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Goliath vs Goliath: Not a David In Sight

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So, in the event that you have been living under a rock for the last couple of weeks, you have read that Silicon Valley icon Peter Thiel was financing former wrestler and probable 2020 Republican presidental nominee Hulk Hogan’s lawsuit against Gawker, the verdict of which was a whopping $140,000,000. I thought this was an interesting piece of trivia. Apparently, though, it’s the End of Free Speech as we know it! Or, at the very least, concerning. As a matter of free speech.

The nature of the concern is that such litigation allows the wealthy to abuse the legal system to squelch free speech. One similar story, wherein Idaho millionaire Frank VanderSloot filed a frivolous lawsuit against Mother Jones that ended up costing the liberal publication and its insurers millions of dollars just to defend itself. That case is concerning because, as any physician (or physician’s spouse) can tell you, you can lose a lawsuit even if you win it, just by ending up in court. That’s certainly a concern, but I see very little that’s particularly alarming in the Gawker story itself, assuming that we’re okay with our litigious culture in the first place.

Whereas VanderSloot sued on his own behalf, Thiel helped others finance lawsuits. Is that a problem? Litigation critic Walter Olson thinks so:

Olson argues that if you went back a century or two and talked to British or American legal scholars, “they’d say of course these things would be used by the rich and powerful if you allowed them.” Under doctrines called champerty and maintenance, the law used to bar unrelated third parties from paying someone else to engage in litigation and financing a lawsuit in exchange for a share of the damages.

But states have loosened these laws over the past 50 years, in part because lawyers began to see easy access to the courts as being in the public interest. This was driven in part by the rise of public interest litigation — think, for example, of an environmental group finding a third-party plaintiff to sue a company to stop an environmentally sensitive development project.

“Awards are constantly being given to projects in which some wealthy person decides that someone needs to be sued, finds someone who has standing as a plaintiff, and generously funds their litigation,” Olson says.

Sounds ominous. But what is the alternative? The alternative is that nobody but the plaintiff can fund lawsuits. The environmental litigation is one example, but another would be the ACLU. Apart from contingency lawsuits, it would limit access to the courts to those with deep pockets. Now, maybe it is the case that we should rely on lawyers to filter out cases by way of their willingness to take them on contingency, but what a lawyer is willing to spend on a contingency case is likely to be considerably less than what they would spend if they had a benefactor. Again, access to the courts would be even more restricted by money than it already is.

I don’t honestly have very strong feelings one way or the other on this. Apart from Burt Likko and a few other folks around here aside, plaintiff attorneys mostly exist in our life as a predator in the shadows. Sonny Bunch has a list of such arrangements that liberals should like, and I am pretty pleased with the results of some of them. The argument in favor of these tends to be that David needs a Goliath to battle Goliath. In any event, the law is the law, and whether we agree with them or not there are reasons that we have these laws on the books. They are not to protect the Peter Thiels of the world. Maybe that should change.

Thiel may not be a good dude, but Gawker’s own history here is highly relevant. They do what they are accused of doing here, and not just to Hulk Hogan. Should they be allowed to under the umbrella of free speech? Should they not be allowed to under the umbrella of a right to privacy? Is a sex video with a celebrity “news”? What about a video in which a woman claims she was being raped? These are good questions that have nothing to do with Peter Thiel, except insofar as he made sure that Gawker wasn’t going to be able to spend plaintiffs into the ground or intimidate contingency lawyers with its largesse.

I don’t know whether Thiel was justifying in doing what he did here. It does seem clear to me that whether this can be considered “philantropic” or not, he is doing this for his own sense of justice. If he were merely looking to intimidate, nobody would have had to dig to find out he was behind it because he would have wanted everyone to know about it. This was in retaliation for Gawker having officially outed him. It’s been said that Thiel’s closet was a glass one, or that he had no right to be in a closet to begin with. Silicon Valley is pretty liberal, after all! Thiel in turn claims that this sort of thing hurt him with overseas investors who are less tolerant, and that he had a right to his privacy. He obviously didn’t have a legal right to his privacy, since he didn’t or couldn’t sue for his outing, but some degree of pissed-offedness seems understandable. Some of the other cases he’s pursuing, including suing individual lawyers, are discomforting.

At the end of the day, though, the Hogan’s lawsuit that threatens to destroy Gawker was not frivolous. He won. Maybe we think the jury got it wrong, or that the basis on which he one is a law that needs to be changed. Gawker lost in good part because it felt invulnerable precisely because it believed it was the Goliath and that it could act with impugnity. Anger at Thiel for funding the successful lawsuits are hard to separate from anger that Hogan got his day in court to begin with.


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Will Truman is a former professional gearhead who is presently a stay-at-home father in the Mountain East. He has moved around frequently, having lived in six places since 2003, ranging from rural outposts to major metropolitan areas. He also writes fiction, when he finds the time. ...more →

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209 thoughts on “Goliath vs Goliath: Not a David In Sight

      • I propose that Gawker not recklessly expose themselves to nine-digit judgments. Gawker’s problem here isn’t that they got sued, it’s that they lost and utterly alienated the jury in the process (protip: when testifying in court, do not make jokes about publishing tapes of children having sex).

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        • That was a stupid comment for Gawker to make on the stand. On the other hand, there is stuff in the case that Will left out. The case was designed strategically to go to trial. The case was thrown out of various courts several until Hogan found a sympathetic forum. The lawyer also dropped a charge from the complaint which would have been covered by Gawker’s insurance.

          So this was beyond compensation, this was about revenge.

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            • Yes and no.

              Everyone tries to get a case into a favorable forum to a certain extent. I’d rather try a case in San Francisco or Alameda Superior Courts but I wouldn’t limit by damages request to stay in state court over federal court because that might not be doing my client a service. 74,999 USD might not be enough damages depending on the injury.

              I would never drop a charge from a complaint to ditch an insurance company. An insurance company is someone you can negotiate with and they will ultimately be paying the damages.

              IMO dropping the claim to get rid of the insurance company was more about bankrupting Gawker than getting Hogan damages for the violation of his privacy.

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              • As I say below, I assume that if the potential award outweighed the potential risk of getting the insurance company involved in the defense. Otherwise, I’m not sure why the lawyers and Hogan would have agreed to do that. Thiel may have been interested in revenge, but Hogan and the lawyers were interested in getting money.

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                • I’ll second most, but not all, of what Saul said. Forum shopping is part of the game. So is your damages request. (If you want to impress people with your vocabulary, call that the “ad damnum”.)

