Fighting Back   

Companies unhappy with coverage are attacking the way information is obtained rather than the merits of a story. CBS’ decision to scuttle a “60 Minutes” piece on tobacco suggests the approach is working.

Lowell Bergman has worked as a producer for CBS' "60 Minutes" for 13 years, doing hard-hitting investigative pieces that have helped make the program the nation's top-rated television newsmagazine. Bergman's forte is persuading reluctant sources to talk.

While working on a story about the tobacco industry, Bergman found a former executive with Brown & Williamson, the nation's third largest tobacco company, who was willing to tell on air some of the secrets of his former employer. Among other things, he alleged that Brown & Williamson knowingly used a cancer-causing flavoring in its pipe tobacco, according to the New York Daily News.

While "60 Minutes" had taped an interview with the former executive, Jeffrey S. Wigand, Bergman was nowhere near ready to put him on the air. Bergman had been working with Wigand for seven months, but the veteran producer says he was still in the process of trying to corroborate Wigand's allegations.

Bergman planned to spend "at least another month, maybe two more" checking out Wigand's allegations, looking for other witnesses or documents to make sure his story held up.

But while he was still reporting, CBS General Counsel Ellen Oran Kaden intervened. In early November, Kaden, backed by CBS management, ordered "60 Minutes" to drop the story--before it was even finished.

Typically, two CBS lawyers are assigned exclusively to "60 Minutes" to vet stories after they're done. Never before, says Bergman, had the general counsel personally intervened on a "60 Minutes" piece.

But this time Kaden was concerned. She warned that CBS could be liable for something called "tortious interference" with a confidentiality agreement, and that the network faced the prospect of a multimillion-dollar lawsuit if it put the Wigand interview on the air.

Wigand, once a $300,000-a-year executive, had signed a confidentiality agreement after he was fired in 1993.

By getting Wigand to talk, CBS lawyers feared, "60 Minutes" could be accused of inducing Wigand to break his agreement--and that might make the network vulnerable to a lawsuit. (B&W eventually did sue Wigand for fraud, theft and breach of contract over the interview.)

The novel legal claim had rarely been raised before in connection with the news gathering process, according to Henry R. Kaufman, general counsel for the Libel Defense Resource Center. Kaufman says that in the past when such a claim has been made after a piece was published, it has never prevailed.

CBS' capitulation in the face of a possible tortious interference claim provoked sharp debate among media lawyers and analysts. Some said the network had acted prudently by scrapping the report. Others argued the "60 Minutes" cave-in was emblematic of the way news outlets are running scared in their dealings with the aggressive, legally savvy tobacco industry.

But regardless of the merits of the network's retreat, it seems clear that the episode reflects a trend, one triggered in part by the media's own missteps. Corporate and individual targets of news stories are fighting back both in courtrooms and in the court of public opinion by trying to put news organizations on trial, and not just for libel.

Plaintiffs are using lawsuits or threats of lawsuits to question whether journalists obtained their information properly, sometimes avoiding the issue of whether the stories are true.

The "60 Minutes" saga is a case in point. Media attention was centered on CBS' behavior, not Brown & Williamson's. (While CBS declined to air Wigand's allegations, they were leaked to the New York Daily News, which published them.)

It's a wave of "trash torts," says Chicago Tribune lawyer Dale Cohen, using the catchall nickname media attorneys have given to threatened or actual suits against news organizations for such things as invasion of privacy, breach of contract, misrepresentation or trespassing.

"The current trend is for lawyers and judges to attack the conduct rather than the content of what our writers and broadcasters put out," says Cohen, senior counsel/publishing for the Tribune Co. "There are a lot of benefits for plaintiffs' lawyers who want to do that. They can avoid many of the constraints of the First Amendment, like the burden of proving actual malice... It's much harder to prove actual malice than breach of contract and trespassing."

The "trash torts" approach may just be smart lawyering by attorneys, since the First Amendment is a powerful weapon against libel suits. For a plaintiff to win a libel claim, it has to prove the news organization knew the information was wrong and recklessly published it anyway. It's a high hurdle, and one the fainthearted are encouraged to avoid because, more often than not, the media eventually prevail.

Going after a news outlet for invasion of privacy, breach of contract or trespassing is an easier route, say many media attorneys.

