Short seller Muddy Waters says Quinn Emanuel betrayed client loyalty in Techtronic lawsuit

Techtronic Industries

20/07/2026 21:25

By Mike Scarcella

    July 20 (Reuters) - Muddy Waters Capital has asked a federal judge in Texas to disqualify law firm Quinn Emanuel Urquhart & Sullivan from a lawsuit claiming the short seller participated in a scheme to publish false reports about power tool maker Techtronic Industries.
Muddy Waters in a filing in federal court in Texas on Sunday said Quinn Emanuel can't ethically represent Techtronic in the case because it previously advised the investment firm and its founder Carson Block during federal investigations into so-called activist short sellers.
Muddy Waters said Quinn Emanuel as part of that work obtained confidential information about its business, trading practices and research operations. Quinn Emanuel has falsely said Muddy Waters was never a client, the short seller said in its new filing.
Techtronic, owner of Milwaukee power tools, sued Muddy Waters last year, alleging the firm conspired to publish defamatory reports about the company and profit from resulting declines in its stock price. Muddy Waters has denied any wrongdoing.
“This case presents an unfortunate example of a law firm suing its former client after obtaining relevant confidential information during its representation of that client in a related matter,” Muddy Waters said in its court filing.

     Quinn Emanuel in a statement said "we believe the motion is meritless and intend to oppose it.” Techtronic did not immediately respond to a request for comment.
Muddy Waters alleged that client conflicts are an "endemic" problem at Quinn Emanuel, pointing to a string of cases in recent years where the firm was disqualified. A judge last week in California barred the firm from defending a real estate company in a copyright lawsuit due to a conflict. Quinn has denied there was an ethics breach in that case.

     In a statement, Block of Muddy Waters on Monday said "at least eight recent conflict-related disqualifications and resignations isn't bad luck, it's a pattern, and law firms shouldn't get a pass on it."
  
Muddy Waters argued that Quinn Emanuel's prior work for the company in 2022 is substantially related to Techtronic’s case because the lawsuit discusses Muddy Waters' business model, short-selling activities and other matters examined during the government investigation.
The filing said Quinn Emanuel publicly marketed its expertise in pursuing claims against short sellers and promoted a "playbook" for suing them while simultaneously representing Muddy Waters.
Quinn Emanuel’s team for Techtronic includes Alex Spiro, one of the top-billing partners at the firm. His clients have included billionaire entrepreneur Elon Musk and former Activision Blizzard chief executive Bobby Kotick.
Spiro did not immediately respond to a request for comment.
The case is Techtronic Industries Company Ltd v. Muddy Waters Capital LLC, U.S. District Court for the Western District of Texas, No. 1:25-cv-00249.
For plaintiff: Alex Spiro, Jason Sternberg, Kristin Tahler and Nicholas Inns of Quinn Emanuel
For defendant: David Korzenik of Miller Korzenik Rayman; and Peter Kennedy and James Hemphill of Graves Dougherty Hearon & Moody

(Reporting by Mike Scarcella in Washington)