Feb 15 • 24M

🗞️ Shell Directors Sued For Climate Change, Are NFTs Art, and SBF's Texting Turmoil

Open in playerListen on);
Welcome to Not Billable. Weekly legal news updates. Full event replays. And, a chance to hear from industry leaders about what’s been going on behind the scenes. Powered by Lawtrades, and hosted by their Head of Community, Matt Margolis.
Episode details

THIS WEEK: Big Oil is reaping major profits and major ire, Hermès doesn't think your NFT is really art, and SBF is in hot water again as his text messages draw scrutiny. Plus, your bonus just got harder to earn, and what's the connection between Super Bowl ads and Kirkland & Ellis?

Hey! When not providing meaningful and funny content, we’re helping busy in-house legal departments do more with less with flexible, on-demand talent. Cool right?

Want to learn more?

Connect With Talent

🥵 Profits And Temperatures Are Up

As Big Oil is coming off one of its most profitable years in history, it still faces the existential crisis of Climate Change. To this end, environmental law firm ClientEarth is suing 11 of Shell's directors, personally, for "mismanaging climate risk, breaching company law by failing to implement an energy transition strategy that aligns with the landmark 2015 Paris Agreement," says NBC News. The suit is the first of its kind, and ups the ante for Big Oil and its boards of directors who may now be personally at risk if they fail to act on climate change.

  • “The shift to a low-carbon economy is not just inevitable, it’s already happening," Paul Benson, a senior attorney with ClientEarth, stated. "Yet the Board is persisting with a transition strategy that is fundamentally flawed, leaving the company seriously exposed to the risks that climate change poses to Shell’s future success — despite the Board’s legal duty to manage those risks."

  • A Shell spokesperson released a statement opposing the claim, noting " “Our directors have complied with their legal duties and have, at all times, acted in the best interests of the company. […]ClientEarth’s attempt, by means of a derivative claim, to overturn the board’s policy as approved by our shareholders has no merit. We will oppose their application to obtain the court’s permission to pursue this claim."

A Record Year

While 2022 was a banner year for Shell, Exxon, BP, and the other Big Oil players, it was also one of the hottest years on record. So how do you get some of the most profitable companies on Earth to stop profiting off, well, the destruction of the earth? “There has really only ever been one way to get the world off oil and gas and that is not to expect the companies who benefit most from that industry to lead the way,” Adrienne Buller, research director at the UK think tank Common Wealth, told the Financial Times. “These companies are set up to maximize returns to their shareholders and they’re doing exactly that.”

The Verdict

While Shell has plans to be carbon neutral by 2050, ClientEarth and other environmental groups clearly think Earth’s habitability may be permanently ruined by then unless things change. So, the question is, who will push Shell (and others in Big Oil) towards change? Seems like it may have to be external forces.

Check out some of our upcoming events

👜 Trademark Tribulations

When you think of Andy Warhol's famed Campbell's soup cans, do you think of great art or of IP theft? The same question is now being asked of NFTs, specifically in the case of legendary Parisian fashion house Hermes claiming the artist/NFT-maker Mason Rothschild stole its Birkin Bag IP to produce 100 "Metabirkins". As Vogue Business writes, Hermes alleges that the Metabirkins are not artistic commentary but trademark dilution and "cybersquatting (the practice of using a name in bad faith with the intent of making a profit)"—allegations a jury agreed with earlier this month and awarded Hermes $133,000 for. But Rothschild and his legal team have scoffed at the verdict—the first suit brought against an NFT-maker for this kind of IP infringement—and is appealing.

  • Blake Gopnik, an art critic for the New York Times and New Yorker, who is part of Rothschild's legal team, told Marketplace: "It seems pretty clear to me that these things are right smack in the middle of the Warholian tradition in art. They’re commenting on the world of commodities. That’s what artists have been doing at least since Andy Warhol in the early 1960s. It’s obvious to me. If he’d wanted to really confuse buyers, he wouldn’t have covered his Birkin bags and fake fur. He wanted to make them as JPEGs anyways, right? These aren’t bags, these are pictures of bags. And artists make pictures of things."

  • “Today's verdict for Hermès is a landmark victory. It signals that the NFT market is not a legal free-for-all — simply waving the flag of fair use will not automatically exempt you from liability for using someone else’s IP. …Fashion brands have already been learning from this case how to protect their IP in this space even more effectively. Even before the verdict, it highlighted the value in seizing the first-mover advantage. In the IP metaverse, everything is evidence.” Jeff Trexler, associate director of Fordham University's Fashion Law Institute, told Vogue Business.

