Author: TSA Press

As of last Thursday, Tesla was the second most shorted stock on Wall Street, right after Apple Inc. Short sellers had $10.5 billion bet against Tesla.

These vampires, er, I mean noble champions of marketplace accountability who are in no way systematically draining the platelets out of what remains of capitalism, took a collective bath to the tune of $1.4 billion last Thursday morning, when Tesla’s stock price skyrocketed by 17 percent. Tesla shares continued their upward trajectory as they crept steadily higher on Friday, to end the week at just above $328 per share.

Tesla stock closed out 2018 at a price of $332.80 per share, so as of the end of last week, the short sellers who hung on for the ride these last 10 months are still just barely in the black year-to-date. But given the reasons for Tesla’s precipitous October climb, it’s not looking good for those betting against the electric automaker.

After hours last Wednesday, Tesla reported a profit of $1.86 per share, crushing the anticipated loss of 42 cents per share predicted by analysts. Tesla also posted a cash balance increase to $5.3 billion, and CEO Elon Musk promised continued advancements in self-driving technology and the 2020 rollout of a more affordable Tesla SUV model. With production of Model 3 sedans set to begin in the near future at Tesla’s new Shanghai factory, and another Gigafactory in the works in Europe, Tesla certainly has costs to control, but also a growing platform for continued expansion.

Normally, there is no shortage of Tesla and Elon Musk critics, including here at ATL and its sister sites. But they were comparatively quiet late last week.

It makes sense that short sellers want to trash Tesla at every chance they get. They make money when Tesla does poorly, just as Tesla shareholders (like me) make money when Tesla does well. Huge, profitable industries which would be threatened by the success of an electric vehicle maker and clean energy proponent also seem to be unoptimistic about Tesla — analysts at the three biggest banks funding development of fossil fuel resources are, not surprisingly perhaps, pretty negative about Tesla’s prospects. People’s loudly expressed viewpoints tend to gravitate in the direction of their financial interests.

And maybe none of this would be a problem if we just all let go of the illusion that we have to base our decisions on what any of these people say. If you think I’m full of shit and that Tesla sucks, well, then don’t buy any Tesla stock. Likewise, if you think that continuing to burn ancient plankton to go places is the wave of the future, just keep at it. I myself will be looking into a Tesla as soon as I’m done driving my old Chevy into the ground (unless GM or one of the other automakers can convince me otherwise, by coming up with something pretty compelling in their own EV department, which is kind of what capitalism is supposed to be all about in the first place).

Theoretically, the existence of short selling has its benefits. Providing more independent research than the analysts at those big investment banks we were talking about (or at least research biased in the opposite direction), encouraging (inciting?) more vigorous debates in the financial markets which promote transparency, and being more diligent about uncovering corporate fraud have all been touted as services short sellers afford the markets (albeit only as side effects of the pursuit of their own self-interest). Benefits notwithstanding, we still don’t have to like short sellers, short selling, or pessimism.

In my view at least, unlike so many of the other ticker symbols building little mountains and valleys in our brokerage accounts, Tesla is not just a money-making machine. Tesla aims to change something fundamental about our society, for the better, and it has to get consistently profitable to do it. When the first U.S. railway was chartered to transport passengers and freight commercially in 1827, there were plenty of skeptics who said a steam engine could never work along steep, winding grades. As construction commenced, there was probably some guy from the livery stable yelling that this whole railroad thing was doomed to fail. But investors didn’t listen to the naysayers then, and they shouldn’t now. Sometimes progress is built on a little faith. And especially in light of last week’s earnings report, Elon Musk still has mine.

Jonathan Wolf is a litigation associate at a midsize, full-service Minnesota firm. He also teaches as an adjunct writing professor at Mitchell Hamline School of Law, has written for a wide variety of publications, and makes it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at jon_wolf@hotmail.com.

Last week’s Clio Cloud Conference offered another opportunity for innovators from across legal technology to come together to meet with users and compare notes.