                  In my jurisdiction there are two levels of trial court. The lower level has exclusive jurisdiction up to $15K and no juries. The higher level has exclusive jurisdiction over $30K. They have concurrent jurisdiction in between. There are decided advantages to trying in the lower level. You are in and out in a matter of four months or so, while in the higher you are looking at one to two years. The lower court has only limited discovery, i.e. no depositions, and therefore none of the expense of depositions. Up to $30K there also are relaxed rules of evidence: you can get medical records and bills in without a doctor’s testimony, saving thousands of dollars.

                  So putting this together, for your soft-tissue injury rear-enders you file at $15K. You aren’t going to get that much, so you lose nothing. For your serious accidents go large, because why not? (The actual rule is that you file for damages “in excess of” $75K.) Then you have the in-betweeners. If you are likely to get more than $15K but less than $30K, you file in the lower court and let the other side pay the filing fee to kick it upstairs, if they want to.

                  The hard ones are where $30K is within the range of a plausible judgment. What to do? Well, talk to the client. It may be that sooner rather than later is the priority, or it may be that going large is the priority. The only way to find out is to explain the situation and ask.

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              • Saul Degraw: IMO dropping the claim to get rid of the insurance company was more about bankrupting Gawker than getting Hogan damages for the violation of his privacy.

                Putting aside the possibility (likelihood?) that Hogan was out for blood, too (apparently he already had a net worth of ~$25 million), could cutting out the insurance company be a good move strategically, since it meant that Gawker wouldn’t have the insurance company backing them in court?

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                • My thought as well… I’ve seen charges added to get insurance *in* why wouldn’t you evaluate whether you wanted insurance *out*.

                  In PvP you always take out the healers… insurance is like a giant legal healing team backing up your target.

                  Plus, we all know insurance has a huge institutional bias towards settling at a reasonable rate – seems that this might also have been an attempt to bait Gawker into going all-in… which, it seems they did.

                  As far as strategery goes, its hard to see a mistake here.

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                • Depends on the insurance company.

                  More significantly, as long as Hogan (the client) was adequately informed of the risks and made the choice, it isn’t up to the lawyer. There is only an ethical issue if someone other than Hogan is directing the litigation path.

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          • Forum shopping may well be another dysfunction of the legal system implicated here, but it’s also yet another factor that seems to get less attention in stories about the case than Thiel’s various political oddities.

            Obviously, Thiel was out for revenge and willing to spend a rather absurd amount of time and money to obtain it, but unless it can be shown that Hogan wasn’t on board with the effort to avoid insurable claims or that Thiel otherwise exerted undue influence over the conduct of the suit I don’t see the relevance. Surely most plaintiffs in civil suits are interested in retribution to some extent.

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            • If the potential monetary reward outweighed the risks, I can’t imagine that they would have pulled that complaint. Even if Thiel didn’t care, the lawyers and Hogan almost certainly did and I am skeptical that Thiel would have made a condition out of it.

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          • ” The lawyer also dropped a charge from the complaint which would have been covered by Gawker’s insurance.”

            That to me is a big one – legal commenters were stating that this was acting against Hogan’s best interest, and is a sign that the lawyer was answering to Thiel

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            • This assumes Hogan was not on board with Thiel burning Gawker to the ground. Is there any evidence that Hogan was just looking for a payday and never changed his mind? Perhaps he started out that way, but many people here have stated that Gawker was behaving pretty horribly about the whole thing. I could easily see Hogan changing his mind on the topic.

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        • @brandon-berg

          I think we might be at the limits of what the First Amendment should and does protect. This was a violation of privacy lawsuit over a consensual sexual encounter (even if it is a rather wild one). This was not a defamation lawsuit or a libel lawsuit.

          Suppose Gawker ran an article about Hogan making racist and homophobic statements (in fact I think they did so) and Hogan sued them for defamation. Gawker would have much stronger First Amendment defenses in that case because Hogan is a public figure and racism is a matter of public concern. Plus truth is always a defense in defamation and libel suits. Thiel did not sue Gawker for defamation when they outed him for these reasons. Plus it is no longer defamatory to call someone homosexual.

          Here the case is different. Does the public need to know about the sex-escapades of celebrities or anyone else? How did Gawker get the tape?

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          • That was just a throwaway dig at the anti-CU crowd and their fair-weather support for the First Amendment. I get that publishing a sex tape without the subjects’ consent arguably isn’t covered.

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          • uppose Gawker ran an article about Hogan making racist and homophobic statements (in fact I think they did so) and Hogan sued them for defamation. Gawker would have much stronger First Amendment defenses in that case because Hogan is a public figure and racism is a matter of public concern.

            This is precisely the problem that Jason mentioned on Sam’s post. we don’t have to have a national conversation about every racist incident that happens. Hogan’s racism is a private matter between himself, his daughter, whoever she wishes to bring home for dinner and his own conscience. A person should be free to be racist or sexist or homophobic within the confines of their own home/head.

            To put it differently, we shouldn’t publicly hound people for private sins. Its not pretty when conservatives do it. But its especially hypocritical when self identified liberals* do it.

            * because don’t impose your private morality on others is a liberal principle (and I think and hope to show in my PhD the best and most consistent account of liberalism)

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            • I don’t know where the conversation happened or how Gawker learned about it. All I know is that Hogan’s daughter was dating a black guy, Hogan freaked out, went on a racist rant, Gawker published.

              I would say the views of public figures (broadly defined) need to be learned and the public has a right to know. Hogan seems like a silly figure or an easy example because of his Wrestling career. What if we were talking about a powerful business person whose company employees tens of thousands of people in a highly lucrative industry? Or a public school teacher and administrator? What if the man’s company had issues where black and hispanics (even those with impeccable credentials) found it hard to gain employment? Or it was a classroom or school district where no black student ever received an A on an essay or black students were punished more harshly for offenses than white students?

              Would a local newspaper still be in the wrong for publishing “Mr or Ms. Smith made racist remarks on numerous occasions?”

              Being falsely accused of racism is libelous and defamation. Going on racist rants and being upset that someone called you a racist is not defamation.

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              • What if we were talking about a powerful business person whose company employees tens of thousands of people in a highly lucrative industry? Or a public school teacher and administrator? What if the man’s company had issues where black and hispanics (even those with impeccable credentials) found it hard to gain employment? Or it was a classroom or school district where no black student ever received an A on an essay or black students were punished more harshly for offenses than white students?

                All of those are examples where any racism could harm others. In fact, your later examples are attempting to actually *establish* harm of others.

                Hogan (Or, rather, Bollea, which is his actual name.) does not manage employees. He does not grade papers or teach students. He does not make any sort of decisions that would generally impact people of different races.

                If he wants to be racist about who his daughter dates, that’s entirely up to him.(1)

                That said, the WWE was well within their rights to fire him for it.

