This is the first in a series of blog articles relating to the topics to be discussed at the 30th Annual Media and the Law Seminar in Kansas City, Missouri on May 4-5, 2017. Blaine C. Kimrey and Bryan K. Clark of Vedder Price are on the planning committee for the conference. In this article, we explore recent developments related to “champerty,” which involves the funding of a lawsuit by a person with no direct interest in the case. The topic of revenge and retaliation against the media through litigation funding will be one of the topics at the 2017 seminar.
Earlier this month, Hulk Hogan settled his lawsuit against what remains of Gawker Media for $31 million, bringing to an end years of litigation that resulted in a stunning $140 million verdict that rocked the media defense bar. But the lasting implications of the case that ultimately shuttered Gawker.com remain unclear. For lawyers who defend media entities, the Gawker case is viewed as a cautionary tale of bad facts making bad law and the dangers of going against an adversary funded by an enemy with deep pockets. But not everyone agrees with this perspective. Speaking recently to the National Press Club, Peter Thiel (the billionaire who funded Hogan’s litigation) seemed to suggest that it was Hogan, rather than Gawker, who was unable to get fair treatment in the courts. “One of the striking things is if you are middle class, upper middle class, a single-digit millionaire like Hulk Hogan, you have no effective access to our legal system,” Thiel said. “It costs too much.”
Of course, Hogan managed to get that access, thanks in large part to Thiel’s funding of the litigation. The question, then, is whether this case is a strange outlier or a new model for individuals or companies with an axe to grind against the media. For his part, Thiel says he’s not secretly funding any other cases. “[This case was] not about the First Amendment but the most egregious violation of privacy imaginable,” he said. But Hogan’s lawyer, Charles Harder, looms large as a threat to the media even without Thiel’s funding. In a profile published last week in GQ, Harder is described as “perhaps the greatest threat in the United States to journalists, the First Amendment, and the very notion of a free press.” Harder currently represents First Lady-in-waiting Melania Trump in a $150 million defamation suit against the Daily Mail and a Maryland blogger, former Fox News head Roger Ailes has reportedly retained Harder to pursue an action against New York magazine and investor Barry Honig retained him to sue two financial bloggers.
The GQ article quotes First Amendment luminary Floyd Abrams in explaining why this new model of action against the press is so troubling: “The impact of the Gawker case is both substantial and dangerous,” Abrams told GQ. “Most important, I think, is the deeply troubling visage of a billionaire setting out to put a publication out of business and succeeding in doing so. Whether you’re talking about The New York Times or The Washington Post or other of our most prestigious media entities, they have limited finances compared to those of the billionaire class.”
The economics and ethics of these lawsuits are likely to be critical issues in defending media entities going forward, and we will continue to monitor these developments with great interest.