HBO Faces Huge Defamation Trial Over "Hoax" Child Labor Report

CEO Richard Plepler could be forced to testify in a massive case brought by a soccer ball manufacturer over a "Real Sports with Bryant Gumbel" story that allegedly featured "staged" scenes and “doctored” interviews.
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In the past month, HBO has experienced tremendous highs in non-fiction programming: Both The Jinx and Going Clear were huge ratings hits, which left audiences buzzing about Robert Durst and the Church of Scientology. But now HBO is bracing for a trial that could deliver one of the biggest black eyes to a national broadcaster's news operation in quite some time. On April 13, the Time Warner subsidiary is set to answer claims that in 2008, Real Sports with Bryant Gumbel featured a report titled “Children of Industry” that was a “hoax,” full of scenes that in the words of one HBO stringer, were "fabricated" or "dramatized."

The plaintiff in the case is Mitre Sports International, which manufactures and sells sporting equipment and is objecting to HBO’s depiction of young children in India hand-stitching Mitre-branded soccer balls for pennies or less in order to pay off their parents’ debts. According to Mitre, it has interviewed the children shown and they have admitted that they were paid by producers to pretend to be child laborers.

An HBO spokesperson maintains that the case is “without merit,” but in May 2014, a judge found there was enough evidence to let a jury decide whether Mitre was defamed by the broadcast. Now, in the weeks preceding trial, HBO has been working furiously to quash a trial subpoena of HBO chairman and CEO Richard Plepler and limit the fallout of a public spectacle that could introduce evidence that HBO employees lied on visa applications to get into India, looked the other way when one of its researchers warned about showing abused kids at the hands of a corporate master, “doctored” interviews with a child labor expert and U.S. government official, and set up a phony “cross talk” between Gumbel and correspondent Bernard Goldberg (a frequent media critic on Fox News) who “had never watched the show seen by viewers.”

Lloyd Constantine, an aggressive attorney representing Mitre who once advised Eliot Spitzer and scored $100 million in an antitrust settlement with HBO owner Time Warner, is again taking on his old nemesis and says, “We will prove that they had facts at hand and they just lied because it made for a better story.”

The idea for the “Children of Industry” report is credited to Real Sports coordinating producer Joe Perskie, who became interested in the manufacturing of soccer balls during the 2002 World Cup. Along with Zehra Mamdani, another Real Sports production assistant, the two conducted research in 2006 and 2007. They talked to Kailash Satyarthi, a Nobel Peace Prize nominee who is an expert in child labor, and focused on the Indian cities of Meerut and Jalandhar. When traveling to several villages in the Meerut area, they personally saw children stitching soccer balls to pay off family debts. They also report being shown Mitre-branded soccer balls.

Later, Goldberg followed up with an interview of Satyarthi as well as Charlotte Ponticelli, the Labor Department’s Deputy Undersecretary for International Affairs, who confirmed that the U.S. government viewed child labor in India to be a problem that still existed. Goldberg asked Ponticelli her thoughts on companies with policies against child labor that still had child labor in their supply chains. She answered, “The source of the problem is that the parent company, no matter how well intentioned, may not be doing due diligence in making sure that their subcontractors down the line are doing the best they can to make sure this exploitation is not occurring.”

The “Children of Industry” segment aired on September 16, 2008.

On the day of day of the airing — Gumbel had only seen a rough cut at that point, according to his own sworn statement — Mitre’s lawyers called with concern over a clip posted on YouTube that showed two girls stitching Mitre-branded balls. According to HBO's court papers, Mitre challenged the credibility and told HBO that the production “was typical of Bollywood.” HBO decided to remove that footage out of caution, but was ultimately sued anyway over a segment that opens with Gumbel introducing, “Now, given the game’s global popularity, the balls are big business, which is why governments, manufacturers and retailers all say they abhor the practice of child labor. Yet, clearly they are all letting it happen.”

Mitre, which is owned by the London-based sports and fashion giant Pentland Group, sprung into action. According to Constantine, Pentland chairman R. Stephen Rubin has made the elimination of child labor exploitation a personal cause and through the 1980s and 1990s, assembled some 12,000 brands to lead the charge and “virtually eliminate” the problem in countries like India and Pakistan.

