Judge: Dan Rather Can Again Pursue Fraud Claim In CBS Suit

A state judge on Tuesday reinstated a fraud claim by former CBS Evening News anchor Dan Rather in a $70 million lawsuit against CBS Corp. (CBS).

At a hearing Tuesday, New York State Supreme Court Justice Ira Gammerman ruled that Rather could file an amended complaint in the case that alleges fraud by CBS. The judge had previously thrown out the fraud claim.

"The reasonable, objective analysis is it was a bad day at Black Rock," said Rather, referring to CBS's headquarters in midtown Manhattan.

Rather also has alleged breach of contract and breach of fiduciary duty by CBS.

Jim Quinn, a lawyer for CBS, said the media company will ask for the fraud claim to be dismissed.

In a statement, CBS said, "Today's rulings by Judge Gammerman were on technical and procedural issues, not on the merits of Mr. Rather's allegations. Most of Mr. Rather's claims already have been rejected by the court and that has not changed. We are similarly confident that Mr. Rather's re-pleaded fraud claim will be dismissed once the court reaches the actual merits."

Rather has alleged in part that CBS violated his contract by failing to provide him enough airtime on "60 Minutes" or "60 Minutes II" after removing him as anchor of CBS Evening News in March 2005 following a controversy over a 2004 report about President George W. Bush's service in the Texas Air National Guard.

The complaint, originally filed in 2007, is seeking about $20 million in compensatory damages and $50 million in punitive damages.

Rather, who first joined CBS News in 1962, also claims CBS conducted a biased investigation - instead of the independent probe it promised into the underlying story and its production. Rather left the network in June 2006.

In his ruling Tuesday, the judge ordered CBS to turn over documents related to the probe, including draft copies of the independent panel's report and separation agreements signed by about a dozen CBS employees after they left the network.

"With respect to the ruling on privilege issues relating to the independent panel, the panel was in fact independent," CBS said.

Meanwhile, the New York State Supreme Court's Appellate Division for the First Department is considering whether the case itself should be allowed to proceed. A decision is expected some time this summer.

-By Chad Bray, Dow Jones Newswires; 212-227-2017; [e-mail]