The arbitration claim filed Wednesday by former CNN anchor Chris Cuomo is a remarkable document for a number of reasons. There is, for starters, the headline number—Cuomo is seeking a whopping $125 million after he was fired for helping his brother, former Governor Andrew Cuomo, to fend off a sexual harassment scandal. According to his lawyers, the nine-figure damages claim would cover not just the $15 million in salary and ratings bonuses that Cuomo was owed for the 19 months remaining on his contract when he was fired, but also the “decades” of earnings that Cuomo presumably would have made, if not for “CNN’s calculated efforts to tar and feather him.”
Even more remarkable is the Cuomo claim that CNN “violated the express terms of his employment agreement by allowing its employees”—former colleagues like Jake Tapper, Don Lemon, and Brian Stelter—“to disparage him.” By this strained logic, one presumes, CNN was contractually obligated not to report on one of the biggest media stories in years. It was CNN’s investigation into Cuomo, after all, that also led to the resignation of the network’s president, Jeff Zucker, and the appointment of new leadership across the news division.
Yet one of the most bizarre wrinkles in the matter pertains not to Cuomo’s former coiffured hosts, but rather to Michael Jackson, of all people. Almost exactly three years ago, HBO aired a documentary, Leaving Neverland, about alleged child sex abuse by the late singer. That drew a lawsuit from Jackson’s heirs, who claimed the film violated a non-disparagement clause in a three-decade-old agreement, one that provided the prestige television service with the rights to air a televised concert following the release of Jackson’s 1991 album, Dangerous.
The plaintiff in the Leaving Neverland case was represented by Bryan Freedman, who also just so happens to be Cuomo’s attorney. And in yesterday’s arbitration filing, Freedman effectively made the same argument: that by failing to instruct anchors like Tapper and Stelter not to disparage Cuomo, CNN violated a non-disparagement clause in his contract. In fact, it’s the big money claim, representing $110 million of the overall $125 million in damages sought by Cuomo.
The non-disparagement claim raises an important question: What happens when your business is news, and the news is about your business? Can those contracting with a media company really expect the enforcement of a deal term that purports to handcuff journalists from covering a top story—particularly one in their backyard that requires their voice?
Of course, the Leaving Neverland case and Cuomo litigation have more in common than the same litigator. HBO, which shares the same parent company as CNN, was represented by Daniel Petrocelli, who just so happens to be CNN’s attorney in the Cuomo case. And Petrocelli’s legal theory on behalf of CNN is likely to mirror his defense of HBO, too. In the Jackson case, Petrocelli made the argument that the old non-disparagement clause was so broad as to infringe upon the network’s First Amendment and due process rights without fair notice. HBO also argued that the non-disparagement clause was unenforceable because it violated numerous public policies.
Before the case was sent to arbitration, here’s what Petrocelli’s client told a federal judge in 2019: “Applying the non-disparagement sentence to HBO’s exhibition of a documentary film regarding a deceased individual would be unprecedented… It would legitimize the creation of a special category of wealthy, powerful, or famous individuals who could—through a lifetime of contracts with news or media companies—preserve for themselves via contract posthumous control over how they are portrayed and described in a way that ordinary citizens cannot. This would run counter not only to California’s policy barring claims for defamation of deceased individuals, but also California’s policy disfavoring restrictions on public criticism or commentary in the form of prior restraints on speech, particularly where they suppress newsworthy information and unlawful acts.”
As Cuomo’s case moves forward, I expect that Petrocelli will make a similar argument on behalf of CNN—that Cuomo can’t really stop via contract the network’s First Amendment right to express itself on issues of public concern, including subject matter that implicates the former governor of one of the nation’s largest states. In response, Cuomo will contend that CNN did legitimately waive its First Amendment right.
Oh, and by the way, the Leaving Neverland case isn’t over. It’s currently scheduled to go before an arbitrator in February 2023. If Cuomo v. CNN runs at the same pace, we can expect a hearing four years from now. Most insiders believe Cuomo wishes to settle; we’ll see if the arbitration demand sufficiently scares the network, or represents enough of a nuisance, to come to a deal.
Shari’s Tax Bill & Other News
—Make sure you read William Cohan’s latest about Shari Redstone and a possible sale of some of her CBS assets. Let me add a spicy nugget to this pot-boiler. The 2020 death of media mogul Sumner Redstone, Shari’s father, resulted in a huge estate tax bill. In fact, according to a probate filing on Tuesday, “Based on values reported on Mr. Redstone’s federal estate tax return, the estimated cumulative value of the Estate and the 2003 Trust is $40,970,19l.48. The estimated amount of Decedent’s Debts and Expenses significantly exceeds the value of the 2003 Trust and the Estate.” Who will be paying these debts? A proposed settlement, among other things, clarifies that it will be Shari, along with other co-trustees of the Sumner M. Redstone National Amusements Trust, and they won’t be raiding $50 million in retirement accounts nor his charitable foundation.