                1) As far as racism goes, it actually seems very tame, except the n-word. Caring about who your daughter sleeps with has always been more misogynist (and also more acceptable) than ‘racist’ per se. It’s racist, but it’s sorta general background racist level. It’s certainly not the Mel Gibson level of racist. Especially as he seems aware he is racist while saying it.

                I haven’t found the entire thing, but no one even seems to hint at any sort of stereotyping of black people or anything in it.

                ‘Older white guy knows he might be a little racist by thinking his daughter shouldn’t sleep with a black guy’ is not particularly news. It particularly has the apology built in.

                Frankly, if he hadn’t kept using the n-word and had just said ‘black people’ instead, it probably wouldn’t have made a ripple at all.

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                • I am generally not a fan of Gawker or their sibling sites. I don’t like the their in-house style of being aggressive and sarcastic without fully thinking it through. I also don’t like the much loved Hamilton Nolan most of the time.

                  But Thiel’s blue-print against them still strikes me as being bad precedent and I generally support journalist and free press rights.

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      • Isn’t that why we have judges, a gatekeeper who is empowered to exercise discretion and judgment?
        Aren’t judges empowered to reduce judgments if they believe them to be excessive?

        Too many of the discussions of law present it as an autonomous machine beyond our control.

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        • Too many of the discussions of law present it as an autonomous machine beyond our control.

          I’m of two minds about this.

          On the one hand, the law as autonomous machine means that the rules are clear and we know exactly what will get us into trouble. In this admittedly imperfect world, where we are faced with many intractable conflicts of various interests, some resolution of the conflict is better than none. Certainty and predictability of law is 1) an immensely under appreciated value and 2) arguably the central purpose of law. We institute laws to coordinate our actions and a lack of clarity in the law undermines the rule of law.

          On the other hand, someone has to apply a judicious (hah) dose of common sense to these things.

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          • Which is why we design systems with exceptions and loopholes, workarounds and safety valves and overrides, the human in the loop being one of them.

            Zero Tolerance is the example of a system built intentionally not to have any such overrides, as are mandatory minimum sentencing laws, Three Strikes, term limits and such.

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            • One of the things about mandatory minimums is that with it you don’t get white people serving 10 for murder and black people getting life in prison for less. Or at least that’s the rationale for it.

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              • IIRC, the impetus for mandatory minimums was a horrible crime wave combined with the perception that there was a problem with bleeding-heart judges going easy on defendants.

                And rather than a tool for eliminating racial bias in sentencing, one of the most notorious minimum-sentencing laws imposed dramatically different standards for crack and powder cocaine, with the result being harsher standards for the overwhelmingly black crack dealers than for the whiter powder cocaine dealers.

                It’s fashionable these days to claim that this was all about sticking it to black people, but the reality is somewhat more complicated. The crack epidemic and the associated street crime were a much bigger problem for black communities than powder cocaine was for white communities, and the law that established this disparity in minimum sentencing was overwhelmingly supported by the Congressional Black Caucus.

                Anyway, while preventing racial bias in sentencing might be a good reason to support minimum sentencing laws and stricter sentencing guidelines in general, I’m not aware of any reason to believe that’s the actual reason they were imposed.

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        • This can happen, but it doesn’t happen that often. The judge who makes such a ruling is sticking her neck very far out for review on appeal. One of the things that judges are evaluated on is how often they are rulings are reversed on appeal. So a (prudent, wise) judge needs to have a very, very good reason to reduce the damages that a jury awards.

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    • Different issue, right? Whether Thiel can bankroll the lawsuit vs. the ridiculously large award, which will almost certainly be greatly reduced on appeal.

      But tort reform in general is a typical bit of dishonesty:

      1. We don’t need so much environmental and safety regulation: let the legal system redress damages, bad actors’ insurance rates will go up, and the incentives are all aligned without requiring the heavy hand of government.
      2. Tort reform, so the legal system becomes really bad at redressing damages.
      3. Profit!

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  1. I think maybe your wife’s status as a doctor biases you a bit against plaintiff’s lawyers. Plaintiff lawyers and Crim defense lawyers tend to be hated by all until they are needed. Doctors commit malpractice, employers discriminate and wrongfully withhold wages, corporations release defective products to the market that injure people. Yet why does the corporation and the corporate defender have the monopoly on respectability?

    In a nation without universal healthcare or a decent welfare state, plaintiff’s lawyers and public defenders are as close to what we have for justice for the people.

    Thiel was rather smart about the whole thing. Hulk Hogan’s suit was a privacy suit and those are on shakier first amendment grounds than a defamation or libel suit. They also are not the most respected or lived media company. They do good stuff but can also be abrasive and mocking without thinking it through as a house style.

    I am not sure what the solution to Thiel’s financing of lawsuits is either. He is allegedly financing other suits against Gawker as well.

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    • Wow. Right off the bat. “You have this opinion because of who you are sleeping with.”

      Scanning to see if Saul included a line about “of course, I have my opinion because I went to Oberlin…”

      And he didn’t.

      Disappointing.

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      • No, it’s a fair thing and I admitted as much in my post. Everybody hates lawyers until they need them. When we had a potential issue in which we would have been plaintiffs, I talked to a lawyer. It’s just that, for us, plaintiff’s attorneys aren’t a neutral or abstract presence, but an active threat. Especially given that my wife delivers babies.

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        • But hammering on it is a silly rhetorical trick.

          “Oh, you have your opinion because it’s in your interest.”

          It’s fair to ask “why do you have your opinion?” in response to someone who points such a thing out (and doubly so if they point it out to someone who already pointed it out).

          I’m wondering if the fact that he mentions how having gone to law school colors his opinions on this and whether his opinions being colored in such a way is significantly different than how your opinions have been colored or whether he grants that he has his opinion because it is in his own interest.

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        • No, I don’t hate lawyers. I despise some of them, view a lot of their work as nothing more than vultures / ambulance chasers, but I recognize that they can and do, do good.

          Now politicians, a (mostly) subset of lawyers, hell yes.

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          • Politicians exist in every form of society. They’re just the guys who, when they tell a man with a gun to do something, the man does.

            Anarchy is a great form of government for a tiny, highly-conformist, very wealthy society with no growth. Everyone else needs at least a police force. Everyone beyond an utterly autocratic society also needs at least a court system and a shared belief that the decisions of the cops and the courts must be respected.

            So I think that it’s not really politicians you despise so much as your fellow citizens whose actions make them necessary.

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            • I think there is a difference between politician and administrator. I would like to imagine that a government could exist with the latter without the former.

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              • Is the difference that a politician primarily makes rules, while an administrator primarily directs their application? If so, I think you almost certainly need politicians at least occasionally, just because the circumstances of your society will change every now and then, and you may need new rules to account for whatever new thing has been introduced. (Or, of course, you may find that old rules are irrelevant in the new context)

                It is a dangerous thing to assume that the correct rule for the use of some thing can be found by analogy every time.

