Jeff Bezos, the founder of Amazon and currently the world’s richest man, has been sued for defamation by Michael Sanchez, the brother of Bezos’s girlfriend/fiancé. In his complaint, filed in a California state court, Sanchez alleges that Bezos has falsely spread rumors that Sanchez obtained and provided explicit text messages from and nude photos of Bezos to The National Enquirer. Sanchez claims that the allegedly defamatory comments have caused him to lose clients and be shunned by family and friends. In addition to Bezos, the suit also names Gavin de Becker, a security consultant hired by Bezos, and ten other “john does” as defendants.

The complaint, which reads like a lurid tell-all, is replete with salacious details concerning the Amazon founder. The complaint alleges numerous previously unknown details including when Bezos’s affair with Sanchez’s sister Lauren began, that Bezos and Lauren allegedly consulted a psychic concerning the affair and that Bezos and Lauren are currently engaged. And although the lawsuit requests actual and punitive damages, it does not specify how much money is being sought.

The lawsuit alleges that Bezos began his extramarital affair with Lauren in 2017 when her production company was hired to do work for Bezos’s space exploration company. Bezos and Lauren decided to keep the relationship secret based on advice from a psychic in New Mexico, according to the complaint. At the time, Bezos was still married to his now ex-wife MacKenzie Bezos. Sanchez, who claims that he has acted as Lauren’s agent since at least 2010, claims that he agreed to keep the affair secret to protect his sister’s personal and professional reputation. Instead, the complaint alleges that Sanchez “was instrumental in covering up first, the existence, and second, the timing of the affair.” Continue reading ›

When a corporation hires an independent auditor to inspect its financials does that auditor owe fiduciary duties to its client? If no fiduciary duties exist as a matter of law, do they arise by virtue of a “special relationship” between the parties? In a matter of first impression, an Illinois appellate court wrestled with these questions and answered both in the negative.

Asian Human Services, Inc. (“AHS”) is a non-profit organization dedicated to helping lower income immigrants obtain health, dental, and employment assistance. After AHS was sued by another non-profit organization, AHS brought a third-party claim for breach of fiduciary duty against its long-time independent auditor, James Wong.

AHS alleged that Wong owed fiduciary duties to the non-profit by virtue of the special circumstances of the parties’ relationship. The complaint alleged that Wong had served as the independent auditor of AHS for more than a decade during which time he became an important advisor to the organization. Additionally, the complaint alleged that AHS relied heavily on Wong and that he even served an integral role in AHS’s hiring process for four separate Chief Financial Officers.

Wong filed a section 2-619 motion to dismiss AHS’s claim arguing that: (1) independent auditors do not stand in a fiduciary relationship with their clients, and (2) there were no special circumstances that created a fiduciary relationship. After briefing and oral argument on the motion, the trial court granted appellee’s motion to dismiss, with prejudice, and included Supreme Court Rule 304(a) language.

AHS appealed and argued that the trial court erred in relying on a federal case, Resolution Trust Corp. v. KPMG Peat Marwick, 844 F. Supp. 431 (N.D. Ill. 1994), which held, as a matter of law, that generally, an independent auditor does not owe a fiduciary duty to its client. Instead, the non-profit argued that the trial court should have relied on case law from various other state courts which have found that independent auditors owe fiduciary duties to their clients.

The appellate court acknowledged that no Illinois case law addressed the issue of whether independent auditors owe fiduciary duties to their clients. But ultimately the appellate court found that AHS waived the argument. In the trial court, AHS expressly stated that it was “not arguing that Mr. Wong became a fiduciary to AHS because he acted as an auditor.” AHS’s attorney in the trial court told the trial judge at oral arguments on the motion to dismiss: “One thing I want to make clear is that we’re not arguing that Mr. Wong became a fiduciary to AHS because he acted as an auditor. Now, clearly that would be the antecedent relationship and it makes his actions that much more strange, but that’s not the basis.” Continue reading ›

Linda Fairstein was once lauded as a champion of women and victims of sexual assault when she was prosecuting the case against the Central Park Five in 1989 and after she succeeded in getting them convicted. Fairstein was in charge of the sex crimes division of the Manhattan district attorney’s office at the time the high-profile case was being investigated and prosecuted, but since all the convictions of the Central Park Five were overturned, the narrative on Fairstein’s career has been similarly upended.

