Peter Thiel, public interest law philanthropist?

There has been much coverage of the revelation that Peter Thiel has funded Hulk Hogan’s lawsuit against Gawker behind the scenes, especially following the Silicon Valley figure’s acknowledgment that he views taking down the notoriously scurrilous publisher as a public service (“one of my greater philanthropic things that I’ve done”) and has sought out and funded other litigants besides Hogan in order to make that happen. As I said in my explainer the other day, the decay of age-old rules against outsider funding of litigation (“champerty and maintenance”) is a broader trend that has left many sectors of society more exposed to the dangers of litigation, with the press just the latest.

I’m quoted by Alison Frankel in her Reuters column on this (“Our ancestors were not complete fools,” I say) and by Timothy Lee at Vox (“‘Some people following the Thiel story appear to be surprised that these weapons can be used by rich and powerful people in order to get their way,’ Olson tells me.”; also see Ezra Klein’s piece). And Lee recounts a recent episode that passed with little notice at the time:

Last year, the liberal magazine Mother Jones defeated a defamation lawsuit filed by Republican donor Frank VanderSloot. Winning the lawsuit cost Mother Jones, a relatively small nonprofit organization, and its insurance company $2.5 million in legal fees.

If VanderSloot’s goal was to punish Mother Jones for writing an accurate but unflattering story about him, a loss was almost as good as a victory. His lawsuit sought $74,999 (staying just under the $75,000 threshold that would have allowed Mother Jones to move the case to federal court and away from an Idaho jury that might have favored the hometown plaintiff). So “winning” the lawsuit cost Mother Jones 30 times as much as the amount it would have had to pay if it had lost.

What was really ominous was what happened after VanderSloot’s loss. He “announced that he was setting up a $1 million fund to pay the legal expenses of people wanting to sue Mother Jones or other members of the ‘liberal press.'”

Of journalists raising the alarm about the Thiel episode, Josh Marshall notes that unlike the usual pattern of litigation by wealthy persons against the press, in which the plaintiff must undertake some risk of reciprocal damage through discovery and bad headlines, the Thiel model allows the one in the background with the grudge to inflict hurt at little risk except financial to himself. “If Thiel’s strategy works against Gawker, it could be used by any billionaire against any media organization,” argues Felix Salmon.

Meanwhile, some other writers echo the point I made about how, once funding other people’s lawsuits for ideological reasons came to be applauded as public interest law, it was unlikely that the weapon would not be used against the full range of targets including the press. Tyler Cowen tries putting the shoe on the environmentalist foot, while Eugene Kontorovich at the Volokh Conspiracy observes that “Thiel’s conduct fits into the ‘public interest’ or ‘ideological’ litigation paradigm” and claims that “By current standards, Thiel’s funding should raise no eyebrows — unless one also wants to revisit public interest litigation, class actions and contingent fees.”

You know what? Maybe it’s time we did revisit those things, including the ideological litigation paradigm. And Andrew Grossman has a tweetstorm and exchange with Kontorovich that comes closer to capturing my own mix of feelings on the subject.


  • This case is really disturbing, as even a run-of-the-mill nuisance libel suit is expensive. More and more reporting is done by bloggers and freelancers, who often can’t afford to pay lawyers to go through the convoluted system. Anti-SLAAP is nice, in a way, but simply receiving the judgment doesn’t mean you’ll receive the money, and you’ll still have to pay someone to collect it.

  • Champerty is the illegal buying into another’s lawsuit. But how is that different than a lawyer working on commission.
    Seems that illegal is defined as a payday for someone outside the bar.

  • It is a little rich that these new found opponents of maintenance (thanks for primer earlier) in the media are coming out of the wood works now that their phony baloney jobs are under threat. Most likely they will seek their own carve out rather then any serious introspection occurring on these practices.

  • The Gawker verdict was not some outlier made by a runaway jury: the verdict accurately and fairly represents the sensibility of the vast majority of people who are viscerally repelled by Gawker’s conduct.

    Because Gawker’s journalistic practices are widely viewed as despicable and abusive, Thiel’s funding the lawsuit in this case would be generally viewed as being an appropriate way for Gawker’s victims to get justice. After all, it’s the only way these victims could afford the cost of the litigation.

    Therefore, I think it is not a good idea to use that case as some kind of argument against 3d party lawsuit funding. Most people would find the case supports the necessity and propriety of such funding, whatever the actual long-term negative consequences would be. I suggest finding a more sympathetic defendant (which would be virtually any other civil defendant).

  • Once again, the best way to discredit and change a bad law or policy is to enforce it vigorously and equally against everyone…

  • I have never seen Gawker so I cannot comment on its content. But I am concerned that there has no comment about the huge amount of the damages awarded. From what I can tell it was for “actual” damages, not punitive damages (and was in an amount much higher than the plaintiff requested.

    There is now some limit on punitive damages which have to have some relationship to the actual damages and a relationship to the defendants wealth. But if “actual” damages for intangible “injuries” such as invasion of privacy can be in unlimited amounts, including far exceeding the wealth of the defendant, it becomes a de facto punitive damages award.

    I have no problem with damage awards based on actual injuries, be it medical costs, loss of income or property and even some allowance for the intangibles that accompany the actual injuries such as pain and suffering. And I have no problem with an invasion of privacy claim which has resulted in embarrassment or even financial loss to a victim. But it is troubling, to say the least, when a jury can unilaterally decide to award almost unlimited amounts of money (free of any limitations of “punitive damages”) against a defendant whom it decides to dislike. Surely there should be some limit.

  • The Left has been conducting lawfare for decades, on many levels. Now we have two examples of them being on the wrong end of what they started, and their panties are in a bunch.

    Good. More of it, please.

  • If the Gawker decision was well founded, then being a poor myself, the only issue I care about is how it takes a billionaire Thiel to get that decision.

    A millionaire like Hogan couldn’t do it.

    I never stood a chance.

    Josh Marshall thinks he’s a progressive speaking up for the poors, but he’s really only defending his only narrow interests.

    The issue isn’t Thiel taking Gawker to court, the rich have always had access. The issue is the denial of the court system to anyone other than millionaires. (Or in this case, billionaires.)

  • […] be.” [New Yorker] My recent posts on Gawker, Peter Thiel, and paying others to sue are here, here, and […]