Gawker Sued into Bankruptcy

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6079_Smith_W
Gawker Sued into Bankruptcy

Gawker media officially filed for bankruptcy this week following its loss of a $140 million lawsuit brought by Hulk Hogan, bankrolled by PayPal founder Peter Thiel.

http://www.nytimes.com/2016/05/26/business/dealbook/peter-thiel-tech-bil...

Quote:

A 2007 article published by Gawker’s Valleywag blog was headlined, “Peter Thiel is totally gay, people.” That and a series of articles about his friends and others that he said “ruined people’s lives for no reason” drove Mr. Thiel to mount a clandestine war against Gawker. He funded a team of lawyers to find and help “victims” of the company’s coverage mount cases against Gawker.

Quote:

But the revelation this week that Mr. Thiel was covertly backing Mr. Bollea’s case as well as others has raised a series of new questions about the First Amendment as well as about the role of big money in the court system — specifically the emerging field of litigation finance, in which third parties like hedge funds and investment firms pay for other people’s lawsuits.

http://www.wired.com/2016/06/gawkers-bankruptcy-free-press-dies-one-vc-t...

Quote:

The piece didn’t “out” Thiel, as so many have written; Owen Thomas, the writer of the piece and now the business editor at the San Francisco Chronicle, says Thiel was open about his sexuality with friends and colleagues. The point of the piece, rather, was to call out the hypocrisy of other venture capitalists, who supposedly prize non-conformity but would rather keep talk of sexual difference hush-hush. It’s a perfect crystallization of Gawker’s editorial posture.

6079_Smith_W

Meanwhile, Gawker, which has received a $22 million lifeline and intends to keep publishing until it can sell, is receiving accolades for a recent exposee on Donald Trump's hair.

Quote:

Thiel has portrayed Gawker as a force for evil, but Feinberg’s article—which drew potential connections between Trump and the work of a $60,000-a-pop hair-extension company called Ivari International—still went over rather well, drawing praise from staffers at the Times, the Wall Street Journal, and The Atlantic; and at least three winners of the Pulitzer Prize.

http://gawker.com/now-peter-thiels-lawyer-wants-to-silence-reporting-on-...

 

Mr. Magoo Mr. Magoo's picture

It's certainly all a bit strange -- and that says a lot when a case involves someone named "Bubba the Love Sponge" -- but the narrative could have been a lot different if Thiel had bankrolled the suit openly and transparently.

6079_Smith_W

Yeah, and the issue for me isn;t that media should have immunity to publish libel, but as the article says, the danger of this being in the hands of people with virtually unlimited resources.

Consider if it was not an outing, but a whistleblower.

Mr. Magoo Mr. Magoo's picture

I'm looking at it from the other side.  Consider if if was not a rich millionaire with an axe to grind, but supportive parents, or a community group, or a GoFundMe page.

I'll agree it's still a bit odd.  But it's also still the rich and famous suing the rich and famous for more munnee.

josh

Peter Theil's war on the first amendment

Boze

An outing is NOT libel. Truth is an absolute defense to a libel charge. If it's true it's not libel, no matter what else the circumstances. Thiel would have a hard time proving that being outed "ruined his life" regardless. I am not a fan of the practice of outing people against their will but in no circumstances should it be illegal.

Furthermore even a false outing shouldn't be considered libel because libel has to be defamatory, and in the 21st century, I don't think being accused of being gay can be considered damaging to one's reputation, at least not in the first world.

Peter Thiel is an ass, as everybody knew already. I would say it's ironic that a so-called libertarian is a fan of using the courts to silence people who talk about him, except, it's not.

Mr. Magoo Mr. Magoo's picture

Quote:
An outing is NOT libel. Truth is an absolute defense to a libel charge. If it's true it's not libel, no matter what else the circumstances. Thiel would have a hard time proving that being outed "ruined his life" regardless. I am not a fan of the practice of outing people against their will but in no circumstances should it be illegal.

Not disagreeing or anything, but that's not really material. The case wasn't about him or his outing.  And he's allowed to hate Gawker for any reason he wants, isn't he?

