CNN accused of withholding critical documents needed to determine value ahead of defamation trial

Lawyers for U.S. Navy veteran Zachary Young accused CNN of withholding critical financial documents in accordance with financial discovery during an Election Day hearing in the high-stakes defamation lawsuit. 

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.

U.S. Navy veteran Zachary Young believes CNN "destroyed his reputation and business by branding him an illegal profiteer who exploited desperate Afghans" during a Nov. 11, 2021, segment on CNN’s "The Lead with Jake Tapper." 

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Judge William Henry previously agreed with Young’s lead counsel Vel Freedman 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. Freedman argued that CNN has since handed over thousands of pages of documents but has failed to turn over cash flow records. 

"CNN’s response has been, ‘Well we don’t have them,’" Freedman said Tuesday during the Zoom hearing. 

"That just can’t be the case, your honor," Freedman added, noting that tax filings indicate Warner Bros. Discovery mentioned the financial statements and a business as large as the media conglomerate presumably tracks its cash flow and basic financial information. 

"It just doesn’t compute with common sense," Freedman said. 

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Freedman wants a sworn statement from Warner Bros. Discovery executives saying the documents "don’t exist," or else he wants to see the data. 

CNN’s attorney, Charles Tobin, argued that the network doesn’t manage its business by a balance sheet, doesn’t maintain a cash-flow statement and suggested it has been truthful and candid. Tobin also suggested that CNN’s chief financial officer would be able to clear everything up during the deposition process. 

After hearing both sides, Judge Henry 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. 

"To the extent that there is any sort of reporting that relates to cash flow, that either CNN, or one of its officers, promulgates to send to Warner Bros. Discovery… such information would need to be produced," Judge Henry said. 

"If you farm something out to somebody else to do your statement, that’s within your control to get that back from them," he continued, suggesting that outsourced bookkeeping must be turned over. 

Judge Henry set a deadline of November 9 at 11:59 p.m. ET for CNN to produce the documents. 

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. 

A civil trial is scheduled to begin on Jan. 6 in front of Judge Henry in the Circuit Court for Bay County, Florida.