Sgt. Peter Damon is asking for $85 million due to "loss of reputation, emotional distress, embarrassment, and personal humiliation." He says the documentarian falsely portrayed him as expressing anti-government sentiments in Fahrenheit 9/11. Damon lost both of his arms in Iraq when the tire of the Blackhawk helicopter he was servicing blew up. Moore's film uses a clip of Damon that originally aired on NBC Nightly News in which he complains about the pain and gives a (metaphorical) thumbs up to a new pain killer the military gave him.
The crux of Damon's argument is that his clip was situated soon after a clip of a U.S. Representative accusing the Bush administration of "leaving veterans behind," thus implying that Damon was one such veteran. In his lawsuit, Damon avers that he supports Bush and the war, and he points to the extensive treatment he got at Walter Reed Army Medical Center and the house that was built for him by Homes For Our Troops as evidence that he wasn't left behind.
Michael Moore is always getting caught playing fast and loose with the truth, largely because he seems to work backwards. He arrives at a conclusion (Bush is evil, Bush is white, guns actually do kill people, etc.) and then assembles his hand-picked evidence. I often agree with Moore's conclusions, but I would never endorse his methods, which give journalism — if this is even possible — a bad name.
Conservatives will be quick to jump on the Moore-bashing bandwagon, and you can see this story getting prominent attention on Drudge right now. They'll have to do some Michael Moore-style obfuscating, however, to justify the preposterous award Damon is seeking. $85 million for "personal distress" hardly fits in with the philosophy of tort reform. But hey, what's another hypocrite?