LEVICK Weekly - Sept 14 2012


Published on

Four Ways Plaintiffs’ Lawyers
Leverage Google to Stir
Food-Safety Fears

Michael Volkov & Julie
Grohovsky: Two Views on
Whistleblowers, Dodd-Frank,
& the False Claims Act

Game-Changer: Qatar Plays
Historic Role in Glencore’s
Bid for Xstrata

Fred Krebs on the Role of
General Counsel


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LEVICK Weekly - Sept 14 2012

  1. 1. EDITION 8Weekly September 14, 2012Four Ways Plaintiffs’ LawyersLeverage Google to StirFood-Safety FearsMichael Volkov & JulieGrohovsky: Two Views onWhistleblowers, Dodd-Frank,& the False Claims ActGame-Changer: Qatar PlaysHistoric Role in Glencore’sBid for XstrataFred Krebs on the Role ofGeneral Counsel
  2. 2. Four Ways Plaintiffs’ LawyersLeverage Google To StirFood-SafetyFears Richard S. Levick, Esq. Originally Published on Fastcompany.com Despite the fact that America’s food safety ground beef, and a host of other kitchen table infrastructure is the most efficient and ef- staples all experienced significant incidence of fective in the world, the International Food contamination in the last five years. The result- Information Council Foundation’s 2012 Food ing consumer anxiety got so bad in 2009 that and Health Survey found that only 20 per- Americans actually put their food safety fears cent of Americans are “very confident” in on par with worries about the War on Terror. food supply safety. At the same time, one That’s a compelling statistic—and it ought to in six U.S. consumers has stopped buying a make farmers and food manufacturers won- particular food or beverage brand because der if there’s something else that is contrib- of safety concerns in the last twelve months. uting to Americans’ fear of food. Even at the Given the rash of high-profile food recalls 2010 height of salmonella, listeria, and E. coli we’ve seen since 2007, the figure is under- outbreaks, the U.S. Centers for Disease Control standable, even if it isn’t backed up by hard and Prevention released data showing that facts. Spinach, tomatoes, peanuts, lettuce, only one in every 125 million meals served in the U.S. had the potential to make a consumer
  3. 3. Weeklyfatally ill. Science supports a conclusion thatthe food we eat every day is, indeed, safe. So 1. Plaintiffs control the keywords. As of this writing, a Google search for 4. Plaintiffs geo-target. As mentioned above, a Google search for “cantaloupe related to their products (“tomato,” “spinach,” ”cantaloupe,” etc.), they don’t do the same forwhy don’t Americans feel that way? lawsuit” returns one plaintiff-maintained link. terms such as “foodborne illness,” “recall,” the term “cantaloupe outbreak” lists a law firm At the same time, a Google search for “canta- “lawsuit,” or “outbreak”—and that enables theThe answer lies in the fact that statistics can’t as the top sponsored link. A search for “canta- loupe lawsuit Kentucky” (one of the hardest hit plaintiffs’ bar and other adversarial voices tocompete with emotion when it comes to as- loupe lawsuit” returns six plaintiffs’ firm sites states during the outbreak) returns two spon- dominate the conversation. At the moment ansuaging anxiety. Numbers don’t move people on the first page. Industry messaging on safety sored links. That tells us that at least one firm instance of contamination is discovered, foodthe way that human drama does—and there issues is nowhere to be found on the first page is targeting its efforts to the geographic areas companies need to engage in Search Engineare no more dramatic events in the food of either of these searches. Bottom line—on where its messages will resonate most. Optimization (SEO) and Marketing (SEM)industry than when a person dies after eating virtually every food outbreak issue, the plain- campaigns that rank their response messagessomething she believed was safe. tiff’s bar is masterfully controlling the dialogue What all of this means is that the plaintiffs’ bar at the top of the list when their risk terms are on Google. is operating in a virtual information vacuumThis facet of human nature explains a large queried. Even better, food manufacturers that 2. Plaintiffs dominate the blogo- when contamination strikes the food and bev-part of the equation; but not all of it. There is do the same in peacetime not only eliminate sphere. When users click those links erage industry. “Within the legal community,another factor at play, and it manifests itself in the need to scramble when trouble arises; they mentioned above, they are most often directed they are simply outworking and outsmartingthe efforts of those with skin in the food-fear create a compelling safety narrative that plain- to