Some Thoughts on Thiel’s Lawfare Against Gawker

By now you’ve heard that Peter Thiel, a well-known Silicon Valley billionaire, has been waging a lawfare campaign against Gawker. The New York Times described his modus operandi: he retained a legal team to watch for cases against Gawker, then Thiel would bankroll promising ones the way only a billionaire can (in the Bollea case, on the order of $10M). Allegedly, the Bollea lawsuit was intentionally structured to keep Gawker’s insurance out of the case, thus inflicting the maximum potential financial damage on Gawker. Thiel denied any financial interest in the Bollea verdict; instead, he apparently seeks vengeance for Gawker’s outing of him a decade ago.

I don’t normally like to wade into stories like this where the facts are still developing, but I did have some thoughts about what we apparently already know:

* It’s tempting to think the jury verdict in favor of Bollea proves that Thiel’s financial backing helped advance the cause of justice. However, I think we should not treat the jury verdict as a definitive statement of Gawker’s legality. It’s possible (probable?) we’ll get new legal insights about the case’s merit on appeal.

* As evidence that the jury verdict may be a questionable barometer of the legal merits, consider if the jury would have reached the same verdict if they knew Bollea’s lawsuit was being funded by a Silicon Valley billionaire seeking revenge for being outed. At minimum, it makes Bollea look less like a victim and more like a pawn.

* Though Thiel targeted Gawker, and plenty of journalists question Gawker’s practices, Thiel’s attack isn’t limited to dubious news organizations. Every news organization makes mistakes; and any good news organization will make legal judgment calls that are expensive to successfully defend in court if tested. So if the game is to wait for a news organization to make inevitable mistakes or wade into legal grey areas, and then pour sufficient funds into litigation to drain the organization dry through litigation costs, each and every news organization exists solely because some billionaire hasn’t declared a vendetta against it (yet).

This game also suggests that news organizations must always keep every billionaire on their side if they want to stay in business. Yet often billionaires make economic and political decisions that deserve scrutiny. The lawfare threat undermines news organizations from performing the watchdog services we expect and need; and it sets up a two-tiered system of journalism depending on the subject’s wealth.

* As Felix Salmon’s article indicates, the mere existence of Thiel’s lawfare scheme spooks potential investors. Even if no one else adopts Thiel’s strategy, his proof-of-concept categorically deters investment capital from the sector and increases its cost, thus undermining the entire journalism industry.

* I am curious about the Thiel-Trump connections. Thiel has demonstrated his commitment to using lawfare for revenge against a news organization. Perhaps not coincidentally, so has Trump (e.g., regarding his lawsuit against book author O’Brien, Trump admitted “ultimately I had great success doing what I wanted to do–costing this third rate reporter a lot of legal fees” and “I spent a couple of bucks on legal fees, and they spent a whole lot more. I did it to make his life miserable, which I’m happy about”). Thiel is a Trump supporter, and Trump has pledged to “open up libel law.” Is Trump taking an aggressive public stance on libel at Thiel’s request or as a courtesy to a major backer?

* Although it’s not easy to prevent billionaire lawfare, Thiel’s litigation-revenge campaign highlights the importance of giving defendants the right tools to survive the attack. This is another reason why I favor a federal anti-SLAPP law. It won’t deter billionaires from throwing away their money (see, e.g., Katz v. Chevaldina and Vandersloot v. Mother Jones); but a quick resolution of weak lawsuits and the possibility of fee-shifts will give defendants a better chance of surviving. Furthermore, the upcoming presidential election emphasizes why I think we need a federal anti-SLAPP law right now, while Obama is still in office and can sign it, rather than waiting and risking a Trump win and a possible veto.