Happy Tuesday, I’m Eriq Gardner.

Welcome back to The Rainmaker, my private newsletter focused on the legal maneuvering inside Hollywood, Silicon Valley, Washington, and Wall Street.

This week, I write about a libel suit that’s quietly causing hell for CNN and Anderson Cooper. There’s a good chance this high-stakes case goes to trial soon. Plus, a last-minute deal between Big Tech and the music industry; Donald Trump’s real privilege; and Tom Girardi’s affair with a judge.

But first…

Nevertheless, that alleged bowel movement is at the center of Baumgarten’s ongoing, three-year lawsuit against ICM, Ballard, and former agency boss Chris Silbermann. Among his claims is a rare instance of alleged self-defamation, meaning he has been compelled to repeat the turd rumor when hunting for new jobs, thus defaming himself. After all, any prospective employer is likely going to ask him to address his termination. (Most states don’t recognize self-defamation as a viable tort, but California is among the handful that do. A 2020 appellate decision made that clear.)

Baumgarten avoided arbitration with his former employer by convincing a trial court, and then a California appeals court, that he didn't actually agree to the arbitration provisions found in the ICM Operating Agreement. This past week, in a new motion, ICM frames Baumgarten’s success in that regard as a “Pyrrhic victory,” arguing, “Baumgarten now is thus precluded from raising employment-based claims, when he has averred that his employment contract is null.”

More provocatively, ICM also claims in its latest filings that the agency has “security camera footage implicating” Baumgarten as the guy who left feces on the floor—footage which was collected as part of Human Resources’ “privileged” investigation into the mystery pooper.

I’ve asked around, being an intrepid reporter, and have been told that the camera wasn’t actually inside the bathroom but rather just outside, down the hall near reception. Maybe Baumgarten has an explanation for whatever has been caught on camera. I haven’t heard back from his attorney, who just happens to be named Leo Livshits. You can’t make this stuff up.

• Donald Trump found a judge who agreed to the appointment of a special master to review the classified and top secret materials that the F.B.I. seized from his Mar-a-Lago residence. U.S. District Court Judge Aileen Cannon issued a Labor Day ruling (read here) that largely grants his request, which would presumably slow, but not undermine, the government’s case. The Justice Department will weigh expediency versus precedent and decide whether to appeal the decision from the Trump-appointed judge. As I explained on last Friday’s edition of The Powers That Be podcast, I don’t believe the ruling will matter much in the long run.
• Spencer Elden, who appeared nude as a baby on the iconic cover of Nirvana’s 1991 album, Nevermind, is now 31 years old. Even under the most generous interpretation of the statute of limitations for a child porn case, that was still a few years too many for the judge who dismissed his lawsuit (again). See the ruling here. Elden has already filed a notice of appeal. That seems hopeless, and Nirvana-obsessed legal nerds are better off paying attention to the epic intellectual property fight over a Kurt Cobain smiley face.
• It’s hard to believe we’re still learning more about this incredible, and sad, Tom Girardi saga. The latest? The attorney, who lost his license and has been facing claims of stealing from clients, apparently had an affair with Tricia Bigelow, a California appellate judge. This was before Girardi separated from Real Housewives star Erika Jayne. The Los Angeles Times reports that financial records show Bigelow paid for a Santa Monica ocean-front condominium with funds earmarked for Girardi’s clients. An attorney for Bigelow, who retired last year, denies that. I’m not sure who to believe, but I do see this as evidence that the blast radius for this scandal is expanding.

The saga dates back to 2016, when a popular West Palm Beach heart surgeon named Dr. Michael Black sued CNN and star medical correspondent Elizabeth Cohen over reporting on infant deaths at St. Mary’s Medical Center, where he worked. The network had reported, both online and on Cooper’s show, that the mortality rate for open-heart surgery at the hospital was “three times the national average”—an eye-catching statistic that Black alleges is deeply flawed and dishonest. Black further claims that experts had repeatedly warned CNN that its methodology effectively cherry-picked data by focusing only on the highest-risk procedures, and that CNN ignored these warnings. Indeed, according to Black, there was no statistically significant difference between St. Mary’s “secret deaths,” as CNN reported, and the national average. Nevertheless, St. Mary responded to the bad press by shutting down its pediatric cardiac surgery program. (CNN settled a separate lawsuit in Georgia brought by the hospital’s former chief executive, David Carbone, who was forced to resign after the exposé was published.)

The judge overseeing the case, Richard Oftedal, has made a string of decisions largely in favor of Black, prompting CNN to seek immediate appellate review, which is one of the reasons why this case has been dragging on for six years. For example, CNN unsuccessfully attempted to assert journalist privilege to shield conversations with one of its key sources. Most recently, Oftedal gave Black permission to amend his suit to seek punitive damages. By Florida law, such a penalty is only available when a defendant is guilty of intentional misconduct or gross negligence. CNN, represented by a half-dozen lawyers led by Ballard Spahr partner Charles Tobin, has argued that this means only the most extreme cases of wanton misbehavior.

Oftedal, though, saw overlap with the “actual malice” requirement for public figures—meaning, knowledge of falsity or reckless disregard for truth—and ruled that Black had met this threshold. “CNN Defendants had been aware that assessing a program’s performance solely based on raw data could be potentially misleading,” wrote the judge, adding that more than 240 CNN employees, including its then-president, Jeff Zucker, were involved in handling this particular story (Zucker gave a declaration in this case, and Black has seized on his emails to show CNN’s leader was asking questions about the reporting including the characterization of the mortality rate, but the judge recently rejected a bid to have him deposed). That should give Black’s attorneys plenty to work with if the case goes to trial, where they’ll argue that a veritable army of journalists sloppily portrayed the good doctor as a baby killer, fueled multiple threats to his life, and trashed his career.