"There is a trend when people are unhappy with what the press has published or is about to publish to look for claims other than libel," says Victor A. Kovner, a New York media attorney who recently defended Business Week against a corporate attempt to halt publication of an investigative story.

Says Rod Smolla, a First Amendment expert and a law professor at the College of William & Mary, "Sometimes the hidden camera or source you coaxed out of the cold has told the truth. The libel suit then isn't so inviting because the truth is a defense in libel. Corporations then are looking for the wrong in the way you got the information."

* A Montana couple, unhappy with a CNN story, is suing the network for trespass and intentional infliction of emotional distress. In March 1993, a CNN camera crew accompanied federal agents to a sheep ranch whose owners were suspected of poisoning eagles. One agent wore a wire, and CNN later broadcast the confrontation. The ranch owner was charged with four misdemeanors. He was cleared of three of them and convicted of using a pesticide in a manner inconsistent with its label.

"It's not like the story was inaccurate or this is a defamation issue," says attorney P. Cameron DeVore, whose firm is representing CNN. "It was a challenge to the news gathering technique."

* Food Lion Inc., the nation's fastest-growing supermarket chain, sued ABC when "PrimeTime Live" used a hidden camera to expose allegedly unsanitary food practices in a piece narrated by Diane Sawyer that aired in November 1992.

Food Lion didn't sue for libel. Instead, even before the broadcast aired, it went after the network for fraud, misrepresentation, trespassing and copyright infringement. Food Lion sued ABC in federal court, charging producer Lynn Neufer Litt with committing fraud on her employment application so she could get hired as a meat wrapper in a North Carolina Food Lion store. The case is pending

* On February 9, 1994, CBS' "48 Hours" planned to air a segment on meat contamination at a meat-packing plant in Rapid City, South Dakota (see "The Press and the Law," April 1994). At CBS' request, an employee of Federal Beef Processors, Inc., who worked in the boning room, operated a hidden camera during his shift. The employee, who was not paid by CBS, gave the tape to producer Robert Currie. The segment, titled "Bum Steer," showed what it said were unsanitary conditions in the slaughterhouse.

A few weeks before the broadcast, Federal Beef sued CBS seeking damages for trespass, invasion of privacy, breach of duty of loyalty and violation of the Uniform Trade Secrets Act. It went all the way to the U.S. Supreme Court in an unsuccessful effort to keep the video off the air.

"The issue of whether the story was true was never an issue," says Jane Kirtley, executive director of the Reporters Committee for Freedom of the Press. "It was more: 'We don't want the story told and we are going to focus on the fact that you got it in a covert way.' "

* In November 1992, "Dateline NBC" ran its now-infamous story on General Motors pickup trucks. Trucks manufactured between 1973 and 1987 had been the focus of scores of lawsuits charging their design made them likely to catch fire upon collision. But Dateline had rigged an explosion. GM filed a suit and the network was forced to settle, admitting its deceptive behavior (see "The Press and the Law," April 1993).

Thanks to NBC's misconduct, GM was able to divert attention from the alleged safety problems of its trucks. "We never get to the merits of what the journalists are talking about," says Kaufman of the media-supported Libel Defense Resource Center.

In fall 1994, Transportation Secretary Federico Peña said the trucks were prone to catch fire in side collisions because of the fuel tank placement, and he blamed GM for 150 fiery deaths. Rather than pursue a lengthy court battle with the government over recalls, GM agreed to spend $51 million on safety and research programs.

"What GM and Food Lion and others have done by threatening or filing lawsuits is to not only affect the debate about the story but they shift the issue away from their conduct to the journalists' conduct," says Kirtley. "Instead of: 'Isn't it outrageous they're selling these cigarettes that are killing people?' it is: 'Isn't it outrageous that the journalists induced someone to breach a contract?' "

Of course, the news media have given their challengers plenty of ammunition. A rigged explosion clearly deserves to be repudiated. And there is much debate about when, if ever, the use of hidden cameras is proper. Television producers argue that in some cases they are necessary to obtain important information for the public. Nevertheless, they invite a legal challenge.