6079_Smith_W

And he didn;'t go after them for outing; that was what pissed him off. He bankrolled Hulk Hogan over his sex tape.

And yes it sometimes happens to people who don't have the resources to sue, but their interests aren't being served by the rich and powerful suing media into the ground. 

Whether there should be regulators to protect from that (and how they would go about codifying it)  is kind of a separate issue.

For that matter, whether there should be some protections for media in cases like this is another issue.

And here I thought Larry Flynt went to the boards to settle all this nonsense.

ygtbk

I think that, given that Gawker engaged with Thiel of their own free will, they deserved what they got.

He's obviously smarter and more motivated than them (not difficult, they're journalists).

It's not as if, given their line of business, they did not know the risks.

6079_Smith_W

Really? Given that they dared to piss off a rich man?

And if Flynt hadn't had deep enough pockets and enough will to take it all the way to the Supreme Court then Jerry Falwell would have been the "obviously smarter" one?

And had he not been able to bankroll that case would everyone since who has benefitted from that ruling regarding fair comment about public figures have gotten what they deserve?

For that matter, you might want to consider that we get to sit around here yapping and playing armchair experts because of the good graces and hospitality of unmotivated journalists who aren't as smart as other people..

josh

ygtbk wrote:

I think that, given that Gawker engaged with Thiel of their own free will, they deserved what they got.

He's obviously smarter and more motivated than them (not difficult, they're journalists).

It's not as if, given their line of business, they did not know the risks.

Smarter?  Don't you mean richer?  Ridiculous post.

ygtbk

josh wrote:

ygtbk wrote:

I think that, given that Gawker engaged with Thiel of their own free will, they deserved what they got.

He's obviously smarter and more motivated than them (not difficult, they're journalists).

It's not as if, given their line of business, they did not know the risks.

Smarter?  Don't you mean richer?  Ridiculous post.

I actually meant smarter, Josh. See:

https://en.wikipedia.org/wiki/Peter_Thiel

 

 

6079_Smith_W

That makes him smarter how?

I can see how it makes him more of a hypocrite. From your wikipedia article:

Quote:

An avowed libertarian, he founded The Stanford Review in 1987 along with Norman Book. The Stanford Review became famous for challenging campus mores including political correctness and laws against hate speech. The Stanford Review is now the university's main conservative/libertarian newspaper.[citation needed]

I guess he is all for free speech except when people use it about him.

 

 

ygtbk

@ Smith:

I think you are melding free speech and torts, and also melding together Gawker's treatment of Thiel and of Bollea. You can do that if you want, but I think it blurs the issues.

Hate speech is not the same thing as "invasion of privacy, infringement of personality rights, and intentional infliction of emotional distress."

https://en.wikipedia.org/wiki/Bollea_v._Gawker 

And yes, if you read about what Thiel has achieved, he's not a dummy.

6079_Smith_W

Actually the only person who said anything about people being less intelligent is you.

And the notion that a fatter wallet makes him smarter? As was said above, it is ridiculous.

As for Thiel's values: 

Quote:

Throughout its history the Stanford Review has remained true to its founding mission, publishing articles that steer campus dialogue away from the safe and into a conversation that promotes rational argument and the consideration of all viewpoints.

http://stanfordreview.org/article/a-brief-and-non-exhaustive-history-of-...

Square that with him going on a vendetta because a publisher pointed out an uncomfortable truth. And regardless of where one stands on outing and targetting someone because of identity (even though this was not an outing)  there is also the greater question of proportionality, and the power of the rich to influence the courts and media. And doing this as a former publisher.

Here's the original article.

http://gawker.com/335894/peter-thiel-is-totally-gay-people

 

ygtbk

@ Smith:

I can break it down further if you want me to.

1) I did not say that being richer makes you smarter (there are many many counterexamples). I included the biographical link to point to achievements, not bank accounts.

2) Is Gawker's gossip-column business model based on embarrassing people? I think so: you may differ.

3) Was Gawker's treatment of Bollea actionable? So far the courts seem to think so, although there could be appeals, and Bollea might ultimately lose.

