Hello and welcome back to What I’m Hearing+, Tuesday’s Animal
Style accoutrements on your WIH Double Double. Lots of news this week at the intersection of Hollywood and law, a perfect opportunity for Eriq Gardner to combine it all into one analysis of the cases involving Drake, Kendrick, Justin Baldoni, Blake Lively, and the Navy veteran who sued CNN for defamation and won. Plus cameos from the South Park guys, Doug Liman’s brother, and the
mysterious actor who won $15.6 million in a poker game…
Over to you, Eriq…
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Eriq Gardner
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- Warner Bros. v.
‘South Park’ bros: Today, a New York judge delivered a win to Warner Bros. Discovery in its ongoing legal tussle with Paramount and South Park creators Matt Stone and Trey Parker over rights to stream the show on Max. As you’ll recall, Warner Bros. shelled out more than $500 million for the rights to the iconic show, anticipating exclusivity. But two extra-long Covid-related “specials” later appeared on Paramount+, which sparked litigation
over the precise terms of the agreement. New York Supreme Court Justice Margaret Chan previously trimmed the WBD suit by dismissing fair-dealing and consumer-protection claims, but today she allowed the company to advance on claims of unjust enrichment and tortious interference.
The significance of the ruling is two-fold. First, Paramount will likely be compelled to turn over extensive data concerning the viewership and profitability of Par+, something it had
very much hoped to avoid by seeking an early summary judgment. And second, barring a settlement, the stage is now set for a trial. In her ruling, Judge Chan pointed out that the contract left room for interpretation regarding whether Warners was guaranteed exclusivity and if the specials should be considered as part of the latest South Park seasons—all but ensuring a trial that focuses on the dealmakers’ intent.
- Which actor
won $15 million in a poker game?: Back in 2009, NBC announced it was developing Tommy Supreme, a legal drama based on “the exploits of real-life attorney Tom Goldstein, who has argued 21 cases in front of the Supreme Court.” The show was pitched as “inverse House,” featuring “a likable guy in the most unlikable
profession.” Alas, the show never got made, and Goldstein, the publisher of SCOTUSblog, was recently charged with tax evasion related to poker winnings. A likable guy he may be, but Goldstein allegedly used his law firm’s funds to satisfy off poker debts, as well pay salaries to women he was having
relationships with, even though the women “performed little or no work for the law firm.” The government further alleges that Goldstein failed to pay taxes on millions of dollars in gambling winnings.
Anyway, the indictment includes a TV-worthy blind item describing a high-stakes poker game that allegedly took place several years ago between an unnamed actor and an unnamed Texas businessman, arranged by an unnamed Hollywood producer. When the game concluded, the actor had won a
staggering $15.6 million.
Apparently, the Texan was reluctant to pay up, and the actor turned to Goldstein to help resolve the matter. According to the indictment, Goldstein threatened the Texan with litigation, which did the trick. To collect his contingency fee, Goldstein allegedly had the actor route the money through a California businessman who owed Goldstein over a poker debt. By doing so, the government claims, Goldstein avoided paying taxes on professional
earnings.
The anonymous actor would likely be called as a witness in the case. Is it a known poker ace like Tobey Maguire? Ben Affleck? Someone more surprising?
- Tackling the Sunday Ticket appeal: Last August, just as the NFL season was kicking off, a jury in Los Angeles awarded a stunning $4.7 billion to customers in a class-action antitrust case over the out-of-market broadcasting package known as
Sunday Ticket. Soon after, Judge Philip Gutierrez overturned the verdict, declaring that the jury’s conclusion that league owners had conspired
to fix prices was unfounded. This past week, the class-action lawyers resubmitted their initial appellate brief—still under seal—and added an alternative damages calculation under a different formula.
One result of the appeal may be an injunction that would prevent Sunday Ticket from continuing with its latest provider, YouTube TV—especially after Biden’s Justice Department, in one of its final actions, threw its support behind the plaintiffs. “The
NFL’s illegal acts are continuing,” the government stated, arguing before the 9th Circuit Court of Appeals that the plaintiffs shouldn’t be required to quantify an injury to qualify for injunctive relief.
Is the injunction a long shot? Perhaps not. The 9th Circuit, which previously revived the Sunday Ticket case after a dismissal, is one of the more liberal appellate courts. That said, all bets are off if the case ascends to the Supreme Court. Justice Brett
Kavanaugh has signaled a willingness to consider the NFL’s position that its TV licensing arrangement constitutes a totally legitimate joint venture.
- Liman lands Blake v. Justin: The dueling Blake Lively and Justin Baldoni lawsuits have been assigned to U.S. District Court Judge Lewis Liman, who has a knack for adjudicating high-profile entertainment industry cases. Among other
disputes, the New York judge oversaw Robert De Niro’s battle with an ex-assistant and is currently weighing a Real Housewives case that raises the question of whether Bravo has a First Amendment right to get its stars drunk.
