Peter Thiel bankrolled Hogan lawsuit to go after Gawker. Is this bad?

[downtown]

You may remember a few months ago, when large digital media company Gawker (of Gawker, Deadspin, Jezebel, etc), lost a huge lawsuit to Hulk Hogan over Gawker's decision to publish Hogan's sex tape. The lawsuit could cost Gawker well over $100 million dollars.

Suing media companies is very expensive though. And now, we've learned that Hogan had a sponsor helping pay for the lawsuit (and the upcoming appeals). Eccentric Billionaire Peter Theil.

Thiel isn't doing this for a cut of that sweet Hogan money. He says he doesn't expect to make money from his investment (in fact, many analysts think Hogan's award will be overturned on appeal). Thiel is motivated by revenge. Gawker tried to "out" him several years ago (Thiel is gay), and went after a few of his friends, so Thiel is now bankrolling multiple lawsuits against Gawker in an attempt to bankrupt the company.

Now, nobody in this story, from Gawker, to Thiel, to heck, even Hulk Hogan, is particularly likable. But what do we think about this?

On one hand, given the costs built into our legal system, letting a 3rd party bankroll a lawsuit can make it dramatically easier for a victim to sue a large corporation and get restitution. These 3rd parties can be used as a financial vehicle, or just to see the big guy get taken down a few pegs. If this was say, a coal company poisoning water, instead of a NY media outlet publishing sex tapes, maybe folks wouldn't complain.

On the other hand, it could potentially be used as a vehicle to chill coverage against rich people in general, since tangling up a media company is costly lawsuits is now easier. Even though Gawker is expected to eventually win the Hogan suit, the company could become bankrupt anyway. They've had to post a bond in Florida before the appeal, the cost of which was so great they had to seek outside investments. If they lose another one of the lawsuits, it could be enough to either force Nick Denton to sell, or put the whole thing under.

I'm biased. I work for a competitor of Gawker and one of their sites once tried to write a hitpiece on me. But I can't say I love Thiel either, and I go back and forth about how uneasy I should be about all of this. What do you think?

 

[emzie]

Gawker tried to "out" him several years ago (Thiel is gay), and went after a few of his friends, so Thiel is now bankrolling multiple lawsuits against Gawker in an attempt to bankrupt the company

Gawker didn't try to. It did. Coming out is probably the most vulnerable thing I have ever gone through. I was outed in a smaller community of a few hundred people and it was brutal (though it all worked out fine). I cried all night. If I had a billionaire's resources, I'd've crushed the person responsible if I could.

That all said, I have to support Gawker here. Scummy journalistic practices are best dealt with boycotting.

 

[Evie]

On the one hand, there are enough protections for journalism ("journalism" in this case, but legally it still pass muster) built into the system without adding more, while victims of yellow journalism have precious few recourses.

Journalism is in a very dangerous - for the rest of us - place right now. They have enormous social power. They have highly enviable social status. They have a non-negligible number of special rights under the banner "freedom of the press", and constantly seek to expand those (including trying to get themselves a journalist version of the counsel-client privilege to avoid having to disclose their sources).

The fact is, any other profession that asked for and received the level of legal protection and special rights journalism enjoys would be a strictly regulated (internally) profession - but journalism isn't, and *can't* be, because forcing journalists to be members of a professional body would go against freedom of the press.

All that adds up to an exceedingly powerful institution - because an institution is what the press is - that has very little to check its power, as the government can't (because the constitution says so) and the constitutiosn can't (because they're not the government), and private entities can't (because nobody can force journalists to be part of one).

For victims of crap journalism, there are virtually no other recourses than lawsuits, and even that's a bad recourse given the comparative resources in most cases, and helping each other.

On the other hand...well, of course I don't want (say) the Kochs bankrolling lawsuits against medias who denounce their political crap in an effort to silence them. Or similar things across the political spectrum. The problem is, in no small part, the lack of a reasonable distinction between what's public interest (and thus fair game to the media) and what isn't (and thus violation of privacy on their part). Unfortunately, the line for "public interest" right now is pushed so far beyond reason as to make the distinction useless.

At the very least, though, such bankrolling should be a matter of public record, with the possibility of someone who excessively bankroll dubious lawsuits against a single target being at risk of being tagged as a querulant and barred from further bankrolling.

 

[Kyriakos]

Imo anyone releasing a sex video with Hulk Hogan should be sued. And not just by Hulk Hogan

 

[El_Machinae]

I like Thiel. He's not perfect, but he has a history of trying to do the right thing. I'm totally on Hoggan's side, I consider publishing someone's sex tape to be sexual assault.

As to bankrolling lawsuits ... I can see the merits in publishing the funders at some level of value. The greater concern is that it's obvious that access to justice is entirely too expensive. By many, many orders of magnitude. Lots of law is an information technology, so we can hope for deflation there.

I know of too many examples of where the wealthier party deliberately made it expensive. The lawsuit was the weapon, not the victory

 

[Evie]

Indeed. Driving up the costs of lawsuits to make weaker sides give up is very much a play in the playbook of lawyers, and of course the various bars cry bloody murder about restricting fundamental rights and the ilk if you try to limit that.