"The reason some of these torts are strong cases is the plaintiff's lawyer can go in and say to a jury, 'If you [the juror] lie to somebody or break a promise, then you should pay damages under the law,' " says Tribune lawyer Cohen. " 'Why should a journalist be treated differently?' "

In fact, some argue using hidden cameras, misrepresenting oneself, trespassing, inducing someone to break a contract or faking information are all scurrilous practices that violate journalistic ethics. Like detectives in a murder case, journalists must be scrupulous about how they acquire their information. If they're not, their efforts can be undermined, even when they have the goods.

"I think too often, especially in sweeps week, we resort to highly dramatic ways of getting a story..," says Casey Bukro, a Chicago Tribune business writer who wrote the Society of Professional Journalists' ethics code in 1973. "Too often in TV, we get into these dramas and we hype these stories when we don't necessarily have to."

Shifting the spotlight from the corporate entity to the reporter's conduct isn't limited to questionable news gathering practices. Bankers Trust New York Corp. and Procter & Gamble, rivals in a legal battle, recently attacked a Business Week reporter for simply asking for a document (see "The Press and the Law," December 1995).

Both sides had requested that documents in the case be sealed. Legal affairs editor Linda Himelstein asked for, and received, a document from a confidential source. When Himelstein called Bankers Trust for comment, the company realized she had obtained a sealed document. It rushed to court with Procter & Gamble and obtained an injunction to block Business Week, which was not a party to the lawsuit nor bound by the secrecy order, from publishing its story.

Eventually, the judge decided the documents didn't need to be sealed. Business Week was then free to publish the material, which it did, spelling out Procter & Gamble's allegations that Bankers Trust deliberately misled and deceived Procter & Gamble when it sold the company derivatives.

Kirtley and other media lawyers are concerned that judges are taking seriously claims they once quickly dismissed. "I do believe the media has a problem it didn't have eight years ago," says Kirtley. "There's a new generation of judges that are a lot more sympathetic to the corporate line."

Washington, D.C., media lawyer Bruce W. Sanford sees a change in corporate litigation strategy. "The General Motors situation and other celebrated libel cases have said there is a way to be aggressive with the news media and come out on top," he says. "Companies with power and wealth take heart from those examples and say we can win at this game. The old adage that you don't fight with people who buy ink by the barrel isn't true."

Despite the prospect of protracted, expensive litigation, some news organizations still take the chance and print or air stories they believe need to be told.

That's what ABC did when it aired the Food Lion story, says Rosemary Armao, executive director of Investigative Reporters & Editors. "They were thinking about bad meat being sold to the public and decided it was worth a chance," says Armao.

But in the "60 Minutes" case, CBS lawyers and management decided to drop the tobacco story regardless of the public health implications. Some say the decision reflects a rise in power and a change in emphasis for media lawyers, whose role traditionally has been to help the newsroom find ways to get information printed or aired. Some media lawyers appear to be behaving more cautiously, with more concern about what a suit might do to the company's bottom line. Some say news executives appear to be relying more on their attorneys to do a cost-benefit analysis before they decide whether to run a story.

"I think it's something that's been percolating for some time," says Smolla. "But you rarely see these divisions in rank so publicly."

Yet as networks are acquired by bigger corporations, many expect to see more news decisions based on financial considerations. "In the last 20 years, the financial people and the marketing people have tended to undermine the independence of the news departments," says Jonathan Hoffman, a Portland, Oregon, lawyer who writes about First Amendment issues.

Even if that's true, critics and journalists are shaking their heads at the loss of face by a news institution as celebrated as "60 Minutes." The saga began in 1993 when producer Bergman received about 1,000 documents about Philip Morris' efforts to make a cigarette less likely to start a fire in bed.

Bergman met Wigand in February 1994 after an antitobacco activist gave him Wigand's name. Wigand was reluctant to talk because he had signed a confidentiality agreement under which Brown & Williamson agreed to provide health insurance for a year for his family, which includes a daughter with spina bifida.

"So," Bergman recalls, "I asked him could he read some documents."

CBS, says Bergman, paid the executive $12,000 plus expenses for consulting on the story about fire hazards, which aired in March 1994. Eventually Wigand decided to talk to Bergman about Brown & Williamson, after the company stopped providing Wigand's health insurance. Wigand said, among other things, that Brown & Williamson asked him to develop a safer cigarette, which it later decided to scrap.

