Why a $40 Million Verdict Against 'Girls Gone Wild' Creator Joe Francis Was Cut

A judge substantially trims a jury's defamation award to Steve Wynn, but not for the reason Francis says.
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Los Angeles Superior Court Judge Joanne O'Donnell has cut by roughly half a $40 million defamation jury award against Girls Gone Wild mogul Joe Francis for defaming Las Vegas casino mogul Steve Wynn.

In the aftermath of the surprising news, both sides are spinning what just happened. Francis appears to be spinning harder.

Wynn took Francis to court after the soft-porn impresario once blurted out in a courtroom: "Wynn threatened to kill me. He said he would hit me in the back of the head with a shovel and bury me in a hole in the desert."

After a TMZ reporter heard the statement, Wynn sued for defamation and presented the case that he was fearful of what the Nevada Gaming Commission might think of such an explosive allegation. After commencement of a jury trial, Francis appeared on Good Morning America and repeated the statement. Wynn then added another defamation claim against Francis.

After the trial, a jury awarded $20 million in compensatory damages to Wynn and $20 million more in punitive damages. It was one of the rare instances where a defamation claim actually ended up in a big verdict.

Now a judge has trimmed the award. Why?

Says Wynn's publicist, "Because Joe Francis was so efficient in hiding the majority of his assets, the judge couldn't confirm Francis could pay even a portion of these and, hence, dismissed the added $20 million."

Says Francis' press release: "After Steve Wynn's cheating tactics in court illegitimately swayed jurors, the judge realized the course of action was illegal. In order to uphold the integrity of the California court system and ensure that everyone receives due process, Judge O'Donnell amended the jury's verdict. During the trial, Steve Wynn's attorneys presented inadmissible evidence into the case stemming from an interview with Good Morning America."

Neither is exactly on point, but Francis' statement is filled with a lot more B.S.

According to a copy of the decision, which The Hollywood Reporter has reviewed, most of Francis' motion to set aside the verdict and start a new trial was rejected. Francis again has failed to make the case that his comment about Wynn wanting to kill him -- originally made by Francis during the course of a debtor proceeding -- was privileged. Thus, the compensatory damages were upheld by the judge, with the sole exception coming from the defamation claim arising from Francis' interview on Good Morning America.

Contrary to Francis' implication that the award was tossed because the judge had determined inadmissible evidence, the judge actually rules "the testimony of [former Nevada Gaming Control Board chairman] Michael Rumbolz and [Wynn attorney] Mitchell Langberg that they had seen the GMA segment and that defendant repeated the defamatory statement on national television is sufficient to support the jury's apparent finding that the third cause of action had merit."

The judge nevertheless threw out actual damages based on the interview but solely because "there was no evidence that [Wynn] suffered any 'shame mortification or hurt feelings' as a result of watching the GMA interview or even that he knew of the interview."

However, this decision merely trimmed just $1 million from the $40 million jury award.

The other $20 million that was thrown out was based on Wynn's inability to provide financial statements showing Francis' financial condition at the time of the trial.

The judge rules that Wynn "failed to provide any evidence of defendant's current financial condition on which the jury could properly determine defendant's ability to pay any amount of punitive damages, much less the $20 million the jury awarded."

Wynn could have introduced an expert to testify about the value of the Girls Gone Wild franchise, the judge notes, but he didn't. To attain punitive damages under California law, Wynn needed to do something like this.

And so, a $40 million award gets reduced to $19 million -- a big reduction, yes, but still more than the $12 million the plaintiff originally demanded over the defamatory statements.

Langberg says the confirmation of the $19 million "still sends a message that is very clear about Francis' wrongdoing."

As for Francis, he says his legal team predicts a "100 percent chance of success in appealing the remaining part of the case" and adds, "This is only the first step of [the judge's] back peddling [sic] and unwinding her illegal actions in order to try to keep her job as a judge."

E-mail: eriq.gardner@thr.com; Twitter: @eriqgardner