MoFo Perspectives: Partners Christin Hill and Jordan Eth Discuss the Latest in Securities Developments

In this episode of MoFo Perspectives, Jordan Eth, co-chair of the Securities Litigation, Enforcement, and White Collar Defense Group, speaks with securities litigation partner Christin Hill about some of their recent victories and the latest developments in securities law. The two also discuss Christin’s professional journey from working as an associate in private practice, to working in-house at Uber Technologies, Inc., and ultimately to joining MoFo, where she now represents public and pre-IPO companies and their boards of directors and officers in securities fraud actions, derivative actions, SEC enforcement actions, internal investigations, and general corporate counseling.

In recognition of their achievements over the past year, Daily Journal recently named Christin to its 2021 “40 Under 40” list and recognized Jordan as one of the 2021 “Top 100 Lawyers” in California.

Transcript

Speaker: Welcome to MoFo Perspectives, a podcast by Morrison & Foerster, where we share the perspectives of our clients, colleagues, subject matter experts, and lawyers.

Jordan Eth: Hello and welcome. I’m Jordan Eth, co-chair of MoFo’s Securities Litigation, Enforcement, and White Collar Defense group. Today, I’m going to be talking to Christin Hill, a partner in our group. Kristen was recently named to the Daily Journal’s, 40 under 40 list. A great honor. So congratulations, Christin.

Christin Hill: Thank you, Jordan. It’s really good to be here.

Jordan Eth: Christin, how did you wind up practicing securities litigation?

Christin Hill: My very first case assignment, as a first year associate, at Heller Ehrman was the Brocade backdating securities class action. Heller represented the former CFO but, of course, it was a huge case and the entire defense bar felt like they were on the case just because it was such a large matter. And I was hooked on securities litigation right away. I liked that the matters, including the Brocade matter, was very high profile, high stakes. I also really liked that our client was an individual, the family, and he just wanted to clear his name and move on with his life. That really resonated with me.

Jordan Eth: Christin, you mentioned representing individuals, but obviously in a lot of these cases, you represent corporate entities. How do you feel about that?

Christin Hill: You never just represent a company. There’s always individuals on the line.

Jordan Eth: And you’ve worked on many securities class actions. What do you enjoy about the practice?

Christin Hill: Lots of things. I like that securities litigation tends to be writing heavy. Each time I get an opportunity to write a new motion to dismiss, I write it with the expectation to win, and we do get to win a lot of the time. And it’s really great to get that early case ending victory for our clients. It always feels really good, and I’m happy to pass that on. I also think that many of these cases are fraud by hindsight, and they come with very serious accusations. Although the plaintiff’s bar would like to believe that these are faceless nameless companies, these cases are accusing real people of black hearted fraud, whether it’s a CEO, or a CFO, or a director, the accusations are very serious. So I take a lot of pride and enjoyment in representing these companies and these individuals and clearing their name and setting the record straight.

Jordan Eth: Christin, you worked in-house at Uber. What brought you back to private practice?

Christin Hill: I missed litigating. I joined Uber in early 2016. It was not a startup at that point, but it was still a few years pre IPO. It was certainly an exciting time to be in the legal department of a company that was literally making new law, even still my role as a litigator was largely managing outside counsel rather than personally taking depositions or arguing in court. And I missed litigation tasks like that. Things came to head for me when I was working on a matter with Tiffany Cheung, now co-chair of our litigation group at MoFo, and we were working on a class action. And as one of our early steps was to file a motion to compel. And I provided all the materials that Tiffany needed and her team wrote a really strong brief. And then we went to court and Tiffany set up in front of the judge, it was Judge Seaborg, and she argued the motion, and I sat in the gallery and I was very happy to watch Tiffany because she was phenomenal and I really enjoyed watching her work. But at the end of the day, I was in the gallery while I was watching somebody else do the argument. And I knew that was not going to work for me long term. And so I, at that point, I said, I need to return to private practice because I want to be the one that’s standing in front of the judge, making the argument, and not sitting in the gallery.

Jordan Eth: So Christin, you were an in-house lawyer for several years and then you chose to come back to private practice and specifically to MoFo. Why did you come to MoFo?