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            • Yes they are. But modern western democracy seems to have created more of them. And no, I despise them as a class. It’s one thing to admonish the man with a gun. In some ways he’s doing his job, “following the law”, it’s the law makers that are the problem. That’s not to say that there aren’t issues with LEOs, but that’s not a result of the scenario your talking about.

              It’s not my fellow citizens who’s actions make them necessary, it’s the citizens who think I should live my life according to how they think I should, and are willing to send the man with a gun against me because I refuse. Those people, they have my utter contempt.

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          • “Politicians” might mean people skilled in the art of persuasion.

            “Politicians” might mean people who artfully deploy power.

            “Politicians” might mean people with charisma, who exploit it to any number of ends.

            Political skill is like a gun. It’s a tool, lacking any inherent moral weight. Potentially very useful, potentially very dangerous. Normative evaluation depends much on perspective.

            Else how to explain that most people don’t like politicians generally, but seem to like their own very much.

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            • “Else how to explain that most people don’t like politicians generally, but seem to like their own very much.”

              People are very happy to have politicians take other people’s money and give it to them in the form of jobs, money, tax breaks, etc. That’s why. If political skill is like using a gun, then there’s lots of folks out practicing unsafe handling such as pointing it at people and threatening them. And they are doing it at lot more than they used to.

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        • In my experience, there are a lot of urban legends spread among doctors about medical malpractice law. The barriers to pursuing a medical malpractice suit are very high. We don’t do them in my firm, but my boss has his share of potential cases come in the door. If they seem plausible, he will refer them to a specialist. In twenty or so years of this, the specialist has actually taken exactly two of these cases. In the meantime, I have seen cases rejected as unprosecutable that arose from incidents that seemed, to the inexpert eye, outrageous examples of malpractice.

          The thing is, “ordinary standard of care” is a very strong defense. The idea of “defensive medicine” out of fear of lawsuits is bullshit: either acting on misinformation or an excuse to jack up fees and blame the lawyers.

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          • Yet American doctors order more tests and use less clinical judgment than Singaporean doctors without noticeably improving healthcare outcomes. So, its either the litigiousness of American society, the fee for service structure or the buffet mentality that you get from paying all healthcare via insurance.

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              • Even if the doctors beliefs are inaccurate and their response to the actual environment is your rational, that’s still pressure on behavior caused by the tort system.

                That said, as a general rule, the only issue that I can see with the mythology of “defensive medicine” is expense. I call the story of defensive medicine “mythology” because it may or may not be factually accurate, but it has emotional resonance. But in my experience as a recipient of medical services, I do not think an inappropriate number of tests have ever been ordered, for me or people I know.

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                • If I were looking for a place for it to have an impact, it would be in the realm of encouraging intervention in obstetrics. Intervention begets more intervention, and you can end up with more c-sections that are not necessarily medically indicated. To be fair, there are *a lot* of causes for our high c-section rate and I’m not blaming it squarely on defensive medicine, but it’s where I would look. There is a lot of gray, everybody can be tense, sometimes both the patient and doctor would prefer intervention for non-medical reasons.

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  2. Gawker screwed up Re Hogan. Some rich guy who was pissed off about something else Gawker did funded Hogan’s lawsuit and crushed Gawker.

    That’s ALL on Gawker. Well deserved. Thiel did nothing wrong. Frankly, I commend him. Would we be having this discussion if it was the Federal Gov’t, who has unlimited money, if they went after someone who did something similar? Nope.

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    • It also doesn’t help that the Gawker people did not seem to take the case seriously when they were in court. You do not tell tasteless jokes on the stand, especially in a jury trial.

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  3. What Peter Thiel is doing was called champerty and maintenance. This is basically buying into another person’s law suit to either get a share of the winnings or something else. Champerty and maintenance were strongly discouraged and considered crimes. An issue as Saul noted is that this leaves many people without legal recourse because they can’t afford to sue the people who have done them wrong. Most people probably really don’t want to deny the majority of people access to the courts for lack of money.

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    • If he doesn’t take a share of the winnings, the claim that Thiel is engaging in champerty pretty much hinges on what “or something else” entails.

      What’s the “or something else” that Thiel is going for?

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      • Why wouldn’t he take a piece of the winnings… if only to recoup his costs (and fund another project)… the something else would be the warm glow of revenge and would be a pure bonus.

        But ultimately its a shell game… if there’s some sort of legal counter, Thiel creates a non-profit organization that protects Privacy rights… an ACLU of his own making.

        That’s the problem with law; without a shared culture to put limits on the acceptable uses, it just becomes words against friends.

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        • I don’t know any details of Thiel’s finances, but he does seem to have reached the point where $10 million in legal expenses here and there is not a loss likely to impact his lifestyle.

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          • This is something to consider when crafting culture, as well.

            Even the most perfectly structured legal system fails when put into practice by a dysfunctional culture.

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              • @will-truman
                I am using “dysfunctional” to mean a rate of dysfunction beyond some tipping point.
                I mean, even the most perfect culture produces its share of crime and hatred- that’s why courts and law exist.

                What I’m talking about is where the rate is high enough to where the law is unable to punish crime, because criminals are running things.

                Like for instance, Jim Crow or the Japanese internment- both were what we would call unconstitutional, yet were widely popular with a sufficient majority. It wasn’t that the laws or Constitution had a design defect- its that they were used towards an unjust end.

                And culture doesn’t just “emerge”- it is highly susceptible to persuasion, advocacy, concerted efforts to change it.

                We all here accept homosexuality as a norm- that didn’t just happen. Thousands, then millions of people worked very, very hard to make that happen, to change our minds and persuade us to accept something.

                Part of what is going on here is that Gawker has made itself a very unpopular entity, with the judge, the jury pool, and the verdict reflects not some objective principle of law, but the fact that the jury really wanted to hurt Gawker.

                There are cultures in the world that have a highly clannish sensibility- mercy and forgiveness to those inside the clan, and outright barbarism to anyone outside. I can see a bit of that here, that since Gawker is a despised entity, there is no level of harm that would be perceived as unjust.

                Or maybe behind all the handwringing about freedom of the press versus champetry, there reflects a sense of injustice, that perhaps even a despised gossip rag is deserving of some measure of proportional punishment.

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    • An issue as Saul noted is that this leaves many people without legal recourse because they can’t afford to sue the people who have done them wrong.

      Doesn’t it work the other way too? People who couldn’t afford to sue now can?

      Thinking about this issue two things jump out at me: 1) if the legal system functions properly then the outcome of a case shouldn’t depend on how much money is being thrown at it; 2) that champerty doesn’t strike me as different in kind than a law firm sitting on a boatload of cash to prosecute (eg) class action suits on the premise that the investment yields expected personal value.