As I’ve written before, Liman has notable family connections: His father, Arthur, was the chief counsel in the 1986 Iran-Contra congressional hearings, while his brother, Doug, is the prolific director of films including The Bourne Identity, Edge of Tomorrow, and Mr. & Mrs. Smith. Normally, these connections would be esoterica, but it turns out that Doug directed Lively, and her Gossip
Girl co-stars, in a 2008 pro-Barack Obama advertisement that parodied anti-drugs ads. (In the video, Lively tells young voters, “If you’re ever out somewhere and you’re considering voting McCain, just call me. I’ll pick you up. No questions asked.”) I’m guessing that’s not enough for Liman to recuse himself.
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Speaking of the Blake v. Baldoni war…
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News and notes on the most polarizing and perplexing entertainment
and media lawsuits of the moment: Drake staring down his archrival’s upcoming Super Bowl halftime show, Justin Baldoni gearing up for a protracted fight, and CNN’s political settlement calculus.
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What’s Drake going to do about the Super Bowl?
The Canadian rapper just launched a blockbuster defamation lawsuit against Universal Music Group for releasing and promoting Kendrick Lamar’s “Not Like Us,” a diss track that disparages Drake as, among other things, a “certified pedophile.” In less than three weeks, Lamar is slated to headline the Super Bowl halftime show, where he’s expected to perform “Not Like Us” in front of 65,000 fans in New Orleans and 100 million-plus watching on TV. Could Drake attempt to push
the NFL and Fox to prevent Lamar from performing the song?
That’s hard to say. Theoretically, repeating something false qualifies as a republication, and if the NFL, Fox, or the halftime show’s producer, Jay Z’s Roc Nation, gave Lamar the microphone to tell new audiences about Drake’s supposed sins, they could be as potentially liable as UMG. (Especially now that Drake
has made everyone aware of the falsity of the statements, if they are indeed false.) However, Drake’s endgame here is… murky. It’s unlikely he’s after a payout—he’s already loaded, and the lawsuit only amplifies Lamar’s insult. Meanwhile, both Drake and Lamar have record deals with UMG units: Lamar with Interscope, Drake with Republic. Some speculate that Drake might be aiming to wiggle out of his record deal, although this would be a strange way to do it. Quite a few lawyers
have emphasized to me that Drake’s lawsuit is targeting only Lamar’s label, not Lamar directly. The decision to not go after the speaker most responsible for the trash talk seems… calculated.
Yet, the theory that Drake is merely out to escape his UMG contract stumbles a bit. According to his 81-page complaint, his deal is nearly up. In fact, rather wildly, Drake alleges that UMG ignored his
objections and hyper-marketed “Not Like Us” because the company wanted to devalue his brand and music in order to gain leverage in extension talks—while simultaneously courting favor with Lamar, whose own contract was also ending. Does that make any sense? No matter. Drake goes even further, claiming that Lamar wrote and recorded “Not Like Us” as part of a strategy by Interscope C.E.O. John Janick to position himself over Republic’s Monte Lipman
as the successor to UMG C.E.O. Lucian Grainge. (Seriously, read it for yourself.)
So what’s really driving Drake? Maybe it’s just plain sensitivity. More and more, public figures are turning to the courts to clean up reputational messes—a strategy that often proves
questionable. In any case, the NFL and Fox should brace themselves. Drake’s reps previously denied sending a cease-and-desist letter over Lamar’s Super Bowl gig, but that was before Drake filed this suit.
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Drake’s legal team is led by Willkie Farr’s Michael
Gottlieb, who also happens to be steering Blake Lively’s lawsuit depicting Justin Baldoni as a sexual predator on the set of It Ends With Us. That conflict escalated last week when Baldoni, flanked by his own retinue, countered with a suit that he promised would refute, or at least complicate, some of the accusations Lively lodged on New Year’s Eve.
Baldoni’s
voluminous 179-page complaint, orchestrated by Bryan Freedman, could give Tolstoy a run for his money with its intricate narrative of allegiances and betrayals, targeting not just Lively, but also her husband, Ryan Reynolds, and publicist Leslie Sloane. The tome frames the dispute not as mere celebrity
squabbling, but as “two of the most powerful stars in the world deploying their enormous power to steal an entire film right out of the hands of its director and production studio.”
Looking ahead, keep an eye on how each side tries to probe the other’s vulnerabilities for leverage. Consider the claim that Lively and Reynolds meddled with Baldoni’s relationship with WME: This could lead to interesting
revelations during discovery, given the talent agency’s conflicting alliances and penchant for oral arrangements with its star clients.