The Rogers Test

In 1988, actress Ginger Rogers sued producer Alberto Grimaldi for using her name and likeness in a film and violating her trademark rights, right to publicity, and for "false light" defamation. The US Second Circuit Court of Appeals ultimately sided with Rogers, and created the "Rogers Test" which states that a trademark holds if it has no underlying relevance to the artistic work, or if that work explicitly misleads about the source. This test was the central argument of the Hermes-Rothschild case, notes Vogue Business.

The Verdict

Clearly, it’s difficult to define what is and what isn’t art. Especially since everyone has their own ideas. To that end, whomever ultimately prevails in this case, it may not set such a firm precedent.

Looking for your next full-time role? Check these out:

  1. Numerator is hiring a Commercial Counsel (Remote).

  2. Brookfield Properties is hiring a Paralegal/Legal Ops Professional (Chicago, IL).

  3. Tegus is hiring a Contract Manager (Chicago, IL).

  4. Cambria is hiring a Litigation Paralegal (Eden Prairie, MN).

  5. Genies is hiring a Director, Product Counsel (LA, CA).

📵 Leaving SBF On Read

While disgraced crypto mogul Sam Bankman-Fried stays under house arrest at his parents' home in Palo Alto, he still seems to be meddling with bankruptcy proceedings in New York. Federal District Court Judge Lewis A. Kaplan has ordered that SBF "create a plan with prosecutors that would ensure Mr. Bankman-Fried did not delete text messages he sent while awaiting trial on charges that he orchestrated the theft of billions of dollars in customer deposits," reports the New York Times. In other words, Judge Kaplan believes the notorious founder of FTX has been communicating with the company's general counsel, Ryne Miller, and other former FTX employees via messaging apps like Signal, which automatically deletes the texts. "I read all the spy novels," Judge Kaplan said, referring to methods of hiding communications. Even worrying that SBF could write encrypted handwritten letters.

  • "Today, it came to the Government’s attention—based on data obtained through the use of a pen register on the defendant’s gmail account—that the defendant used a VPN or 'Virtual Private Network' to access the internet on January 29, 2023, and February 12, 2023. After learning this, the Government promptly informed defense counsel and raised concerns about the defendant’s use of a VPN," the US Attorney's office wrote to the court on February 13. 

  • The issue of using encrypted and/or disappearing messaging apps to skirt communications rules (and destroy evidence) has come up before with major Wall Street firms using WhatsApp and Signal, raising concern from the SEC and DOJ.

Bill Pay

It was an expensive November for beleaguered crypto firm FTX, says Coinbase, which reported that Sullivan & Cromwell billed $9.5 million for 6,500 hours across 151 staff over the period November 12 through 30, 2022. But Sullivan & Cromwell says it charged a discount for senior staff, and is only seeking 80% of the total bill (or $7.5 million). 

The Verdict

Every new story about SBF and how he’s handling FTX’s collapse is more outrageous than the last. If your strategy is to appear as though you didn’t know what was going on behind the scenes of your own company, then maybe don’t use Signal and VPNs to communicate with your general counsel or reach out to witnesses in your case. Not the best look.

📤 What Else We’re Forwarding

Squeezing Hours: Associates of Perkins Coie wanting their full bonus need to bill more hours, reports Above The Law. Nearly 5 months into the firm's current fiscal year and word has come that associates need to up their billable hours from 1950 to 2000 hours to receive annual bonus.

Parallel Lines: The cost of a 30-second Super Bowl ad and the average profits per partner at Big Law firm Kirkland & Ellis have followed an "eerily-similar trajectory" for nearly 40 years, Bloomberg Law details. In 1985, 30-second Super Bowl ads had a $525K sticker price, and Kirkland's partners earned about $405K each. For 2023, those figures were $7 million and $7.4 million respectively.

We're halfway through the quarter and, before you know it, you're going to be slammed with deals from your sales team. If you have the bandwidth and buy-in from your team, all should go well. Otherwise, it may end up like this:

Tiktok failed to load.

Enable 3rd party cookies or use another browser

Did you enjoy this week’s edition?

⭐️ Give us a star (or five!)

😇 Community @ Lawtrades