Christin Hill: I knew I wanted to go back to securities litigation. It’s a practice that I knew and I loved prior to going in house and I knew that I wanted to return to it. And I also knew that MoFo has one of the strongest nationwide securities litigation groups and in the bay area in particular. So MoFo was immediately at the top of my list for that reason. And I also was fortunate that I had a few friends at the firm and other groups, and they were kind enough to introduce me to the securities litigators at the firm. And once I met the team, I was sold, and now it’s been four years and it’s been a great move for me. I’ve been very happy at the firm.

Jordan Eth: Well, one advantage that you have Christin, is that you did work in house. What did you learn from that experience?

Christin Hill: I saw firsthand some of the challenges that in-house litigators face. I was amazed at the caseload that I handled when I was in house, but now I know that it’s not uncommon at all. They’re juggling matters, and as much as I, as outside counsel, want my case to be a top priority, I know that they have many demands on their time. And so I’m a lot more sensitive about writing really concise emails, making sure that when I’m asking for things, I know that I have to get it from that particular client and not from some other source. And so being very considerate of their time even more so now than I ever was before. And also, just having been in the position of reviewing legal bills as a client, I’m really aware of how those hours quickly add up. So I will want to make sure that each hour I’m billing, and that the associates are billing on the matter, are really adding value. That doesn’t obviously necessarily mean that I’m billing less, but I do think it means that I’m really focused on what’s the output for those hours. What’s the end product that I’m producing from those hours and making sure that it’s valuable to the client.

Jordan Eth: So speaking about output and results, can you tell me about a big victory that you had?

Christin Hill: Earlier this year, we got a great result for a client and the District of Oregon, that was a summary judgment victory that was a long time coming. The client in that case had made certain statements in connection with the financial target, and right away, that sounds like a forward looking statement case. And we know that the law generally protects companies when they make forward looking statements. But the judge in this case, didn’t see it that way at first and said at the motion to dismiss, which was before MoFo joined the team. The court had ruled that these statements, although they were about a financial target, were not forward looking statements, and rather they were representations of where that the company was hitting certain benchmarks on the way toward the financial target. And of course we disagreed with this ruling, but we had to play the cards we were dealt.

Christin Hill: So we moved forward with discovery and did all the things that we needed to do to get the case ready for summary judgment. And when summary judgment came, we were in a position to, again, argue that this is a case that involves forward looking statements and the defendants are protected from liability for forward looking statements. But again, the court did not see it and she ruled against us on summary judgment, but we did not give up. Instead, we ultimately filed two motions for reconsideration and it was on that second motion for reconsideration with the benefit of a new ninth circuit ruling about forward looking statements, and then the court finally ruled that these were in fact forward looking statements protected by the Safe Harbor. So it was a long time coming and required quite a bit of briefing and discovery in our part to get to that end result, but in the end, we got a great result for our clients because they were vindicated after a long process.

Jordan Eth: What’d you learn from that experience, Christin?

Christin Hill: You know, Jordan, we learned a lot of things. One of the things that comes quickly to mind is the importance of working together as a team. We were very fortunate to have a great team of professionals working together with us on this matter. Internally at MoFo, from the legal assistants and the paralegals, and the associates, and the partners. There was a great group of professionals on our side, but we also worked very closely with the client, and we had a great general counsel and her head of litigation and other attorneys and professionals and the client, who really all were in the trenches with us and working hard on this matter to get the end results. And so just working on that team was really awesome, and frankly, a lot of fun. The other lesson that I think about is the importance of not giving up. As I mentioned, this is a case where we didn’t get the result that we wanted at the motion to dismiss.

Christin Hill: We didn’t get the result that we wanted at summary judgment. And we didn’t get the result that we wanted on that first motion for reconsideration. It wasn’t until the second motion for reconsideration that we ultimately prevailed. And we were extremely fortunate that we were able to get buy-in from the numerous constituencies involved: the company, the individual defendant, their insurance carriers, who were all willing to work with us and trust us with this important matter and to see it through to the end, to get the result that we knew we were entitled to. And so that was very rewarding to have that buy-in from all those constituencies. The other thing, if you’ll indulge me with one final lesson, is of course the importance of staying engaged on legal updates. We would not have won this case if it were not for closely monitoring what was happening at the ninth circuit on other cases that could have some bearing on our case, and what ultimately led to victory, was one particular case.

Christin Hill: The Tesla case, which had statements that were very similar to our statements and the ninth circuit ruled that these statements were forward looking statements. And we were following that case, but several others. And as soon as this case came out, we went straight to the judge and we were not afraid to bring a second motion for reconsideration because we really believed that we were right on the law and we were willing to continue to push this effort. And of course, being aided by the ninth circuit ruling was really a game changer and being tenacious in going after this result, no matter what sticking with it and seeing it through to the end is really what ended up leading to our victory.

