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.
Filed under: champerty, libel slander and defamation, litigation finance, publishers