blog posts that outline how the industry the other side when it comes to online com-game. Food industry adversaries—the plain- tiffs will have to overcome. failed to keep cantaloupe consumers safe. munication,” says Bob Hibbert, a partner attiffs’ bar chief among them—understand howemotion impacts the marketplace. Even moretroubling for the food industry, they under- While the posts provide plaintiffs with an im- portant messaging venue, the blogs themselves Morgan Lewis & Bockius who has worked on number of high-profile food safety issues. “It’s 2. Address the blogosphere. Plaintiffs’ attorneys maintain blogs as a means to clearly in the best interest of the food industry, provide a steady stream of optimized contentstand how to manipulate digital and social ensure high search rank for the posts because and of the people who represent it, to mount a that keeps their messages front and center onmedia strategies to ensure their emotional ap- they are sources of the frequently-updated more effective response to this challenge.” search engines. They know that if they are ac-peals ring out in the marketplace. content that attracts the Google spiders. tive all the time, the Google spiders will elevate 3. Plaintiffs use online video. A Google Fortunately, leveling the playing field doesn’tBy way of example, when we look at the their sites when a food recall hits and it comes Video search for “cantaloupe listeria require any great strategic leap. Food manu-circumstances surrounding the recent salmo- time to troll for class action clients. By blogging lawsuit” features two plaintiff-produced videos facturers need to understand that the samenella outbreak that killed two people, sickened about all the ways they work to diminish the in the top three results. Just like the blog posts tactics driving high levels of consumer anxiety150, and originated at an Indiana cantaloupe possibility of contamination, food manufac- mentioned above, these videos don’t paint the can be employed to diminish it as well. Specifi-farm, we see just how effective their efforts turers can also create the salient, frequently- industry as a responsible steward of public cally, food companies should:are at controlling the flow of information on updated content that ranks on Google when 1. health. And as Google increasingly emphasizesfood safety issues. In other words, we see just Own their risk terms and keywords. consumers seek information on food safety.how good they’ve gotten at controlling search the spoken word over the written one, these Plaintiffs’ keyword dominance existsresults on Google, the venue more people turnto for information than any other (digital videos further optimize plaintiffs’ messaging. because food manufacturers don’t own the risk terms that their consumers use to find infor- 3. Engage via video. Food manufacturers that reach out to consumers with engag- ing video content not only provide themselvesor otherwise). mation on the latest safety crises. While they a leg up on the SEO front; they establish the likely optimize their Web properties for terms emotional connections needed to bridge the
  4. 4. safety perception gap. Articulating food safety where they are need most; it enables compa-statistics such as those cited above merely tells nies to directly reach the very consumers mostpeople their food is safe. Video shows them why likely to change their buying and eating habitsthey should consume with confidence. With as a result of a contamination incident.video content that highlights safety procedures Google is the portal by which consumers gainand the men and women charged with carrying or lose confidence in products and services.them out, food manufacturers can powerfully As such, it is too important a venue for foodarticulate a commitment to safety that sticks manufacturers to cede to their adversaries.with their audience. By going a step further At a time when more than half of Americanswith how-to videos that outline healthy food are concerned about the foodborne illness,preparation steps, they can themselves take on the industry has a compelling safety story tothe identity of true consumer advocates. share. With strategies that enhance Web opti- 3. Be where the fear is. When an outbreak does occur, the companies at mization, they can help ensure that a captive audience is there to hear it. Lthe center the problem—as well as those whose Richard S. Levick, Esq., President and CEO of LEVICK,brands may be tarnished by mere association— represents countries and companies in the highest-stakesneed to target their messages to affected popu- global communications matters—from the Wall Streetlations. Not only does geo-targeting streamline crisis and the Gulf oil spill to Guantanamo Bay and the Catholic Church.their optimization efforts by focusing resources