Jordan Eth: And you talk about tenacity, Christin, it’s sometimes hard for the clients, business people, to understand what it takes in the litigation system, because litigation time isn’t the same as business time. In litigation, tenacity can take years and years of effort and in the business world that doesn’t make a lot of sense sometimes. Why should something take years and years? So you need to work closely with the clients and keep on it and make sure that everyone understands that there will come a time when you’ll be able to present all the arguments and that it worked out very well there. So, going forward in terms of advice you have in terms of when companies make projections, did you learn anything about the kind of counseling you would give to clients in that area?

Christin Hill: Yeah. I think that this is an area that has caused some confusion on the part of companies or how best to present projections. And I think one area that has been particularly confusing for some companies is how to deal with on track statements where the company says we are on track to achieve a future goal. And of course, a lot of companies that they want to provide a progress update, a status update, on a long-term financial target, or a long-term goal, and wanting to provide that update. And obviously analysts and investors are asking, where are you? What’s the status on this projection? And companies often want to say, here’s where we’re at. And I think what’s helpful that we learn from the ninth circuit ruling, which was in the Tesla case, that decision confirms that there’s a difference between saying we’re on track to meet a target, and a statement that we’re on track to meet a target because we have achieved X, Y, Z metric.

Christin Hill: So the court makes a distinction between what would be pure on track statements, “We’re on track for the target,” versus on track statements that contain concrete facts, “We’re on track to meet a target because we’ve grew our customer base by 20%.” That “grew our customer base by 20%” is a concrete fact that has now been mixed in with the on track statement and can sometimes create some level of, lack of clarity or risk for the company on which part of the statement is forward looking, and therefore, protected and which parts of the statements are perhaps more risky. And so the advice I like to give is to really separate, to the greatest extent possible, forward looking statements from non-forward looking statements. So when we say we expect to achieve our Q4 goal, say that, and stop. Wait a little while and maybe talk about some other things, and then separately, you can comment on the growth in your customer base or that you sold a certain volume of material.

Christin Hill: It’s better to separate that confirmation of the goal from the factual assessment of where you are, that is a less risky way of presenting your projection. And so that, that would be the advice that we give to the extent possible to separate those forward looking portions of the statement from the non-forward looking portions of statement so that there is not a lot of confusion there about which portion of the statements are protected.

Jordan Eth: It’s another frustrating area for business people because often when they make statements and conference calls or other unscripted settings, the exact language and where the punctuation is, and whether they’ve combined two thoughts into one sentence, can make a difference in our cases. And they’re not used to having to scrub every single sentence. So it can be, what business people will call semantics, can wind up turning these cases.

Christin Hill: That’s totally right. And so getting again, to the greatest extent possible, getting a lot of thought into the forward looking statements and how you’re going to respond to them, getting the lawyers in the room and talking about that in advance of the call, that time spent on the frontend is going to save you time on the back end in the form of litigation. Hopefully.

Jordan Eth: All right, Christin, is there anything else that you wanted to discuss?

Jordan Eth: Yeah, I’ve done a lot of talking. I suspect our listeners would like to hear from you. You are obviously a leader in securities litigation. What do you think are some of the up and coming trends in securities litigation that our listeners should be thinking about?

Jordan Eth: Well, everybody’s heard about SPACs, so we’re going to see how that develops. Obviously the SEC is looking at that and it’s a big issue in terms of different kinds of IPOs and so on. And I think that’s just developing now. The news, something we can’t really project, we saw in the last year a bunch of diversity cases in which companies were accused of lying about their commitment to diversity. You and I, Christin, worked on one of those. I’ll note that every one of those so far that’s been brought has been dismissed. So who knows what the news bring to us in the future. We do know that the SEC is looking at a bunch of different areas: 10b5-1 plans, crypto, and so on. That will affect enforcement actions, but enforcement actions often spill over into the private area. And on top of all of this, the markets are still at or near all-time highs. And it’s when you have market declines that you really start seeing a whole lot of cases and a lot of new types of cases. So we’ll have to stay tuned on all of that. Okay, Christin, thanks very much. It’s been a pleasure speaking with you, as always.

Christin Hill: Thanks for having me. It was a lot of fun.

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