Truth and Consequences


Playing dirty is playing dirty is playing dirty. In February 2002, Walt Disney Company president Robert Iger wrote a letter to New York Post editor Col Allan alleging errors in the work of media and entertainment reporter Nikki Finke. Allan fired Finke without ever investigating the alleged errors, and a Post spokesperson later trashed the writer to the Voice, saying, “We had a number of problems with the accuracy of her reporting.” Then, when Finke sued Disney and the Post for libel, both companies countersued, guaranteeing that the case would drag out in court.

The Post, which is owned by Rupert Murdoch’s News Corp., has yet to offer evidence of inaccuracy in reporting by Finke, whose current employer, LA Weekly, is owned by Village Voice Media. But this past spring, a private investigator began calling Finke’s friends and colleagues to ask questions about her journalism and her personal life. Sources identify the snoop as Anne Murray, a former Post police bureau chief who now works for the James Mintz detective agency. Asked to comment, Murray said, “I don’t talk about the work that I do.”

A Post spokesperson declined to comment on the hiring of the investigator and declined to respond to many critical points raised in this article.

Pierce O’Donnell, a Los Angeles lawyer who is representing Finke, called the Post‘s decision to investigate his client a “sleazy” and “desperate” move, adding, “If they are trying to intimidate us, it has had a reverse effect.”

O’Donnell is on a crusade to prove that Finke was wrongfully terminated for accurate reporting, and his efforts are gaining traction. On July 28, the California Court of Appeal issued a ruling in which it refused to throw out Finke’s suit against Disney, endorsed all but two of her claims, and sent the case back to trial court.

O’Donnell called the decision “a banner day for all journalists,” but Mickey Mouse was cheering, too. In a statement, Disney spokesman John Spelich said the company was “pleased” with the decision, adding that “We expect to present evidence during the rest of the case sufficient to find for Disney on the remaining claims.”

The decision did go partly in Disney’s favor. But it also endorsed much of the evidence introduced by Finke as credible. Rejecting the arguments of the media companies, the court found that Finke is not a public figure, which means she does not have to prove malice to win her libel case. What’s more, the court concluded that Finke has a “reasonable probability” of winning her claims of libel, interference with contract, interference with prospective business advantage, and infliction of emotional distress. (The court rejected the reporter’s claims of slander and unfair business practices.)

Nothing is certain. The Post has a similar appeal pending, and Disney is considering its option to appeal to the California Supreme Court. But O’Donnell is already talking about discovery. “The Post‘s appeal is doomed,” he said. “They’re as naked as Disney in terms of not having a defense. Now the issue is whether she was defamed.” O’Donnell says he will take depositions from “the big three”—Iger, Allan, and Disney chairman and CEO Michael Eisner—and the case will go to trial next year.

The question for smart observers is no longer, “Why is Finke pursuing this nutty case?” but rather, “Did Disney and the Post really shaft her?”

In perhaps the most ironic courtroom development, the letter from Robert Iger to Col Allan turned out to be a crucial piece of evidence. O’Donnell calls it “the noose around Disney’s neck.” While the Iger Letter was the only piece of evidence introduced by Disney, for the purpose of proving the company was exercising its free-speech rights, the court also saw it as potential proof of defamation. O’Donnell calls the letter “defamatory on its face.”

According to court documents, Iger sent the letter in February 2002, after Allan asked Disney to put its position in writing with regard to two disputed articles by Finke on the subject of litigation involving Winnie the Pooh licensing rights. In the letter, which is densely written, Iger cited specific sentences from Finke’s reporting and labeled them, variously, “a gross misstatement of the facts,” “an absolute distortion,” and “absolutely false,” concluding, “In light of this record, I am sure you can appreciate why we are so disappointed with the Post‘s inaccurate, misleading, and unbalanced account of the court proceedings.”

In oral arguments at the California Court of Appeal on July 10, Judge Aurelio Munoz seized on the Iger letter, asking Disney lawyer Patricia Glaser, “Isn’t the letter an admission?” The following exchange ensued:

Glaser: “I’m sorry?”

Munoz: “Isn’t the letter an admission?”

Glaser: “Admission of what, your honors?”

Munoz: “It’s a libelous letter as to her, isn’t it?”

Disney spokesperson Spelich declined to comment.

The decision that followed on July 28 anticipated—and seemed to reject—some claims contained in the Post‘s pending appeal before the same court. For one thing, the court declared that Finke has credible evidence to prove that the Iger letter was the reason she got fired. Finke’s source: Post business editor Jon Elsen. In a declaration, Finke claimed that Elsen told her repeatedly she was going to get fired because of the Disney complaints. No one has denied her claim, but Post lawyers now call Elsen’s statements inadmissible and say that he lacked the authority to speak for News Corp. or the Post.

That brings us to decision making in the newsroom, a hot issue if the case ever goes to trial. For expertise, Finke’s lawyers have introduced two declarations by Michael Parks, director of the Annenberg School of Journalism at the University of Southern California in Los Angeles, and former editor of the Los Angeles Times. After a review of the evidence, Parks sharply criticized the Post‘s decision to fire Finke on the grounds of inaccuracy without ever having investigated the alleged errors. He calls that move a violation of “basic principles” of newsroom management. (Parks left the L.A. Times in the wake of a scandal involving that paper and the Staples Center.)

Finally, the Court of Appeal said that Finke had offered credible evidence that she was damaged financially when the Post fired her. The evidence dubbed credible is Finke’s claim that she was talking to editors at The New York Observer and Salon when the Post accused her of accuracy “problems,” whereupon the talks ceased. No one ever said you could tell the truth without having to suffer the consequences.