  5. 5. WeeklyMichael Volkov & Julie Grohovsky: Two Views on Whistleblowers, Dodd-Frank, & the False Claims ActMichael Volkov, a shareholder in LeClairRyan, discusses the tough whistleblower laws that were Julie Grohovsky, partner at Wu, Grohovsky & Whipple, discusses the importance of the Falsepassed as part of the Dodd-Frank financial reform package. Whistleblowers that meet certain cri- Claims Act for combating fraud and protecting American tax dollars. Ms. Grohovsky particularlyteria are now entitled to as much as 30 percent of all recoveries that result from their cooperation stresses the significant impact of whistleblowers and the rewards that motivate them on exposingwith the government. That’s a powerful incentiveand it dictates an urgent need for companies to fraud against the national treasury.ensure that employees report problems internally, before turning to regulators.
  6. 6. Weekly Game- Changer: Qatar Plays Historic Role in Glencore’s Bid for Xstrata Richard S. Levick, Esq. Originally Published on Forbes.com It is no doubt a matter of historical inter- Not just the wrangling over sale price, the est when two companies like Glencore and story is further vivified by the power struggle Xstrata engage in a high-profile yearlong over who will run the reconstituted entity. The back-and-forth negotiation to create the fact that Glencore was originally founded by world’s largest mining concern. If the deal Marc Rich in 1974 and that its IPO set records gets done, the marketplace and shareholder last year in London certainly adds more spice impact will be significant as it would to the stew. create a global commodities giant that All that said, the real historical significance of can compete with the likes of Rio Tinto this saga may have less to do with mining, or and Vale. The merger, worth around even with corporate takeovers in general, than $36 billion, would be the year’s biggest with a portentous next chapter in the history corporate transaction.
  7. 7. Weeklyof sovereign wealth funds, and how these look for a third party. Knight Vinke is one ofmassive investment entities must now position Xstrata’s 20 largest holders.themselves in the global community. But let’s back up for a minute. The spark thatOf course there’s been no dearth of blow-by- really set this fire was struck by Qatar Holdingblow media coverage of Glencore’s bid for LLC (QH), established in 2006 by Qatar Invest-Xstrata, the world’s fourth-largest diversified ment Authority (QIA), the sovereign wealthminer. Glencore, which already owns 34% of fund (SWF) that owns about 12 percent ofXstrata, was rebuffed in June and a revised Xstrata. After QH rejected Glencore’s initialoffer, including a reported 27% premium, was offer in June, no less a personage than formerformally made on Monday, September 10. Ivan UK Prime Minister Tony Blair, a good friendGlasenberg, Glencore’s chief executive, had of Qatari prime minister Sheikh Hamad binpreviously insisted that he would not budge Jassim, was recruited to keep both Glasenbergfrom his original terms. Glencore now similarly and Ahmad Mohamed Al-Sayed, the managingavers that it will not increase this current offer. director and chief executive of Qatar Holdings, at the bargaining table.Glencore’s options may still include a hostileposition that would only require a majority More than any other Xstrata shareholder, Qa- formation was likely inevitable once the sov- Xstrata board issues a statement expected onrather than 75% shareholder approval, al- tar Holding seems to be the linchpin. Not sur- ereign wealth funds began to invest directly September 24.though the company seems to have backed off prisingly, there was no small interest in how it in companies,” says Leonard Schneidman, The kingmaker role underscores another po-from that strategy. The revised offer calls for would respond to Glencore’s revised offer. In Managing Director of WTAS, a tax, valuation tentially decisive point: that, as an SWF, QH isXstrata Chief Executive Mick Davis to stay at fact, not just the content, but the style of that and financial advisory firm. “They can no lon- rich enough, and expansive enough, to take itthe helm for only six months, then be replaced response, reported on Tuesday, is significant. ger work solely behind the scenes or pursue or leave it. In late August, Glasenberg assumedby Glasenberg while Xstrata Chairman John First of all, it is the first statement of any sort their objectives via intermediary entities,” the same position when he said that XstrataBond would remain