Well, their mistake was making public comments that he was guilty of embezzlement. There’s no real evidence of that, and he hasn’t been charged with anything. That’s not to say that he wasn’t involved, but unfortunately for the news organization those statements opened the door for this law suit.
It’s a bad look but he’s not governor anymore so it doesn’t really hurt him to sue them. He doesn’t even have to win. Hell, he doesn’t even have to get his case in front of a jury. If they turn over the documents the judge is asking for, it will do irreparable damage to their news organization.