In the meantime, the two sides are gearing up for a critical summary judgment. Judge Oftedal will also soon decide what a jury can hear about CNN’s process for how it reviews its most sensitive stories—a ruling that could conceivably reverberate among media lawyers and influence newsrooms elsewhere, and one that would be particularly important for an organization that brands itself as the most trusted name in cable news. Ironically, Black is represented by the same conservative husband-and-wife litigators that are leading Dominion’s defamation case against Fox, Tom Clare and Libby Locke.

Perhaps the most consequential part of the deposition, though, pertained to what’s known as “The Triad” process—a special fact-checking system in place at CNN, one that’s even been profiled in The Times. The network’s most adventurous journalism is reviewed rigorously prior to publication by a triumvirate of senior editors, Standards & Practices employees, and company attorneys. Cooper testified that two of his prior employers, ABC and Channel One, didn’t have a system quite like this, and that it gave him confidence in CNN’s journalism.

So much confidence, in fact, that Cooper said he wouldn’t interfere or take liberties with reporting that had come to him pre-vetted. “My getting involved with [the review] will only gum up the works because so many eyes had looked at it,” he told Locke in January, adding on the second day of questioning that the system impacts how he interacts with those who appear on his show. “Normally, I would just ask the question that I’m interested in about something, and the reporter wouldn’t know in advance what I’m asking, and they would just answer it. The fact that there is an answer here [in this script,] I’m assuming that meant it had gone to the Triad process.”

Later in the deposition, Cooper grew defensive over the implication he’s just a pretty face: “I feel it makes it seem like I don’t do anything all day long and I’m just sitting around for the camera to turn on,” he said. “I’m deeply involved, you know, all day long every day, in learning and research and stuff. It’s just not for lengthy yearlong investigations.” When he was asked if CNN has any rules or policies for how hosts should conduct interviews, Cooper retorted: “Well, host isn’t a term I would use.”

Other CNN editorial staffers also nodded in their depositions to their reliance on this pre-publication review process, which prompted Black’s lawyers in March to make a push for access to “Triad” communications that the network has been insisting are shielded by attorney-client privilege. And if CNN won’t give up these sensitive conversations, Black’s team wants Judge Oftedal to prohibit CNN from pointing to the Triad as a demonstration of its care in vetting the hospital exposé. “This is a textbook use of attorney-client privilege as both a sword and shield,” Black’s lawyers argued.

CNN didn’t like the suggestion that it must choose between waiving attorney-client privilege and forgoing the presentation of evidence about its pre-publication process, and warned the judge about committing a “reversible error.” (Black then did the same.)

Judge Oftedal has attempted to steer both parties to some sort of middle ground where jurors might be instructed not to draw inferences about the Triad process, but this is still a hotly debated area, and it won’t be a shock if the outcome of this issue has an outsized impact on the trial (and an appeal).

That is, if the case actually makes it to trial. CNN, just like Fox News in its showdown against Dominion, will have to consult its insurers and take a measure of the state of play as the trial nears. It’s certainly possible that after six long years in court, this one ends in settlement. If not, though, we could see Anderson Cooper on the witness stand, references to the Zucker regime, and a parade of media reporters who thought they’d be in Wilmington to cover Fox’s landmark First Amendment case traveling to Palm Beach instead.

That royalty rate shouldn’t be surprising, as it’s pretty similar to what the CRB ordered for the five previous years, and it’s basically the midway point between what publishers demanded and what the streamers wished. So why did negotiations take months? Well, for one, things always get complicated when competitors are jointly negotiating. In this case, Spotify (Latham & Watkins), Apple (Kirkland & Ellis), Pandora (Weil Gotshal), Amazon (Kellogg Hansen), and Google (Wilson Sonsini) each brought their own power lawyers into the Zoom dealroom.

But the real reason these discussions were so complicated should become clearer over the next few years as streamers roll out newer and more complicated customer enticements, such as the Spotify-Hulu bundle. The proper way to account for revenue from these “bundles,” among other incentives, was a key focus of these negotiations, I’m told. For example, under old regulations, streamers could offer a 30-day trial to an individual every two years. Now, they can offer 45 non-consecutive days every year.

• The late October trial between Elon Musk and Twitter is getting closer and closer. In the coming week, the parties are scheduled to exchange their expert reports, detail their initial lists of witnesses, and finish depositions and factual discovery (although don’t be surprised to see bids for an extension).

• Speaking of Musk, congratulations to a group of brave Oklahoma firefighters, whose pension fund has been allowed to become lead plaintiff in a securities fraud lawsuit against Musk for his attempt, earlier this year, to buy Twitter a bit too under the radar. These same firefighters are involved in 14 other shareholder lawsuits presently, and overcame an allegation of being a “professional plaintiff” to take pole position in a case alleging that Musk ignored timely disclosures. Alas: The world’s unluckiest investor vs. the world’s richest man.

• From Angelina Jolie to the Monkees, this is clearly the year of the Freedom of Information Act. Micky Dolenz, the last surviving member of the band, wants any F.B.I. records the bureau may have about the band and their interactions with other musicians and artists who were being tracked by the government at the time, such as Jimi Hendrix. Now he’s going to court to get them, proving The Simpsons right about one more thing.

• The California legislature has voted for the Age-Appropriate Design Code Act, which will require many websites to verify the ages of users as well as prioritize privacy for minors. If Governor Gavin Newsom signs the bill into law, expect to see tech companies bring a lawsuit challenging the constitutionality. They might also make arguments about how the law is preempted by federal statutes and regulations.

Send comments, suggestions, and leaked depositions to eriq@puck.news. No poop, please.