chairman. The market that QH has made in response to Glencore’s adds Schneidman, editor of Sovereign Wealth was “not a must-do deal.” But Glasenbergseems confident the deal will now go forward proposals. Heretofore, SWFs have typically Funds: A Legal, Tax and Economic Perspective blinked on September 10. QH is not likely to.as shares increased by 2.4% on Monday. Yet been cautious passive investors, a judicious (Practising Law Institute).the leadership issue remains a question mark. strategy in the past considering the potential For companies and their boards, QH is thus Further heightening its profile in this deal, QHAs of this writing, Davis is reportedly ready to in both the U.S. and Europe for intensified a new kind of activist investor, one that has is holding back approval, saying that it willquit and so is CFO Trevor Reid along with 20 regulatory interest in how the investment seemingly endless options and immeasurable make its decision “in due course.” The SWF isother senior executives. arms of foreign governments buy up leverage. It’s a dazzling prospect of what the thus openly playing the role of what the me- domestic properties. future may hold when we consider anotherThe institutional investors were fairly split in dia describes as “kingmaker” and it certainly essential point: that no one in the investmenttheir response to the revised deal. Standard It is therefore something of a watershed seems content to play hard-to-get. Reportedly, arena takes a longer-term view of things thanLife supports it, but Knight Vinke, an activ- moment when an SWF acts like an activist QH may not even weigh in until after theist shareholder, now wants Xstrata’s board to shareholder, which is precisely what Qatar did when it rejected Glencore’s offer. “The trans-
  8. 8. Weekly“ Power and prominence increase incrementally but inexorably and, in an uncertain political climate, it is wise to make the world as comfortable in your presence as possible.” Fred Krebs on the Role of General CounselSWFs. If Qatar’s holdings in Xstrata suffer be- At the same time, the SWFs have already beencause this deal falls through, Qatar can and will shrewd enough to characterize their invest-ride it out. ment strategies as “opportunistic,” which is precisely how the QIA describes its philosophy.Yet Qatar’s precedent-setting role in the Glen- An opportunistic strategy is an unpredictablecore bid suggests new challenges ahead for the one, happily so in the sense that there’s noSWFs as well. The 12th largest SWF in the world carefully devised plan, no multifaceted conspir-has just taken a step beyond quiet power, to the acy to influence anyone’s foreign policy or buynoisier public role of activist investor. No one up the Eiffel Tower and ship it off to Doha.in the U.S. or Europe is raising national securityconcerns as a result. It is fair to say, however, Conversely, the SWFs can reinforce that assur-that Qatar’s conspicuously aggressive role in ance by carefully communicating how and whythis deal presages additionally more aggressive they do pick their investment targets, focusing Fred Krebs, Senior Advisor at Clearspire LLC and the Association of Corporate Counsel discussesSWF positions in the future. too on the diverse benefits for everyone; when, the current “golden age” for general counsel—an era in which their influence and impact on the for instance, their money supports neededAt the very least, SWFs can revisit how they will business community has never been more significant. With this higher profile comes intensified infrastructure projects. Xenophobic tensionsrepresent themselves in the years ahead if and scrutiny, even as new resource challenges demand that general counsel identify new ways to get won’t go away in our lifetimes but it is alwayswhen such positions do indeed become increas- the most out of their outside law firm relationships. prudent to turn as many enemies as possibleingly aggressive and public. Power and promi- into stakeholders, no matter how untold thenence increase incrementally but inexorably wealth you currently enjoy. Land, in an uncertain political climate, it is wise tomake the world as comfortable in your presence Financial Communicationsas possible. To that end, these emergent powerbrokers should remind everyone that they have Richard S. Levick, Esq., President and CEO of LEVICK, represents countries and companies in the highest-stakes Litigationthe same rights as any other investor. If Carl global communications matters—from the Wall Street crisis and the Gulf oil spill to Guantanamo Bay and the Corporate & ReputationIcahn can make or break a deal, so can they. Catholic Church. Public Affairs Crisis Sign Up Today