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Rather v. CBS Corporation, et al.

In a suit relating to CBS’s purported treatment and eventual termination of Dan Rather following a 2004 broadcast about President Bush, a judicial hearing officer in New York state Supreme Court dismissed Dan Rather’s claims against CBS and Viacom executives Les Moonves, Sumner Redstone and Andrew Heyward and dismissed four of the seven claims against all defendants.

The case arose out of a broadcast on 60 Minutes II narrated by Rather that reported that President Bush had avoided military service in Vietnam by using his father’s political connections to be accepted into the Texas Air National Guard and ultimately shirked his duties.

Rather claimed that following President Bush’s re-election he was removed as the anchor of The CBS Evening News in November, 2004, was coerced to issue a formal apology, was barred from appearing on 60 Minutes II, and was terminated on June 16, 2006. In addition, he argued that although he continued to receive compensation until his termination date, he should have received his entire outstanding compensation immediately following his last broadcast as anchor of The CBS Evening News.

The court first held that six of Rather’s seven claims were not time-barred because they were not claims for defamation that have a one-year statute of limitations. Regarding the breach of contract claim, the court examined Rather’s employment agreements with CBS and denied the defendants’ motion to dismiss, noting that the agreements did not require CBS to use Rather as an anchor of The CBS Evening News, but did require that CBS pay him his entire compensation immediately if it stopped using his services in certain specified ways. In reaching its holding, the court considered and rejected defendants’ argument that the gravaman of the contract claim was that Rather was “benched” for more than a year and was, in essence, a claim for reputation damages that are not recoverable through a breach claim. The court found the breach claim sufficient to survive the motion to dismiss, despite the general inability to recover for damages to reputation that are incidental to a breach, stating “here, the alleged damage to Rather’s reputation resulting from his ouster from the nationally prominent place he had occupied at CBS News, coupled with the near silence that he was required to keep for more than a year, was not an unforeseen by-product of the alleged breach of contract.”

The court also found that dismissal of Rather’s claim for breach of fiduciary duty would be premature. The court explained that while an employment relationship alone does not give rise to fiduciary duties on the part of the employer, in some circumstances a contractual relationship can give rise to fiduciary duties between the parties. The court then noted that Rather had contended that, due to the length of his relationship with CBS and the nature of his service, he became the public face of CBS News and his relationship with CBS was something more than the relationship of an employer and an employee.

The court additionally found that it would be premature to dismiss Rather’s claim that CBS and Viacom were liable for tortious inducement of breach of contract. Defendants had argued that CBS Corporation cannot interfere with its own contracts and that Viacom cannot be liable because it was not formed until after the events at issue. However, the court found that by virtue of the merger of the old Viacom with CBS, the current CBS Corporation is a successor-in-interest to the old Viacom and could be held liable for the old Viacom’s alleged inducement of breach. Additionally, the court stated that the new Viacom had not shown that it was not also a successor-in-interest to the old Viacom.

The court dismissed Rather’s remaining four claims, finding that: (1) his breach of implied covenant claim failed because it was redundant of the breach of contract claim; (2) his fraud claim failed because it was either redundant of his contract claim or amounted to a time-barred claim for defamation; (3) his claim for tortious interference with business relations failed because Rather did not identify any prospective business relations with which any of the defendants interfered; and (4) his claim for prima facie tort failed because Rather had not pled any special damages.

The court additionally dismissed all the claims as against Les Moonves, CEO Of CBS, Sumner Redstone, CEO of Viacom, and Andrew Heyward, President of CBS News, because the complaint failed to allege that they were acting outside the scope of their employment.