"To Settle, or Not To Settle: That is the Question"

By: Marci Hutchinson 

 

On April 18, 2023 the “largest publicly known defamation settlement in US history involving a media company”[1] was announced as Fox News Network reached a settlement with Dominion Voting Systems. Fox News agreed to pay Dominion $787.5 million. No other specifics about the settlement have been publicly released.

The settlement was reached on the day the jury was sworn in and opening statements were to begin. This was following a two year time span from the filing of the complaint in the Superior Court of Delaware. You can read the complaint filing here, where they lay out the alleged facts supporting their complaint and Prayer for Relief for damages totaling $1.6 Billion for lost profits, lost enterprise value, security expenses, and expenses incurred to combat the disinformation campaign they claim that Fox News waged against them. The alleged campaign included repeatedly airing allegations, knowing they were false, that Dominion Voting Systems were “rigged” during the 2020 Presidential election and giving interviews on their programs to people making those allegations.[2]

Recently, at a speaking engagement at Harvard Law School Fox Corporation’s Chief Legal Officer Viet Dinh blamed “a series of errors” by the Delaware judge for forcing them to settle the case[3]. He is believed to be referring to the decision by the judge on March 31, 2023 to grant partial Summary Judgment to Dominion on the element of “falsity”. You can read the ruling here. Essentially, Fox News couldn’t argue at trial that the allegations may have been true and therefore they had an obligation to report them. It was ruled a material fact that the allegations of voter fraud related to Dominion Voting Systems were false.[4] The Judge stated:

“The evidence developed in this civil proceeding demonstrates that is CRYSTAL clear that none of the Statements relating to Dominion about the 2020 election are true. Therefore, the Court will grant summary judgment in favor of Dominion on the element of falsity.”[5]

Additionally, during the discovery phase emails, texts, and other communications between Fox News hosts and executives had been released.  You can read about those communications here as well as in the Summary Judgment ruling above.

I don’t think anyone could argue that $787.5 million is not a large sum of money. We learned last week in class how common settlements are and that most cases don’t make it to trial. But, why would parties go through years of expensive litigation only to settle at the last minute? What could be some motivating factors for parties to settle?

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[1] Marshall Cohen and Oliver Darcy, Fox News settles with Dominion at the last second, pays more than $787 million to avert defamation trial over its 2020 election lies, CNN.com April 19, 2023 https://www.cnn.com/2023/04/18/media/fox-dominion-settlement/index.html

[2] US DOMINION, INC., Dominion Voting Systems, Inc., and Dominion Voting Systems Corporation, Plaintiffs, v. FOX NEWS NETWORK, LLC, Defendant., 2021 WL 1153152 (Del. Super. March 26, 2021) (Trial Pleading)

[3] Brian Baxter, Fox Legal Chief Cites Judge Errors for $787 Million Settlement, Bloomberg Law October 16, 2023 https://news.bloomberglaw.com/business-and-practice/fox-legal-chief-cites-judge-errors-for-787-million-settlement

[4] US Dominion v. Fox News Network, WL 2730567 (Del. Super. Mar. 31, 2023) (Trial Pleading)

[5] Id. at 21

 

The Uncommon Truth About Legal Cases

by Naomi Batsuuri 

The facts associated with legal cases often fall into the trap of people believing third-party information including inaccurate reports on the media. For instance, the Liebeck v. McDonald’s Restaurants case is among the most notable lawsuits often termed as frivolous by various critics. However, it is crucial to understand the specific details and facts before forming an opinion about the case.

The case dates back to 1992 when Stella Liebeck, who was 79 at the time, was severely burned after spilling coffee on her lap. She had bought the coffee from McDonald’s. From a superficial point of view, it would be easy for one to question the validity of these lawsuits. For instance, one opinion would suggest that it was Liebeck’s fault because she spilled the coffee while another may contend that coffee is typically expected to be hot. These opinions are mostly formed without careful consideration of the case’s actual circumstances. In essence, the incident happened in a parked car where Liebeck was a passenger and not the driver. In addition, the coffee was exceptionally hot to a level likely to cause severe burns. This resulted in the victim suffering third-degree burns and even required skin grafts. As such, it would be credible to argue that this was a serious incident as opposed to notions that it was a frivolous injury.