According to the New York Times, Wigand is the highest ranking tobacco executive ever to cooperate with antitobacco efforts. (He is now helping Mississippi officials in a lawsuit in which the state is trying to recoup from tobacco companies public money spent on tobacco-related diseases.)

Given the nature of the material and the aggressive stance of the tobacco industry, this was clearly a story that had to be handled with great care. The legal department and "60 Minutes" staff argued for "six, seven, eight weeks back and forth" about what to do about the Wigand interview before the November decision to drop it, "60 Minutes" correspondent Mike Wallace later recounted on the "Charlie Rose" show.

Kaden, CBS' general counsel, raised the concern that if "60 Minutes" aired the story, B&W might sue the network for tortious interference with a contractual relationship. Heads spun. Few in the news business had even heard of the legal concept.

What worried Kaden and other CBS lawyers was the fact that Wigand had signed a confidentiality agreement with Brown & Williamson, which amounted to a contract. By getting Wigand to talk, CBS may have induced him to break his contract.

The legal debate was hardly occurring in a vacuum. ABC had recently settled a libel suit filed by Philip Morris over a "Day One" broadcast (see "Up in Smoke," November 1995). ABC initially contested the suit, but in an abrupt turnaround shortly before the trial was to begin--and with the Capital Cities/ABC merger with Disney pending--the network apologized for one aspect of the broadcast and agreed to pay Philip Morris' legal fees of about $15 million.

And CBS and Brown & Williamson had locked horns in the past. In 1985 the network paid the tobacco company a $3 million libel award. CBS' outside counsel, P. Cameron DeVore, who advised the network on the "60 Minutes" decision, represented CBS in its unsuccessful appeal during its first go-around with Brown & Williamson.

Meanwhile, as "60 Minutes" wrestled with the question of how to proceed with the Wigand interview, CBS' merger with Westinghouse was nearing completion. Among those who stood to profit from the merger were some CBS executive officers. According to a CBS filing with the Securities and Exchange Commission, Kaden would reap nearly $1.2 million from the merger. Eric W. Ober, president of CBS News, would receive $1.46 million and Peter A. Lund, president of CBS Inc.'s Broadcast Group, would get over $2.1 million. Each was involved in the decision to drop the Wigand interview.

"The decisions were made independently of the merger," says CBS spokesman Tom Goodman.

In late November came the news that Loews Corp., which had a controlling interest in CBS before the merger and which owns Lorillard, a major tobacco company, had purchased six tobacco brands from Brown & Williamson. And so, against the backdrop of the ABC settlement, the previous defeat at the hands of Brown & Williamson, the Westinghouse merger and negotiations over the tobacco brands, CBS scrapped the Wigand interview.

The first report on the latest trouble at Black Rock came in a front page story in the New York Times on November 9. The story, by Times television writer Bill Carter, said CBS had decided not to broadcast a planned on-the-record interview with a former Brown & Williamson tobacco executive. The article reported that Executive Producer Don Hewitt and Wallace agreed with the decision.

Many journalists and media critics expressed disbelief and outrage over the decision to jettison the interview. A New York Times editorial on November 12 declared, "This act of self-censorship by the country's most powerful and aggressive television news program sends a chilling message to journalists investigating industry practices everywhere."

That night, "60 Minutes" presented a story on the way the tobacco industry tries to intimidate whistleblowers and the news media. The show, largely a rehash of material that has appeared elsewhere, was not vintage "60 Minutes." At the piece's close, Wallace explained that "60 Minutes" had wanted to run an interview with a former high-ranking tobacco executive. "But," he added, "CBS management told us we couldn't do that."

Wallace outlined the perceived legal problem and concluded, "All of this, of course, speaks to a disturbing reality: That news organizations can be sued not for the truth or falsity of what they report, but instead, just for seeking out information from insiders who have material important to the public health and welfare but who have signed confidentiality agreements."

The following evening Wallace and colleague Morley Safer appeared on the "Charlie Rose" show. Wallace was no longer saying he agreed with CBS lawyers. "It became so obvious, to me anyway, that we were--we were simply dead wrong, that we were caving in," he said.

Safer assured viewers that CBS hadn't paid the former executive to talk, adding, "I am, as Mike is, dismayed by the decision of our lawyers."

Had CBS been cowardly or simply prudent in pulling the plug on the Wigand interview? Several attorneys interviewed by AJR after the controversy surfaced said the network could be vulnerable to a tortious interference claim only if it had given Wigand something of value to break his contract.

