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Twitter investors want Vanity Fair writer to testify at securities class action trial – Reuters

The logo for Twitter is seen on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., August 3, 2021. REUTERS/Andrew Kelly
(Reuters) – Shareholder lawyers headed to a Sept. 20 trial in a securities class action against Twitter Inc claim that testimony from Vanity Fair writer Nick Bilton will prove their allegation that the social media company's top brass deliberately misled investors about user engagement in 2015.
But can they get Bilton into the witness chair?
That’s one of the most intriguing pre-trial questions for U.S. District Judge Jon Tigar in Oakland, California, as the long-running case nears trial. Securities class action trials are so rare that it’s news whenever they happen. But a last-minute 1st Amendment dispute over Bilton’s testimony certainly adds to the suspense in this case.
It also, as I’ll explain, raises a worrisome question for reporters about whether they give up their constitutional rights by talking to prospective sources.
The class action alleges that the company knowingly deceived investors in 2015 about its users’ daily and monthly engagement with the site. Twitter has consistently denied the allegations, though the company also fought mightily to keep the years-old data secret. Tigar denied Twitter’s motion for summary judgment in 2020, holding that reasonable jurors could conclude Twitter deceived investors by concealing declines in key user metrics.
Plaintiffs lawyers believe Bilton’s testimony can prove Twitter’s fraudulent intent. Bilton, the author of a 2014 book about Twitter’s origins, wrote a 2016 Vanity Fair article about Jack Dorsey’s return to the company as CEO. The article, entitled “Twitter Is Betting Everything on Jack Dorsey. Will It Work?” vividly described a “tempestuous” 2015 meeting that took place soon after Dorsey was re-appointed CEO. According to Bilton, Twitter’s communications director, Gabriel Stricker, told other Twitter top managers that the company had “zero credibility with Wall Street right now.” Bilton quoted Stricker as saying, “We have to come clean” about the company’s stalled growth.
Twitter’s lawyers at Simpson Thacher & Bartlett and Cooley have already succeeded in keeping the article itself out of evidence. In March, Tigar ruled that the article was inadmissible hearsay, rejecting plaintiffs’ arguments that the quotes Bilton attributed to Stricker were corporate admissions. “It is clear from the article’s context,” the judge wrote, “that these statements, and others like them, were not precise quotes made directly to Bilton and that he is reporting them second-hand.”
But in the same ruling last March, Tigar denied Twitter’s motion to bar Bilton’s testimony. Bilton had not been deposed, the judge said, so neither side knew for sure what the Vanity Fair reporter might say. “The court cannot exclude testimony unless the court knows what it will contain,” the judge said.
Robbins Geller Rudman & Dowd and Motley Rice subpoenaed Bilton in late July, calling for him to appear in Tigar’s courtroom on Sept. 22. Instead, Bilton brought in lawyers from Davis Wright Tremaine, who moved on Sept. 1 to squelch the subpoena.
Bilton's motion argued that his reporting is protected by the 1st Amendment. Newsgathering, the motion said, is shielded by a qualified 1st Amendment privilege under precedent from the U.S. Supreme Court in Branzburg v. Hayes in 1972 and from the 9th U.S. Circuit Court of Appeals' Shoen v. Shoen in 1993. There are narrow exceptions, the brief acknowledged, when there’s no alternative source for dispositive information. But those exceptions don’t apply in this case, according to Bilton’s lawyers, because (among other things) shareholders were able to depose 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 lawyers told Bilton's counsel that they didn’t intend to ask Bilton to reveal his sources, but his lawyers said he was nevertheless worried that future sources would refuse to talk if they “viewed him as a potential investigative tool for private litigants.”
In a response filed last Friday, Robbins Geller and Motley Rice said Bilton waived the right to rely on a 1st Amendment privilege because he met with plaintiffs' lawyer Daniel Drosman of Robbins Geller back in 2016 to talk about his article. Bilton did not reveal his sources at that two-hour meeting, the shareholder firms said, but he did vouch for the accuracy of the statements attributed to Stricker. He also, according to the brief, told Drosman and a Robbins Geller forensic accountant that other confidential sources who were at the 2015 meeting had corroborated his account of Stricker’s protestations.
The shareholder firms promised the judge they will not ask Bilton to reveal his sources if he testifies at the trial but argued that they should be allowed to ask him to confirm in sworn testimony what he has already told them in a meeting. “Fairness dictates that, once Mr. Bilton has voluntarily disclosed the very type of information he now seeks to ‘shield’ via the journalist’s qualified privilege, he may not simultaneously use the privilege as a ‘sword’ to quash his trial subpoena,” the brief said.
Bilton conceded in a declaration that he met with a plaintiffs' lawyer after his 2016 Vanity Fair article came out. (The story ran several months before shareholders filed their initial complaint.) He said he agreed to the meeting, which was pitched as an opportunity to “exchange information,” because he regarded shareholder lawyers as potential sources for future stories. Bilton said he revealed no confidences at the meeting and never agreed to appear as witness.
I’m not at all surprised that Bilton met with Robbins Geller. That’s what reporters do: Talk to people who may know something. I’m also not surprised that Bilton confirmed the accuracy of his reporting in the meeting with Drosman (who is not named in the Bilton declaration). Why wouldn’t he stand by a published story? (Bilton's lawyers did not immediately respond to my email.)
Robbins Geller declined to provide a statement about the Bilton subpoena dispute, which is scheduled for a Sept. 17 hearing before Tigar. If the judge refuses to quash the subpoena, reporters will have to think hard about talking to plaintiffs lawyers if that means risking their 1st Amendment protections.
Opinions expressed here are those of the author. Reuters News, under the Trust Principles, is committed to integrity, independence and freedom from bias.
Read more:
Twitter cannot invoke its lawyers at securities fraud trial
Twitter wanted to redact key data in a summary judgment opinion. The judge said no
Our Standards: The Thomson Reuters Trust Principles.
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
Alison Frankel has covered high-stakes commercial litigation as a columnist for Reuters since 2011. A Dartmouth college graduate, she has worked as a journalist in New York covering the legal industry and the law for more than three decades. Before joining Reuters, she was a writer and editor at The American Lawyer. Frankel is the author of Double Eagle: The Epic Story of the World’s Most Valuable Coin. Reach her at
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