More than 2,500 years ago, Chinese military strategist Sun Tzu argued that the key to victory on the battlefield is knowing the enemy.
Jay Edelson has taken that ancient wisdom a step further by learning from the enemy.
The Chicago lawyer built his reputation and career suing tech legends - noting on his own Twitter bio that he may be the most hated man in Silicon Valley. Edelson nonetheless credits the industry for some of his successes.
“One thing – which Silicon Valley gets – is to go where you think society is going and don’t worry immediately about what the financial implications are,” explains Edelson, who opened a new class-action firm just four years after earning his juris doctorate at University of Michigan Law.
“We made a decision from the beginning that we were going to make long-term decisions,” Edelson says. “We weren’t going to bring cases where we thought, ‘We’re going to make money within the next 18 months.’ Instead, what we were thinking was, ‘How do we set the law up so the law’s better?’ Then we can have a much more expansive practice. That’s something we stole from Silicon Valley. They understood that much better than I think brick-and-mortar companies did.”
Timing gave Edelson another advantage. When he and his former partner were forming Blim & Edelson – the predecessor to today’s Edelson PC – in 2000, the Internet was still in its adolescence. The laws that would govern it, with the notable exception of Section 230 shield provisions included in the 1996 Communications Decency Act, had yet to be written.
“A lot of really established plaintiffs’ firms weren’t actually doing a lot of work involving the Internet,” Edelson recalls. “When I started bringing suits, a very successful lawyer who I was friends with was kidding with me and he said, ‘Oh, yeah, you’re the Internet class-action lawyer,’ as if I was practicing on the Internet, as if these weren’t real cases. And I remember just thinking, ‘A lot of people are missing this.’ They weren’t seeing that the Internet was going to be this major place on which our economy would become centered.”
To Edelson, that oversight represented a potential gold mine. “You had these companies that had new business models that didn’t exist before and then old statutes, which either applied or didn’t apply,” he says. “It was the perfect time to start being a class-action lawyer and have my own firm.”
Among the victories he has achieved in the developing frontier since is a $650 million verdict in a lawsuit accusing Mark Zuckerberg’s Facebook of violating Illinois state biometric law by collecting face templates, which it used to recommend new friends to existing users.
There have also been class-action settlements totaling more than $300 million in privacy cases against firms from Netflix to Amazon to Sears.
“Often, I got to just pick,” he says. “Here’s a case that’s interesting, and there’s no law on it. Let’s go and try to figure it out.”
If Edelson’s comparative youth once gave him an edge in terms of identifying gaps in the laws governing emerging technology, he recognizes that the next generation of lawyers enjoys a similar advantage today.
“The idea of not letting them really run with it seems silly,” he says. “They’re the ones who, when Twitter came out, were explaining it to me: ‘This is why Twitter is going to be a huge thing. This is what Twitter’s doing. This is what we’ve got to be careful about.’ They just live in that world in a way that I don’t.”
Lawdragon: That’s very perceptive. It shows an awareness that senior-level people in a variety of fields sometimes lack. Can you tell me a little more about how the Facebook privacy suit came together?
Jay Edelson: First of all, you need to know that I’m not a techie person. I like ideas, but you don’t want me fixing your car. You first have to explain to me what a car is, and then give me a number for AAA, and then I would probably screw that up, too. So I realized that while I wanted the firm to have a strong focus on tech matters, we needed people smarter than me to do that. So we created what we call our own internal lab, which is a mix of computer forensic engineers and lawyers who are tech-savvy.
They’re the ones who are pitching cases all the time, and the Facebook case was one of two they pitched in the same day. Those cases actually have fundamentally changed the firm’s trajectory. With Facebook, they said, “There’s this statute, and we think Facebook might be violating it. We want to look into that.” The other was a group of gambling cases where people would go onto apps that functioned like online casinos, basically.
The way that we have these meetings is, when it’s a big case or group of cases, we will have a bunch of lawyers there: people from our appellate group, our litigators, our investigators and our government affairs group. And everybody just dives in. The appellate people are saying, “These are the arguments I’d make if it goes to the 9th U.S. Circuit Court of Appeals.” The government affairs people are saying, “Here’s how they’re going to gut the statute through legislative changes.” We go through everything. They’re the most fun days that I ever have.
LD: They sound incredible.
JE: It’s tons of fun. And in the end, I said, “Yes, let’s go for it on Facebook and let’s not go for it on gambling.” I didn’t get that. I said, “People can’t be spending much money on these things. If someone lost $10 or $20, I don’t care.” So that was a veto. We moved forward on Facebook and then people came back to me on gambling and said, “OK, you’re an idiot. They’re not losing $10 or $20,” and they showed me people were actually losing hundreds of thousands, if not millions, of dollars on these apps.
LD: Really? I wouldn’t have understood that either.
JE: And these aren’t rich people. The apps are set up to be totally addictive and they prey on people who really don’t have money. People were maxing out their credit cards, home equity lines of credit, IRAs, it was destroying people’s lives. We had clients who attempted suicide because of the debt they were in. Really horrific.