"What we really don't know about and what hasn't been talked about by people--presumably because they can't--is what went on between the reporter and the source," media lawyer Sanford said several days after the Sunday broadcast. "That's always the central inquiry."

There had to be more to the story, said many lawyers.

And there was.

On November 16--the day CBS shareholders were to vote on the Westinghouse merger--the Wall Street Journal ran a revealing story by staff writers Alix Freedman, Elizabeth Jensen and Amy Stevens. CBS hadn't told the whole story, said the Journal, in the "gotcha" style patented by "60 Minutes." The network had promised the source that it would protect him financially in the event of a libel suit and that it would not air the segment without his approval. The paper also revealed CBS' consulting payment to Wigand for the March 1994 story.

"They'd given him lots of things that Mike Wallace neglected to tell us about when he made that wonderfully pious statement at the end of his program," says Martin London, an attorney who represented Brown & Williamson in its successful libel claim against CBS.

Some media lawyers said the fact that CBS had offered Wigand something of value could be seen as an inducement. "Those are troublesome factors," says media lawyer Kovner. "It's not surprising they decided to pull the interview."

The brouhaha didn't end there. New York Daily News reporter Joe Calderone obtained a draft copy of the "60 Minutes" tobacco transcript. On November 17 the Daily News revealed Wigand's identity and his allegations: the company had used cancer-causing flavoring agents in pipe tobacco; had scrapped plans for developing a safer cigarette; and its chief executive officer perjured himself when testifying before Congress that nicotine is not addictive. A federal grand jury is investigating the perjury allegation.

A day after the Daily News story, the saga had another twist. CBS' Safer was furious he'd defended Wallace's piece on "Charlie Rose" without being told all the facts. Now there was a public feud between two of the network's top journalists.

At that point, CBS News President Ober weighed in, defending the network decision as "correct" in a memo to his staff. Ober added that since Wigand had been identified, CBS "will provide full indemnification to the source." (Brown & Williamson sued Wigand on November 21.) Safer and Wallace agreed to make up, saying they wanted to put the matter behind them. Neither is talking about the flap now, according to "60 Minutes" spokesperson Kevin Tedesco.

How unusual was CBS' arrangement with Wigand? Wallace told the Wall Street Journal that, while he hadn't known about the indemnification letter, such arrangements are "standard operating procedure." But lawyers for the Washington Post and the New York Times, who say they've never participated in such arrangements, say it is not commonplace.

"I've never heard of this kind of protection against libel for a source," says IRE's Armao. "I checked with Steve Weinberg, my predecessor for seven years. He's never heard of it."

ABC News spokesman Gary Morgenstein says, "In rare instances we've agreed to pay court costs if we are sued and the subject of the interview is involved in the lawsuit through our actions."

Meanwhile, what's been lost in much of the debate is whether CBS would have lost if it had been sued. Some lawyers say absolutely not.

James C. Goodale, who represented the New York Times in the Pentagon Papers case, says even if it were shown that the network had induced Wigand to break his contract, it might have been justified in doing so. He says winning a tortious interference claim is a three-part process. First, Brown & Williamson would have to prove there was a breach of a contract; second, that the breach was caused by an inducement by a third party, CBS; third, that CBS' actions were not in the public interest. Goodale says it would have been a "slam dunk" for CBS to win the case.

"If there is justification for interfering with the contract," says New York Times assistant general counsel George Freeman, "that can overweigh the maliciousness of the interference. The justification here is CBS was putting out news in the public interest regarding a potential health problem."

Goodale and some "60 Minutes" staffers fear that the fallout from the "60 Minutes" contretemps will be an unwritten rule: Don't talk to anybody who has signed a confidentiality agreement.

In the end, although it may have had a strong defense, television's most accomplished bastion of investigative reporting caved after its attorneys decided airing the story could trigger a lawsuit and jeopardize CBS' financial well-being. The importance of what Wigand may have had to say was sacrificed in the legal fray.

"No one has been talking about the fact that we are unable to report a story which, from everything I understand, is essentially true and is of tremendous public importance," says CBS media correspondent Edie Magnus. And Brown & Williamson--whose willingness to sue is well known--cowed the network without spending a dime.