Twitter investors want Vanity Fair writer to testify in securities class action lawsuit
Summary judgment Opinion
(Reuters) – Shareholder lawyers attended a September 20 lawsuit in securities class action lawsuit against Twitter Inc. say testimony from Vanity Fair writer Nick Bilton will prove their claim that senior executives at the social media company deliberately misled investors about user engagement in 2015.
But can they get Bilton to the witness chair?
It’s one of the most intriguing preliminary questions for U.S. District Judge Jon Tigar in Oakland, Calif., As the long-standing case nears trial. Securities class action lawsuits are so rare that they make the news every time they happen. But a last minute 1st Amendment dispute over Bilton’s testimony certainly adds to the suspense in this case.
As I will explain, this also raises a worrying question for journalists as to whether they are giving up their constitutional rights when speaking to potential sources.
The class action lawsuit alleges the company knowingly deceived investors in 2015 about its users’ daily and monthly engagement with the site. Twitter has consistently denied the allegations, although the company has also fought hard to keep years-old data secret. Tigar dismissed Twitter’s summary judgment motion in 2020, arguing that reasonable jurors could conclude that Twitter had deceived investors by covering up declines in key user metrics.
Lawyers for the plaintiffs believe Bilton’s testimony may prove Twitter’s fraudulent intent. Bilton, the author of a 2014 book on the origins of Twitter, wrote a 2016 Vanity Fair article about Jack Dorsey’s return to the company as CEO. The article, titled “Twitter is betting it all on Jack Dorsey.” Will that work? ”Vividly described a“ stormy ”2015 meeting that took place shortly after Dorsey was re-appointed as CEO. According to Bilton, Twitter’s chief communications officer, Gabriel Stricker , told other senior Twitter executives that the company had “zero credibility with Wall Street right now.” Bilton quoted Stricker as “We have to be honest” about the stalled growth of the company.
Twitter attorneys at Simpson Thacher & Bartlett and Cooley have already managed to keep the article itself out of evidence. In March, Tigar ruled the article as inadmissible hearsay, dismissing the plaintiffs’ arguments that the quotes Bilton attributed to Stricker were corporate confessions. “It is clear from the context of the article,” the judge wrote, “that these statements, and others like them, were not precise quotes made directly to Bilton and that he reports them secondhand. “
But in the same decision last March, Tigar rejected Twitter’s request to ban Bilton’s testimony. Bilton had not been deposed, the judge said, so neither party was sure what the Vanity Fair reporter might say. “The court cannot exclude testimony unless it knows what will be in it,” the judge said.
Robbins Geller Rudman & Dowd and Motley Rice subpoenaed Bilton in late July, calling him to appear in the Tigar courtroom on September 22.
Bilton’s motion argued that his reports are protected by the 1st Amendment. The collection of information, according to the motion, is protected by a qualified 1st Amendment privilege under the United States Supreme Court precedent in Branzburg v. Hayes in 1972 and the 9th United States Court of Appeals Shoen v. Shoen in 1993. There are small exceptions, the memoir acknowledged, when there is no alternative source of positive information. But those exceptions don’t apply in this case, according to Bilton’s attorneys, because (among other things) shareholders were able to remove Twitter executives who attended the 2015 meeting.
Forcing Bilton to testify, meanwhile, would compromise his ability to report on the tech industry, the brief said. Shareholder attorneys told Bilton’s attorney they had no plans to ask Bilton to reveal his sources, but his attorneys said he was concerned nonetheless that future sources would refuse to speak to him. they “saw it as a potential investigative tool for private litigants.”
In a response filed last Friday, Robbins Geller and Motley Rice said Bilton waived his right to avail himself of the 1st Amendment privilege because he met with Robbins Geller’s plaintiffs attorney Daniel Drosman in 2016 to discuss his article. Bilton did not reveal his sources during the two-hour meeting, the shareholder companies said, but he vouched for the accuracy of the statements attributed to Stricker. He also, according to the brief, told Drosman and an accountant at Robbins Geller that other confidential sources present at the 2015 meeting corroborated his account of Stricker’s protests.
The corporate shareholders promised the judge they would not ask Bilton to reveal his sources if he testified at trial, but argued that they should be allowed to ask him to confirm under oath what he already has to them. said in a meeting. “Fairness dictates that once Mr. Bilton has voluntarily disclosed the very kind of information he now seeks to ‘protect’ through qualified journalist privilege, he cannot simultaneously use the privilege as a ‘sword.’ to quash his subpoena, “he added.
Bilton conceded in a statement that he met the plaintiffs’ attorney after his 2016 article on Vanity Fair appeared. (The story was published several months before shareholders filed their initial complaint.) He said he agreed to the meeting, which was touted as an opportunity to “exchange information” because he viewed the lawyers shareholders as potential sources for future stories. Bilton said he didn’t reveal any secrets at the meeting and never agreed to appear as a witness.
I’m not at all surprised that Bilton met Robbins Geller. That’s what journalists do: talk to people who might know something. I’m also not surprised that Bilton confirmed the accuracy of his report during the meeting with Drosman (who is not named in Bilton’s statement). Why wouldn’t he stick to a published story? (Bilton’s lawyers did not immediately respond to my email.)
Robbins Geller declined to make a statement about the dispute over Bilton’s subpoena, which is scheduled for a September 17 hearing before Tigar. If the judge refuses to quash the subpoena, reporters will need to seriously consider talking to the plaintiffs’ lawyers if it means risking their 1st Amendment protections.
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