There’s also the subplot involving Taylor Swift, one of Lively’s best friends, who has been pulled into the fray for allegedly pressuring Baldoni to include script rewrites by Lively. You can bet that cameo will whet the appetite of the press, as
will the accusation that Reynolds lampooned Baldoni in Deadpool & Wolverine—although I have trouble figuring out what’s legally problematic about poking fun at a guy’s self-identification as a feminist. (Perhaps Freedman will argue it violated a non-disparagement agreement, but I’m highly dubious that Reynolds, who wasn’t even party to a deal over the the promotion of It Ends With Us, can’t draw inspiration for a fictional character in another movie.)
And surely, Disney and Sony would prefer to steer clear of the drama. Freedman’s latest strategic move—submitting It Ends With Us outtakes to the Central District of TMZ—is bound to raise eyebrows and hints at stratagems to come. (Remember, Baldoni has also filed a $250 million defamation suit against
The New York Times for its “We Can Bury Anyone” story, published just before Christmas.)
Meanwhile, Baldoni, who was unceremoniously dropped by WME in December, might appear to have little left to lose from a protracted
fight. But not so for his co-plaintiff Melissa Nathan, whose high-octane P.R. shop juggles clients including Johnny Depp, Logan Paul, and… Drake. I’m frankly surprised she agreed to be a co-plaintiff in this case, which may subject her high-profile clientele to unwanted exposure.
This legal saga may stretch on for years—especially with so many players of all
kinds on the stage. Also, don’t overlook the lawsuit against Baldoni, launched by publicist Stephanie Jones, who once represented the filmmaker and then cooperated with Lively’s team when he dropped her for Nathan. This is really a three-way battle.
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Late Friday, after a weeklong trial, CNN settled with
Zachary Young, the Navy veteran spotlighted in a 2021 exposé on bad actors profiting from aiding Afghans escaping the Taliban. By the time the sides began discussing a deal, a Florida jury had already slapped CNN with a $5 million bill for defamation, teeing up a further round, in which Young’s attorneys gunned for $150 million in punitive damages—a number calculated after considering CNN’s $4.9 million in daily revenue and $2 billion-plus “net worth” (whatever the plaintiff’s
economic expert meant by that). Faced with these stakes, CNN cut its losses, promising publicly to mine the ordeal for “useful lessons.”
CNN’s loss isn’t a stunner, although many may find it questionable whether the network’s reporters truly branded Young a criminal war profiteer, as he alleged. CNN’s real problem was geographical: The trial was set in Panama City, one of Florida’s
deepest-red outposts. Yet what’s truly surprising is how Young’s legal team managed to transform this low-key defamation trial into a referendum on American journalism. In closing arguments, Vel Freedman, Young’s attorney, underlined the presence of reporters in the courtroom and watching the stream remotely, then urged jurors to send a message that would ripple across newsrooms everywhere. “Media companies are waiting by their phones to see what you do,” he told them.
As deliberations began, CNN’s Ballard Spahr team drew Judge William Henry’s attention to the Supreme Court’s 2007 decision in Philip Morris USA v. Williams, where a $79.5 million punitive damages verdict was overturned as an unconstitutional violation of due process, since
it was based on a jury’s desire to punish the defendant for health damages suffered by cigarette smokers who weren’t involved in the case. Similarly, CNN argued that punitive damages shouldn’t be a vehicle for punishing CNN for the sins of the broader media industry, a nuanced point that the judge was urged to consider. If the parties had not settled, Judge Henry’s interpretation—that while the jury’s punitive damages shouldn’t reflect a general punishment for what the media had done
historically, the damages could still act as a deterrent against future journalistic slipperiness—might have ripened into a potent appellate issue
Further complicating matters, Judge Henry was nudged toward the State Farm v. Campbell precedent, suggesting punitive damages
shouldn’t dwarf compensatory ones by more than a single-digit multiplier. For all the saber-rattling from the right, framing this as a billion-dollar showdown, and despite Young’s team salivating at the prospect of a $150 million punitive windfall, the initial $5 million compensatory verdict actually offered CNN a lifeline, potentially capping its total exposure at $50 million—a bitter pill, no doubt, but far from a ruinous blow.
I bet the settlement hovered around half that—say, $25 million—to sidestep the hazards of an appeal. Some media advocates might balk at the figure, deeming it steep, yet considering the appellate bench is peppered with appointees from Ron DeSantis and Trump, it’s hardly far-fetched. For CNN, it’s a Jake Tapper-sized gulp, the price of shaking off a persistent headache. Late to the game, sure, but as the old adage goes: Better late than never,
especially when the lesson is this costly.
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Thanks, Eriq. I’ll be back on Thursday evening.
Matt
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Puck founding partner Matt Belloni takes you inside the business of Hollywood, using exclusive reporting and
insight to explain the backstories on everything from Marvel movies to the streaming wars.
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Unique and privileged insight into the private conversations taking place inside boardrooms and corner offices up
and down Wall Street, relayed by best-selling author, journalist, and former M&A senior banker William D. Cohan.
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