It’s also an opportunity for the legal media to come together to discuss trends and what they’ve been seeing both at the show and throughout the year. Legal Talk Network’s On the Road podcast gathered a few of us together at the show to chat. In addition to me, the panelists were:

• Keith Lee of Lawyer Smack;
• Gregory Pang of Legal Cut Pro;
• Chelsey Lambert of Lex Tech Review; and
• Cathy Kenton of Legal Tech Media Group.

Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

When a Biglaw firm is embroiled in a scandal involving sexual assault allegations, you kinda expect there to be a he said / she said tussle in public. But I’m not sure we expected the wild back and forth that’s gone down in the DLA Piper case that has been rocking the Biglaw world this month.

For those who may not be fluent in all the details, earlier this month, DLA Piper partner Vanina Guerrero released an open letter to the firm, and filed a complaint with the Equal Employment Opportunity Commission, alleging that the co-managing partner of the Silicon Valley office, Louis Lehot, repeatedly sexually assaulted her after she’d been recruited to the firm in 2018. She asked the firm to release her from their mandatory arbitration agreement so she can pursue her claims in court. The firm has been conspicuously silent on the forced arbitration agreement — despite the attention their arbitration stance in this case has garnered, but, they did announce that Lehot had been let go from the firm. But the firm also put Guerrero on administrative leave, saying they’d uncovered allegations against her unrelated to Lehot during their investigation of her claims. Lehot released a statement contesting the allegations against him and saying Guerrero was “exploiting” the #MeToo movement. Then a second woman, an anonymous HR manager, came forward with her own allegations against Lehot, saying he made her “physically afraid,” and further alleging the firm let her go when she complained about Lehot. Then a third women, Leah Christensen, came forward with her own stories of Lehot’s bullying and name calling.

Now, in a newly filed 122-page response to the EEOC, DLA Piper alleges Guerrero “orchestrated” her relationship with Lehot to further her career:

Ms. Guerrero’s own emails show that she was not subject to abuse or assault by Mr. Lehot. In fact, dozens of emails and messages show that Ms. Guerrero was a willing participant in a lengthy emotional flirtation with Mr. Lehot that she orchestrated to advance her career.

As noted by Law.com, DLA Piper’s filing — penned by their attorneys at Gibson Dunn — included a stream of consciousness email Guerrero sent to herself using her DLA account. The email contains ruminations on her relationship with Lehot, containing thoughts like: “Louis: This man will help me / Control him: friendship w/o anything.” And: “Cannelize [sic] the energy – get me to where I need professionally,” and “Don’t open up to him / Leverage it for me…” The firm’s response also calls attention to what Guerrero didn’t say:

The Gibson Dunn attorneys note that the email, which is published in full, includes a number of other candid statements about her professional goals and references to her sexuality, and it does not describe Lehot as “abusive, bullying, or controlling”—in contrast to her EEOC claims.

As further evidence of what it characterizes as Guerrero’s duplicity, the Gibson Dunn team representing DLA Piper pointed to her omission of a March 2019 trip she took with Lehot to Machu Picchu from her EEOC charge and her other public statements.

The trip came after the fourth and final allegation of sexual assault, during which Guerrero claimed she made it clear to Lehot that she would never be in an “intimate relationship” with him, allegedly prompting Lehot to threaten her job, position at the firm and compensation, telling her “their working relationship would never be the same.”

The firm also counters the allegation Guerrero was retaliated against, saying Lehot and Guerrero disagreed over the optimal place to spend firm resources and the deal she was pulled off of was allegedly at the request of the client.

DLA Piper’s response also took aim at Leah Christensen, the ethics counsel who came forward in support of Guerrero’s claims. The firm says as Christensen was based in another office than Lehot, she wouldn’t know about Lehot’s alleged behavior. Additionally, given Christensen’s role at the firm, DLA Piper says her statements violated ethics rules:

“Christensen’s letter to this Commission, as well as her public statements, are in direct violation of her duty of confidentiality and her duty of loyalty, among other ethical and tortious transgressions,” the letter said.

Unsurprisingly, Guerrero’s attorney, Jeanne Christensen of Wigdor LLP, had something to say about the filing:

“DLA Piper, a global law firm, has managed to reach a new low in the how to smear women that speak out about sexual assault playbook—a low that even Harvey Weinstein, Bill O’Reilly and Matt Lauer did not reach.”