4) Was Gawker's treatment of Thiel actionable? Likely not, but it obviously led to him holding a grudge. He might not have wanted the whole world to know he was gay.

5) Did this lead to a situation in which Thiel had reason to make common cause with Bollea? Yes. 

6079_Smith_W

You don't need to break anything down. I see pretty clearly where you are coming from.

Quote:

I think that, given that Gawker engaged with Thiel of their own free will, they deserved what they got.

He's obviously smarter and more motivated than them (not difficult, they're journalists).

As for a "business model based on embarrassing people" do you think other media don't get sued?

And so what? Frank Magazine had a similar model, and they still managed to break a number of legitimate stories.

And not to dwell too much on Hustler Magazine vs. Falwell but it is often edgier publications which test the law that all media benefit from.

Question is, should media have to have wealthy patrons in order to do business, or risk being shut down by any rich guy (or corporation) who holds a grudge?

Gawker went out of their way to NOT have wealthy investors in order to avoid any such conflict of interest. I'd say any small independent media, regardless of their mandate, should be concerned by this.

 

 

 

ygtbk

@ Smith:

I think we might want to agree to disagree.

6079_Smith_W

Yes, I expect so.

The story linked to in the opening post presents some of the conflicting sides here:

Quote:

Mr. Thomas, now business editor of The San Francisco Chronicle, said the goal of Valleywag was to improve the tech community.

“Silicon Valley said it had ideals,” he said. “All we asked was that it live up to those ideals. If you’re going to say that you’re a meritocracy, then don’t hire all of your buddies to launch a start-up who all happen to be young white men. Don’t say you’re apolitical when you’re secretly funding anti-immigration measures.”

...

Mr. Thiel returned the favor, calling Valleywag “the Silicon Valley equivalent of Al Qaeda.”

“It scares everybody,” he said in a 2009 interview with Pe Hub, a private equity publication. “It’s terrible for the Valley, which is supposed to be about people who are willing to think out loud and be different. I think they should be described as terrorists, not as writers or reporters.”

http://www.nytimes.com/2016/05/26/technology/gossip-in-silicon-valley-an...

Mr. Magoo Mr. Magoo's picture

As long as we're going to make sure to note the difference between being "rich" and being "smart", we might also want to rationally consider whether Bollea won because Thiel bought him some lawyers, or because Gawker really did, in fact, invade his privacy.

6079_Smith_W

Sure.

(though the ruling is  being appealed)

And there are certainly things that some of Gawker's websites did which crossed lines.

But given that Theil's ulterior motive was not to seek damages but to break them, and there was no chance of any settlement, and that the deal was kept secret, this could also be seen as an abuse of the legal process.

http://theconversation.com/was-peter-thiels-funding-of-the-gawker-case-a...

And again, there is the matter of proportionality. Ezra Levant lost $80,000 in a suit two years ago. Certainly Gawker is bigger, and it is the U.S., but should awards be so high that they force the breakup of a media organization?

And should media have to have 160 lawyers on board, as HBO did for its documentary Going Clear, to shield themselves against someone with a grudge. And despite the presumed validity of Hogan's case, the real story is a wealthy and powerful community going after a media organization which would not bow to their will. A grudge so strong that Thiel stooped to calling them "terrorists" in a trade paper.

And my mention of the threat over trump was sort of a joke, but really, should slap suits be allowed as interference in coverage of a presidential campaign?

With a threatening letter which the firm claims cannot be published because it is under copyright?

http://www.nytimes.com/2016/06/15/business/media/gawker-article-on-trump...

 

6079_Smith_W

http://www.cjr.org/analysis/shadowy_war.php?utm_content=bufferc2bc9&utm_...

Quote:

Investigative reporter Bethany McLean worries this dynamic is making some journalists, especially young freelancers, “pull in their horns” and go softer on companies to avoid any trouble or for fear of losing access. She recalls a time when, for reporters, having a company call you up and scream at you was considered a badge of honor.

McLean thinks the current digital landscape is ruled by a different maxim, the sense that “anything is fair game.”

