Freedom of the Press Foundation Issues Warning to Paramount’s Shari Redstone Over Trump Lawsuit
The Freedom of the Press Foundation, an organization advocating for media rights, has sent a formal notice to Shari Redstone, the executive chair of Paramount, signaling its intent to file a lawsuit if the media conglomerate opts to settle a lawsuit initiated by former President Donald Trump against its subsidiary, CBS.
Warning Against Settlement
Seth Stern, the director of advocacy for the Freedom of the Press Foundation, emphasized the gravity of the situation in a recent statement. “Corporations that own news outlets must avoid settling unfounded lawsuits that infringe upon the First Amendment,” he stated. In light of this, Stern has requested that Paramount implement a litigation hold to preserve any documents linked to the potential deal with Trump, urging the company to refrain from any settlement.
As a shareholder, the nonprofit organization asserts its right to seek damages, representing both itself and other investors. It contends that a settlement would represent a breach of fiduciary duty by Paramount’s executives and could waste corporate resources. This allegation is bolstered by claims from U.S. senators and others suggesting that such actions could amount to unlawful bribery, which lies beyond the boundaries of the business judgment rule.
Context of the Lawsuit
The legal battle commenced in October when Trump filed a suit against CBS Broadcasting and CBS Interactive, claiming that an interview with former Vice President Kamala Harris aired on CBS’s longstanding program, 60 Minutes, was deceptively manipulated, thus constituting election interference. Initially seeking $10 billion in damages, Trump later revised his request to $20 billion in February. Paramount Global’s current market capitalization stands at approximately $8.5 billion.
Previously, Paramount has referred to the lawsuit as “an affront to the First Amendment” in its attempts to dismiss the case. However, reports indicate that the company is considering a settlement, possibly influenced by a forthcoming merger with Hollywood studio Skydance, which would require approval from the Trump administration.
Concerns Raised by Lawmakers
Adding to the scrutiny, Democratic senators Elizabeth Warren, Bernie Sanders, and Ron Wyden expressed their concerns in a letter to Redstone, questioning any potential settlement and labeling it as possible bribery. They cautioned that if Paramount executives make concessions in a quid pro quo arrangement with Trump or other officials, it could lead to legal violations.
Internal Changes at CBS
Reports of settlement discussions have stirred unrest within CBS. Longtime 60 Minutes executive producer Bill Owens unexpectedly resigned in April, followed by the resignation of CBS News president and CEO Wendy McMahon earlier this month. In an internal memo, McMahon articulated her disagreement with the company’s direction regarding these matters.
Broader Implications of Trump’s Legal Actions
Trump’s lawsuit against Paramount is part of a larger trend of legal actions against media outlets. Earlier this year, he filed a defamation lawsuit against ABC News, a subsidiary of the Walt Disney Company, related to remarks made by anchor George Stephanopoulos, who suggested the president was “liable for rape.” Following a civil case in which a federal jury found Trump liable for sexual assault (but not for rape), the case was settled in December.
In April, Trump also hinted at potential legal action against The New York Times through statements on his social media platform, Truth Social.
Conclusion
The implications of the ongoing lawsuit further underscore the challenges facing media organizations when navigating legal disputes involving high-profile figures. The Freedom of the Press Foundation’s stance reinforces the importance of protecting journalistic integrity and the First Amendment amidst rising pressures from powerful entities.
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