It is also imperative to note that McDonald’s had previously received over 700 injury reports with some involving third-degree burns but failed to make substantial rectification efforts. Liebeck initially wanted to settle for $20,000 to help her cover medical expenses. However, McDonald’s was reluctant to offer more than $800. Consequently, the jury awarded compensatory and punitive damages amounting to $160,000 and $2.7 million respectively with the case ending in a confidential settlement. Therefore, as opposed to ideas that the case was frivolous, it is crucial to note that the facts of the case were corroborated by expert witness testimony and McDonald’s eventual admission of failure to warn customers about the risks in question.

Finally, other cases get settled without a trial. A recent example is the Dominion Voting Systems v. Fox News Network case. In the settlement, Fox paid about $800 million to Dominion Voting Systems in a move meant to avoid a trial. A trial would have been detrimental to the news network’s reputation as it relates to reports concerning the 2020 presidential election. The settlement seems significant, but it also raises questions about broader consequences for organizations like Fox News beyond payments meant to eliminate the possibility of trials.

Questions to think about: What is the role of public perception in directing narratives associated with legal cases? How does this impact settlements and the attainment of justice?

Do punitive damages constitute effective remedies in cases like Liebeck v. McDonald’s Restaurants? Should alternative methods to address corporate negligence and public safety be explored?

Sources:

Weiman, D., S. (2017, Jan 7). “The McDonalds' Coffee Case.” Huffpost 

 https://www.huffpost.com/entry/the-mcdonalds-coffee-case_b_14002362

Liebeck v. McDonald’s Restaurants

Dominion Voting Systems v. Fox News Network

 

Stolen Fire from the Gods: Legal Considerations for Wielding the Gift of AI

Ryne Vogel

In Greek mythology, Zeus withheld fire from humans to compel their penitence and devotion. Concerned for their vulnerability, the Titan Prometheus scaled Mount Olympus, stole fire from the Gods, and provided it to humans. Prometheus’ gift allowed humans to flourish while simultaneously enhancing their destructive capacities.

Like the stolen fire, Artificial Intelligence (AI) has the potential for advancement or devastation. However, the societal impacts of AI are not limited to a blissful utopia or catastrophic Armageddon. AI will also disrupt the mundane. For example, how might AI affect routine tasks performed by practicing attorneys or even judges?

The purpose of the Federal Rules of Civil Procedure (FRCP) is to “secure the just, speedy, and inexpensive determination of every action and proceeding.” ^[1] A 2008 survey identified discovery as a particularly costly phase of the litigation process, finding that in “medium-sized cases involving e-discovery, the estimated cost of just attorney time and vendor bills incurred in searching, retrieving, reviewing, and producing electronic information can average $3.5 million.” ^[2] AI is well-positioned to assist and cut costs in these areas.

 Individuals using AI can analyze documents and perform repeatable tasks faster and more affordably than individuals without AI ^[3], leading some to question junior associates’ future roles in law firms. ^[4] Some even postulate a future of impartial “Robojudges” who “tirelessly apply the same high legal standards to every judgment without succumbing to human errors such as bias, fatigue or lack of the latest knowledge.” ^[5] If these methods can improve efficiency and access to justice, wouldn’t the FRCP require their use?

Challenges abound, threatening adoption. For example, how will AI’s mistakes impact liability assessments? “If self-driving cars cut the 32,000 annual U.S. traffic fatalities in half, perhaps carmakers won’t get 16,000 thank-you notes, but 16,000 lawsuits.” ^[6]

The EEOC recently settled a lawsuit with a tutoring company that allegedly programmed their applicant tracking system to reject candidates based on age. ^[7] Some speculate a connection to AI. ^[8] A similar lawsuit alleging algorithmic bias was filed in California. ^[9] The EEOC is now considering enforcement possibilities for AI in hiring practices. ^[10]

Given that humans make mistakes independently, how much more accurate or less expensive will AI need to become before society determines that its use offers a more just legal system? How can society regulate the use of this “gift” in the legal field to ensure the best possible outcomes?

References

[1] Fed. R. Civ. P. 1.

