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In New Theranos Book, Boies Schiller Doesn’t Come Off So Great

[caption id="attachment_16191" align="aligncenter" width="620"]

Wall Street Journal reporter John Carreyrou and the cover of his new book. Author Photo: Michael Lionstar[/caption] By now everybody knows the gist of the Theranos story: A high-flying blood testing startup led by a captivating CEO crashes to earth after revelations that its technology doesn’t work. The dogged reporting efforts by Wall Street Journal journalist John Carreyrou were instrumental in exposing a corporate fraud that many otherwise powerful and brainy people bought into. Carreyrou's new book about the Theranos saga, "Bad Blood," offers a deeper look at what happened at the company and how it managed to achieve stunning sleights of hand. But as much as it’s a story about science and corporate intrigue, it's also a tale about lawyers. And it doesn't make Theranos' long-serving counsel, David Boies and his firm, look all that great. Across the book's 300-some pages, Boies and Boies Schiller Flexner are described as employing a range of intimidation tactics to defeat or silence Theranos' perceived opponents — including surveillance, threats of litigation and just being generally aggressive. In one colorful scene, Carreyrou writes that Boies "growled and flashed his teeth like an old grizzly bear" during a contentious meeting at the Journal's headquarters. Carreyrou, in an interview, told me he sees Boies' role in the Theranos saga as that of a "scarecrow." Employees who considered voicing their qualms not only had to reckon with Theranos executives, Carreyrou said, "they also had to take into account that the [company's] lawyer was David Boies, arguably the most famous and feared attorney in America." "His role as the lawyer in terms of dissuasion was really important," Carreyrou added. [caption id="attachment_16195" align="alignright" width="245"]

David Boies. Photo: Rick Kopstein/ALM[/caption] Boies first enters the scene to represent Theranos in a patent case against Richard and Joseph Fuisz, a father-and-son inventor pair and former friends of the family of Elizabeth Holmes, the CEO of Theranos. Boies also later became a member of the Theranos board. (The company and the firm parted ways in 2016.) According to Carreyrou's book, the gloves quickly come off in the dispute with Fuiszs. They came to believe they were being surveilled after the suit was filed. "Boies's use of private investigators wasn't just an intimidation tactic," Carreyrou writes, "it was the product of a singular paranoia that shaped Elizabeth and [then Theranos president Sunny Balwani’s] view of the world. That paranoia centered on the belief that the lab industry's two dominant players, Quest Diagnostics and Laboratory Corporation of America would stop at nothing to undermine Theranos and its technology." The knock-down, drag-out litigation — which was also covered by The Recorder — roped in a number of large law firms. For a while, McDermott Will & Emery was accused of wrongdoing. The Fuiszs went through two sets of defense counsel, Keker & Van Nest (now Keker, Van Nest & Peters) and Banie & Ishimoto, before resorting to litigating pro se against Boies. Two days into trial, they settled in a deal invalidating the patent at issue. The book also paints the firm and its lawyers as going hard after Carreyrou's sources in an effort to stamp out the story. One former Theranos employee, Erika Cheung, says she became frightened after being served a letter from the firm threatening suit, at an address not even her mother knew — leading her to believe she had been followed. In another part of the book, Michael Brille, a Boies Schiller partner in Washington D.C., is depicted as threatening a young former Theranos employee named Tyler Shultz, the grandson of Theranos board member and former Secretary of State George Shutlz. Tyler Shultz was later revealed to be one of the Journal's key confidential sources in the Theranos reporting. Theranos had suspected as much, and Brille, the book says, tried to get the younger Shultz to name other employees who had spoken to the paper. But he refused. "As the stale-mate dragged on, Boies Schiller resorted to the bare-­knuckle tactics it had become notorious for. Brille let it be known that if Tyler didn’t sign the affidavit and name the Journal’s sources, the firm would make sure to bankrupt his entire family when it took him to court," Carreyrou writes. When I asked Carreyrou what he thought of that, he said: "It's thuggery. It's thuggish behavior. It's tactics that you don't associate with a white-shoe law firm." Brille, in an interview, vehemently denied that account. "There is no sense in which that statement is true," he said. "I never said that, and I never said anything to anyone — Tyler Shultz, his lawyer, or anyone else — even approximating that statement." Boies himself offered some praise for Carreyrou, but also criticized him as overdramatizing the tale. The litigator denied, for example, growling or flashing his teeth at Carreyrou. "I don't know of anybody who thinks that I growl like a grizzly bear," Boies said in an interview. “Mr. Carreyrou deserves credit for being a good reporter. However, his attempt to portray himself as a hero standing up to scary lawyers is inconsistent with the record — including the transcripts of the only two meetings I had with the Journal,” he added in a statement. Boies suggested Carreyrou stretched the truth to make his book more exciting. "I never hired private investigators to try to intimidate either a former employee or the Journal," Boies' statement continued. When asked to clarify, he added that he never hired private investigators in connection with Theranos at all. Brille also said the firm's actions were not made out of a desire to bury Carreyrou's reporting, but to fulfill the obligations all lawyers have to protect a client’s trade secrets. Under California law, in order for something to be recognized as a trade secret, a company must take reasonable measures to make sure it isn’t found out by others. "The legal backdrop is important to keep in mind when evaluating our actions, and John Carreyrou conveniently ignores that,” Brille said. “Our actions were responsible and professional. To suggest it was unusual for lawyers to do what they often have to do regarding trade secrets is unfair and inconsistent with legal reality." In the book, Carreyrou rejects the idea that the information he was after constituted trade secrets, since he was in part trying to reveal the extent to which Theranos relied on third-party testing machines. “How could anything involving a commercial analyzer manufactured by a third party possibly be deemed a trade secret?” he recalls asking Brille. Boies Schiller isn't the only firm hired by Theranos mentioned in the book. Carreyrou includes anecdotes about Wilson Sonsini Goodrich & Rosati and Zuckerman Spaeder. Wilmer Cutler Pickering Hale and Dorr has stepped in to deal with the wave of litigation and regulatory action that has ensued since Carreyrou’s first story ran; the firm is mentioned only in passing. With all that his book reveals about Theranos and the extremes it went to, Carreyrou says lawyers in general don't come off looking all that great in the tale. "I think it says very negative things for the legal profession,” Carreyrou said. “It's not a pretty picture that I paint in my book about how these law firms behaved. But it's a real picture, it's a factual one, it's a true one."