 

[innonimatu]

The only problem with this is that it is a symptom of a very bad thing you have with your justice system (and it's not just yours): money and political influence seem to be too important in deciding who wins.

 

[Kyriakos]

The only problem with this is that it is a symptom of a very bad thing you have with your justice system (and it's not just yours): money and political influence seem to be too important in deciding who wins.

Law is like a spider's web; small creatures are stopped by it, but larger ones will always go through. Quote by Thucydides

 

[Camikaze]

This is known as 'maintenance' and was illegal at common law. That's been abolished for a while in most places, though, because it's recognised that someone providing the means to access the court furthers the idea of justice being done. Nowadays there's a growing market for 'litigation funders', which are basically companies that invest in lawsuits (particularly class actions), by bankrolling them in return for a cut of the profit (usually quite high, like 30-40%). It's a high risk investment but apparently works well enough if sufficiently spread.

The real problem in this case is the absolutely absurd damages, both compensatory and exemplary.

 

[warpus]

*shrug* Gawker are a bunch of annoying morons so they can burn for all I care.

Hulk Hogan has a cool moustache, brother, so it seems logical for me to be on this side in this.

 

[Narz]

Is it bad for the rich to come to the aid of someone who's personal life is being exploited for profit? Um, no, of course it's not bad.

Is it bad that rich people can take sides & buy justice in general. Yeah probably.

 

[Ryika]

It seems to me that the main problem is with the american "justice" system itself. The concept that someone needs to be sponsored to be able to get their attempt at justice is baffling to me.

Not allowing people to use the money of other people to finance their lawsuit would just be another layer of injustice added on top of a stupid system.

It's a bit like saying: "We know the system is broken and being exploited, but now that one person over here exploits it is a way that I don't like."

 

[BvBPL]

It seems to me that the main problem is with the american "justice" system itself. The concept that someone needs to be sponsored to be able to get their attempt at justice is baffling to me.

The notion that someone seeking justice must bankroll up front and in full their legal representation (which is the alternative to being sponsored) would deny whole swaths of people access to the legal system. Contingency cases, legal aid, pro and low bono work, representation by insurers, suits for minors by their friends, legal activism cases, and class action suits would all be impossible in such a system. Access to the legal system would be permitted to only those with immediate funds capable of paying for an attorney or a willingness to represent themselves.

 

[dutchfire]

Yes, the (American) justice system is too expensive, too slow and too unpredictable and that is a large part of the problem here. See also: patent trolls.

 

[Oruc]

Screw them. When winner was around he said he wanted freedom from religion, well give me and society freedom from the press, they should be all out of a job.

 

[Rashiminos]

This is known as 'maintenance' and was illegal at common law. That's been abolished for a while in most places, though, because it's recognised that someone providing the means to access the court furthers the idea of justice being done. Nowadays there's a growing market for 'litigation funders', which are basically companies that invest in lawsuits (particularly class actions), by bankrolling them in return for a cut of the profit (usually quite high, like 30-40%). It's a high risk investment but apparently works well enough if sufficiently spread.

The real problem in this case is the absolutely absurd damages, both compensatory and exemplary.

Based on an admittedly partial review of the transcripts, I get the feeling the jury felt Denton would be unrepentant in his indecent "journalism" and a substantially lesser punishment would be too ambiguous. If that's the course Gawker wants to pursue, there's quite a few who wouldn't mind the company going bankrupt.

Spoiler :

Where boycotts have limited effectiveness to accomplish the same result.

 

[danjuno]

It's a shame we need oodles of money to get justice in this country, but Gawker is getting exactly what they deserve. Outing a billionaire and publishing the sex tape of a celebrity who REALLY doesn't want it out there is just asking to get burned.

 

[Zelig]

The notion that someone seeking justice must bankroll up front and in full their legal representation (which is the alternative to being sponsored) would deny whole swaths of people access to the legal system. Contingency cases, legal aid, pro and low bono work, representation by insurers, suits for minors by their friends, legal activism cases, and class action suits would all be impossible in such a system. Access to the legal system would be permitted to only those with immediate funds capable of paying for an attorney or a willingness to represent themselves.

Whole swaths of people are already being denied access to the legal system.

 

[Takhisis]

This is known as 'maintenance' and was illegal at common law. That's been abolished for a while in most places, though, because it's recognised that someone providing the means to access the court furthers the idea of justice being done. Nowadays there's a growing market for 'litigation funders', which are basically companies that invest in lawsuits (particularly class actions), by bankrolling them in return for a cut of the profit (usually quite high, like 30-40%). It's a high risk investment but apparently works well enough if sufficiently spread.

The real problem in this case is the absolutely absurd damages, both compensatory and exemplary.

Can't Gawker sue Hogan and/or Thiel for malicious litigation and claim damages of their own in turn?

 

[El_Machinae]

How can you sue for malicious litigation if you ended up losing the case?

Though showing that the adversary intentionally increased costs would be ... an interesting tactic. But as long as they didn't force you to spend more than the actual reward, it's obvious a settlement should have been pursued.