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      • Plaintiff’s law firms are not necessarily sitting on loads of cash. I noted this above but almost all law firms (like many other businesses) have lines of credit. Apple and Google are about the only firms I can think of that are sitting on piles of cash. Now part of this might be because partners want a bigger payout than is wise (true on both sides) but there are firms that go two or three years before seeing fee’s collected. During this time they have to keep the lights on, make payroll, etc.

        Class Action lawsuits are somewhat easy targets. How about pharmaceutical litigation? These are representing people who were injured or killed by drugs that should not have received FDA-approval probably. Sometimes medical conditions are completely made up or sound made up. Low-T (for Testosterone Replacement Therapy) sounds like a made up condition to me. Another drug ad I heard on Pandora was a lower back pain med for people under 40. “It might not be the gym or forgetting to stretch! It could be condition X!! Take our pill!!” The back pain med has not become a litigation yet but I could. There is also Trans-Vaginal Mesh which destroyed the uteruses of many women.

        These cases last years before they resolve.

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    • As far as I know, Theil hasn’t asked for anything more than a refund of his stake back. My comment here is predicated upon that assumption.

      That being the case, there is no champerty and maintenance. Champerty requires that Theil look to profit from the endeavor — if he spends $1,000,000 in legal fees so Hogan can sue Gawker, he must be looking to get more than $1,000,000 back as a result of prevailing.

      Similarly, we might accuse him of barratry, but barratry has an element of not only vexatiousness (Theil’s intent is clearly vexatious) but also of at least disregard for the merits of the suit. Hogan’s suit against Gawker obviously had a substantial degree of merit and likelihood of success on the merits.

      So what Theil has done was to fund Hogan’s litigation at no profit to himself. The attorneys taking their fees from Theil to work for Hogan would have needed to have gotten Hogan’s written consent to the arrangement, indicating that Hogan understood that Theil might have an agenda and a reason to do this that was not compatible with Hogan’s own objectives in the case, and Hogan would have needed to have retained ultimate control over the conduct of the litigation, including ultimate control over when and on what terms settlement might have occurred. This would all be handled in a written conflict waiver, which would not be a public document.

      But assuming that the conflict waiver was knowingly executed by Theil and Hogan and the attorneys, there is nothing either illegal or tortious about the arrangmenet.

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      • The questions there are: a) are the lawyers “interested parties”? b) If not, then is the ability to share in the proceeds, enabling impecunious litigants access to justice, a greater policy good than the evils that champerty and maintenance seeks to avoid? c) Are the claims presented likely to have substantial merit, given a lawyer willing to advance costs of suit but not manufacture evidence or otherwise suborn perjury?

        Your answers to these questions may vary and you may not reach the same normative conclusion that I do, but therein lie the roots of the policy reasons offered to justify taking contingency fees.

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  4. …[Powerful folks using their power to shut down speech they don’t like is deeply worrisome. That’s true whether those folks are Silicon Valley billionaires going after low gossip, or state attorneys general trying to shut down climate change advocacy they don’t like, or politicians using the power of the Federal Elections Commission to keep critical movies about them from airing during election season.
    I don’t think this is an existential threat to journalism, however.

    I don’t think there’s an easy way to stop this sort of thing without stopping a lot of other stuff we’re rather fond of. And I think that journalists who have suddenly, belatedly discovered that harassing lawsuits funded by deep pockets might be a bit of a problem should ask themselves if it’s also a problem when they’re aimed at people other than them.

    Megan McArdle has the right take on it, in my view. Lawfare is pretty much a B, and while it might be cool when your team uses it, you gotta be aware that others will see what works and roll with it.

    Also, from everything I read, Gawker never took the case seriously and seems to have angered the jury in the process. Thus 140M.

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    • “Powerful folks using their power to shut down speech they don’t like is deeply worrisome.”

      I agree with your comments, but that quote form MM isn’t what was going on. Gawker wrote some stuff that was actionable. They got sued. They lost. The fact that the guy funding the suit was pissed over something else isn’t relevant. If Gawker had kept it’s nose clean, no Thiel would still be looking to fund a case and Gawker would still be “alive”. The “fee speech” angle on this is bogus.

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      • Oh, I agree with you. But that is the complaint, that the rich can go around putting Journo’s out of business for writing stuff that isn’t in their favor.

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        • This is still fairly light shit, for the rich.
          When the rich want to ruin someone’s life, they’re pretty good at doing so.

          Have we forgotten the lessons of gamergate? That mobs of people can put journalists out of business on the internet — even when the journalists are printing the truth?

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      • Yup. The same thing is unlikely to happen to the National Enquirer, because they’re smart about not putting themselves in that situation. Look at the Ted Cruz smear piece: not “he’s having affairs” but “people are talking about his having affairs”, which was true, even if the talk was all nonsense.

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      • This is fundamentally and indisputably correct:

        Gawker wrote some stuff that was actionable. They got sued. They lost.

        In even simpler language, they did it.

        The fact that the guy funding the suit was pissed over something else isn’t relevant.

        This may or may not be correct, depending on what the issue raised might be. But it doesn’t change the basic fact that they did it.

        Worst imaginable case: Marvin the Murderer murders Vincent the Victim. Unbeknownst to Marvin, Boris the Blackmailer got video of the whole thing. The fact that Boris subsequently blackmails Marvin does not somehow exonerate or excuse Marvin’s crime. Marvin did it. Marvin pointing out the wrongfulness of Boris’ conduct is a distraction.

        Now, what it it’s not Boris the Blackmailer but Calvin the Cameraman? Or, closer to home in this case, Peter the Paparazzi? The motives of the person who has the evidence of the wrongful act, making prosecution of Marvin possible, aren’t relevant to the issue of Marvin’s guilt. But we might praise Calvin, condemn Boris, and sort of waver on the morally ambiguous Peter.

        If the question is whether we think Theil has rendered a net benefit to society by funding Hogan’s litigation, we’ve got to decide if he’s more analogous to Boris (who himself did something wrong) or Calvin (who did exactly what we’d want him to).

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        • Insofar as we’re concerned about wealthy patrons funding nuisance suits against journalists, Mother Jones is the case to use in the argument, not Gawker, since Gawker actually did something that can support a (apparently quite hefty) judgment against them.

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  5. I’m also in the camp that this is a case of sauce for the goose. If folks want to talk about how to do tort reform such that the system is not exclusive, I’m game. But I can’t muster up any outrage over Gawker getting kicked solidly in the ass, or any first amendment concern.

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  6. I can’t help but think of this in light of recent SCOTUS decisions really cracking down on class action lawsuits.