In 2002, Matias Reyes, a man who had already been convicted of murder and a series of rapes, confessed to raping a white woman as she was out jogging in Central Park 13 years earlier. The problem was that Reyes was not one of the five black and Latino men who had been accused and convicted of the crime, and his confession led to the public questioning of the role racism played in how the New York City Police Department and Manhattan district attorney’s office handled the case. Continue reading ›

Facebook has agreed to pay $550 million to settle a class-action lawsuit over its use of facial recognition technology in Illinois. According to the complaint, Facebook’s photo-labeling service called Tag Suggestions, violated the Illinois Biometric Information Privacy Act by harvesting biometric from the photos of millions of Illinois users without their permission and without telling them how long Facebook would store the data. The case proceeded to settlement after a federal appellate court rejected Facebook’s attempt to have the case dismissed and ruled that the case could go to trial. We previously wrote about that decision here.

Under the terms of the settlement, Facebook will pay $550 million to eligible Illinois users and cover the plaintiffs’ legal fees. The firms representing the plaintiffs called it the largest cash settlement ever to resolve a privacy related lawsuit. The settlement dwarfs the $380.5 million that Equifax recently agreed to pay to settle a class-action suit over its 2017 data breach.

Facebook disclosed the settlement as part of its quarterly financial results, in which it took a charge on the case. The sum, while appearing large at first blush, barely amounts to more than a rounding error for Facebook, which reported $21 billion in revenue in the fourth quarter of 2019 alone. This represents a 25% increase in revenue over the same quarter in 2018. Continue reading ›

When a high-level employee left Archer Daniels Midland (ADM) to start his own consultancy company, ADM filed suit against the former employee alleging that his new business violated the non-disclosure agreement he signed. A trial court sided with ADM and enjoined the former employee from engaging in consultancy activities. In a case recently added to the official reports, an Illinois appellate court reversed finding that ADM failed to establish a likelihood of success on its claim that the former employee’s activities would violate the NDA he signed.

Lane Sinele worked at ADM for 28 years. At the time he left, he was the manager of national accounts for ADM’s sweetener division. In that position, he represented ADM soliciting, procuring, and servicing buyers of sweeteners. While employed by ADM, Sinele had access to ADM’s Tableau database, a customer profitability database, which contained information about freight systems, manufacturing costs by facility, individual customers’ procurements of corn, manufacturing costs of the corn products, customers’ margins, and margins by location. ADM considered the information contained in its Tableau database to be trade secrets. To maintain their secrecy, ADM limited access to the database to salespeople, like Sinele, and then only for those customers for which that salesperson had responsibility.

In 2018, Sinele left ADM and formed his own consultancy business in which he planned to act as an agent of sweetener buyers in their negotiations with the five major sweetener manufacturers, of whom ADM is one. Shortly after leaving ADM, Sinele sent an email to his former boss requesting a meeting with ADM to negotiate on behalf of two of Sinele’s clients who happened to be ADM customers whose accounts Sinele handled while at ADM. ADM responded by filing suit against Sinele shortly thereafter. Continue reading ›

As the sexual assault trial of Harvey Weinstein gets underway, people are reminded of the impact of the #MeToo movement on our justice system. We are also reminded of another truth that many victims of sexual assault know all too well, waiting to speak out can mean that the guilty party is immune from criminal prosecution because of the short statute of limitations periods on sexual assault in many states. Victims, unable to pursue justice directly, have begun in increasing numbers turning to the centuries-old tool of defamation lawsuits, opening an alternative legal battleground for dealing with accusations of sexual misconduct.

No one exemplifies this growing trend more than the actress, Ashley Judd. In 2017, Ms. Judd raised allegations about a sexual assault she claims to have suffered at the hands of Weinstein some twenty years earlier. However, like many of the claims of sexual misconduct leveled against Weinstein in the months that followed, Ms. Judd’s claims were too old to prosecute. Undeterred, Ms. Judd sued the producer for defamation in 2018 after reading that Mr. Weinstein’s studio, Miramax, had described Ms. Judd as a “nightmare to work with.”