In the more than five years that the case has been litigated, Mitre has come forward with various pieces of evidence to support its argument that this was a tainted report. For instance, the program shows one 12-year-old “orphan who lives with her grandparents” and is portrayed as “a full-time soccer ball stitcher.” In Goldberg’s interview with the Nobel Peace Prize nominated expert in child labor, he mentions the girl’s name, saying she “is making a ball for Mitre, one of the biggest soccer brands in the world, the preferred brand of the pros.”

After being deposed, this same young girl testified that her guardians are actually gainfully employed and was induced to pretend to stitch a Mitre ball with the promise of money.

Mitre’s attorneys believe there were other scenes staged — what they frame as the unfortunate result of HBO telling foreign stringers to find them the footage they needed. What’s more, they point to HBO’s alleged knowledge before the segment ran. Zehra Mamdani, the associate producer, is said to have outlined concerns about showing kids abused at the hands of corporations, figuring the parents were the real problem. According to court documents referencing her old e-mails, she wrote the story was still “do-able, if its done in a clever way.” At one point, Goldberg himself wrote a colleague, “I think this is unfair to Walmart and Mitre."

HBO is defending the lawsuit by arguing that whatever faults were inherent in the 2008 report, statements made about the use of child slave labor were not “of and concerning” Mitre, a key requirement of a defamation claim. Concurrently, HBO’s attorneys at Williams & Connolly will also portray the report as being “substantially true,” with news articles and witness testimony supporting the notion that child labor is sometimes used in the manufacture of Mitre-branded products in India even if the company itself isn’t directly responsible for putting the children to work. Mitre is said to have admitted in depositions that it has long been aware of child labor found in its supply chain. HBO will also argue that some comments during its report constituted subjective opinion.

If either side has an advantage in the fight, it’s probably Mitre after a judge ruled the company shouldn’t be considered a “public figure.” As such, the company won’t have to show "actual malice," a tougher standard in such cases; instead, they must show merely that HBO was grossly irresponsible when it came to things like tricky editing or fact-checking lapses.

The ruling that Mitre wasn’t a “public figure” because according to the judge, “Mitre does not approach the status of being a household name or a celebrity in the community,” was so disconcerting that last June, 27 news organizations including ABC, The Associated Press, CBS, Fox News, Gawker, NBCUniversal and The New York Times submitted an amicus brief over a decision they say has “sown uncertainty” on the standards for covering international companies. The news organizations urged an emergency appeal, and while that won’t be happening before trial, should HBO get slammed with a jury award that could easily amount to tens or even hundreds of millions of dollars, HBO has already put the judge on repeated notice that it intends to take the issue to a higher authority.

First Amendment expert Floyd Abrams calls the decision that Mitre isn’t a public figure “deeply troubling” while attorney Lincoln Bandlow, whose clients include Morgan Spurlock and Conan O’Brien, says, “Stay tuned because even though statistically, about 75 percent of the time, the media defendant gets hit at trial, about the same 75 percent of the time, that gets reversed on appeal.”

Meanwhile, Mitre has grown increasingly upset that Time Warner has inserted Mitre's name and products into Warner Bros. films like Sherlock Holmes and Invictus, allegedly to demonstrate that Mitre is indeed is a celebrity. During one point of the dispute, Mitre’s attorneys even tried to depose a producer of HBO’s Curb Your Enthusiasm over a scene where a Mitre soccer ball is held by a kid.

For now, the focus is on the trial, and most pressingly, whether HBO chairman and chief executive Richard Plepler will testify.

On the day after HBO aired the controversial report in question, Plepler sent an email to one of the network’s publicists demanding that the segment on child labor be sent to New York Times columnists Thomas Friedman and Nicholas Kristof as well as Samantha Power, one of Barack Obama’s top foreign policy advisors. “This should get real traction,” he wrote. “It’s important work.”

Mitre wants Plepler on the witness stand to talk about this.

No matter how the trial turns out, the HBO segment will indeed be important — perhaps even a media milestone.

Constantine hopes so. “If a jury gets to see what was done here by HBO, a jury would certainly be within its rights to award punitive damages,” he says. “If that has some teaching effect on HBO or other news organizations, then so be it.”

Email: Eriq.Gardner@THR.com
Twitter: @eriqgardner

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