We will be following all the latest in this case as it develops.

Kathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

I don’t think the press gets Billy Barr.

First, he is a PR genius compared the rest of these dopes (thank you whatever anon source still gets treated with credibility, and also Kerri Kupec). But he also knows that PR can corner him, legally.

— emptywheel (@emptywheel) October 30, 2019

For most folks, the NYC Marathon is a grueling endeavor that takes up their entire focus during the final lead up. For Quinn Emanuel’s Luke Nikas, it’s just a weekend project he’ll have to get to after heading to trial the rest of this week.

This is an appropriate juncture for you to feel shamed over your workout regimen.

Nikas started running in high school — maintaining the right weight class made running the best workout strategy. But, as the old joke goes, “running” and “running a marathon” are about as similar as shooting a bullet and throwing it. For Nikas, getting into the hardcore running world came only a couple of years ago when he lost his uncle to pancreatic cancer. That brought him to Project Purple and back into running. After getting back into it for a good cause, Nikas realized he could really make a go at this pastime.

His Project Purple running got him into the marathon world and a whole new level of training. Crack of dawn — or earlier — loops around the park racking up the miles and running races from 10Ks to half marathons throughout the year. Unfortunately it also brought him a pain in his shin that he was a bit too stubborn to address. “The doctor told me I had a shin splint that turned into a stress fracture and then turned into a fracture,” Nikas said. Medical orders forced him off of running for two months.

Undeterred, he bought a Peloton and kept swimming — workout methods that minimized stress on his shin — and managed to make the marathon and excel. Last year, he finished in 3 hours and 12 minutes. That’s about a 7:15 mile pace and good enough to finish 2,377 in the field of 52,706.

His reliance on swimming and biking during his recovery also opened up another opportunity to make all the rest of us look bad expand his competitive athletic career. “I thought, if I could do that well in the marathon having only had swimming and biking to train…” Oh no, I know where this is going. Yes, Nikas has entered an Ironman competition next year to show off his swimming and biking too.

Why not add Ninja Warrior to it, while you’re at it?

Good luck to Nikas in this weekend’s big event. The rest of the Quinn partnership is also rooting Nikas on and hoping he can improve on his already impressive time.

Mostly because all this time is unbillable.

Earlier: Quinn Emanuel Filed A Complaint To Save An Artist’s Life… Sadly, It Came Too Late

Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

The right to use assisted reproductive technology to conceive a child is severely limited in much of the world, including most of Europe and Asia. But despite the fact that I write about such restrictions on a weekly basis, I was shocked to read Anna Louie Sussman’s recent New Yorker piece. Sussman details just how bad the situation in Poland has become.

Sussman describes the changes in the country relating to in vitro fertilization (IVF) over the last few years, including its complex political and religious underpinnings, and the stories of a number of women negatively impacted by the new laws. Prior to 2015, there were no laws in Poland regulating IVF. As a result, fertility clinics were flourishing. In addition to married couples struggling with infertility, single women were utilizing fertility services, as well as donor sperm, to become parents.

Then, on November 1, 2015, the situation changed drastically. A new law went into effect prohibiting medical professionals from forming embryos with any patient not in a heterosexual married or cohabiting relationship, or from transferring already-formed embryos to a woman without the consent of a man agreeing to assume paternity of any resulting child. Talk about paternalistic control of women! It also left potential single parents out in the cold.

Forced “Donation”

The new law did not stop at requiring consent of a man for a woman to use IVF to conceive. It went further. Existing embryos were prohibited from being destroyed. So single women who had formed embryos before the new law went into place were not permitted to use them for their own hoped-for family. Instead, they were required to donate their embryos to a heterosexual couple for that couple’s family. Any embryo that was not willingly donated to such a qualifying couple, would be force-“donated” (aka transferred to such a couple without consent) 20 years after the law went into effect!

