CNN parent Warner Bros. Discovery must hand over financial info as defamation trial looms, Delaware court says
FIRST ON FOX – A Delaware court ordered on Friday that CNN parent company Warner Bros. Discovery has to hand over detailed financial documents in support of a Plaintiff’s high-stakes defamation lawsuit or else the company must offer a "sworn declaration" that they do not exist.
U.S. Navy veteran Zachary Young alleges that CNN smeared his security consulting company, Nemex Enterprises Inc., by implying it illegally profited when helping people flee Afghanistan during the Biden administration's military withdrawal from the country in 2021. Young believes CNN "destroyed his reputation and business" during a segment on "The Lead with Jake Tapper."
A Florida judge previously agreed with Young’s legal team that CNN should hand over sensitive financial information that the cable network presented to its parent company, Warner Bros. Discovery, in order to determine CNN’s net worth. However, Young’s attorneys say that they have not received the appropriate documents and filed a motion to compel in Delaware, where Warner Bros. Discovery is based.
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Young’s attorneys, Blake Bennett and Joe Delich, said that Warner Bros. Discovery has "not been able to complete financial discovery" related to cash flow statements and balance sheets.
"It’s simply inconceivable that Warner Bros. Discovery is incapable of providing cashflow and balance sheet information for its wholly owned subsidiary," Delich told Judge Lynne Parker.
"Warner Bros. Discovery has produced some documents but has not produced any information about cashflow, or any kind of balance sheet information," he continued. "We know that Warner Bros. Discovery has the ability to do this."
Delich then explained that Warner Bros. Discovery prepares consolidated financial statements publicly filed with the SEC.
"In order to prepare consolidated financial statements, there must be something to consolidate," Delich said.
Jennifer Ying, representing Warner Bro. Discovery, argued the plaintiff’s team filed a "premature motion" ahead of the subpoena return date, and the subpoena didn’t specify cash flow statements and balance sheets. Ying also said Warner Bro. Discovery has "repeatedly" explained the documents don’t exist.
"If it doesn’t exist, we can’t be compelled to produce anything," Ying said.
"We have told them twice now that such information does not exist," she continued. "They have refused to accept that. We cannot create information that simply does not exist."
Judge William Henry, who is presiding over the case in Florida, previously ordered that CNN is obligated to "produce whatever is within its possession, custody or control" but said there is nothing in the law that would require a CNN executive to produce a sworn statement or declaration claiming the documents don’t exist.
Judge Lynne Parker disagreed and said Young’s attorneys need to file a new subpoena specifying cash flow statements and balance sheets, and CNN’s parent company will be held accountable if the information is not promptly handed over.
"Well, CNN does not have to provide a sworn declaration, but Warner Bros. does. You’re going to subpoena Warner Brothers requesting these two specific things, and they’re either going to produce documents or they’re going to give you a sworn declaration that it does not exist," Judge Parker said.
"Issue the subpoena right away," she continued. "They have 20 days from the date of issuance to respond."
A civil trial is scheduled to begin on Jan. 6 in front of Judge Henry in the Circuit Court for Bay County, Florida.
The CNN segment at the center of the suit, which was shared on social media and also repackaged for CNN's website, began with Tapper informing viewers that CNN correspondent Alex Marquardt found "Afghans trying to get out of the country face a black market full of promises, demands of exorbitant fees, and no guarantee of safety or success."
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Tapper tossed to Marquardt, who said "desperate Afghans are being exploited" and need to pay "exorbitant, often impossible amounts" to flee the country. Marquardt then singled out Young, putting a picture of his face on the screen and saying his company was asking for $75,000 to transport a vehicle of passengers to Pakistan or $14,500 per person to end up in the United Arab Emirates.
"Prices well beyond the reach of most Afghans," Marquardt told viewers.
No other people or companies were named other than Young, who alleged that CNN, using the terms "black market," "exploit" and "exorbitant," inaccurately painted him as a bad actor preying on desperate people.
Internal communications between CNN employees that were revealed during the discovery process have indicated editors were concerned about the segment but aired it anyway. Other internal communications revealed CNN employees used profanities and disparaging language when privately discussing Young.