An unusual legal case between Gawker Media and former professional wrestler and entertainer Hulk Hogan became that much more unusual over the past few weeks. The dust up began when Gawker posted a sex tape of Hulk Hogan on their website without his consent. Hogan followed that publication with a lawsuit aimed at Gawker alleging privacy violations. Gawker argued that it was in the public interest. A jury disagreed with that interpretation and found in favor of Hogan rewarding him $140 million, a number with a high degree of sticker shock. Gawker has now appealed the ruling.
As the case progressed through court procedures over the past few years, comfortable but not extraordinarily wealthy Hogan made decisions that indicated to Gawker Media founder Nick Denton that Hogan was not merely interested in monetary restitution. For one, Hogan’s legal team withdrew a claim that would have had Gawker’s insurance payout instead of the company itself. Moreover, Hogan rejected a $10 million settlement despite the probability that the jury would not fall in his favor – especially to such a enormous amount – and the continued legal costs of pursuing the case.
Denton suspected Hogan had funding. He was right. Paypal founder and venture capitalist Peter Thiel had been secretly backing Hogan’s legal costs through his own funds. Thiel and Denton have a long running feud due to the outing of Thiel by Gawker in 2007 – again, a move Gawker defended as “in the public interest.” While few, besides those working for Gawker, are willing to defend the media outlet’s editorial judgement, there is a significant backlash to the notion of very wealthy people funding lawsuits to which they are not a party.
Peter Thiel is a German-American entrepreneur, venture capitalist, and hedge fund manager. Thiel co-founded PayPal with Max Levchin and Elon Musk and served as its CEO. He also co-founded Palantir, of which he is chairman. He was the first outside investor in Facebook with a 10% stake acquired in 2004 for $500,000.
There are no laws against this. Many organizations, such as the ACLU, help back legal fees to cases they believe are, to borrow from Gawker, in the public interest. The fear from some, especially in the media, is that very wealthy individuals can enact monetary penalties on press they don’t like through the large costs of litigation. If the press is truly publishing stories that are truly for the greater good, then one man or woman punishing them for it is a scary proposition. However, if the press is acting in their own interest, as the jury indeed ruled Gawker was doing, then perhaps discouraging that behavior through capital means is the proper and most efficient response.