Mr. Magoo Mr. Magoo's picture

Quote:
But given that Theil's ulterior motive was not to seek damages but to break them, and there was no chance of any settlement, and that the deal was kept secret, this could also be seen as an abuse of the legal process.

If we say, for the sake of argument at least, that Gawker really did violate Bollea's rights then I'm having a bit of trouble seeing how this is a good example of abuse of justice.  If this were some sort of vexatious suit, or a SLAPP suit, and Bollea won because of munnee, I could see it, but if he won because he was right then who helped him financially, and why they wanted to do so, doesn't seem all that relevant to me.

If I wanted to sue McDonalds for cruelty to animals, and PETA and a GoFundMe campaign financed some lawyers, who would say that was an abuse of justice because clearly PETA and those strangers want to watch McDonalds burn?

Quote:
And again, there is the matter of proportionality. Ezra Levant lost $80,000 in a suit two years ago. Certainly Gawker is bigger, and it is the U.S., but should awards be so high that they force the breakup of a media organization?

That I can agree with.  I'm having trouble making sense of that number as well.  But unless Thiel also paid for a judge, I'm not sure how that has anything to do with anything -- other than the state of tort law in the U.S.

 

6079_Smith_W

As that article in the Columbia Journalism Review states, the fact that Thiel's funding was kept secret makes this questionable.

And that if there is a third party with his own motive, any question of settlement is off the table. That might not have been the case if Hogan was filing this suit on his own.

We know that organizations like Scientology have a reputation for suing their opponents into submission. All the more reason that information should be declared up front.

And that Thiel seems to be taking his vendetta to the point where it is interfering with coverage of the federal election.

It might seem like a frivilous issue but , we also had a story here in Canada about Stephen Harper's hairstyling, remember?

 

 

Mr. Magoo Mr. Magoo's picture

Quote:
As that article in the Columbia Journalism Review states, the fact that Thiel's funding was kept secret makes this questionable.

I would agree that the optics of it are a bit hinky -- that's the first thing I said in this thread.  But I don't think it makes it questionable in any legal sense.  It just could have looked so much more principled if he'd been transparent.

Quote:
And that if there is a third party with his own motive, any question of settlement is off the table. That might not have been the case if Hogan was filing this suit on his own.

Perhaps.  But nobody has any legal right to a settlement, any more than in the criminal justice system they have a right to a plea bargain.

Quote:
And that Thiel seems to be taking his vendetta to the point where it is interfering with coverage of the federal election.

This Thiel fellow seems all but omnipotent.  But is this really his fault? 

 

6079_Smith_W

No need to spell out the technical points. I am aware of them, and that he has so far won.

And if you want to give him a pass and full benefit of the doubt you are quite free to do so, and I am not trying to stop you.There are a lot of people who agree, I am sure.

But I don't need to repeat where I see a real danger here, including for people who have not committed an invasion of privacy, or libel, but for whom the prospect of being hauled in the door of a court would mean ruin.

As for this case, the judge has ordered Hogan's lawyers to stand down on threats of further action, and Gawker is shielded from a number of other pending suits while under chapter ll:

http://www.wsj.com/articles/gawker-hulk-hogan-agree-to-complete-standsti...

So I suppose it is good there are technical requirements to keep that omnipotent wrath in check.

I never said it was all his fault (thought I clarified that upthread). But I don't buy his being ticked off about media pointing out his hypocrisy giving him carte blanche, or that the fact he is acting within the law means he is justified in using his power to attack.

That goes double when this starts interfering in coverage of political candidates

Mr. Magoo Mr. Magoo's picture

Quote:
But I don't need to repeat where I see a real danger here, including for people who have not committed an invasion of privacy, or libel, but for whom the prospect of being hauled in the door of a court would mean ruin.

OK.  Let's suppose that all that Gawker did was publish a picture of Bollea with the comment "Doesn't the Hulkster look ridiculous in these silly bandanas??" that he'd have been awarded $140M because Thiel lawyered him up?

I'll put it another way.  If you believe that Gawker actually was guilty, what makes any of this a useful object lesson in what will happen to the innocent?

6079_Smith_W

Did you read the cjr piece, Magoo? For that matter, did you read the sentence you just quoted above your question?