    I’m not sure it’s a good idea to simultaneously be locking out groups of mildly injured people (100,000 who might only be injured for about 1500 a piece. The way the courts work, it’s a simple matter to make it not worthwhile to try to recover individual damages) while allowing rich investors to speculate in the more volatile claims (injuries into the tens of millions) from single individuals.

    I’m not sure those incentives really align, and I’m not sure I like the direction it seems to be going.

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  7. That open letter from Denton to Thiel is precious. Denton fancies himself a muckraker, but that’s not the reason he’s covered in excrement.

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  8. I haven’t read through the comments, so someone may have already brought this up. And Burt can address this better than I, and I admit up front that this is out of my bailiwick.

    That being said…

    The issue with the Thiel hubbub isn’t just one of free speech and billionaires. There’s actually a long history of legal ethics which maintains there must be indemnity in order to take action against someone, and that everyone involved in a legal suit be transparent about both their roles in the proceedings. There are instances where we have, collectively, decided that it’s ok for a third party with no indemnity to step in and flip the bill. (The ACLU, for example.) But up till now, we’ve collectively agreed that this in only ethical when the third party does so in a completely transparent way.

    Let’s say a newspaper is doing an expose on Nike, and Nike decides to put the paper out of business via lawsuits. They may be justified in doing so, or they may not, and we might agree with Nike, or we might condemn the company. But we want to know that Nike is the one putting the paper our of business. Nike secretly contracting with 100 individuals to file frivolous lawsuits bankrolled in such a manner that, merit of the suits aside, the paper would go under but no one would be aware the real reason why should be troubling. As it would be is Donald Trump secretly had ghost plaintiffs file dozens of frivolous lawsuits against the students of Trump University to both publicly discredit those individuals.

    Agreeing to be OK with a lack of transparency in our legal system is a really really, really terrible idea.

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    • So the problem wasn’t with the merits of the case, just with the fact that we didn’t know that Thiel was paying for the lawyers?

      So does the fact that Thiel was secretly paying for the lawyers change any of the merits of the case?

      Agreeing to be OK with a lack of transparency in our legal system is a really really, really terrible idea.

      Is Thiel’s case setting a precedent, as far as we can tell? My assumption, I admit, is that this has been going on for centuries and centuries.

      Is that not the case?

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        • So I’ve been contemplating this and I need someone to lead me down the path to where this particular precedent takes us and why we wouldn’t want to be there.

          My attempts to walk that path don’t lead me anywhere significantly different from where we are now (except that we’ve got fewer sites doing what Gawker used to do).

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          • I’m not sure what Gawker has to do with this particular point, other than they happen to be involved in this one suit?

            I’m pretty sure if you keep at it, you’ll be able to come up with a scenario where people bankrolling lawsuits against their enemies in secret with zero transparency is less than perfect. 300 million people living lives of infinite variations, and all that. I’m not so sure, though, that you’ll be able to come up with one so potentially common and/or devastating to the Republic that it will make me root for a lack of transparency. Might happen, though.

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            • No, please. Let’s assume that I’m blind here.

              I’m trying to game this out and anything that I can imagine is stuff that is already happening and has already been happening for a good long while now.

              As for what Gawker has to do with this particular point, it’s the whole “they did something very, very wrong and the lawsuit brought against them was demonstrated to not have been a specious one.”

              If billionaires start bankrolling non-specious lawsuits… yeah. I’m blind.

              I need someone to explain to me why this would be bad.

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              • That’s because you’re using the phrase “non-specious.” It’s a phrase that only becomes relevant if everything is transparent.

                If it isn’t transparent, why does it matter if its specious or not? No one will ever know.

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                • I’m not seeing the problem with “no one will ever know”.

                  I mean, I know why we’d *LIKE* to know who is bankrolling which lawsuits… but if a lawsuit is good on its merits, it doesn’t really matter to me if it got privately bankrolled. More than that, if a lawsuit is good on its merits, it seems more reasonable to me to ask “why in the hell does it require a billionaire to play this game?” than questions about who is bankrolling whom.

                  If a lawsuit is bad on its merits, I suppose I’d be against someone spending money to push it forward but we live in a system that has a *LOT* of lawfare going on and has always had a lot of lawfare going on and this lawsuit right here is not setting a precedent. It’s not even *CLOSE* to setting a precedent.

                  If it isn’t transparent, why does it matter if its specious or not?

                  The fact that it isn’t specious is something that can get us to say “good, I’m glad we had this outcome of the trial. The system worked.”

                  I’m not sure the whole “but we didn’t know who was bankrolling it until it was over” changes anything at all. I don’t see how it does.

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    • I don’t have a problem with a transparency requirement, but in this case the lack of transparency actually makes it seem more benign. The threat of this sort of thing is that a millionaire would do it specifically to tell newspapers everywhere “Don’t **** with me.”

      That’s what VanderSloot did. It also seems that Nike would have an incentive to let it be known that they are the ones not to **** with.

      That Thiel didn’t go this route, suggests that he is acting more specifically in a social capacity. Akin to the Electronic Frontier Foundation, or any other group. Which the funding for the group is known, but where the groups get their money is not. Which is some accountability, though relatively easy to bypass.

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        • I’ll take that bait, with the caveat that we’re talking about transparency with respect to a specific issue, and not transparency in general. I don’t think the motives and identity of involved third parties are relevant to the merits of a case, and it’s not at all obvious to me that justice would be better served by adding an additional source of bias. As I said in my other comment, if you can harm someone by filing numerous frivolous lawsuits, this suggests deeper problems with the legal system, that would be better addressed by more aggressively throwing out frivolous suits and stronger deterrents to bringing them. If a company is getting hit by a hundred frivolous lawsuits, that’s a problem, regardless of whether they’re coming from one person or a hundred.

          If a case is deemed frivolous on its merits, then it seems reasonable that the identities of involved third parties could be subpoenaed, but I don’t see why that information is relevant in trying the case.

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          • As I said in my other comment, if you can harm someone by filing numerous frivolous lawsuits, this suggests deeper problems with the legal system, that would be better addressed by more aggressively throwing out frivolous suits and stronger deterrents to bringing them.

            I look at it this way: A good way to get laws that deter frivolous suits is to allow the public to see who (and thus, *why*), such suits are filed.

            Making the funding public is less a solution than it is ‘Make everyone do it in the open so everyone can see the problem clearer, and thus might actually solve it.’.

            If a case is deemed frivolous on its merits, then it seems reasonable that the identities of involved third parties could be subpoenaed, but I don’t see why that information is relevant in trying the case.

            I agree that it is not relevant in trying to case. But there’s also no reason to require a subpoena. The people in any part of the justice system are (with a few, very deliberate exceptions) supposed to be public actors. On purpose. That’s how the system is set up. We don’t even (Except in rare cases) shield *jury* members.