Ms. Judd’s slander suit is hardly the only high profile defamation suit to come out of the #MeToo era. This year alone several highly publicized defamation cases involving President Trump, the Senate candidate Roy Moore and the actor Johnny Depp are expected to go to trial.

In one such case, Summer Zervos, a former contestant of the president’s popular reality TV show “The Apprentice,” filed a defamation lawsuit against President Trump for his comments on the campaign trail that her accusations of unwanted kissing and groping were fabricated. The president has sought to avoid the suit by arguing that he cannot be sued in state court while in office. E. Jean Carroll filed a similar lawsuit against President Trump after he accused her of lying about his raping her to increase sales of her new book.

While the facts of each libel suit differ, many #MeToo plaintiffs are basing their suits on statements by the men they accused calling them liars. For many plaintiffs, suing for defamation provides them the opportunity to air the facts of what happened years ago, even if they are unable to hold the accused criminally liable. On the other hand, men like Mr. Depp are using defamation suits defensively to preserve their reputations against allegations from women, in his case, his ex-wife Amber Heard, who accused him of domestic abuse. In another case, writer Stephen Elliott sued Moira Donegan, the creator of a widely circulated list of men accused of sexual misconduct that included his name. Continue reading ›

For the second time in a week, President Trump’s reelection campaign filed a defamation lawsuit against a major media outlet. The target of this lawsuit, filed in federal court in Washington, D.C., is The Washington Post. The allegedly defamatory statements at issue in the lawsuit come from two opinion pieces published by the Washington Post in June 2019.

One of the articles, entitled “Trump: I can win reelection with just my base,” was written by opinion writer for The Washington Post, Paul Waldman. In his piece, Waldman quipped that “who knows what sort of aid Russia and North Korea will give to the Trump campaign, now that he has invited them to offer their assistance?” The President’s reelection campaign alleges in the libel complaint that the statement is false and defamatory because no one associated with the campaign has made any statements inviting assistance from Russia or North Korea in the upcoming election.

The other article, entitled “Trump just invited another Russian attack. Mitch McConnell is making one more likely,” was also penned by an opinion writer at the Washington Post. This second piece “contained the defamatory claim that Special Counsel Robert Mueller concluded that the Campaign ‘tried to conspire with’ a ‘sweeping and systematic’ attack by Russia against the 2016 United States presidential election,” the complaint alleges. The complaint argues that statements concerning the conclusion of the Mueller report are false and that “[i]n fact, Special

Counsel Mueller’s Report . . . came to the opposite conclusion.” Trump’s campaign argues that the Mueller Report actually concluded that there was no conspiracy between then-candidate Trump’s campaign and Russia or any coordination with Russia’s efforts to interfere with the 2016 election. Continue reading ›

Though it has been months since the initial cases of people being infected with Coronavirus Disease 2019 (COVID-19) surfaced, many employers in the United States still find themselves unprepared to respond to a local outbreak of the coronavirus. While Illinois and Chicago health officials seem sure that there is no indication of an Illinois outbreak any time soon, employers would be wise to begin preparing a response to an outbreak now rather than waiting until after one occurs. Any outbreak response plan must ensure compliance with the requirements of federal, state, and local employment and sick leave laws and ordinances, including special duties that may be triggered only during public health emergencies.

Can employers ask employees suspected of having or being exposed to the coronavirus to stay home?

Employers are under a general obligation to protect their employees from known hazards. In certain circumstances, this may include the coronavirus. However, employers must take care to establish policies that are nondiscriminatory and are not applied selectively or arbitrarily. Employers should not act on mere suspicion when asking an employee to stay home but should be able to articulate an objective basis for the suspicion (and document it) before asking an employee to stay home.