And whether Gawker is guilty or not is irrelevant.

 

Mr. Magoo Mr. Magoo's picture

I hadn't read the cjr piece.  I skimmed it just now, skipping over the parts that were about other totally different cases, but I really didn't expect it to be a game changer (or mind changer).

I certainly read the part that I quoted.  And I get that the rich and powerful could certainly use their money or their clout to drag some innocent schlub like you or me into court with the hope of bleeding us dry before we could even make our case.  As it often is when you and I argue, I think we're probably in slightly more agreement than disagreement, and I totally get that.

But:

1.  Gawker isn't some schlub like you or me

2.  I really can't see where Gawker was innocent either

So while we can all certainly oppose "SLAPP" suits, intended to discourage legitimate criticism of corporations or wealthy individuals, I'm still a bit unclear as to how a large media outlet publishing video of an individual having sex qualifies as some sort of "investigative journalism" that we should be worried on behalf of. 

Perhaps next we'll all come to the defense of paparrazzi who use a 7,000 mm lens to keep the world informed of some starlet's boobs on a private island.  God forbid that moneyed interests buy off the justice system and make that difficult for those "journalists".  The world has a right to know!

Anyhoo, lemme just suggest again:  this would be a TOTALLY different story if there were any way in which Gawker was innocent in this.  Until someone can demonstrate that Gawker was acting in the public interest, and/or that Thiel somehow "bought" the outcome, I don't really care.  What you're concerned about surely exists, but this is simply not an example of it.

Mr. Magoo Mr. Magoo's picture

Quote:
And whether Gawker is guilty or not is irrelevant.

Really?

Were they bankrupted by the onerous cost of having to finance a defense?  Or by the judgement, once they were found guilty?

If it really doesn't matter then they may as well have also suggested that he's a convicted child molester.  Why not, if the important part is "some rich guy"?

Or, to put it another way, if someone guilty is found guilty, how is that a travesty of justice???

6079_Smith_W

Considering that one of the landmark cases around press freedom involves a piece of satire about someone having sex with his mother (and another Canadian one about pulling wings off flies), your paparazzi example is kind of immaterial.  Besides, the darker and more serious side of that, of course, has the Church of Scientology as its prime example

Besides, whether Gawker is guilty in this one case doesn't alter the fact that there is a problem with people and corporations being so powerful that they can slap someone into submission to the degree that they no longer can defend themselves (as is the case here, since there are more cases pending).

You said upthread already that you saw that point regarding proportionality, so clearly your "Gawker isn't us" has limits.

And again, the fact that Thiel is trying to sue them over coverage of Donald Trump shows how far this can go.

As for the innocent, if you don't have the money to risk going to court, or fight an unfair judgment, what are you going to do? Those with power know that, and they use it.

And what does it say about the system as a whole when those judgments and precedents about freedom of expression are left to stand based on who has money and who does not?

Mr. Magoo Mr. Magoo's picture

Quote:
Besides, whether Gawker is guilty in this one case doesn't alter the fact that there is a problem with people and corporations being so powerful that they can slap someone into submission to the degree that they no longer can defend themselves (as is the case here, since there are more cases pending).

Fair enough.  I'm not defending "SLAPP" suits.  I'm saying this is not a "SLAPP" suit.

Quote:
You said upthread already that you saw that point regarding proportionality, so clearly your "Gawker isn't us" has limits.

I blame the disproportionality of this on the trial judge, not on Thiel or his tricks.

Quote:
As for the innocent, if you don't have the money to risk going to court, or fight an unfair judgment, what are you going to do? Those with power know that, and they use it.

Agreed.  I'm not disputing that.  I'm suggesting that this case has nothing to teach us about that.  Is there any reasonable reason to believe that Gawker was too poor to mount a reasonable defense?

Quote:
And what does it say about the system as a whole when those judgments and precedents about freedom of expression are left to stand based on who has money and who does not?

Was this case about freedom of expression?  Publishing a clandestine video of someone having sex with someone else is "freedom of expression"?  If not, then what are you asking?