            Hell, here’s a fun example that no one has even thought of: If people are secretly funding cases that no one has any idea they are involved in, how do we notice any conflicts of interest with them that the judge might have?

            I.e., what if the judge had been Thiel’s brother? Or someone with a less-direct connection with him, but still a connection?

            Granted, you can’t ever catch *all* conflicts of interest, and a judge who has a friend that was ‘harmed’ by Gawker should possibly have recused themselves preemptively…but a lot of conflicts of interests are pointed out by the other party, where the people with a conflict of interest *didn’t* think they had one, but the other party said ‘Uh, no, you need to recuse yourself’, and they shrugged and did so.

            I.e, the problem with secret funding is not when the conflict of interest is so obvious that the parties involved should have recused themselves of their own accord…they should still already do that. The problem is that those ‘preemptive’ recusals are just part of how the system works…in an adversarial system, the *other* side also gets to research conflicts of interests, and ask for recusals, which they often get if they ask for…and if they don’t, they can try to force them in court.

            If the funding is *secret*, the other side can’t do that with them.

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      • Who didn’t know and who has a right to know?

        Did the court know through disclosures? Could the defendants have found out through discovery if they suspected? What is “knowable” on the business side of any legal engagement?

        (I’m purely asking, no actual agenda, just real practical ignorance).

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    • If you can hurt a media company, or any company, really, by filling frivolous lawsuits, isn’t that the actual problem, rather than the motive of the entity initiating the frivolous lawsuits? The lawsuit either stands on its merits or it doesn’t.

      Why not work on more proactively identifying frivolous lawsuits, and/or imposing stronger sanctions on lawyers who bring frivolous lawsuits, including personal liability for the costs incurred by the defendant and taxpayers?

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    • But up till now, we’ve collectively agreed that this in only ethical when the third party does so in a completely transparent way.

      Yes, this. I was sitting here reading down the comments thinking: Does anyone not notice there’s a bit of a difference between *openly* funding something and *secretly* funding something?

      There are instances where we have, collectively, decided that it’s ok for a third party with no indemnity to step in and flip the bill. (The ACLU, for example.)

      While I’m not sure if there is any sort of *legal* difference, it’s worth mentioning that when we talk about lawsuits that involve the ACLU, we talk about ‘Blah and the ALCU have sued…’, not ‘Blah sued and the ACLU is paying for his lawyers..’

      That is not how you would describe what the ACLU is are doing. The ACLU is, in this particular sense, a charity-funded law firm.

      The ACLU is, functionally, taking the ‘public defender’ idea and applying it to civil suits. They (as an entity) are working as someone’s lawyer for free, not paying other people to be someone else’s lawyer. (1)

      I’m not quite sure if this distinction is important legally, or if it *should* be important, but it does exist. A law firm providing free legal services for a case is not *quite* the same thing as an unrelated third party hiring a law firm for a case.

      1) Unless you want to assert that *all* law firm are paying people (their employees) to be someone else’s lawyer, a statement that is technically true but kinda stupid. The ACLU, as a corporate entity, is providing legal services, just like all other law firms…it’s just doing it for free.

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      • It’s not just about the ACLU defending accused criminals. There are cases with wedding bakers and couples looking for their wedding cake to be baked. There are environmental cases.

        I’m relatively certain that these groups are often looking for sympathetic plaintiffs, or at least plaintiffs with legitimate claims, in order to do their thing. As Thiel did.

        Regarding Thiel, one of the biggest complaints is “Rich people can use this to intimidate people and that’s a threat to free speech!” Except that such intimidation only occurs through disclosure. If the point is to intimidate, you don’t keep it a secret. If he had been upfront about what he was doing, the argument that this is a threat to Free Speech would be stronger, not weaker.

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        • It’s not just about the ACLU defending accused criminals. There are cases with wedding bakers and couples looking for their wedding cake to be baked. There are environmental cases.

          I think you misunderstood my distinction.

          My point is there is a difference between a *law firm* taking on X’s case without any expectation of payment, and someone else *hiring* a law firm for X without an expectation of getting any money out of it.

          The ACLU not only doesn’t pay for lawyers for people…it doesn’t ‘pay for lawyers’ at all. (Except in the sense that all law firms pay their employees.) It *itself* is standing in court.(1) It is the actual attorney of record. Well, ‘Lawyer Name from the ACLU’ is, I guess.

          It not only isn’t secret, it literally *couldn’t* be secret.

          As I said, I don’t know if this actually an important distinction…but it is a distinction.

          1) Sometimes the ACLU just advises another lawyer, and in those situations, possibly, it could hide the fact it was involved in the case at all? Maybe? Not sure what the ethic rules are there.

          Regarding Thiel, one of the biggest complaints is “Rich people can use this to intimidate people and that’s a threat to free speech!” Except that such intimidation only occurs through disclosure. If the point is to intimidate, you don’t keep it a secret. If he had been upfront about what he was doing, the argument that this is a threat to Free Speech would be stronger, not weaker.

          If that’s the biggest complaints, people are idiots.

          What actually happened here is that a rich person tried to destroyed a ‘press institute’, and *that* is a threat to free speech.

          Public intimidation and eventual destruction is much better than *secret* destruction.

          And the idea that institutes won’t figure out the intimidation is dumb. Gawker, for example, knew fully what was going and figure it out. So the intimidation *already is known*.

          Right now, everyone has learned: If you piss off rich people saying thing that are entirely within your rights, you can be randomly secretly attacked for huge amounts for any small mistake you might make in any other way. You not only have to be really careful about talking about the rich and powerful, but if you talk about them at all, then you have to be really careful talking about *everyone* or the rich and powerful will find a weak spot.

          The *minimum* we can do about this problem is not let the attacks remain secret. Make them fully documented in the public.

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          • I don’t know if the ACLU (or the EFF or environmentalist groups) are providing in-house counsel or are hiring lawyers on behalf of litigants. But I don’t honestly care too much, because I don’t think it’s a meaningful distinction. In either case, you have a third party taking care of the costs to pursue its own sense of right-and-wrong.

            Nor do I see “secretly” as being especially threatening here. As says below, it’s the revelation that is really spooking people. If Thiel wanted to spook people, he would have revealed it himself. If anything, I view the secrecy in a pretty favorable light here. I’m open to arguments for transparency generally, but this is a poor case for it. I consider VanderSloot more concerning than Thiel, in part because VanderSloot was sending a very loud message about VanderSloot, which Thiel wasn’t.

            That a wealthy person can sue a media outlet potentially into oblivion is indeed a concern. Especially in cases where the lawsuits are frivolous and meant specifically to drown the defendants not necessarily through verdicts but through legal expenses. Very worrying. Here, though, the lawsuit wasn’t frivolous. It won. Maybe it will be reversed, but it’s at least a sufficiently close call that we’ve reached this point.

