Judges
Tommy Thompson found the Ship of Gold. In 1988, his crew pulled thousands of gold bars and coins from the wreck of the SS Central America, a steamship that went down in 1857 carrying thirty thousand pounds of freshly minted San Francisco gold destined for the U.S. gold reserves in New York. The ship went down of the Carolinas in a hurricane with 425 of her passengers and crew. The sinking led to the Panic of 1857.
For two centuries, the gold sat two miles down. After meticulous research, Thompson found her, inventing new ways to explore the ocean depths along the way.
In 1988, the value of the sunken gold was $860 million ($2.4 billion in 2025). Thompson and his team brought up between $100-150 million in coins and ingots. He then spent years in litigation with insurance companies who covered the losses in 1857 and his investors, the ones who funded the expedition.
He went off grid in 2012 to avoid a federal judge who was demanding answers. A bench warrant for failure to appear was issued. He was caught living off the grid in a Florida hotel in 2012 and was sentenced to two years on the failure to appear. As that sentence ended, the judge demanded answers to the whereabouts of some five hundred missing gold coins. Thompson refused. The judge sent him back to a federal prison camp for contempt.
Civil contempt sentences are, by design, indefinite. You stay until you comply. Thompson didn’t. He sat in for a decade, never accounting for the coins. A few weeks ago, after the judge finally concluded he was never going to talk, he was released.
There is a lesson here that has nothing to do with treasure hunting but everything to do with how the unwary misread a judge’s power. We see it with all manner of clients – the biggest shock of trail litigation isn’t the courtroom itself, it’s the sudden realization of how little control they have in that room and how much the person in the robe does.
A judge is the one person in the room with the power to determine, within broad limits, what happens to your business, your assets, and in Thompson’s case, your freedom. Anyone who walks into court thinking the judge will recognize the obvious righteousness of their position learns quickly that . . . well, it was obvious only to them.
We advise clients what to do in a courtroom: wear something neat and appropriate, pay attention, say nothing unless asked, and when asked, answer only what is asked. We tell them what not to do: roll their eyes, make faces, react to testimony they know is wrong, whisper anything except directly to their attorney. We tell them they will hear things in that room that are unfair, out of context, and sometimes factually incorrect and that their job at that moment is to do stay silent. It’s our job to correct the record.
In court, with the judge at the bench, the only available contribution you can make is to not make things worse.
Thompson somehow first decided that whatever the coins were worth was worth more than his freedom, then refused to believe the judge wasn’t bluffing.
Pro tip: judges don’t bluff: they don’t have to.
Update to “Cut Us Some Slack”
In our last newsletter we wrote about the lawsuit originally brought by the Department of Justice – then joined by the attorneys general of 39 states – against Live Nations Entertainment, owner of Ticketmaster.
The trial began in Manhattan on March 2nd.and went one week before Live Nation and the Justice Department reached a settlement. Twenty-six states rejected it and continued the case with the same jury.
That’s when the internal Slack messages between two Live Nation employees boasting about soaking ticket buyers hit the news. The lesson we took was this:
“Slack messages are stored, searchable, and in any company of meaningful size, subject to litigation hold and discovery the moment a lawsuit is filed or reasonably anticipated. “Private” in the Slack context means your colleagues cannot see it. It does not mean a plaintiff’s attorney and a federal judge cannot.”
Last week, the jury found for the plaintiffs and ruled that Live Nations has been acting as a monopoly (and a pretty unprincipled one at that). The company could be broken up, it will be paying much more than the DOJ settlement, an agreement that has not been accepted by the judge yet and may also be hanging in the balance.
Zappos-ed
Here’s a bizarre story that’s all over newsfeeds right now: the probate saga of Tony Hsieh, the founder of Zappos, who died in 2020 at 46, unmarried, childless, and, it was thought, without a will.
Hsieh’s $500 million estate was headed to his parents as his only surviving relatives, which is how intestacy works. The state of Nevada stepped in and distributed the vast estate according to its formula. While it’s not necessarily a bad outcome, it’s hardly ideal for far too many reasons to get into here.
So far, so normal. The parents were managing as well as could be expected considering Hsieh had agreements with dozens – maybe hundreds – of startups and closely held companies all of which he tracked on a post-it note covered wall.
Everything changed when a priority mail envelope arrived at a Reno law firm last March. Inside: a seven-page document claiming to be Tony Hsieh’s last will and testament. Signed, witnessed, dated 2015. Complete with a typed narrative about how it had been discovered among the belongings of a 91-year-old man in Pakistan who had just died without, apparently, knowing Hsieh had been dead for four years.
If that wasn’t enough to raise eyebrows, the four witnesses turned out to be untraceable. The man who mailed it from had vanished into the Hindu Kush. Several trusts were named as beneficiaries (including something called the Tony Hsieh Lit Wow Irrevocable Trust) and set to receive $50 million but there was no record of them anywhere.
A linguistics professor concluded the document language read ‘like South Asian English.’ Several experts said Hsieh’s signature looks forged. The will misspells his middle name.
A Nevada judge, calling the whole thing “just odd” went no farther and ordered a trial (Nevada’s threshold for probate consideration is almost unbelievably low), ordered a trial. The Hsieh family is now in the middle of a court battle that could last years and cost millions. On top of everything, there’s a brutal no-contest clause, meaning if the family challenges the will and loses, they get nothing. It’s a zero-sum game law suit.
More than a few legal commentators have already opined that this situation will become the new Jarndyce v Jarndyce, Charles Dickens’ fictional estate case in Bleak House. That case lasted generations and most of th3 1,039 pages of the Classic Penguin edition. “We are always appearing, and disappearing, and swearing, and interrogating, and filing, and cross-filing, and arguing,” was Dickens’ startingly accurate description of matters like this.
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The lesson here is this: make a will and tell people where it is. Or don’t but still people you haven’t and why – in writing.
A will that no one knows about is barely better than no will at all. An estate left without clear testamentary documents is an open invitation for exactly the kind of mischief playing out in Nevada right now: phantom witnesses, the untraceable trusts, the heirs, if any, of the mystery heir in Lahore.
Tony Hsieh was brilliant, creative, and by all accounts a genuinely interesting human being, albeit troubled. He had hundreds of millions of dollars, a team of advisers, lawyers on retainer, and endless resources. And yet he either never got around to doing the one thing that would have made his wishes clear and protected the people he cared about or he forgot to tell anyone that he had a will and it was with a friend in Lahore.
What’s most upsetting about this case is that it doesn’t just affect family members, the future of dozens of business hang on the outcome as well. How long it will take to sort it out is anyone’s guess. The facts so far point to an almost impossible discovery process. The only thing we can say for certain is that it will not go as long as Jarndyce v Jarndyce.
Spoiler alert: by the way, Jarndyce finally came to a close in the last chapters of Bleak House but there were no funds left, they were consumed by legal fees.
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