Judge Agrees to Vacate Prior Restraint Against Critic of McDonald’s Settlement – For Now

by Paul Alan Levy

At Monday's hearing on the our motion to vacate the preliminary injunction against Majed Moughni to shut down his criticism of the proposed settlement of a lawsuit over McDonald’s sale of haram meat that had been advertised as halal, Judge Kathleen Macdonald agreed to both prongs of the relief we had sought – dissolving the injunction, and reopening the notice period for class members to intervene in, object to or opt out from the settlement. She did it, not because she agreed that Moughni’s First Amendment rights had been violated, but for the reasons offered by McDonald’s and endorsed by the other parties.  Regrettably, both Judge Macdonald’s statements at the hearing, and threats made by the parties inside and outside the courtroom, suggest that the attack on Moughni’s free speech rights is not at an end.

Specifically, McDonald’s put forward a reason for the injunction that had not been argued when the injunction was first sought — that because Moughni was allegedly trying to recruit clients to represent as objectors, he was subject to judicial discipline for his supposedly misleading statements about class action procedures.  Now, said McDonald’s, because Moughni has made clear that he is not trying to represent members of the class in their objections, circumstances have changed making the injunction no longer needed.  At the same time, McDonald’s argued that it was Moughni’s supposedly misleading statements about opt-out procedures and the like that required reopening of the class notification period.  In agreeing to dissolve the injunction and reopen the notice period, Judge Macdonald's brief oral opinion was very clear about embracing this reasoning, not Moughni’s.  Agreeing with McDonald’s, the judge proclaimed that she had done the right thing in suppressing Moughni’s speech in the first place.  Still, she said, she would issue an order later that day dissolving the injunction.

Further Threats Directed to Moughni

If McDonald’s only purpose here was to give the judge (and the parties) a painless way to give Moughni the relief to which he is entitled, that would not be so worrisome.  Unfortunately, there have been indications that McDonald’s line of reasoning was intended to set the stage for later efforts to force Moughni to pay damages for having had the audacity to oppose the settlement.  As reported earlier this week in Forbes, McDonald’s has described Moughni as a “third-party tortfeasor,” which I took to be a threat to sue him for damages (the tort of opposing a settlement?).  Meanwhile, during oral argument on Monday, class counsel complained about the cost of the additional notice, which he estimated to be $30,000, and about the possibility that the costs would be deducted from the cy pres donation to the Arab-American Museum, pursuant to the provision of the proposed settlement agreement that subordinates such a donation to his firm’s attorney fees and claimed out-of-pocket expenses.  This is thirty scholarships for local students, he explained; the charity should not lose this money.  

If the cost of objecting to a class action settlement is having to pay five figures worth of “damages” based on fanciful claims that statements about the settlement were “misleading” or “confusing,” affected class members are much less likely to speak out.  So, we will be monitoring the situation closely, ready to step in if any of the parties move against Moughni for monetary relief.

Equally worrisome was the judge’s insistence that if, in the course of urging members of his  community to speak out against the proposed settlement, Moughni self-identifies as a lawyer, she will reissue the prior restraint.  That insistence reflects a failure to appreciate the legal rule that lawyers do not give up their First Amendment rights when they join the bar.  Whether Moughni will take his chances of having to go up on appeal over his rights by acknowledging that he is a lawyer when he speaks out about the settlement, I do not know, but Public Citizen will stand ready to defend him. 

The “Fair and Balanced” Basis for the Prior Restraint

There were several fascinating moments during oral argument; the transcript is now available here. 

But one moment stood out for me.  During my argument, I made the point that even if the Court concluded that Moughni was seeking to represent class members in his capacity as counsel, the Supreme Court has repeatedly distinguished between lawyers who seek to represent clients for a cause, to stand up against perceived injustice, and lawyers who solicit paying clients.  By advocating selflessly for a cause in which he believed, Moughni was really acting in the highest traditions of the bar.  McDonald’s response was to urge the judge not to listen to my “silvertongued” argument; it specifically faulted me for stating last week that the prior restraint was entered without an adequate record of supporting evidence.  Said McDonald’s, it doesn’t matter what was in the record, because anybody who watched what was happening on Fox News would understand why Moughni deserved to be enjoined.

If that is enough basis for a prior restraint in the Circuit Court for Wayne County, Michigan, serious intervention from the appellate courts is going to be needed.

What Could McDonald’s Have Been Thinking?

In a comment to the ABA Journal’s article on the promised lifting of the injunction, “Pushkin” made this significant point:  “You would think someone in Mickey D’s marketing department would have known that trying to squelch Moughni’s postings would breathe life into the issue and would have told the lawyers not to do it.  Marketing knows a lot more about this kind of thing than legal, and a client sometimes has to protect itself from its own lawyers.”

One can think about the settlement of the class action through the payment of charitable donations to neighborhood institutions as representing a smart move by McDonald's to contain the damage caused by the embarrassment of having been caught making serious mistakes with respect to an important market — Muslims who care about how their meat has been slaughtered.  Plainly, the marketing department was on the scene here.  So how could McDonald's make the mistake of undoing all the good optics of its charitable donations by attacking a Muslim critic?

My sense is that companies often take the chance of suppressing dissent because, even if marketing gives such sensible advice, the lawyers are allowed to go ahead anyway because they tell their clients that a local judge will go along, and they just assume that the suppressed critic will not find his way to a lawyer who can present the First Amendment law with sufficient force — or, indeed, that the critic will be unable to afford free speech counsel.  The best way to make companies like McDonald’s think twice about this calculus is to increase the costs of failure.  McDonald’s should face serious injury to its brand because of what happened here, just as it did in the aftermath of the McLibel litigation fifteen years ago. 

Boycott McDonald’s, anybody?