HBO Pleads With Judge Not to Let a Jury Hear About Time Warner Billions

A judge indicates that what HBO's parent company made in revenue last year could be relevant in a calculation of punitive damages.
Courtesy of HBO

On Wednesday, a New York federal judge gave HBO a real reason to be concerned about the outcome of a trial examining whether a 2008 report about child labor in India defamed Mitre Sports International, one of the biggest soccer brands in the world.

The trial is three weeks old and will be wrapping up tomorrow. Mitre is suing HBO for allegedly tarnishing its reputation through a Real Sports With Bryant Gumbel report that allegedly contained fabrications of children stitching soccer balls for pennies to pay off their parents' debt.

What had Dane Butswinkas, attorney for HBO, seething in court this morning was the prospect that a jury could be hearing that Time Warner made $5.4 billion in revenue last year.

U.S. District Judge George B. Daniels hasn't made a firm decision on whether to allow punitive damages if HBO is found liable, but he's been sending off signals that a jury might get to weigh such punishment. What's worse for HBO, the jury could be told by the other side they should factor the money collected by HBO's parent company in deciding how to dole out punitive damages.

Butswinkas said allowing the jury hear about Time Warner billions would be "highly prejudicial ... compounded that this is the last thing the jury will hear."

But the judge said, "You haven't convinced me that [Time Warner's] financial condition isn't relevant to punitive damages," and even gave an example that a person who makes $10 who is found liable, can be punished by $10 in punitive damages.

HBO is arguing that the judge should preclude punitive damages because there's insufficient evidence to show it acted with malice in the controversial 2008 report. Before the trial began, the judge ruled that Mitre isn't a public figure, and so, Mitre won't have to demonstrate malice on HBO's part to win the case. But if Mitre hopes to collect more than compensatory damages, and send HBO a big message about the consequences of shoddy journalism, the plaintiff will need to go beyond just showing that HBO was grossly irresponsible.

Thus far, Mitre has introduced all sorts of evidence including testimony from a Nobel Peace Prize winner and a top U.S. government official who were interviewed for the report and didn't like how their interviews were edited. The most damning evidence appears to be children who were shown in the report. One testified she wasn't actually a soccer-ball stitcher and was paid 100 rupees to pretend. Two others said they also weren't stitchers and were tricked by HBO's stringers. Mitre has also attempted to show the jury that "HBO physically and mentally abused children in fabricating this sensationalized story."

Whether or not that adds up to malice is Daniels' decision first and then possibly the jury's, but the judge indicated on Tuesday that the Real Sports employees were high enough on the HBO food chain to support the recovery of punitive damages. Today, the judge addressed the issue of Time Warner revenue — which isn't only factor relevant to the calculation of punitive damages, but may also go to HBO's motive in airing the 2008 report.

Butswinkas argued that to allow the jury to pour over Time Warner's 10K would deprive HBO of a fair opportunity to rebut. "It's prejudicial [for the other side to say] that HBO has some financial incentive to fabricate," he told the judge.

The judge seemed to not buy the motive argument ("I think you should drool if they said this"), but also held firm, saying that Time Warner's revenue was a matter of public record. "If they prove defamation, and they prove it was with malice, it's not going to matter."

The judge indicated that Butswinkas could give a more complete picture of Time Warner's financial state by possibly talking about the company's expenses. However, the judge appeared to lean against Butswinkas' request that if Time Warner's fortunes come up, HBO should at least be able to say that Real Sports loses money for the network.

Closing arguments will be delivered on Thursday.

According to a Reuters reporter who has been observing, Bryant Gumbel got on the witness stand earlier in the week and attempted to distance himself from the report on his show, saying he had not much to do with it. Bernard Goldberg, the correspondent in the piece, testified on Tuesday and was reportedly questioned about his book, Bias, and a line about not letting facts interfere with a good story. Mitre's lawyer wanted to know whether that was the case here.