Mackris/O'Reilly et al. litigation settles with a whisper, not a bang

This is a very interesting and cryptic press release from counsel for Bill O'Reilly, Fox, and their codefendants, about which several of my readers have already emailed to ask for my interpretation:

Statement from Ronald Green, Epstein Becker & Green, P.C.
Thursday October 28, 6:41 pm ET

NEW YORK--(BUSINESS WIRE)--Oct. 28, 2004--The Parties regret that this matter has caused tremendous pain, and they have agreed to settle. All cases and claims have been withdrawn and all Parties have agreed that there was no wrongdoing whatsoever by Mr. O'Reilly, Ms. Mackris, or Ms. Mackris' counsel, Benedict P. Morelli & Associates. We now withdraw any assertion that any extortion by Ms. Mackris, Mr. Morelli, or Morelli & Associates occurred. Out of respect for their families and privacy, all Parties and their representatives have agreed that all information relating to the cases shall remain confidential.

The Associated Press reports tonight that

O'Reilly, who's married, is host of the top-rated prime-time cable news program — and he's seen his ratings go up by 30 percent since the case was filed....

Mackris' lawyer did not immediately return a telephone call seeking comment.

The New York Daily News had reported on Saturday, October 23rd, that unidentified "[s]ources say Fox has made it clear that any payments to Mackris would come solely from O'Reilly."  On the same day, WaPo's Howard Kurtz had reported, also without identifying his source, that "[t]he [on-going settlement] discussions involve payments to Mackris of more than $2 million."

So both the preemptive extortion lawsuit and Ms. Mackris' sexual harassment lawsuits have been settled, and the parties have contractually agreed to keep the details under their respective hats. 

But I'll hazard some guesses, reading between the lines as a trial lawyer who's handled both sides of sexual harassment cases. 

Lawyers for Mr. O'Reilly and Fox et al. had initiated pretrial discovery proceedings to require Ms. Mackris' lawyers to turn over any and all tape recordings.  My strong hunch from the beginning of this case was that such tapes must exist, based on the specificity of the alleged quotes contained in Ms. Mackris' complaint.  My further strong hunch is that Ms. Mackris' lawyers indeed did turn over copies of the tapes, and that's what led the parties to begin serious settlement discussions.

The press release announcing the settlement undoubtedly was closely negotiated — note the use of what's apparently a defined term from the settlement document in the opening words — "The parties regret ...."  In all probability, another negotiated term of the settlement was who would make the announcement — in this case, Mr. O'Reilly's and Fox's lawyers, rather than Ms. Mackris' lawyers.  And I seriously doubt that it's mere happenstance that Ms. Mackris' lawyer didn't put out a simultaneous press release or return AP's inquiring telephone call.  Rather, it's highly likely that for the privilege of announcing the deal and controlling the spin thereon, Mr. O'Reilly and/or Fox et al. effectively paid an additional cash premium.

And there's almost no doubt that it was they, and not Ms. Mackris, who paid.  Indeed, Mr. O'Reilly's and Fox et al.'s lawyers had been arguing in the press that Ms. Mackris is broke as part of their media spin.  But the powerful implicit proof is in what else the statement says — and doesn't say.  First, focus on this extraordinary statement:

We [that is, counsel for Mr. O'Reilly and Fox et al.] now withdraw any assertion that any extortion by Ms. Mackris, Mr. Morelli, or Morelli & Associates occurred.

That, my friends, is eating crow bigtime.  That, my friends, is a settlement-mandated mitigation of damages that otherwise might continue to accrue for a defamation claim on Ms. Mackris' behalf.  Accusing someone of commiting a crime like extortion, if untrue, may be defamatory "per se" — meaning that an accusation that someone's a criminal is conclusively presumed to be injurious to his or her reputation; it may not necessarily be defamatory if, for example, it's true, but there's no dispute that it would cause members of the public to think less of the accusee.  While there's a privilege for making such accusations in court filings, that privilege may not extend to accusations that are republished by the accusers outside the courtroom.  There's no way that O'Reilly's and Fox et al.'s lawyers would have made the admission that the extortion claim was unfounded unless they were simultaneously receiving a release from Ms. Mackris that would cover her potential defamation claims as part of the overall package; and it's something they'd only give up grudgingly.  My hunch is that Ms. Mackris' counsel painted his demand for such an admission as a "deal-killer point" in the negotiations; their side might have gotten more money if they'd dropped that demand, but they were unwilling to do so.

What's also missing from the press release that one would normally expect to see is a statement to the effect that by agreeing to settle all claims of all parties, no party was admitting any liability and no party was admitting that any other party's factual allegations or claims had any validity.  That's probably exactly what the settlement documents themselves say, and it's usually something that a defendant insists on being able to say publicly.  But in the press release, there's only a weaker statement that "there was no wrongdoing whatsoever by Mr. O'Reilly, Ms. Mackris, or Ms. Mackris' counsel."  Again, my strong hunch is that Ms. Mackris and her counsel objected to any broader statement than this one, knowing that it would have been spun by Mr. O'Reilly's and Fox et al.'s lawyers as part of a "these claims were bogus but would've been expensive to litigate, blah blah" meme.

