, including an approximate shortfall of at least $170,000 that happened in the account.

A state appeals court has accepted the resignation of a Brooklyn-based attorney who practiced law for more than 60 years, after he admitted that he can’t defend against allegations he failed to safeguard funds held in an escrow account on behalf of an estate and that he disbursed at least one check from the account after he’d already been suspended for a year because of professional misconduct in the matter.

The lawyer, Joseph George Costello, was admitted to the New York state bar in 1959 and, according to an earlier 2019 disciplinary decision, practiced law in more recent years with his son at the Brooklyn firm of Costello & Costello. Legal website listings say his practice included business law, real estate law, landlord and tenant law and surrogate’s court practice, among other specialties. One site,, listed him as also having worked in private practice serving Howell, New Jersey.

In an opinion from a per curiam panel of the Appellate Division, Second Department that accepted the resignation of the elder Costello, and disbarred him immediately, the justices wrote that Costello had acknowledged he was under investigation by the state attorney grievance committee for the Second, Eleventh, and Thirteenth Judicial Districts, covering Brooklyn, Queens and Staten Island.

The panel further explained that the investigation arose from a client’s complaint, and that there were allegations of attorney neglect and Costello’s failure to safeguard funds he’d held on behalf of an estate, including an approximate shortfall of at least $170,000 that happened in the account.

Moreover, the allegations said Costello disbursed at least one check from the account in his capacity as an attorney after he’d been suspended from practicing law for one year by the Second Department in 2019 for what appear to have been related allegations, according to the justices disbarment opinion issued July 28 and the 2019 suspension opinion.

In a June 2019 opinion from a Second Department, the Costello & Costello firm was retained in 2011 to represent a party in a real estate closing. After the closing, wrote the panel, $680,388 was deposited into the escrow account on behalf of that client. The Costello firm  later issued the client three escrow checks for $250,000, $200,000 and $1,638.70.  Two of the checks cleared when presented to a bank by the client, but when the $200,000 check was presented months later in June 2012 for payment, the escrow account balance was $106,878.23.

The elder Costello explained in testimony, wrote the 2019 Second Department panel, that after the firm issued the $200,000 check, the firm was under the mistaken belief the check had cleared, and that he had used funds in the account to pay the firm’s bills. Because of overdraft protection, the $200,000 check did clear but the 2019 Second Department panel of justices, in deciding to suspend Costello’s law license for one year, wrote in part that “although the respondent [elder Costello] restored those funds to the escrow account once his son alerted the respondent to the shortage, notably, he has not explained, nor made any serious effort to determine, the cause for the substantial shortage.”

In the disbarment opinion issued last week, that Second Department panel wrote that Costello has provided proof that he paid back a $170,000 shortfall in the estate account. Still, the panel also said Costello acknowledges that his resignation is “submitted subject to any future application by the Grievance Committee for an order directing he make restitution or reimburse the Lawyers’ Fund for Client Protection.”

Mark Longo, a partner at Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara, Wolf & Carone in Brooklyn was listed in the July 28 opinion as representing Costello in the professional discipline matter. Longo didn’t return a call Monday seeking comment.

An effort to reach the elder Costello for comment was not successful.