A Grim Situation for “Non-Traditional” Families

I spoke with Warsaw-based Polish attorney Anna Mazurczak. Mazurczak specializes in anti-discrimination law, including the numerous family-building legal issues for hopeful parents. Mazurczak said that the current legal situation not only discriminates against single women, but heavily discriminates against the LGBTQ community. For single men and same-sex male couples, surrogacy is necessary to have a genetically related child. While there are no surrogacy laws on the books in Poland, surrogacy is still strongly disfavored throughout Europe, and Poland is no exception. Most individuals or couples turning to surrogacy must go to neighboring Ukraine, or places like the United States. But even without a legal prohibition, when families return to Poland with their child, the government has resisted recognizing the child’s Polish citizenship if the presenting parents are not a man and a woman together.

The legal situation for such families has been precarious. Mazurczak described how in two separate cases last year, the Polish Administrative Supreme Court (there are two separate Supreme Courts in Poland) found that it was the right of the child to have Polish citizenship, and required such recognition. Yay! However, despite these positive rulings, the Ministry of Interior has since continued to refuse to confirm citizenship for several children born via surrogacy abroad.

After the 2015 law took effect, the Commissioner for Human Rights Office in Poland (the Ombudsman) brought a case before a Constitutional Tribunal, arguing against that the constitutionally problematic effect of the law on single women — women who had been in progress with their fertility treatment and were now unable to use the embryos created in that process. While the Ombudsman argued that these women had a right to rely on the previous state of the law permitting such action, the Tribunal, in a split decision in 2018, determined to discontinue the hearings, finding that because there was no previous law on the subject, the lack of law could not have been relied on, and such a dispute was outside its role of interpreting existing law. Before discontinuing the hearings, the Tribunal frustratingly opined on the right of a child to have a mother and a father, outweighing a single woman’s right to procreate or have control of her genetically related embryos.

Mazurczak does not see the situation improving any time soon. This past year, there was a proposed law to further restrict IVF to only married couples, not just cohabiting ones. And, of course, in Poland, a married couple must be a married heterosexual couple. The country does not recognize same-sex marriage or even civil unions.

Mazurczak sees the best hope for equality to come through the courts, and hopes that through litigation certain key issues on equality and family building will reach the European Court of Human Rights. Mazurczak also believes that the current situation in Poland is especially ripe for a single woman with embryos to challenge the 2015 law before the European Court of Human Rights.

The situation in Poland reminds those of us in countries like the United States to be thankful for the freedom we enjoy and the recognition that healthy, loving families and parents come in many forms — including single parents and same-sex couples. As for Polish intended parents, at least they can maintain some hope knowing there are attorneys like Mazurczak fighting for their rights.

Ellen Trachman is the Managing Attorney of Trachman Law Center, LLC, a Denver-based law firm specializing in assisted reproductive technology law, and co-host of the podcast I Want To Put A Baby In You. You can reach her at babies@abovethelaw.com.

Imagine having your home invaded by an armed criminal, escaping with your nine-year-old child, having the police show up to apprehend the criminal, watching for 19 hours as the police systematically destroy your home, and having the state deny you just compensation for your troubles afterwards.

If doesn’t sound like something covered under the Fifth Amendment’s “Takings” clause, then the Fifth Amendment needs to be amended.

Maybe one day it will be, but for right now Colorado man Leo Lech is out of luck. The Tenth Circuit ruled that the police action which destroyed his home is not a Taking, and thus he’s not entitled to any remedy from the city or state. The Washington Post has the story:

The suspect, Robert Jonathan Seacat, had stolen a shirt and a couple of belts from a Walmart in neighboring Aurora, Colo., and then fled in a Lexus, according to a police affidavit. A police officer pursued him in a high-speed chase until Seacat parked his car near a light rail station, hopped a nearby fence leading to the interstate, and then crossed five lanes of traffic on foot. He climbed the fence on the other side — and then, shortly thereafter, came upon the Lech residence.

A 9-year-old boy, John Lech’s girlfriend’s son, was home alone at the time, waiting for his mom to return from the grocery store, Lech said. He told police he was watching YouTube videos in his room when he heard the alarm trip, according to the affidavit. He emerged to find a man walking up the stairs, holding a gun. “He said, ‘I don’t want to hurt anybody. I just want to get away,’ ” Lech said. Minutes later, the boy walked out of the house unharmed…

Thus began the 19-hour standoff.

