Media giant Warner Bros. Discovery (WBD) is expected to catch a subpoena following a Thursday hearing in the $1 billion defamation suit against its subsidiary, CNN. In a hearing lasting almost four hours, exclusively recorded by NewsBusters, Florida 14th Judicial Circuit Judge William Scott Henry cleared the way for Plaintiff and Navy veteran Zachary Young to issue a subpoena to turn over select financial documents that pertained to CNN. In addition, Judge Henry also signaled that punitive damages sought against CNN could go beyond the simple net worth of the network.
Looking to “boil it down to something simple,” Judge Henry delivered an analogy likening a request of financial documents from WBD to asking a doctor for the medical records of a patient involved in an accident claim:
In a car accident case, the defense does a RFP to the plaintiff saying, ‘send me all your medical records,’ but then, at the same time, there's a notice of production and subpoenas all the medical providers and gets their records not only from the accident but predating it or whatever. And it's just to make sure that what's being produced on one side is the same as what the doctor actually has in their office.
But the subpoena for CNN’s finances via WBD will be limited to the documents the network presented to its parent company. Essentially, this will act as a way to double check to see if CNN was being honest with the financial documents they were turning over as part of discovery; comparing what they turned over to Young’s legal team vs what they told corporate.
The Judge’s analogy for this part was that a kid trying to ask a parent for a larger allowance with a very detailed PowerPoint presentation:
I compare this, for instance, to, you know, the kid goes to the parents and go, ‘hey, I need to up my allowance this year.’ ‘Well, Johnny, why do you need to up your allowance?’ ‘Well, I got to pay for this. I gotta pay for this, you know, these are the things I wanna do, um, you know, I'm gonna go cut grass and I'm only gonna get, you know, so much from cutting mowing yards during this point in time, so here's where I think you ought to settle on my allowance per week now because this is what I need to pay for lunch or go have fun to the movies with my friends or do whatever.” But it's Johnny's bringing that to mom and dad and saying here, up my allowance.
So, I mean, if CNN did internal modeling or predictions and set that within the umbrella for Warner Brothers and Warner Brothers happens to have a copy of it. I think Warner Brothers can produce it, and it's the same thing as asking the doctor's office to produce the records that maybe the plaintiff's attorney produces as well, but the defendant can, you know, in that case has a right to verify it. Y'all have the right to verify it.
“I would overrule the objection to the extent that it was prepared by or on behalf of CNN Inc. or CNN Worldwide and just submitted to Warner Brothers,” he added.
CNN received more bad news by way of Judge Henry signaling that the punitive damages claim that would be presented to the jury next year would go beyond just the global network’s net worth.
Citing previous cases that involved punitive damages, Judge Henry noted that the precedent in Florida was that a juries are instructed to take into account the financial resources of a defendant, not just net worth:
All right. So, with those guiding principles, nowhere in here does it say ‘the defendant’s net worth.’ The only thing that financial talks about are: motivation by unreasonable financial gain and the financial resources of the defendant. Resources, not financial net worth of the defendant. The financial resources of the defendant. And then, as I indicated, the note referenced two cases the deal with punitive damages being awarded in other cases. So, that is what the jury is instructed on to make a determination as to the proper amount of punitive damages.
“So, obviously information that is being requested in discovery that would go to those things that obviously would have to be admissible evidence at trial are certainly fair game for purposes of discovery,” he said. “And any other request that would drive toward that information or potentially uncover that information would be discoverable.”
Young is also allowed to see the last three years of CNN's defamation settlements. These are important because punitive damages are meant to cause enough pain to deter or prevent an entity from repeating the offensive behavior. So, if what they paid in settlements wasn’t enough to correct their behavior, a jury could take that into consideration in setting a price to punish them.
CNN did not respond to a request for comment.
The relevant portions of the transcript are below. Click "expand" to read:
CNN Defamation Suit
September 5, 2024
12:03 p.m. Eastern(…)
JUDGE SCOTT HENRY: All right. So, with those guiding principles, nowhere in here does it say ‘the defendant’s net worth.’ The only thing that financial talks about are: motivation by unreasonable financial gain and the financial resources of the defendant. Resources, not financial net worth of the defendant. The financial resources of the defendant. And then, as I indicated, the note referenced two cases the deal with punitive damages being awarded in other cases.
So, that is what the jury is instructed on to make a determination as to the proper amount of punitive damages. So, obviously information that is being requested in discovery that would go to those things that obviously would have to be admissible evidence at trial are certainly fair game for purposes of discovery. And any other request that would drive toward that information or potentially uncover that information would be discoverable.
(…)
1:07 p.m. Eastern
HENRY: And then the last bit is on the Warner Brothers subpoena. And I think the way that I'm looking at this is – You know, let's boil it down to something simple.
In a car accident case, the defense does a RFP to the plaintiff saying, ‘send me all your medical records,’ but then, at the same time, there's a notice of production and subpoenas all the medical providers and gets their records not only from the accident but predating it or whatever. And it's just to make sure that what's being produced on one side is the same as what the doctor actually has in their office.
So, I think even though something may be being produced by CNN, it wouldn't necessarily bar it if Warner Brothers has the same type of document. Having said that, I don't think Warner Brothers should be compelled to produce something that it was creating as its own separate entity. That is separate apart from a financial record that CNN may have internally produced itself, and I think there's a difference of opinion or a difference in terms of how those need to be looked at.
And hence some of my questions that I asked you, Mr. Delich of ‘Well do you really think this is the same thing if Warner Brothers is doing it for its evaluation purposes as opposed to CNN walking in to apply for the loan.’ And I think, at least at this point in time, I think there is a slight difference on that because Warner Brothers is not CNN and CNN is not Warner Brothers.
So, having said that, if, for number one, for instance, if there is internal modeling or predictions of future revenues or profits for CNN that Warner Brothers has in its records and archives. And it was sent by CNN to Warner Brothers. And it wasn't just generated by Warner Brothers itself. I think Warner Brothers should produce what CNN – you know, I mean – You know, I don't know.
I compare this, for instance, to, you know, the kid goes to the parents and go, ‘hey, I need to up my allowance this year.’ ‘Well, Johnny, why do you need to up your allowance?’ ‘Well, I got to pay for this. I gotta pay for this, you know, these are the things I wanna do, um, you know, I'm gonna go cut grass and I'm only gonna get, you know, so much from cutting mowing yards during this point in time, so here's where I think you ought to settle on my allowance per week now because this is what I need to pay for lunch or go have fun to the movies with my friends or do whatever.” But it's Johnny's bringing that to mom and dad and saying here, up my allowance.
So, I mean, if CNN did internal modeling or predictions and set that within the umbrella for Warner Brothers and Warner Brothers happens to have a copy of it. I think Warner Brothers can produce it, and it's the same thing as asking the doctor's office to produce the records that maybe the plaintiff's attorney produces as well, but the defendant can, you know, in that case has a right to verify it. Y'all have the right to verify it.
If it's internally done for Warner Brothers. Financing. Modeling You know, what are making a determination on what we're paying on – to shareholders for dividends this year. If it's Warner Brothers doing these things, Warner Brothers doesn't have to produce its own document. Okay?
And I know Mr. Delich, I know you're saying, well, it's mom and dad would be the one, they're not selling Johnny, but mom and dad would be the ones selling the car if they had that, and therefore they ought to be able to value that asset that they own. Mom and dad aren't a party to this case. So, at this point I would sustain an objection to anything Warner Brothers prepared itself.
I would overrule the objection to the extent that it was prepared by or on behalf of CNN Inc. or CNN Worldwide and just submitted to Warner Brothers.
(…)
