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🍔 McDonalds gets McSued

Legit.
Happy Monday! Last week was a weird one. A lot of things went down in the legal world, so we have a pretty diverse (still fun) second issue for you. This week, we also bring you some Johnny Depp-related breaking news.
  • McDonalds gets sued.
  • Senators bully Big Tech.
  • Johnny’s judgement day.
  • Tiffany plans a wedding.

DISCRIMINATION
I’m Suin’ it
McDonalds is getting sued. Again. On Thursday, two brothers filed a class action suit against the fast food giant for racial discrimination. It’s the second discrimination case McDonalds has faced in the last 4 months.
The brothers claim McDonalds sends Black franchisees on “financial suicide missions” by offering them locations in neighborhoods with low sales and high insurance and security costs.
The duo is seeking class-action status on behalf of every Black franchisee, meaning McDonalds will face a supersized bill of $1 billion if it loses the case.
THE TAKEAWAY
McDonalds’ strategy is denial. But evidence is mounting against the fast food chain. One ex-McDonalds consultant said she was pressured to write up Black franchisees for minor infractions, while their white counterparts freely broke rules.
Like when a white franchisee left half a dead mouse in his McDonalds ice machine. McScuse me?!
In other food news: Grubhub is being sued for listing restaurants without their permission, and the European Parliament says veggie burgers can, indeed, be called burgers. Farmers are sad about it.
TECH
Senate Takes Aim at Big Tech
Tech’s all-star team - Google, Facebook and Twitter - reassembled on Wednesday to testify before the Senate on Section 230. And things got messy.
What’s Section 230? A law that gives social media platforms immunity from the content people post. An amendment would see platforms removing content that promotes violence, terrorism and harassment to avoid liability.
The hearing started going downhill when the Committee chair couldn’t pronounce the name of Google’s CEO. Which was straight away. Three hours and lots of petty bickering later, s. 230 had only been mentioned four times.
A quick roundup of the detours taken:
  • Ted Cruz yelled at everyone, calling Zuckerberg, Dorsey and Pichai a “threat to free speech.”
  • Marsha Blackburn asked why Twitter “censored Trump 65 times,” and Biden zero times. A confused Dorsey replied none of Trump’s tweets had been removed.
  • Senators asked the CEOs what party affiliations their employees have. The CEOs shrugged. They don’t ask employees that.
THE TAKEAWAY
To be honest, not much. All three tech CEOs agreed s. 230 should be reformed. But they visualized reform differently.
  • Zuckerberg wants federal regulations to set clear content moderation standards.
  • Twitter’s Dorsey wants to give power to the people, backing user-controlled content algorithms.
  • Google’s Pichai didn’t mention specific remedies.
Some senators thought repealing s. 230 was a better plan. History disagrees.
The last time s. 230 was amended, it hit small platforms who didn’t have the resources to control content and shoulder legal liabilities the hardest. Wiping away the law completely would ironically make Big Tech bigger.
The bottom line. Everyone agrees Big Tech needs more regulation. But having a hearing during election week was never going to be productive. Amending s. 230 will probably be revisited when there’s less political theatre in play.
LIBEL
Johnny Depp Loses Defamation Suit
Image: Giphy
Image: Giphy
“Close your eyes and pretend it’s all a bad dream.” Is what Captain Jack Sparrow said in Pirates of the Caribbean. After today’s judgement, Johnny Depp might want to do the same.
The backstory. In 2018, the Sun published an article referring to Depp as a “wife beater.” The actor, offended and eager to preserve his reputation, lawyered up. He denied ever hitting ex-wife Amber Heard, while she claimed he assaulted her 14 different times.
What followed was a high-profile, month-long libel trial in London that uncovered a whole lot of Hollywood secrets. Drug binges. Severed fingers. Alter egos. Elon Musk cage fights. You name it.
One hour ago, a High Court judge ruled against Depp. The judge said the phrase the Sun published i.e. “wife beater” was “substantially true,” and found “the great majority of alleged assaults have been proved to a civil standard.”
THE TAKEAWAY
Victory for the Sun is also a win for:
  • The media industry at large, who may ramp up their reporting on public personalities.
  • Claimants in domestic abuse cases. Throughout the trial, Depp’s team tried to discredit Heard as a “gold digger” and “adulterer.” Lawyers were worried a win for Johnny would reinforce these stereotypes and discourage victims from publicly pulling back the curtain on their abuse.
  • Amber Heard. The London trial played out like a telenovela. And the sequel is already in production. Depp’s $50 million defamation suit against Heard is taking place in Virginia next May. Heard’s legal team is likely to flaunt her London win in Virginia courts, and have already said they’re presenting “even more voluminous evidence in the US.”
Things aren’t as good for Johnny:
  • His reputation is as good as shattered.
  • Losing means he has to pay for the Sun’s legal fees, as well as his own.
  • During the trial, he admitted to taking a boat load of drugs, meaning he could struggle to obtain visas for countries with anti-drug laws.
  • He might try settle his case with Heard before they face-off in Virginia.
M&A
Wedding Bells for LVMH and Tiffany
The Ross and Rachel of the corporate world have reconciled.
Back up. Last November, LVMH proposed to Tiffany with a pretty expensive ring. The conglomerate - owned by France’s richest man - announced it was acquiring the jeweller for $16 billion.
Then, coronavirus happened and LVMH got a bitter dose of buyer’s remorse. It tried to wriggle out of the marriage and blamed it on two things:
  1. A weird letter from the French government; and
  2. Tiffany’s sales fell 29% during the pandemic, meaning it was no longer the PYT that LVMH had fallen in love with.
Tiffany didn’t take the heartbreak well. It filed a suit in Delaware, arguing a letter and regret weren’t valid reasons to divorce. LVMH sued back, saying the way Tiffany’s management handled the pandemic (badly) triggered the ‘material adverse effect’ clause in their agreement.
Translation: the pandemic was an unforeseen change of circumstances that reduced Tiffany’s value, so no deal.
Now the former power couple have reconciled, lowering the price of the acquisition to $15.8 billion. The merger will take place early next year.
THE TAKEAWAY
LVMH realized divorce was unlikely. Delaware courts have only called off a deal because of an MAE clause once. So LVMH took out the Sun Tzu playbook, played strategy, and decided to put a ring on Tiffany after all - just one with a smaller diamond.
Pretty thrifty for a luxury conglomerate.
Zoom out: lawyers were waiting to see how COVID affects M&A deals. Turns out, not much.
LEGIT ONE LINERS
  • Tomorrow is election day in the US, and lawyers are prepping for a repeat of Bush v Gore.
  • New Zealand votes to legalize euthanasia.
  • COVID restrictions could violate the human rights of UK children in custody.
  • Tensions boil over as Pakistan and India battle over rice in EU courts.
  • Bag of chips: AMD’s purchase of Xilinx makes 2020 a year of chip deals.
  • Banned conspiracy channels are suing YouTube.
  • Lawtech startups founded by coders grow quicker than those set up by lawyers, says Oxford study.
  • A woman is accused of impersonating a prosecution officer to drop charges… against herself.
LEGAL TECH SPOTLIGHT
This startup provides a secure platform for parents to communicate after divorce. It keeps a record of all communications for legal purposes - so no more deleted messages or threatening texts.
Before you go - click here for a really cool guide on legaltech (that I maybe wrote).
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