[2] Electronic Discovery: A View from the Front Lines (2008), Institute for the Advancement of the American Legal System, supra n. 4, at 3‐4, 25.

[3] Karim Lakhani, AI won’t Replace Humans – But Humans with AI Will Replace Humans without AI, HBR Aug. 4, 2023, https://hbr.org/2023/08/ai-wont-replace-humans-but-humans-with-ai-will-replace-humans-without-ai (accessed Oct. 16, 2023).

[4] Jordan Furlong, Legal education’s day of reckoning approaches, Sep. 21, 2023  https://jordanfurlong.substack.com/p/legal-educations-day-of-reckoning, (accessed Oct. 15, 2023).

[5] Max Tegmark, Life 3.0: Being Human in the Age of Artificial Intelligence (Alfred A. Knopf 2017) 105.

[6] Id at 108.

[7] EEOC v. iTutorGroup, Inc. et al., E.D.N.Y., 22-cv-02565 (May 5^th, 2022), https://www.courtlistener.com/docket/63288748/1/equal-employment-opportunity-commission-v-itutorgroup-inc/ (accessed on Oct. 22, 2023).

[8] Annelise Gilbert, EEOC Settles First-of-Its-Kind AI BIAS in Hiring Lawsuit (1), Aug. 10, 2023 https://news.bloomberglaw.com/daily-labor-report/eeoc-settles-first-of-its-kind-ai-bias-lawsuit-for-365-000 (accessed on Oct. 22, 2023).

[9] Mobley v. Workday, N.D. Cal. Oakland Div., 23-cv-00770 (Feb. 21, 2023), https://www.bloomberglaw.com/public/desktop/document/MobleyvWORKDAYINCDocketNo423cv00770NDCalFeb212023CourtDocket?doc_id=X3RQKE3Q8C58PQRTUBPH4O34SIP (accessed Oct. 15, 2023).

[10] Draft Strategic Enforcement Plan, U.S. Equal Employment Opportunity Commission, Jan. 10, 2023, available at https://www.federalregister.gov/documents/2023/01/10/2023-00283/draft-strategic-enforcement-plan (accessed on Oct. 22, 2023). 

 All or Nothing: Utah's Social Media Lawsuit Against TikTok. (by Leigh Ann Bauman) 

 

Governor Cox in his first term has focused on the mental health of teenage Utahns, specifically with the usage of social media. Earlier this year the State passed two bills, HB0311 and SB0152 that seek to regulate how social media companies operate when it comes to minors. The laws set to make age requirements, prohibit companies from collecting data, grant parental access, and limit the hours of access.  

Today, the State of Utah took it one step further and filed a consumer protection lawsuit against TikTok (here’s a link to the filed lawsuit, it’s 60 pages long Division of Consumer Protection of the State of Utah vs. TikTok).

The civil lawsuit seeks to force TikTok to change its practices and seeks punitive damages to rectify the alleged harms. The Attorney General brought the action asking TikTok to “stop the harm it causes to Utah’s children through its ongoing violations of the Utah Consumer Sales Practices Act, Utah Code §§13-11-1 through -24.”

The lawsuit compares features of TikTok to that of a “slot machine” with its addictive features, such as the constant video play and reward for the next video.

The State is seeking that TikTok:

a.     Preliminarily or permanently enjoin Defendant, in accordance with Utah Code § 13-11-17(1), from violating the UCSPA;

 

b.     Order Defendant to pay restitution and damages well in excess of $300,000 in accordance with Utah Code § 13-11-17(1)(c);

 

c.      Order the payment of civil penalties well in excess of $300,000, as permitted by statute in accordance with Utah Code § 13-11-17(1) for Defendant’s violations of the UCSPA;

 

d.     Award the Division the costs of this action, its investigation, and reasonable attorney’s fees in accordance with Utah Code § 13-11-17.5; and

 

e.     Grant such further relief as the Court deems just and proper.

 

I believe that all social media is addictive. I am not on TikTok, but I will admit I took 2 Instagram breaks in writing and researching this. So as the Attorney General who has to argue this in court, how do you prove the harm of an addictive substance that is solely impacting mental health? How do you make something less addictive? Is this an issue that states can bring forth to begin with? Do these limits on social media and TikTok infringe on someone’s First Amendment rights?