“They proceed to destroy the house — room by room, by room, by room,” Lech said. “This is one guy with a handgun. This guy was sleeping. This guy was eating. This guy was just hanging out in this house. I mean, they proceeded to blow up the entire house.”

I’ve watched action movies, I know how this goes. The cops have the criminal surrounded but the bad guy is well defended. Mel Gibson saunters in with a rocket launcher. The property owner, Shooter McGavin, shouts “CAREFUL! My Ming Dynasty vase is worth more than your entire family!” Mel Gibson fights his way through the house, destroying everything but the vase, finally cornering and arresting chief henchman Tony Todd. Just then, trainee Michael Cera comes busting through the fourth wall in a bulldozer. The vase topples over. Later, back at the station, police chief Jeffrey Wright — seen looking over a bill — chews out Gibson and Cera for the wanton destruction that is costing the city millions. Fellow officer Kiefer Sutherland, who is actually the mole and the real criminal mastermind, is seen consoling McGavin with a giant check.

Except in real life, there is no check. Shooter McGavin never gets paid. The Takings clause doesn’t cover property destruction caused by law enforcement as they are trying to enforce the law. The Tenth Circuit explains:

[T]he Lechs urge us to disregard the distinction between the police power and the power of eminent domain in resolving this appeal. In support, they point out that “the Takings Clause ‘was designed to bar [g]overnment from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.’” Aplt. Br. 13 (quoting Armstrong v. United States, 364 U.S. 40, 49 (1960)). And they argue that upholding the district court’s summary-judgment ruling would do just that: it would force the Lechs to bear alone the cost of actions the defendants undertook in an effort to “apprehend[] a criminal suspect”—actions that were clearly “for the benefit of the public” as a whole. Id. at 13, 33.

We do not disagree that the defendants’ actions benefited the public. But as the Court explained in Mugler, when the state acts to preserve the “safety of the public,” the state “is not, and, consistent[] with the existence and safety of organized society, cannot be, burdened with the condition that the state must compensate [affected property owners] for pecuniary losses they may sustain” in the process. 123 U.S. at 669. Thus, “[a]s unfair as it may seem,” the Takings Clause simply “does not entitle all aggrieved owners to recompense.” AmeriSource Corp., 525 F.3d at 1152, 1154.

Accordingly, we reject the Lechs’ first broad challenge to the district court’s ruling and hold that when the state acts pursuant to its police power, rather than the power of eminent domain, its actions do not constitute a taking for purposes of the Takings Clause. And we further hold that this distinction remains dispositive in cases that, like this one, involve the direct physical appropriation or invasion of private property.

I do not think that just compensation for the destruction of property unduly burdens the police in their pursuit of enforcement. It’s not like the officers have to pay for the damage out of their own pockets. The taxpayers do. And you don’t have to shroud yourself too darkly behind the veil of ignorance to imagine that taxpayers should want to share the collective burden of destruction pursuant to an arrest, as opposed to localizing those cost on one unlucky individual. However, if local and state officials were kind of sick of paying the costs of police property destruction, and that filtered down to the point where police were a little more cautious before destroying an entire house to catch a shoplifter, that would also be a good thing.

The Tenth Circuit appears to be right on its interpretation of Fifth Amendment precedent, which means I’m going to need (gulp) progressives and conservatives to help change the law here. That should be possible, right? Progressives are woke to the fact that police have entirely too much power to harm innocents without accountability, conservatives allegedly care when “big government” does anything to “mah property.” Surely we can reach some kind of broad consensus that if the cops shoot up your house because it was invaded by a criminal, the state should pay you back for it.

We should fix this. I can’t imagine James Madison thought it was okay for the government to nuke your house from orbit because a petty thief commandeered your kitchen.

Police blew up an innocent man’s house in search of an armed shoplifter. Too bad, court rules. [Washington Post]

Elie Mystal is the Executive Editor of Above the Law and a contributor at The Nation. He can be reached @ElieNYC on Twitter, or at elie@abovethelaw.com. He will resist.