LD: That’s appalling. So what happened next?
JE: Initially, we lost. And we didn’t just lose: Either the trial court or the appellate court said these were fake cases that basically made the plaintiffs’ bar look bad. It’s a quote that I’m going to have on my wall, because we then went to federal court in Washington state, and the 9th Circuit agreed that these weren’t fake cases. We just settled a few of them, and the three settlements that we resolved are for $200 million.
JE: We’re excited. What’s really important is we’re going to have class members who are going to get back the majority of what they lost. So people are going to get checks for a half million dollars. And they’re going to be able to repair their lives. What I’m really proud of is that I told the firm, “I don’t get it; I don’t get these suits,” and these young associates kept pressing. The fact that I was wrong actually makes me more proud than the cases I’ve been right on, because people just kept pushing for it. They didn’t care that I said, “I don’t get it.” They didn’t care that the initial court didn’t get it. They had that same instinct that I had as a young attorney, which is, “This is really bad stuff; we are going to create the law, even if it doesn’t exist.”
LD: What I love so much about that, and I’m sure you do as well, is that what you’ve created in your firm obviously encourages the inclusion of all different levels of thought and abilities. Lawyers and law firms tend to be slow because there’s the pyramid where the presumption is that the older you get, the more knowledgeable and wiser you are, and that’s really who we should be listening to. And what you’ve done with your firm is make it more organic, ground-level, which is where so much about data and the web and the Internet actually exists.
JE: It was a mix of my own personal value system - which is that an idea is an idea, and I don’t care if it comes from a paralegal, a law student or the managing partner of the firm, the best idea should win - and necessity. We’re bringing a lot of novel cases with emerging technology, and the younger people just frankly have a better handle on it.
KD: Fascinating. Can we go back a little and talk about how you decided to become a lawyer? What were the interests that drove you?
JE: It’s funny. I remember when I was 8 years old, talking to two of my best friends at the time, and we all decided we were going to become lawyers and each of us would have our own law firms.
What’s crazy about it is none of us had families in the law. I don’t think we had any idea what that meant, but we were convinced of it. And what’s even crazier is all three of us actually did graduate law school. One of my friends went to Michigan Law School with me, and the other one went to a school in D.C. And my Michigan friend ended up not liking being a lawyer and he’s now a high school teacher. The other one actually has his own firm.
So our 8-year-old selves were pretty spot-on. Two-thirds of us ended up fulfilling the dream. For whatever reason, I always just felt that that was my calling.
LD: Had you guys just seen a movie or read a book about lawyers, or was there something that was going on in your 8-year-old minds that made you think about it?
JE: Honestly, it all came from a discussion about religion and the proof of God. We were weird kids. That’s what we were debating. Of the three of us, one was more religious than the other two. We debated it out and then that led into a discussion about us all becoming lawyers. Of course, I wasn’t attached to being a lawyer the whole time. When I went to college, I majored in philosophy and that was definitely something I was interested in as well, but I ended up going through with what I thought would suit me a little bit better, which was law.
LD: Did you always know you wanted to do plaintiffs’ law?
JE: Actually, I started at what was then considered a large defense firm, Holleb Coff, with 130 attorneys. I stayed there a little while, and I was defending class actions and that’s how I learned that this was something you could practice in.
LD: Did you like defending class actions?
JE: I did, actually, really enjoy the work. I didn’t enjoy being at a defense firm. I didn’t like how they were structured. I don’t like hierarchical places. I’ve always valued autonomy, and I had a weird arrogance as a young lawyer where I felt like, “Give me the case, and I’ll win it for you.” That’s not how big firms are set up. I was told explicitly, “The goal is to win slowly, not win quickly.” That was awful. And then I looked at the other side and I thought, “These people are fighting for stuff I really believe in. And they’re going for the win. And when they get a win, instead of losing $2 million of billing hours, they’re celebrating because that helps them, too.” It was just so clear I was never a defense lawyer.
I stayed at big firms for two years, and then I said, “I can’t do this.” I was really lucky to find a small plaintiffs’ firm called Plotkin, Jacobs & Orlofsky. My mentor was a guy named John Jacobs, a brilliant guy. He’s the most ethical, smart, creative lawyer you could ever hope to learn from and, luckily, they gave me a job and I spent two years there. And then I started my own firm.
LD: Did you like it right away once you got to the plaintiffs’ side?
JE: I loved it. I remember that I was given an assignment by John Jacobs in which a client was denied health insurance. The client had been covered, but the company was canceling it. He said to me, “I don’t know if there’s a case here or not. Can you look into it?” And I said, “Terrific.” And I ended up coming up with a fairly novel argument and we brought a class action. He was nice enough to let me run with things, and we got an injunction preventing the health insurance company from canceling not just our client’s health insurance, but that of thousands of other people, too.
