| Truth and consequences
Published: October 15, 1998
Last Updated: May 20, 1999
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Gannett is hardly the only company to face the dilemma of a disagreeable
settlement. While second-guessing such settlements is a popular armchair
pastime (especially in hindsight), such speculation or criticism is pointless.
No one other than the executives making the tough decisions has all the
facts. Some recent examples:
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ABC’s 1994 broadcast suggesting that the tobacco industry was “spiking”
the nicotine level of its products during manufacture changed the nature
of the public debate over the regulation of cigarettes. It also landed
ABC in court in tobacco country, when Philip Morris sued the network for
$10 billion in Virginia, alleging that the segment was libelous. For over
a year, ABC vigorously defended the case. But in the summer of 1995, the
network settled the lawsuit, reimbursing Philip Morris for the cost of
its legal fees (which amounted to roughly $15 million) and apologizing
in prime time. While it is arguable whether “spiking” was an accurate characterization
of the production process uncovered, subsequent reporting confirmed that
tobacco companies can control and manage the level of nicotine during the
manufacturing of cigarettes. In fact, ABC had filed a confidential summary
judgment motion in the case, the contents of which were later leaked, that
indicated that it had acquired considerable evidence during discovery to
document that charge.
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In another showdown between a cigarette giant and network news, Brown &
Williamson successfully pressured CBS’s “60 Minutes” to cancel plans to
broadcast an interview with industry whistleblower Jeffrey Wigand in November
1995. CBS officials did not fear a libel action; rather, Brown & Williamson
threatened to lob a newsgathering tort in its direction — “tortious interference
with business relations.” According to this theory, CBS would have been
liable for persuading Wigand to reveal internal company practices in violation
of an nondisclosure agreement he had signed with Brown & Williamson.
Several months later, The Wall Street Journal published its own version
of Wigand’s charges. “60 Minutes” then broadcast its interview. Brown &
Williamson did not file a lawsuit against either news organization.
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Richard Jewell, the security guard who for months was a leading suspect
in the bombing at the Atlanta Olympics, secured handsome payments from
NBC and CNN after the FBI cleared him of wrongdoing in October 1996. Jewell
did not sue either network. The NBC settlement was reported by The Wall
Street Journal to approximate $500,000. The network admitted no wrong-doing
or editorial error. Indeed, Jewell’s potential libel case against the two
networks was not strong — they reported that he was a principal focus of
the investigation, which was true. But, highlighting the attenuated protection
for newsgathering, NBC stated that shielding “confidential sources was
a major consideration” in its decision. Jewell has used the proceeds of
these settlements in part to pursue his defamation suits against The Atlanta
Journal and The Atlanta Constitution, among others.
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