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Judge Upends Harvey Weinstein Settlement, Questioning Its Approach Judge, Expressing Skepticism, Upends $25 Million Harvey Weinstein Settlement
(about 3 hours later)
A federal judge on Tuesday upended a $25 million proposed civil settlement between Harvey Weinstein, his former film company, and dozens of women who have accused him of sexual harassment and misconduct. Expressing deep skepticism, a federal judge on Tuesday upended a $25 million proposed civil settlement between Harvey Weinstein, his former film company, and dozens of women who have accused him of sexual harassment and abuse.
In a contentious Tuesday morning hearing, Judge Alvin K. Hellerstein of the Southern District of New York denied a motion for preliminary approval of the settlement agreement. He questioned its overall fairness, and whether the women, whose allegations vary, constituted a legal class. In a scathing 18-minute phone hearing on Tuesday morning, Judge Alvin K. Hellerstein of the Southern District of New York picked apart the class-action lawsuit at the heart of the deal, suggesting it was misconceived. He asked why the women were not pursuing individual cases, given how much their allegations varied in severity, and whether the group met the definition of a legal class.
Suggesting the settlement plan was misconceived, he also questioned how the money would be allocated and called the millions of dollars in legal fees that would have been allotted to Mr. Weinstein and his former company directors “obnoxious.” “What is there to make me believe that a person who just met Harvey Weinstein has the same claim as the person who is raped by Harvey Weinstein?” the judge asked.
The proposed deal, which also includes the New York attorney general, and creditors of The Weinstein Company, has been controversial since its contours first came into view, in part because it did not require Mr. Weinstein to admit wrongdoing or make any payments to his alleged victims, relying instead on insurance coverage. He went on to question how the women’s allegations would be evaluated and the money allocated among them, and called an additional $12 million that would have gone toward legal fees for Mr. Weinstein and his former company directors “obnoxious.” He criticized Beth Fegan, the lead counsel for the plaintiffs in the class-action case, saying she wasted time “with settlements and attempts to create a class that doesn’t exist.”
In the run-up to Tuesday’s hearing, several alleged victims filed formal objections, calling the settlement unfair to the women on multiple counts. By the end of the call, the judge had denied a motion for preliminary approval of the agreement — in essence, scuttling the deal, lawyers said. His decision renewed a lingering question: Will the nearly 100 women who have come forward with allegations of sexual abuse by Mr. Weinstein, now a convicted rapist, see any restitution?
“The judge identified so many problems, it was not even close,” said John Clune, who represents one of the women who objected to the proposal. “Functionally, the whole thing has been thrown out,” he said, referring to the agreement. “Everyone wants a good result for these survivors. This wasn’t it.” The proposed settlement, and now the judge’s rejection, has left Mr. Weinstein’s alleged victims divided between those who supported the deal, calling it flawed but necessary, and those who opposed it.
In the proposed settlement, which also would have required approval from a federal bankruptcy court in Delaware, the insurance companies would pay $12 million toward some, but not all, legal costs for Mr. Weinstein; his brother, Bob; and other former members of their company’s board. The board members would be insulated from future liability, and the alleged victims would drop their claims against Mr. Weinstein and other executives. “Today felt like a huge setback,” said Caitlin Dulany, one of the lead plaintiffs. “The whole point of me doing this was to represent a class, of a hundred-plus women, and many more who haven’t spoken out,” she said in an interview. “The #MeToo movement brought us all together, it’s about survivors joining forces.” Now, she said, the judge has separated them again.
“We have been saying for over a year and a half that the settlement terms and conditions were unfair and should never be imposed on sexual assault survivors,” Douglas H. Wigdor and two other lawyers representing several women who had challenged the settlement, said in a statement. “We were surprised that class counsel and the New York attorney general did not recognize this fact but are pleased that Judge Hellerstein swiftly rejected the one-sided proposal. On behalf of our clients, we look forward to pursuing justice against Harvey Weinstein and his many enablers.” The proposed settlement, which also would have required approval from a federal bankruptcy court in Delaware, has been controversial since its contours first came into view. It was always a legal hodgepodge, consisting of various lawsuits, including the class action, soldered together in an attempt to reach one global deal. It did not require Mr. Weinstein to admit wrongdoing or make any payments to his alleged victims, relying instead on insurance coverage.
In February, Mr. Weinstein was convicted of sex crimes against two women, a fraction of his numerous accusers, and was sentenced to more than 20 years in prison. The civil settlement has long been seen as the best hope of legal recourse for many of his other alleged victims. Those insurance companies would also have paid $12 million toward some, but not all, legal costs for Mr. Weinstein; his brother, Bob; and other former board members of the Weinstein Company, the brothers’ studio. The board members would have been insulated from future liability, and the alleged victims would have dropped their claims against Mr. Weinstein and other executives.
The payout to the accusers was to be part of an overall $47 million settlement intended to close out The Weinstein Company’s obligations. Because the business is in bankruptcy proceedings, the women have had to make their claims along with its creditors. After the judge’s decision on Tuesday, Dominique Huett, one of several accusers who had filed objections to the settlement deal, expressed relief. Under that agreement, Mr. Weinstein “wasn’t going to have to be held accountable for his wrongdoing,” she said, and she had been especially alarmed by the millions of dollars in legal fees the settlement provided for the convicted sex offender and his former board of directors.
In 2018, when the Weinstein Company entered bankruptcy, the accusers watched a potential settlement payout dwindle from a projected $90 million victims’ fund that had been discussed as part of a possible sale of the film studio. “The judge identified so many problems, it was not even close,” said John Clune, who represents Zoe Brock, another of the women who objected to the proposal. “Everyone wants a good result for these survivors. This wasn’t it.”
Some of the women had agonized over whether to sign onto what they called a flawed settlement. By this year, after months of negotiations with the insurance companies, many of the parties had concluded that this proposed settlement was the best Mr. Weinstein’s accusers could do. But now the question of what that result might be, and how to achieve it, is open once again. While Mr. Weinstein was convicted of sex crimes against two women earlier this year, and is serving a 23-year prison sentence, the civil settlement has long been seen as the last, best hope for legal recourse for his numerous other alleged victims.
“This agreement is a win for every woman who has experienced sexual harassment, discrimination, intimidation or retaliation by her employer,” New York’s attorney general, Letitia James, said in a statement last month. Those women have been operating with difficult constraints: Because the Weinstein Company is in bankruptcy proceedings, they have had to make their claims along with its creditors. The accusers have already watched a potential settlement payout dwindle from a projected $90 million victims’ fund that had been discussed as part of a possible sale of the film studio in 2018, when the Weinstein Company entered bankruptcy.
In response to the ruling, plaintiffs, their lawyers and the office of the New York attorney general said they were considering their options, none of which look easy. Some say they are considering appeals. But the now-rejected settlement took more than two years to negotiate, given the number of parties and the complexity of the bankruptcy proceedings, and many of the women may be reluctant to restart the process.
Ms. Fegan, the lead attorney for the plaintiffs in the class-action case, did not respond to requests for comment.
Letitia James, the attorney general of New York, said, “We will review the decision and determine next steps.”
“Our office has been fighting tirelessly to provide these brave women with the justice they are owed and will continue to do so,” Ms. James said.
Katherine Kendall, who has said that Mr. Weinstein harassed and chased her around a living room in 1993, said she was not sure whether she would continue to pursue a civil claim against him. “It could take years,” she said. And she is not sure she wants to continue alone, without the solidarity of the group.
“It was all about, for me, the women joining together,” she said.
Benjamin Weiser contributed reporting.