Should Peter Thiel be allowed to finance Hulk Hogan’s lawsuit?

You Can Hate What Peter Thiel Did to Gawker. You Shouldn’t Hate How He Did It.

You Can Hate What Peter Thiel Did to Gawker. You Shouldn’t Hate How He Did It.

The law, lawyers, and the court.
May 26 2016 3:56 PM

Peter Thiel Is Wrong About the First Amendment

But that doesn’t mean he should be barred from financing Hulk Hogan’s lawsuit.

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Peter Thiel, left, and Nick Denton.

Photo illustration by Lisa Larson-Walker. Photo by Neilson Barnard/Getty Images for New York Times and Fred Lee/ABC via Getty Images.

Peter Thiel, an eccentric libertarian and billionaire tech entrepreneur, confirmed on Wednesday that he financed Hulk Hogan’s successful lawsuit against Gawker, after the website published a portion of a sex tape featuring the wrestler. There are many reasons to be alarmed by the Gawker case: The verdict poses a grave threat to free speech; the damages, $140 million, are outrageously high; the judge’s re-election campaign mid-litigation may have affected her courtroom conduct. Thiel’s funding of the case, however, does not belong on this list. It is not particularly concerning, or even unusual.

Mark Joseph Stern Mark Joseph Stern

Mark Joseph Stern is a writer for Slate. He covers the law and LGBTQ issues.

To understand why Thiel did nothing wrong legally, you have to view the Hogan case the way Thiel does: as a form of public impact litigation—a suit designed to change the law and benefit a broader group of people. Many critics of Thiel’s involvement in the Hogan case have seen it as purely vindictive, and his motive may well have been retribution for his own treatment at Gawker’s hands. He has despised Gawker Media since its site Valleywag outed him as gay in 2007. But he also believes the magazine engages in “a unique and incredibly damaging way of getting attention by bullying people even when there was no connection with the public interest.” He told the New York Times that his motive is “less about revenge and more about specific deterrence.” Thiel seized on the Hogan case to set a legal precedent that demarcates where free speech ends and privacy rights begin. It’s a precedent that would have spared Hogan his brush with Gawker Media, but also one that would deter media organizations from engaging in such practices going forward. To Thiel, that’s a benefit to the public.

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I vigorously disagree with Thiel’s conception of the First Amendment. Constitutional freedom of expression protects truthful speech about a matter of public concern, especially speech about a public figure like Hogan. (You might not consider Hogan’s sex life to be a matter of public concern, but Hogan certainly did; before the Gawker showdown, he frequently bragged of his sexual prowess and exploits, making them an integral aspect of his fame.) But as the jury’s verdict demonstrated, reasonable people can disagree on this matter. The jury found that Gawker overstepped the protections of the First Amendment by publishing such intimate images.

Thiel and Hogan wanted to use the case as a vehicle through which to change the law, and depending on how appeals courts view the case, they may well succeed. Their approach isn’t just common: It’s downright American. If you donate to the American Civil Liberties Union or the Competitive Enterprise Institute or any public interest law firm, you are doing (on a small scale) what Thiel did here. Impact litigation is built on third-party financing. The battle for marriage equality triumphed because millions of Americans were willing to help fund same-sex couples’ lawsuits against discriminatory states. The campaign against Obamacare almost succeeded because conservative donors underwrote the plaintiffs’ suits. Our most treasured civil rights cases, including Brown v. Board of Education and Loving v. Virginia, required third-party financing (through the NAACP and the ACLU, respectively).

In fact, the Supreme Court has found that litigation finance may itself constitute a form of free expression and association, meriting its own constitutional protections. The court reached that conclusion in NAACP v. Button, a challenge to a Virginia law designed to prevent third parties from financing legal challenges to racist state statutes. Virginia, the justices held, is constitutionally barred from banning litigation finance, because “litigating activities are a form of political expression within the protection of the First Amendment.” Thiel’s suit is not as noble as the NAACP’s midcentury racial litigation—you may even view it as ignoble—but his “advocacy of litigation” exists on the same continuum of free expression.