As the CDC and WHO have often reiterated, the best way to prevent the spread of the coronavirus is to quarantine infected individuals to prevent the spread of the virus and contact with the uninfected. In the workplace, this means employers should actively encourage sick employees to stay home as soon as they suspect being exposed to the virus, even before they begin displaying symptoms. Employers would be wise to also remind sick employees of any rights that they may have to paid time off when sick or caring for sick family members. If an employee is displaying symptoms of an acute respiratory illness such as fever, cough, or shortness of breath, employers can ask the employee not to return to work until he or she has been without a fever for no less than 24 hours.

Employers should also consider halting non-essential work-related travel, particularly to countries known to be coronavirus hotspots such as China, Italy, Japan, or South Korea. If an employee has recently returned from such a country, an employer should consider asking the employee to self-quarantine and work from home for up to 14 days, which is the virus’s estimated incubation and transmission period. Continue reading ›

A couple who defaulted on their mortgage filed suit against prospective purchasers who dropped out of a short sale agreement shortly before closing. Though the couple later sold the property at a different short sale, the appellate panel determined that the $35,000 difference in the prices was a loss attributable to the bank that owned the mortgage. As such, the panel affirmed the decision of the district court regarding the calculation of damages.

Hartwell P. Morse III and Deborah B. Morse owned property commonly known as 282 Stonegate in Clarendon Hills, Illinois. The property was encumbered by two mortgages, one held by Chase Bank and the other held by PNC Bank. The Morses defaulted on both mortgages. In August 2015, the couple entered into a contract for the sale of the property to Anthony Donati and Concetta Donati for $410,000.

The contract contained a “short sale addendum” which indicated that the plaintiffs were selling the property for less than they owed on their mortgages. The sale was contingent upon the plaintiffs’ obtaining PNC bank’s consent. In September 2015, the bank consented to the sale, provided that it received all of the proceeds and that the plaintiffs received $0 at closing. The bank also agreed not to pursue a deficiency judgment against the plaintiffs. Continue reading ›

A private investigator involved in a controversial investigation of a wrongful conviction, who was later alleged to have employed improper investigative techniques in a book and a documentary, sued several defendants for defamation and false light. The appellate panel reversed the trial court in part, finding that the investigator’s claims were not time-barred.

In 1982, Jerry HIllard and Marilyn Green were murdered in Washington Park in Chicago. Anthony Porter was convicted for the murders and was sentenced to the death penalty. Professor David Protess and other members of Northwestern University’s Innocence Project investigated the case and identified another suspect, Alstory Simon. At some point, members of the Innocence Project came to believe that Simon and not Porter had really committed the murders.

Paul Ciolino was employed as a private investigator and did work for the Innocence Project. Ciolino and another investigator traveled to Milwaukee to meet with Simon. Simon claims that Ciolino pretended to be a police officer from Illinois, and that Ciolino was armed with a handgun at the time of their meeting. Ciolino told Simon that the Innocence Project had sworn statements from Simon’s ex-wife, Inez Jackson, and from an eyewitness to the murders. Ciolino also showed Simon a video that the Innocence Project had made with a paid actor pretending to be the eyewitness. Simon also alleged that Ciolino persuaded him to confess to the murders by promising him that he would receive a sentence of only a few years in prison, and that he would receive money from book and movie deals because of the intense publicity of the case.

The Innocence Project eventually succeeded in freeing Porter from prison, using Simon’s videotaped confession as well as statements from Simon’s ex-wife and her nephew, Walter Jackson. The Cook County State’s Attorney then indicted Simon for the murders. Simon eventually pled guilty and was sentenced to 37 years in prison. Still, many people felt that Simon was not actually responsible for the murders and began investigations of their own to determine whether he was innocent of the crimes.

Inez Jackson and Walter Jackson eventually recanted their statements. The two explained they had implicated Simon in their statements based on promises from Protess. They alleged that Protess and his team had given them food, cash, alcohol, and other things of value to induce them to make statements. Northwestern University later conducted an internal investigation into the journalistic and investigative practices of the Innocence Project under Protess, and he was separated from the University as a result. The Cook County State’s Attorney then investigated Simon’s case and determined that, due to the misconduct on the parts of Protess and Ciolino, the conviction was so tainted that it could not stand. Simon was eventually released from prison after serving 15 years. Continue reading ›

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