6079_Smith_W

Go back and read the article I posted at #26, it might answer some of your questions about this series of lawsuits, and Gawker's ability to fight them.

And if they had not demonstrated need they would not have been allowed to file for Chapter 11.

 

Mr. Magoo Mr. Magoo's picture

Quote:
And if they had not demonstrated need they would not have been allowed to file for Chapter 11.

Simple question here:  did they file for Chapter 11 before, or after, the judgement?

6079_Smith_W

Look Magoo, not sure what question you think you are begging, but you sure are begging it.

In the first place, in the wider context of numerous suits bankrolled by Thiel, that point does not matter.

And it really has no bearing on my point, which is that whether Gawker is ultimately guilty or not on this issue, there are plenty of journalists and small media who do not have the means to fight an attack like this.

 

Mr. Magoo Mr. Magoo's picture

Quote:
Look Magoo, not sure what question you think you are begging, but you sure are begging it.

Not begging, just asking.

Did they file for Chapter 11 because they couldn't afford reasonable legal representation, or because they couldn't drum up enough cash for the eventual judgement?

6079_Smith_W

I don't know how much they spent fighting this one, but they have declared they don't have the means to fight the upcoming suits Thiel is also bankrolling. It is in the article.

They did manage to get through the trial, and were asking for a retrial (refused) if that means anything to you. You can write them and try and pin them down if there is some reason you want to know,

And you seem to be setting this up as proof of something. I just have no idea what it is, and I don't really care, because it has no bearing on my points and concerns around this.

 

 

6079_Smith_W

http://www.poynter.org/2016/what-does-peter-thiels-lawsuit-against-gawke...

Quote:

By way of comparison, Goldberg likened this variety of litigation financing against media organizations to SLAPP lawsuits, cases where the primary aim is actually to censor, intimidate or silence the defendants. Many states have anti-SLAPP statutes to prevent these cases, but there are no laws that prevent a wealthy backer from financing a legal war against a media company.

The result? Punitive lawsuits for the sake of litigation, Goldberg said.

...

"It's not unethical to accept payment from outside third parties for litigation, and in fact that's been traditional in civil rights cases and other public-interest cases, so the payment itself is not the crucial fact," LoMonte said. "What matters is whether outside third parties actually caused an otherwise unmotivated plaintiff to initiate a case, especially where the degree to which the plaintiff is genuinely outraged is an issue in the case."

6079_Smith_W

And this:

http://www.forbes.com/sites/ryanmac/2016/06/07/behind-peter-thiel-plan-t...

It is worth reading the whole thing for some background. The fact that Thiel is the billionare who wants to build a floating libertarian island nation off the coast of California is just one other aspect of this - both why Gawker would have cause to mock him and why it would piss him off, and the fact that he is a champion of justice when it comes to bashing regular folk, but he doesn't want to have those laws apply to him.

Quote:

Rather than simply play the vigilante, available to help those who have been publicly attacked by a company even the most ardent press advocates must hold their noses to defend, Thiel secretly declared a multi-front war against Gawker, seeking to crush it by any means necessary.

...

Thiel’s level of involvement in each of these initiatives remains opaque. What isn’t: the impact of this attack on Gawker. The $140 million judgment, which isn’t covered by insurance, could prove fatal to the company if it’s upheld–and could serve as a blueprint for any billionaire who wants to lay siege against a media outlet.

...

For much of this year, Gawker’s Denton floated rumors that someone was behind the Hogan lawsuit. Too many things didn’t add up. How could Hogan, who had recently gone through an expensive divorce, afford a high-powered celebrity attorney on what seemed to be a long-shot case? Why didn’t he accept several settlement offers? And why did he drop his claim involving negligent infliction of emotional distress–thus freeing the real deep pockets, Gawker’s insurance company, from paying any part of a potential recovery?

6079_Smith_W

Yes Nick Denton has been forced to file for personal bankruptcy. But fortunately there is still someone around to point out that Peter Thiel wants to be a vampire:

http://www.rawstory.com/2016/08/billionaire-peter-thiel-thinks-young-peo...

Maybe he'll bankroll Donald Trump's promise to sue everyone.