—The Russian incursion against Ukraine has opened the Peppa Pig front. Now that multinational corporations are exiting Russia, Moscow is passing laws to seize abandoned assets and allow patent theft. But will Russians still be able to eat at McDonalds and drink a Pepsi while staring at their newly bought iPhone? That’s where the cartoon character comes in. A Russian court has reportedly ruled in favor of a local entrepreneur who drew his own version of Peppa Pig, citing “unfriendly actions by the United States of America and affiliated foreign countries.” Expect more entrepreneurial ingenuity to follow.
—Is it possible to be born into a Non-Disclosure Agreement? That’s what I was puzzling when reading about the woman who is now suing Dallas Cowboys owner Jerry Jones. According to reports about the new case, Jones paid this woman’s mother to conceal that he was her biological father, with ongoing payments conditional on both the parent and child’s continued silence. Supposedly the child is in breach by speaking up, but after consulting with attorneys to make absolutely sure, I can say that aspect really makes no sense. As one lawyer explained to me, “Children lack legal capacity to enter into contracts, and contracts are not enforceable against them absent appointment of a guardian ad litem for purposes of court approval prior to entry into the contract.”
—There was a lot of buzz this past week about how former Miami Dolphins football coach Brian Flores is asking NFL commissioner Roger Goodell to not try to move a racial discrimination suit into arbitration. Given there hasn’t yet been a motion to compel arbitration filed in court, nor opposition, this amounts to a “pretty please.” Actually, let’s call a spade a spade. It was a publicity stunt by Flores’ attorney Douglas Wigdor, no stranger to attempts to leverage media sympathies for maximum advantage. That’s not always bad, but it should be noted that at this very moment, in a separate case over alleged rape by billionaire Leon Black, Wigdor’s press strategy is front and center and he is now resisting a subpoena regarding communications with reporters.
Smartmatic v. Fox
Finally, this was a pretty extraordinary past week with respect to libel law. The big news was that Fox News couldn’t get out of a high-stakes lawsuit brought by election tech company Smartmatic over conspiracies spread about the 2020 presidential election. A New York judge rejected the network’s motion to dismiss. But there were a pair of other important developments as well in different cases: Donald Trump was denied a counterclaim against writer Jean Carroll, who alleges being raped and then smeared by him as a liar. And similarly, in a now eight-year-old case between the pop producer Lukasz Gottwald and the pop singer Kesha Sebert over what was said about an alleged sexual assault, an appeals court just ruled that she won’t be able to pursue legal costs for an allegedly frivolous libel case.
Amazingly, there is a common thread running through all of these stories. It begins in 2020, when the New York legislature recognized legal bullying by the likes of Trump and Harvey Weinstein and passed an “anti-SLAPP” statute designed to curtail lawsuits that chill free speech. Henceforth, for cases not premised on any substantial basis in fact and law, defendants could now recover their legal fees. Also, the actual malice standard became part of New York’s libel code.
Then, in December 2020, in Sarah Palin’s libel suit against The New York Times—yeah, that same one that went to trial in January—the presiding judge ruled that New York’s new anti-SLAPP law applies retroactively. Three months later, Kesha’s lawyer cited that Palin ruling in a motion, and the judge granted the bid for a counterclaim under that anti-SLAPP law. Finally, on Jan. 11, Trump’s (latest) attorney turned around and cited the Kesha win in order to pursue the same advantage in the Carroll case. (The judge responded that a proposed counterclaim would be futile.)
Now comes some backtracking as an appeals court, upon a push from Gottwald, rules that contrary to the decisions in the Kesha case, there is insufficient evidence that the legislature intended its anti-SLAPP modifications in 2020 to apply retroactively. This is an adverse development for Kesha, whose lawyer will pursue further appeal, and potentially a welcome one for Palin too, now attempting to reverse her trial loss and maybe ditch the actual malice standard.
As for Fox News, in the wake of the Smartmatic loss, the network filed a counterclaim today under New York’s anti-SLAPP statute. The filing attacks the election tech company’s basis for asserting $2.7 billion in damages, though it’d be unprecedented to prevail on such a counterclaim. Alas, good luck with that.