President Donald Trump has won a $16 million dollar libel settlement from the American Broadcasting Corporation, a Disney company, which agreed to "make a statement of regret." Trump is liable for sexual assault of E. Jean Carroll in a New York dress shop. The trial judge—a Florida federal District Court judge held a “reasonable viewer…could be misled” by an on-air statement by ABC correspondent George Stephanopoulos that Trump had been found liable for rape. But he did not make clear that in New York digital penetration is a sexual assault only—not the crime of rape.

The Florida federal trial judge, Cecilia Altonaga, ruled that a “reasonable juror” could misunderstand the difference, making the correspondent’s statements to Trump false and defamatory. Facing trial under a mistake of law, Disney settled. The landmark 1963 case of New York Times v. Sullivan immunizes such errors—and requires actual malice—the heedless disregard of the truth when the person disparaged is a public figure.

While at first glance the settlement resembles more the capitulation of a huge entertainment company facing the specter of the incoming administration’s threats to undermine the media than it does an effort to provide compensation for true reputational damage, a closer look reveals that, while it may have avoided significant risk for Disney, it also provides compensation far beyond any actual reputational damages for Trump: it creates a bad precedent in uncertain times for a tattered and beaten news media under attack from many quarters.

The case centered over Stephanopoulos’s repeated use of the word “rape” in describing what a New York jury had determined Mr. Trump had done when in May 2023 it awarded Carroll $2 million for sexual assault in a New York dressing room. In an interview in March of this year, the ABC News correspondent pressed Florida GOP Rep. Nancy Mace about her support for Mr. Trump’s reelection, given a long history of derogatory remarks and actions toward women and given that Mace herself had been the victim of a sexual assault. Stephanopoulos made the inaccurate statement during the segment.

While New York juries had found Trump civilly liable for sexual assault and in a second trial for defamation of Carroll, the jury did not find that Trump “raped” her as defined by New York criminal law. When the president’s lawyers moved for a new trial because the jury rejected the rape claim, Senior U.S. District Judge Lewis A. Kaplan explained that the definition of rape under New York penal law depends on penile penetration. It is “far narrower” than in “common modern parlance” and other criminal statutes. According to the judge’s written opinion, “the jury found that Mr. Trump in fact committed digital penetration, which “many people commonly understand [by] the word ‘rape.’”

There are two important defamation concepts at play here in a public defamation case. First is “substantial truth,” where a defamatory allegation is slightly different than the truth but its gist or sting is no worse. That is essentially what Kaplan was describing. Second, and more importantly, a public figure plaintiff must prove actual malice.

For Trump to meet the high constitutional standard of proving Stephanopoulos acted with actual malice the president, the consummate public figure would have to show such malice with the convincing clarity required by New York Times.  

Actual malice does not mean Stephanopoulos was motivated by spite, ill-will, or hatred; that is common law malice. New York Times the 1964 Supreme Court case upon which this constitutional protection is based, demands subjective knowledge of falsity, not falsity in fact. That case and its progeny eliminate strict liability for speech and allow for a speaker to be wrong when discussing matters of public concern without liability. In this case, actual malice would be Stephanopoulos’ subjective knowledge at the time his statements were made; that he either (1) knew that the statement was in fact false or (2) that he consciously chose to disregard the high probability that his statement was false (a concept known as “reckless disregard”).

By that standard, it would have been quite difficult for Disney’s defenses to fail. But the judge ruled that substantial truth and actual malice in the case were jury questions. A jury, she wrote, need not accept Stephanopoulos’ reliance on Kaplan’s understanding, which she concluded was "only fleetingly referenced."

"A reasonable viewer," she wrote, "could have been misled by Stephanopoulos statements, which did not include the jury’s original findings" in Trump’s favor on the rape count. But a reasonable viewer—like the reasonable man—does not state the actual malice standard demanded by the sixty-year-old landmark.

More than a decade ago a runaway Florida jury awarded Hulk Hogan $140 million for a questionable defamation suit against the online gossip site Gawker. The site could not afford to post the enormous appeal bond involved and was forced to file for bankruptcy. The lawsuit was financed in part by Peter Thiel, a Silicon Valley billionaire and self-described "conservative libertarian" whom the site had outed as gay.

It is likely the Gawker verdict and the prospect of a Trump-supportive Florida jury played a big part in the company’s decision. In a different circuit, barring the existence of incriminating emails or conversations within ABC (like those among Fox personnel unearthed in the Dominion-Fox defamation suit which resulted in an almost $800 million settlement) Disney would likely have a decent shot at an appeal. Nevertheless it appears Disney, which had been locked in lengthy legal battles with Florida Gov. Ron DeSantis spurred by Disney’s liberal culture, was facing four years of potential retribution by a president who thrives in threatening just that. Further, the case settled at a very early stage for defamation suits, just days before Mr. Trump and Stephanopoulos would each have been deposed, something that surely would have annoyed Trump further. In the end, even a future payment of a likely tax-deductible $15 million payment plus $1 million in legal fees is, after all, essentially nuisance value to a corporate giant.

Notably, this result would likely not have happened in New Jersey, where damages must be the result of "concrete proof" and without that, there can be no presumed damages for defamation, simply nominal vindicatory damages. W.J.A. v. D.A., 210 N.J. 229, 239 (2012) (quoting Prosser and Keeton on Torts § 116A at 842 (5th ed. 1984)). Under the Punitive Damages Act, punitive damages cannot be awarded unless there are compensatory damages. Here, Mr. Trump’s chances of proving compensatory damages in this instance were close to nil, but Florida law may have allowed him to seek presumed damages because he was accused of a “crime” he wasn’t specifically charged with.

The ABC settlement does not come in a vacuum. ABC was just one of several high-profile targets sued and threatened with suit by Trump and his allies. In recent days Trump has filed a state deceptive practices action against the Des Moines Register for its poll predicting he would lose Iowa. (And he won, so where are the damages, let alone a viable cause of action?) And in a Texas federal court where his appointee is the only judge, Trump filed a deceptive practices act claim against CBS for the purportedly misleading editing of an interview with vice-President Kamala Harris on 60 Minutes.

The concept of these suits is anathema to the First Amendment. Yet Trump recently doubled down on these lawsuits: “I think I have to do it. I shouldn’t really be the one to do it. It should have been the Justice Department or somebody else. But I have to do it. It costs a lot of money to do it, but we have to straighten out the press.”

The fallout from this pressure campaign has been immeasurable: wealthy owners of the Washington Post and Los Angeles Times have made it clear by beginning to moderate the tone of their editorial pages. In recent weeks, many Trump loyalists are doubling down on threatening to file defamation lawsuits. Trump’s surrogate Kashyap Patel, his announced nominee for FBI Director, has run a foundation which has supported libel suits against media (he sued Politico and the New York Times) as well as at least two federal government departments as a harassing tactic to test the boundaries of case law. He has promised to "come after" the media, and he has written a book including a list of those whom he accuses of improper conduct against Trump.

Unless news organizations—most of which are in dire financial straits—stand firm using established law that will protect them, we fear that it will simply encourage more groundless legal actions and demands against publications large and small.