Can you draw a legal distinction between what Thiel is doing and what the ACLU does? You can’t. Felix Salmon writes in Fusion that Thiel’s funding constitutes a dire threat to freedom of the press. His strategy, Salmon argues, “could be used by any billionaire against any media organization. … Thiel has shown them how to go thermonuclear: bankroll other lawsuits, as many as it takes, and bankrupt the news organization that way.” But notably, Salmon does not propose a solution to this allegedly looming problem, probably because there isn’t a good one. As the Button case suggests, laws against litigation finance have historically been deployed by states wishing to protect their own discriminatory or unjust interests. (The biggest opponent of third-party litigation today is the Chamber of Commerce, which is terrified that the practice could enable more class-action lawsuits against big businesses.)

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Salmon also asserts that Thiel has essentially weaponized a tort, using his fortune to prop up Hogan’s case, pushing it through to trial when most plaintiffs might have settled earlier on. That may be true, but again, it is nothing new. Impact litigation typically requires plaintiffs to spurn settlement offers in order to obtain final rulings. Otherwise, the litigation won’t have much impact at all. Many police brutality civil suits, for instance, never go to trial, because the family of the victim is understandably eager to accept a decent settlement. When private funders pay a plaintiff’s legal bills, it creates an incentive to push forward with a case and, with luck, set a precedent that will help others.

Salmon declares that Thiel’s replication of this strategy is “very, very frightening for anybody who believes in freedom of speech.” I’m not sure it’s quite that frightening. The strategy is not foolproof: You still need the right plaintiff, the right laws, the right judge, the right jury. Thiel lucked out with Hogan’s judge and jury—it’s hard to imagine a court more sympathetic to Hogan’s claims—but there’s no reason to think future plaintiffs will be so wildly fortunate. Yes, deep-pocketed donors could theoretically finance frivolous yet costly nuisance lawsuits and pester publications into oblivion. But most such suits would be dismissed early on, and an attorney who brings overtly frivolous claims risks court sanction. In short, it is exceedingly rare for the stars to align as neatly as they did for Hogan. Unless billionaires do launch a coordinated campaign to sue more publications out of businesses, the threat does not justify new rules to outlaw what Thiel did here.

If you’re looking for a structural legal problem revealed by the Hogan case, I would instead direct your attention to two somewhat related issues: elected state judges and anachronistic state torts. Judge Pamela Campbell, who presided over the Hogan trial, was previously a culture warrior who fought to keep Terri Schiavo on life support. When the Hogan litigation began, Florida was approaching primary season; a perceived softness toward a coarse New York magazine with a tabloid streak could have opened her up to a challenge from the right. We can’t know whether this fact affected her decisions—but we do know that judicial elections often influence judges’ decisions.

Further, the invasion of privacy tort at the heart of Hogan’s case has long clashed with constitutional freedom of expression. Many state tort claims, especially those pertaining to privacy, have not been brought into alignment with the Supreme Court’s increasingly robust interpretation of the First Amendment. (A tort is just a wrongful act that leads to legal liability.) The court, citing speech concerns, is slowly imposing greater limits on state tort claims, which will help to prevent plaintiffs from forum-shopping by imposing uniform federal restrictions on all 50 states’ laws. But for now, the jurisprudence is tenuous enough to let suits like Hogan’s slip through. At the very least, the constitutional ambiguity here allows judges like Campbell to permit a suit like Hogan’s to proceed, despite the fact that it seemed designed from the start to suppress speech.

Make no mistake: The Gawker case is a calamity for free speech. The jury’s verdict has likely already chilled expression by placing a sword of Damocles over the head of any publication that dares to expose and ridicule the private lives of public figures. But of all the reasons to rue the case’s outcome, Thiel’s involvement isn’t one of them. Lawsuits are expensive; if we’re going to let the ACLU fund litigation against discrimination, we have to let Thiel fund Hogan’s case against Gawker, as well as the others he has reportedly bankrolled. Ending judicial elections and re-evaluating the constitutionality of archaic torts would do much more to preserve justice than outlawing third-party litigation. To my mind, Thiel’s secret funding—like Gawker’s Hogan video post—is the price we pay for free speech. 

Disclosure: One Slate editor is married to a Gawker editor. One is married to a lawyer who represented Gawker in the Hulk Hogan trial. One is a former Gawker Media executive editor. None of these Slate staffers worked on this story.