When Not To Pursue Litigation In China Or Anywhere Else -- What Was Foxconn Thinking?
The Imagethief blog did a post the other day, entitled, "What Was Foxconn Thinking?" seeking answers as to why Foxconn (Apple Computer's contract manufacturer in China) had sued two journalists individually for having reported on Foxconn's treatment of its workers. Foxconn not only sued the two journalists, it secured a court order freezing their assets. It does not take a PR genius to figure out what this lawsuit has done for Foxconn's already damaged image. Imagethief, which is written by a PR guru, was asking about Foxconn's mental capacity from a PR perspective and it asked for China Law Blog's input from a legal perspective.
But in my answer to Imagethief (which can be found here), I did not discuss the legalities of the lawsuit because I just could not get past the PR blundering. I was appalled by the strategy (really, the lack of any strategy) behind the lawsuit. My feeling was that any damages Foxconn might hope to get, even assuming a total victory, would be so far overwhelmed by the damage to their reputation and by the legal costs, they could never be victorious. I am guessing Foxconn thought their lawsuit would intimidate journalists planning future stories on Foxconn.
Today, however Foxconn dropped its ridiculous lawsuit.
Bottom Line: Litigation often involves more than just what transpires in the courtroom. If a company suspects it is going to be involved in such litigation or is involved in such litigation, it should get its lawyers and, sometimes, its public relations people as well, to analyze all potential benefits and repercussions involved.
Comments (2)
Read through and enter the discussion by using the form at the endChina Law Blog - September 4, 2006 5:35 AM
Tom --
Thanks for checking in. I viewed this as a strike suit, precisely because it was brought against the journalists and not the company. It appears the goal was to intimidate those who might publish future stories, not to secure damages. If Foxconn really wanted damages, why did it not sue the company itself?
There are countless ways a company can "combat journalistic incompetence" and a lawsuit is just one of those. In fact, my experience has taught me that lawsuits are very good at securing damages, but usually very poor at doing anything else. I am not a PR person, but it seems to me that countering a falsehood with the truth can be mighty effective.
I did not read the article (or articles) for which these journalists were sued, nor do I (of course) know all of the facts regarding Foxconn's treatment of workers, so I do not know exactly where the truth lies in this whole thing.
China Law Blog - September 4, 2006 9:28 AM
Tom --
You raise some important points and, rather than respond here in the comments section, I will do a whole 'nother post on this, with your comments and my responses. At this point, I will just remind you that China has 1.3 billion people and an economy growing at more than 10% a year.