May 23, 2009

TechCrunch offers to pay a source’s legal expenses

A recent TechCrunch post recapitulates its dispute with CBS and Last.fm, reiterates its confidence in its accusations, and closes with

And to the CBS employee who was fired and threatened based on this story – we believe certain U.S. Whistle Blower laws may protect you from retaliation from CBS in this matter. We’d like to provide you with legal counsel at our cost.

That’s a remarkable offer to make, one that is very rare for traditional media to match. As such, it’s a strong (albeit very partial) answer to the ongoing handwringing about the future of investigative journalism.

By the way, I once got an analogous offer — but it was from a company, not a media outlet. In 1994, I broke the news that Sybase’s development efforts were a train wreck.  Gartner Group accelerated its research on the same issue, and went out with the same story*. Sybase faxed libel threats to Gartner and me. I quickly reached out to Sybase competitors for help.  Oracle’s and CA’s general counsels walked me through the legal issues (without overstepping the bounds that would have led them to be “acting as my lawyer”). Larry Ellison promised by email to pay my legal expenses if any. Charles Wang of CA was too cheap to match the offer — but he sat in personally on my call with his lawyer.

*Tony Percy admitted the causality to me a few years later, after he’d left Gartner.

So fortified — and with PR maven Simone Otus doing her best to talk sense into her Sybase clients — I faxed back a pair of two-page letters.  One explained the basis for my written opinions, demonstrating there was NFW I was guilty of libel. The other outlined a proposal for reducing hostilities.  The whole thing simmmered down. Sybase’s sales and earning fell apart a couple quarters later, exactly when I predicted. Management was replaced by people much more friendly to me (Mitchell Kertzman, Dennis McEvoy, et al.). Some outstanding folks got involved in analyst relations (at various times Rob Cooley, Dave Taber, and Merv Adrian, which is pretty much a Hall of Fame class right there).  And all was cool.  But I digress …

Anyhow, my main point is that the new information ecosystem is constantly evolving new ways to fill the roles that traditional media are, at least in part, vacating. TechCrunch’s bold act of investigatory journalistic commitment is just one example.

And while it’s now almost 15 years old, my Sybase story shows another way this can work. I’m a self-employed analyst and writer now, just as I was then. But even so, I can afford to research and write contentious things, without concern for legal intimidation.

Comments

6 Responses to “TechCrunch offers to pay a source’s legal expenses”

  1. Daniel Weinreb on May 24th, 2009 7:53 am

    I imagine that some, perhaps most, threats of libel action are merely for intimidation. If you show that you intend to fight back competently, I’d imagine that such threats would be dropped. Still, one must take it seriously. The idea of going to competitors for help is great! I’ll keep that in mind, just in case this situation arises for someone I know!

  2. Elliott C. Back on May 24th, 2009 9:50 am

    Last.FM, the RIAA, and TechCrunch…

    TechCrunch refuses to let their claim that Last.FM gave CBS user data which was passed onto the RIAA lie. In a post called Deny This, Last FM, they claim that:
    CBS requested user data from Last.fm, including user name and IP address. CBS wanted the da…

  3. Curt Monash on May 24th, 2009 4:51 pm

    Dan,

    The basic threat of a libel suit against an individual is supposed to be “Even if you successfully defend yourself, the legal bills will be ruinous.” (For a bigger outfit, that’s nonsense, because they have more activities to leverage the PR benefit over, and they can afford the cash anyway. Libel’s only a problem for them if they actually lose.)

    Having a third party defray the costs obviously helps avert that.

    I must confess, however, that I’m in an unusually good position. First, I was trained as a stock analyst, where the standards of accuracy are even higher than libel prevention. (Not only mustn’t you say anything negative about a stock or company without solid grounding, you can’t say anything too positive without solid grounding either.) Second, I write about subjects and have relationships that make the “Reach out to a competitor for support” tactic a very easy one to implement.

  4. James Blunt on December 20th, 2009 12:29 pm

    Companies like Google, Yahoo, Bing and others have long worried about the liability implications of comment sections on “live” blogs whether moderated or unmoderated. Because of this we will continue to see cases focused on this issue.

  5. How to preserve investigative reporting in the New Media Era | Text Technologies on September 26th, 2010 8:20 am

    […] TechCrunch is a top news outlet in his area, so the problem was automatically solved for […]

  6. Pitfalls for Pollyannas | Strategic Messaging on July 2nd, 2014 2:30 pm

    […] beta cycle.* I scoffed; the company took umbrage; my relationship with them went from bad to worse. And the tool? That failed so completely I no longer remember its […]

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