Is Kurtz' source right in speculating that Mr. O'Reilly will write the entire check, however much it is for?  I suspect he is.  As I've pointed out in my previous posts, if Fox's lawyers were correct in their claims that it has an aggressive anti-harassment policy in place and that Ms. Mackris hadn't ever complained or attempted to make use of that policy, then Mr. O'Reilly's potential liability was much, much greater than that of his codefendants.  Indeed, there was an enormous potential conflict of interest between him and all of the other defendants; it's not uncommon in such cases for the employer to initially back its employee, pending investigation, and then later to flip and essentially join the plaintiff in painting the employee as an errant rogue (while continuing to insist that the employer neither knew nor should have known of his misconduct).  It strikes me as quite likely that Fox et al. not only insisted that Mr. O'Reilly write the settlement check out of his own ample bank account, but that they insisted that he settle now, before the tapes (if they exist) hit the court files or were otherwise leaked.

As for the amount:  In my opinion, $600 million or $60 million were ridiculous figures, absent proof of physical contact.  If Kurtz' source is right and the settlement price was in the $2 million to $3 million range, however, that wouldn't surprise me.  Incredible as that amount of money is when compared, say, to Ms. Mackris' annual salary (or yours or mine), it's an amount that Mr. O'Reilly could certainly afford to pay — not "nuisance value" (because you can buy a lot of high-powered lawyer time for that kind of change), but not something that's going to put any crimps into his lifestyle.  Just think of it as history's highest-priced phone sex.

In an absolute sense, is it fair that Ms. Mackris get that kind of money for listening to her boss talk dirty — especially if she did little to discourage him, or possibly even set him up?  Naw, of course not.  I continue to think that there's a substantial probability that she'd have done much, much worse with a jury, even as against Mr. O'Reilly.  But in the real world in which we live — as opposed to a hypothetical, perfectly just world — the settlement value of her case was inflated by Mr. O'Reilly's identity and particular self-created vulnerability, as well as his wealth.  And Mr. O'Reilly, by settling, was buying more than just the elimination of his risks before a jury.  He bought his peace, and Ms. Mackris' silence in the future. 

And presumably he bought every existing copy of some very, very expensive tapes.  It wouldn't surprise me, in fact, if there's a penalty clause that's triggered if the tapes are ever leaked — and/or very possibly even a delayed/escrowed future partial payment contingent upon the tapes not being leaked.  That's what I'd insist upon if I were representing Mr. O'Reilly.

Even if Ms. Mackris is a gold-digger, even if she set him up, nevertheless, if Mr. O'Reilly said what he's alleged to have said and was a big enough sucker to let himself get set up that way, I have little sympathy for him.  And his temporary ratings surge notwithstanding, I'm pretty sure that he ended up paying more than he would have had to otherwise in order to settle the case because of the stupid preemptive extortion lawsuit.  Those crow feathers can't taste very good going down.

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Update (Thu Oct 28 @ 9:35pm):  Here's Mr. O'Reilly's statement about the settlement from his show tonight, as reproduced on his website (the wording of which probably was also carefully negotiated and stipulated in the settlement documents):

Hi, I'm Bill O'Reilly, thanks for watching us tonight. Before we get to the talking points memo I have something very important to tell you.

All litigation has ceased in that case that has made me the object of media scorn from coast to coast.

Today lawyers issued a statement saying there was no wrongdoing in the case what-so-ever by anyone. Obviously the words "no wrongdoing" are the key.

On a personal note, this matter has caused enormous pain; but I had to protect my family and I did. Some of the media hammered me relentlessly because, as you know, I am a huge target as is FOX News. All I can say to you is please do not believe everything you hear and read.

The good news is that Factor viewers and listeners seem to have given me the benefit of any doubt when some in the media did not. You guys looked out for me and I will never forget it.

This brutal ordeal is now officially over, and I will never speak of it again.

Especially on the telephone, I'll bet.

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Update (Fri Oct 29 @ 1:50am): WaPo's Howard Kurtz's report on the settlement says "Fox believed Mackris had tape recordings of the long, highly detailed conversations alleged in the suit, but Morelli never confirmed that, saying only that they had concrete evidence." 

Although I have a high opinion of Mr. Kurtz and, of course, he has access to sources that I don't, I still don't buy this suggestion at all.  It would be incredibly foolish for Mr. O'Reilly and Fox et al. to settle without absolutely, positively pinning down that subject and obtaining both whatever tapes exist and iron-clad representations that there weren't others.  Lawyer Morelli may never have confirmed publicly whether or not there were tapes, but I'd bet a hefty sum that he's done so — in meticulous detail — as part of the settlement discussions and documentation.  Indeed, part of what Mr. O'Reilly presumably bought as part of the settlement was Mr. Morelli's and his client's future silence even as to the existence of any tapes.

The New York Post has a fine headline:  "Now, $hut Up!"  It also reports:

The settlement statement did not mention the Fox News Channel, which had filed suit with O'Reilly against Mackris and was named as a defendant with O'Reilly by Mackris. That means the network was likely not involved in the deal. A spokeswoman for Fox declined comment.

I suspect that's wrong, and that the settlement documents define "the Parties" to include Fox.  Note too the closing line of the press release, which refers to "all Parties."  It's conceivable that the use of a term defined elsewhere, in fact, was a deliberate (very subtle) way to distance Fox from the PR about the settlement and keep the spotlight, so to speak, on Mr. O'Reilly.  Fox's own website republishes an updated AP story describing the press release as "saying the cases and claims had been withdrawn and all parties [note the lower-case "p"] agreed there was no wrongdoing by O'Reilly, Mackris or Mackris' lawyer Benedict Morelli."

Searching for other news accounts about the settlement, I was briefly confused by this one, headlined "O'Reilly scores twice, including OT winner."