How often do you get to think about champerty and maintenance these days? The words ring vaguely from the first year of law school, but they play little role in modern litigation, as they are archaic notions, that some outsider would finance litigation, whether for a piece of the action or other reasons. Those “other reasons” could be a belief in a socially utilitarian outcome, or to vindicate some personal butthurt.
Enter Peter Thiel, the co-founder of PayPal and a billionaire as a result. Thiel had a special hate on Gawker. Not like your hate because it’s such a horrible, disgusting, low-brow online media outlet reflecting our taste for the sordid. Thiel’s hate came from a Gawker subsidiary, Valleywag’s, effort to out him.
“Valleywag is the Silicon Valley equivalent of Al Qaeda,” Thiel said at the time.
Somebody really hated Gawker, and had the money to turn his hate into lawfare. Then came some clown in a bandana, and boom!
One of Silicon Valley’s best-known investors has been footing a former wrestler’s legal bills in lawsuits against a shared enemy.
Peter Thiel, a PayPal cofounder and one of the earliest backers of Facebook, has been secretly covering the expenses for Hulk Hogan’s lawsuits against online news organization Gawker Media. According to people familiar with the situation who agreed to speak on condition of anonymity, Thiel, a cofounder and partner at Founders Fund, has played a lead role in bankrolling the cases Terry Bollea, a.k.a. Hogan, brought against New York-based Gawker. Hogan is being represented by Charles Harder, a prominent Los Angeles-based lawyer.
And as Ryan Mac and Matt Drange point out, there is nothing unlawful about Thiel doing so, no matter how unpleasant the odor. Just as advocacy groups like FIRE, EFF and ACLU seek out litigants willing to front lawsuits to further their agendas, so too can Thiel, even if his only agenda is to put Gawker out of business because he hates them so much.
But in this case, the win isn’t just about destroying a hated, sleazy media outlet that tons of people read and love, even if they loathe themselves for loving it too much. It’s about opening the door to the sensibilities of some local jury in the middle of nowhere, that just happens to be the plaintiff’s home field, deciding whether it agrees with the media’s editorial decisions.
Lawsuits like these can have a chilling effect on the rest of the media industry, said First Amendment expert Peter Scheer, as they may encourage other wealthy individuals to back litigation against media companies that run unflattering stories about them.
“That’s often the purpose of these cases,” said Scheer, the director of the First Amendment Coalition. “Winning is the ultimate chilling effect, but if you can’t win the case, you at least want the editors to think twice before writing another critical story about you.”
The advent of lawfare isn’t new, much as the description reflects the aggressiveness with which the courts are used as a tool of social change. It’s no more available to one side’s political cause or another’s. And lawfare, in itself, has become an accepted use of the legal system, champerty notwithstanding.
Yet, Thiel’s financing of this horribly misbegotten litigation smells differently than other uses of litigation financing. It’s not for the money, whether or not he gets a slice of Hogan’s payoff should he prevail on appeal. It’s because Gawker wrote something that hurt his feelings. When you’re a billionaire, you can indulge your feelings that way.
Is this wrong? Aren’t rich guys just as allowed to be butthurt as anyone else? Can’t rich guys use their wealth to their advantage? Well, sure. That’s the glory of a capitalist system, that we can use what we have in any lawful manner to accomplish our ends, even if the ends may be of dubious social utility.
On the other hand, the ability to use money to pervert the systemic incentives upon which the legal system is based produces some dangerous outcomes. That
Hulk Hogan Terry Bollea obtained the absurd judgment totalling $140 million against Gawker, after two federal courts trashed their claim as having no chance of prevailing under the First Amendment, because he had a sugar daddy funding a third try in the local courthouse, where nobody ever heard of the Free Press thingy, takes lawfare to the extreme.
And to add insult to injury, that unprincipled, agenda-driven academics told lies about it so that they could seek to bootstrap this ill-conceived litigation to their own advantage after the public’s mindless anger over Gawker’s unseemly publication means that we will be living with the consequences of Thiel’s personal vendetta in ways no one would have believed at the time he signed the checks.*
Thiel has his views of the world, some of which are peculiar. He’s allowed, just as others are allowed to disagree with his views. While there is no principled argument that would explain why Thiel’s indulgence in champerty or maintenance is any more wrong than anyone else’s, the ramifications for free speech and press are significant. Hey, if Thiel wanted to shut SJ down under the crushing weight of billionaire financed litigation, no doubt he could. Money talks, kids.
But it still smells horrible that a guy with a bunch of loot can use lawfare to undermine the First Amendment, to silence free speech and a free press. You see, a lot of rich guys would like to do so, because they really hate speech and press that doesn’t do what they want them to do. And with an outcome like that which befell Gawker, they can.
*Just a phrase. No doubt it was an electronic transfer of payment to the lawyers, because Thiel likely has a Paypal account.