Breaking: Appellate court dismisses Dan Rather's lawsuit against CBS; Rather vows to appeal [updated]

More than two years after Dan Rather filed a $70-million lawsuit against CBS for breach of contract and fraud, a New York Supreme Court appellate division has tossed out his claim.

The ruling, handed down today, dismissed Rather's claims that CBS News broke his contract and committed fraud by sidelining him in the wake of a controversial story he reported about President George W. Bush's Vietnam-era service in the Texas Air National Guard. The anchor alleged that CBS sought to curtail reporting on the story because of pressure from its then-parent company, Viacom.

But in its ruling, the appeals panel found that CBS did not violate the terms of Rather's contract because it continued to pay him, citing the contract's "pay or play" provision. The finding was a major blow to the longtime newsman, who had cast the suit as part of a broader effort to rein in the influence of corporations on news organizations.

[Updated at 11:11 a.m.: CBS was jubilant about the ruling. “We’re studying the decision right now, but it appears to be a total victory – and vindication for CBS’ position,” said CBS News spokesman Jeff Ballabon. Neither Rather nor his attorneys immediately returned a call for comment.

In its ruling, issued more than five months after the parties argued the case before the appellate division, the court reversed Judge Ira Gammerman’s decisions on the case.

“This Court finds that the motion court erred in denying the defendants' motion to dismiss the claims for breach of contract and breach of fiduciary duty, and therefore we find the complaint must be dismissed in its entirety,” the ruling said.

The appellate division found that Gammerman should have dismissed Rather’s breach of contract claim against CBS, rejecting the anchor’s argument that he was warehoused by the network constituted a violation of his deal.

“This claim attempts to gloss over the fact that Rather continued to be compensated at his normal CBS salary of approximately $6 million a year until June 2006 when the compensation was accelerated upon termination, consistent with his contract,” the court wrote. Rather’s contract did not require “that CBS actually use Rather's services or broadcast any programs on which he appears, but simply retains the option of accelerating the payment of his compensation under the agreement if he is not assigned to either program.”

The appellate division found that Rather failed to support his claim that CBS damaged his future business opportunities, saying “it would be speculative to conclude that any action taken by CBS would have alone substantially affected his market value at that time.” And the appeals judges wrote that he could not sue for breach of fiduciary duty because CBS did not owe Rather a fiduciary duty.

The appellate division wrote that Rather had no grounds on which to claim fraud, dismissing his argument that he is making substantially less money at his current job at HDNet than the $4 million annually he believed he could have made at CBS as speculative and irrelevant. And the anchor failed to prove that the fall-out from CBS’ handling of the Bush story curtailed other job prospects.

“As to lost opportunities in the trade, while Rather has shown his own track record of earnings and the earnings of other trade professionals, his future earnings are speculative, because there is no basis to conclude that his employment status would not have changed, regardless of CBS's actions, once he determined to make the broadcast,” the ruling said. “Rather never identified a single opportunity with specified terms that was actually available to him and which he declined to accept because of CBS' actions.”

[Updated at 11:22 a.m.: Rather's attorneys said they plan to appeal. “We are extremely disappointed with the Appellate Court's decision,” Martin R. Gold, Rather’s lead attorney, said in a statement. “ We believe the decision is incorrect on a number of grounds and, accordingly, we intend to ask the New York Court of Appeals to review it.”]

-- Matea Gold

Comments

[KK]

I stop watching CBS evening news after Dan left. He was the voice of evening news. I watch him at HDnet now. The goverment was out to get him period.

[grumpiestoldman]

Time for your nap Mr. Rather.

[JR]

What's the frequency, Dan?

[danshanteal]

let it lie, dan.

[Jorge]

I disagree with the court. It would have been nice tho know the background of the justices that rebuked this case. Something is rotten in NY court system. I don't know what it is, but that something is driving this case, it's obvious and it's not justice. From the day that the Bush controversy started, it became clear that political agendas and regime puppets were behind this crime committed by the powers to be against the truth. It was clear from thay one that even though the memo was transcribed with the wrong typewriter, it was also obvious and confirmed by the commander's secretary that every thing listed in the report was truth, but since America can't handle the truth, they decided to kill the messenger. Don't tell me that Dan Rather was partially owner of CBS. If the network thought that the facts of the story were compromised, why they din't can it? It's sad to see that in America today, loyalty has become a dirty word and throwing people under the bus is the new slogan and action to continue with the "death panels", "pulling the plug off grandma's" and all the ridiculous propaganda that, not only the media, but also the citizens swallowed.

[Jeff]

There's no place for Dan Rather and his partisan reporting in the media. There never should have been. Go home you old hack.

[Stellar]

Just go away Dan. Please!
Keep in mind that Mr. Rather consistently took 3rd place in a 3 horse race, was there any question that the only place that wanted this left-over was HDNet - whomever they are?
His journalistic integrity had been compromised long before this sham.

[Roger]

Fighting corporate takeover of the news is the right fight, right now. TV news has NO integrity ever since Nelson ratings were allowed credence in news shows. Now, instead of having the goal of breaking a story or informing Americans, we get noise, shouting and more noise. Whoever is likely to say the craziest thing is going to get the ratings. THAT is what Rather is fighting and I'm on his side. Allowing some CEO or board member to shut down news stories is beyond shameful. It should be criminal but I guess if it's for profit, that makes it ok. Not in my book. TV news used to inform instead of devolving into histrionics. Check out Edward R. Murrow if you don't believe me. Or 60 minutes back in the day. The shame of it is that the only ones breaking news stories nowadays are the guys at TMC and all they cover is celebrity news. American journalistic integrity is gone, and that's a shame we have to live with daily.

[Beavis Christ]

Rather's reputation was ruined by his actions in putting up fake documents as if they were real.

CBS just did what anyone would have done--canned his wrinkly hide.

[Fred]

So, like most who are corrupt, the guilty party accuses the innocent...it gets thrown out, so the guilty continue right on....

[Dave92]

I don't see how he thought he would win, it's a standard industry "golden handcuffs" contract: You are hired for N years, on the air or not, we still pay you.

[dante']

Unbelievable.
This guy makes Millions and millions per year... retires and sues the hand that MADE him.

He will go down in the history books alright.
A crybaby and a tarnished professional.

[2 cents]

thank heaven somebody's paying this clown to stay off the air - a true public service by CBS

[Gary in Mosul]

Dan, you have the money and you have the people who KNOW what this case is REALLY about rooting for you. This is just a bump in the road.

Rest up, there is work to be done.

Cheers

[ALM]

I think the entire lawsuit was Rather Bush.

[ozymandias]

There comes a time when one needs to pack up the tent and creep into the sand dunes.

[zorro1x]

Now that George W. Bush (the worst president ever) is gone and everyone know realizes what a lying loser he was, can we please get Dan Rather back on the TV news. CBS is a joke without him. I mean, Katie Couric as an anchor? Give me a break! Bring back a real newsman. Bring back Rather.

[Lola Hopkins]

I believe that CBS has done a real disservice to Dan Rather. They buckled under political pressure and allowed a great reporter to be discredited in the eyes of the public after a long and illustrious career. CBS should own up to their mistake.

[frank carter]

Is that the way Dan Rather repays CBS for making him a very wealthy person and one of the best jobs in the world. Rather's problem is he just got old and like the rest of us retire before they tap you on the shoulder and say old timer time to go. Rather ego just got in the way, it was CBS that made him for what he is and not the way around...........

[Dukecati]

A liberal bozo who slanted the news his way. Good riddance and a good decision to throw out this bogus lawsuit.