Basically, the company had made the decision to cancel the health insurance of the sickest people. And it had the backing of the state Department of Insurance, and we won in court. It was an incredible thing to see that it went from me looking at the statute and trying to come up with an argument to 30 days later, getting a decision that had a huge impact on people’s lives.
Our specific client was suffering from chronic obstructive pulmonary disorder, or COPD, and had an air tank that she carried with her and had very real concerns that if she didn’t have access to health care, she wasn’t going to make it. The stakes were really high, and it felt like the most meaningful thing, certainly, I’d done in law.
LD: That’s incredible. Tell me about the leap from John Jacobs questioning whether it was even a case to making it a class action.
JE: That was my idea. We were a class-action firm, but I’ve always had the view that you start with what’s right and then you figure out a legal hook to that. So I looked at it and what they were doing was just dead wrong and so my view was, “I just have to keep thinking hard about this until I figure out a way that we can win this case.”
And he was completely supportive of that. He said, “Go, take a week,” and I was there until 11 at night every night, trying to figure it out and he didn’t have any concerns with that.
LD: Are there other cases early in your career as a plaintiffs’ lawyer that you learned particular lessons from?
JE: I think I took the lesson I learned on that one with me to almost all of my future cases, which was to not be scared about tackling an issue where there wasn’t any law. That brought me back to the days when I was 8 years old arguing about religion and to my philosophy classes.
LD: In the past month, you’ve brought a very high-profile lawsuit against Los Angeles plaintiffs’ lawyer Tom Girardi triggered by his failure to pay settlements to widows and orphans of a plane crash. Beyond the celebrity of Tom and his wife, there has been much discussion in the plaintiff bar about the lawsuit. Will you share some of your thoughts in deciding to sue?
JE: It was one of the hardest decisions we have had to make. Accusing an attorney of essentially stealing client funds is as serious as you can get and we were getting so much mixed information that we didn’t want to bring the suit without a very high degree of certainty that we were correct. A number of people on the plaintiff’s side asked me not to pursue it at all, because they thought it would lead to reforms of the plaintiff’s bar. Unfortunately, I think this situation demonstrates that reforms are necessary.
LD: Were you surprised as the lawsuit, then bankruptcy and presumed criminal investigation has moved forward?
JE: I have been surprised by the speed of everything. I kept waiting for some explanation from Tom’s side as to how we just misunderstood the facts. When they conceded the money was gone and refused to explain why it didn’t get to the clients, I was stunned. I thought it would take six months to get to this point.
LD: What are some of the lessons you see in the case of Tom Girardi?
JE: There are so many lessons. First, there are way too many attorneys who believe that plaintiff’s work is a game and clients are merely the chess pieces. I think that there has to be fundamental changes governing our industry to refocus everyone on what plaintiff’s work is really about – reforming industries and serving our clients. I also think that plaintiff’s lawyers have to abandon the notion that it’s bad for business if rotten apples are called out. I think the opposite is true. Tom was one of the most prominent plaintiff’s lawyers in the country. As the facts continue to come out, I think we are going to realize how much damage he did to the public’s faith in our judicial system. I also think that he serves as a stark reminder that people should live within their means. If you’re going into plaintiff’s law for the lifestyle, maybe it’s better to pick a different job.
LD: Do you have a favorite philosopher?
JE: Not really. What I like about philosophy is that all the philosophers give you a different way of thinking about the world. The philosopher that I focused on most in college was Immanuel Kant, who I totally disagree with. Almost everything he said, I totally disagree with and, still, his conception of metaphysics and morality, despite my disagreements, have shifted how I think about the world.
LD: Favorite might have been the wrong word. Was he among the ones who influenced you most?
JE: I’d say so. And then also, on the opposite side, ancient Eastern philosophies like Taoism, which are in a completely different world. That’s what I love about philosophy: You just have totally different ways of viewing the world and it has allowed me, when I look at problems, to see them through many different lenses, which I think is a fun thing in law.
LD: I could see that. When you talk about your cases and what the firm’s done and how it operates, there is this philosophical tone.
JE: We think a lot about what it means to have a successful firm. What we realized was that most firms aren’t really set up in a way in which people are terribly happy and so we thought a lot about how we could have a firm where people are able to self-actualize and get the most out of their career.
We’ve done that by focusing on autonomy, letting people choose their own path and also realizing that people have different interests and skills. Typically, firms make everyone do the same types of work. If you’re a litigator, that means you’ve got to investigate the case, do the discovery, argue in court, do the appeals. What we realized was that might be fine for some people but other people, they just love the investigation process. And if that’s the case, let them do that.
Others want to be in court all the time mixing it up, so we let them do that. And that’s been really fun. So some people’s roles here, at the firm, they’re different than I think at a normal firm. People aren’t required to do a lot of the work that is energy-depleting for them. They get to do work that they find to be energy-generating, and it makes the firm a lot more fun to be around, a higher-energy place, and I think we do better work as a result.