TikTok May Face Boutique Firm Hired by Texas Over China Access

Texas Attorney General Ken Paxton (R) took initial steps to sue video sharing app TikTok Inc., hiring Cooper & Kirk PLLC to represent the state, with the firm’s partners billing $3,780 per hour if they win.

TikTok faces a potential ban in the US if it isn’t sold by its Chinese parent company by Jan. 19. But in Texas, Paxton could sue over alleged misrepresentations it made about the Chinese government’s ability to access user data, according to a copy of a contract between the state and Cooper & Kirk.

Cooper & Kirk managing partner David Thompson, who Texas also tapped as outside counsel to bring an antitrust suit against BlackRock and Vanguard in late November, didn’t respond to a request for comment on when he’ll file the suit. Thompson signed the contract on April 16, while Paxton signed on May 13.

The threat of litigation ratchets up pressure on TikTok over its Chinese ties ahead of a looming nationwide ban. On Dec. 6, a federal appeals court in Washington upheld a law that would ban the social media app if it isn’t sold by ByteDance Ltd, its Chinese parent company, ruling that the law is a legitimate means to protect national security and user privacy.

The US Supreme Court will hear arguments on Jan. 10, a little more than a week before the ban takes effect. President-elect Donald Trump asked the court on Friday to hold off on the ban to give him time to “seek a negotiated resolution” of the dispute. His request cut a contrast to a brief from 22 Republican state attorneys general asking the court to uphold the ban. Paxton, a three-term Republican who often aligns himself with Trump, didn’t join the brief.

Contract Details

The contract, which Bloomberg Law obtained through a public records request, directs Thompson to pursue claims for “misrepresentations regarding content on the TikTok platform and misrepresentations to consumers related to the ability of the Chinese government to access US user data held by TikTok.”

The contract doesn’t specify which misrepresentations Paxton believes TikTok made. It calls for the firm to receiver the lesser of two options—billable hourly fees multiplied by four, or 10% of the total net recovery.

Partners or shareholders will bill $945 per hour, multiplied by four, while senior associates will bill $650 per hour before the multiplier. Others expected to work on the case have lower hourly rates.

The contingency deal closely resembles the one Texas used to sue Meta for using Texans’ facial recognition data without consent. Keller Postman and McKool Smith, the outside firms that helped the state obtain the $1.4 billion settlement, billed a combined $136 million in contingency fees last month.

Neither Paige Willey, Paxton’s director of communications, nor a TikTok spokesperson responded to a request for comment.

Paxton v. Big Tech

Paxton’s steps to sue TikTok are in line with other efforts he’s made to crack down on Big Tech.

In addition to the Meta settlement, he is also pursuing claims against Google for misusing facial recognition and tracking users’ movements; both lawsuits are pending in Texas state courts.

In October he sued TikTok for failing to comply with a new law designed to prevent minors’ exposure to sexual material and other explicit content. TikTok denied the allegations and is fighting them in court.

That case, which TikTok recently motioned to transfer to Austin, where it keeps an office, is handled by prosecutors in Paxton’s office. Cooper & Kirk isn’t involved, court records show.

Shawn Tuma of Spencer Fane said Paxton’s recent efforts represents a turnaround from prior years when the Texas attorney general’s office has not focused as much on consumer privacy.

“They’re trying to send a message to Texas businesses that we take very seriously the protection of informational privacy for Texas residents and we’re going to enforce it,” Tuma said. “That’s been their big goal for the year.”