            There are some systems questions goin on here, as I allude to in the OP, but that Thiel funded this – or funded this secretly – isn’t one of them. Unless the complaint is that only the defense should have brought money into the courtroom.

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            • As Berg says below, it’s the revelation that is really spooking people. If Thiel wanted to spook people, he would have revealed it himself. If anything, I view the secrecy in a pretty favorable light here.

              Is the idea here that Thiel was operating some sort of *trade secret*? That the information would never get out? That his other rich friends wouldn’t know this, and perhaps hint at it communications with other media outlets?

              That is…extremely silly.

              That information was getting out. It was either getting out as public, confirmed information, at which point we can have a discussion about the possible chilling effect it has on the media…or it was getting out as a *urban legend* told in secret by the media and hinted at by the rich in their communications with said media, having almost exactly the same effect on the media…and we’d never know it.

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        • I don’t remember where I saw this, but someone pointed out that this revelation makes Gawker extremely unattractive to investors. No one’s going to want to invest in them knowing that Thiel is waging this war against them. But as you point out, it’s the publicizing of Thiel’s campaign that made that an issue.

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    • I’m actually pretty surprised you have this opinion. When, exactly, did we actually require this transparency? Whether an attorney represents a client on a fee or contingency basis is not discoverable. Whether that attorney uses a litigation funder to cover costs is not discoverable. Whether a company is paying its own bills or using a legal lender is not discoverable. Heck, I doubt that whether a young adult is having their DUI defense paid by their parents is discoverable.

      I just don’t see what the big deal is. Given Gawker did it, are we really saying there is something better about Hogan using a contingency lawyer than a private funder? Do we care if that lawyer uses a private funder to float the contingency time? If not, what possible distinction is there?

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      • I’m unsure that the comparison between taking out a loan from a place that gives loans is a situation that requires transparency, any more than I do if you borrowed the money for a retainer from a family member.

        A third party trying with no standing in a court case that is only bankrolling the for to damage the defendant? That seems a pretty different kettle of fish, and one where — I would argue — transparency is an issue.

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        • So the question for you boils down to the funder’s motives? If it’s personal to the plaintiff, you seem ok. If it’s coldly-financial, you seem ok. But if it’s unrelated animus against the defendant we’ve crossed some line?

          I can see the logic of your concern, but absolutely no way to enforce that distinction. Also, your rule wouldn’t prevent what happened here, it would just require Thiel to participate in the upside and sign a declaration saying he was funding for financial reasons.

          Moreover, it’d be a fantastic new tool for defense lawyers, as they’d definitely get to see all funding agreements so they could take discovery on whether the funding was for a prohibited reason.

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          • Hmmm… I confess, you are beginning to convince me I’m in the wrong here.

            Let me just pitch one (admittedly) hypothetical to you, and let you destroy my point once and for all.

            Someone with a lot of money, for whatever reason, takes slight at someone with very little money. That wealthy person goes out and hires a number of other people to all file frivolous lawsuits against his or her non-wealthy enemy. All costs, up to and including legal fees the plaintiffs might be defended to reimburse the defendant for, are promised to be reimbursed. In such a case, would we not want to know who was funding all of these lawsuits, and why? Otherwise, would we not do what we always do when a person is in the news for being sued a large number of times by different parties — assume guilt and malfeasance?

            I confess that Trumpism makes me weight this possibility more than I would have prior. A year ago, I think I would look at such a scenario and say, “yeah, but what are the odds of that ever happening?” Now, I confess, I think I would be truly surprised to learn definitively that Trump has never, ever done this.

            But as I said, I’m thiiiiiis close to being convinced you’re right and I’m wrong.

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            • This strikes me as an argument for stronger protections against frivolous lawsuits (see comment on SLAPP suits), not funding transparency.

              Also, can someone explain the efficacy of how such transparency would actually stop a billionaire hell bent on lawfare from actually doing it. There appears to be a very large assumption here that being outed as the funding source would actually make such a person back off. This despite all the fun ego games the wealthy play and the media regals us with.

              Have we learned nothing from Trump?

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            • What you describe in this comment, , is actual barratry.

              What makes it barratry is that the lawsuits in question are defined as “frivolous.” I take this to mean that the contentions made in the lawsuits obviously lack legal and/or factual merit. [1]

              Barratry is already prohibited by law, and is in fact a crime in many states. [2] So the new rule doesn’t seem like it would add much of anything to existing law (and, indeed, may be rendered useless by virtue of a litigant being able to invoke the Fifth Amendment in response to its invocation as a privilege against rendering testimony tending to implicate oneself in the commission of a crime, here, accessory to barratry).

              [1] There seem to be some people who use the word “frivolous” before the word “lawsuit” unconsciously, without considering what the word actually means or why it describes a subset of lawsuits from which other lawsuits might be distinguished. In any event, the Hulk Hogan lawsuit is not such a suit. It had legal and factual merit. One hundred and forty million units of merit, in fact.

              [2] E.g., California Penal Code §§ 158-159: “Common barratry is the practice of exciting groundless judicial proceedings, and is punishable by imprisonment in the county jail not exceeding six months and by fine not exceeding one thousand dollars ($1,000). [] No person can be convicted of common barratry except upon proof that he has excited suits or proceedings at law in at least three instances, and with a corrupt or malicious intent to vex and annoy.”

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              • Oh, I get that.

                What I don’t get is how that matters if it’s all allowed to be done in secrecy with no transparency. Transparency, it seems to me, is how we determine what is barratry and what is not.

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                • As with many crimes, the system waits for a person who believes herself to be a victim to complain about it, and then investigates. “The system” in this context can be a) the criminal justice system, b) the civil justice system, or c) the administrative justice system of a bar regulatory agency and/or a state’s Supreme Court.

                  In such circumstances, a court can make a case-by-case determination of whether and how to pierce the privilege.

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                • Well, I think the short answer is that if you got into a situation where civil sanctions (or, Burt’s more severe criminal misdemeanor charges) are in play then the Court has broad power to punish wrongdoing.

                  That’s a very different thing from a policy that litigation funding should be transparent as a general practice.

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            • Wait, arguments on the internet can be won?!?! Holy moses.

              Seriously, though, it’s a reasonable concern. I would suggest a few things:

              First, I completely endorse ‘s reference to SLAPP (though if we are positing a person with very little money it seems unlikely the claims would be against public participation). Methods to quickly terminate abuse of process are generally good, and its one of the reasons I prefer to practice in federal courts (with strong motion to dismiss practices) over California state courts (where the equivalent procedure is far weaker).

              Second, I’m not sure what this guy would gain from going through the effort of finding a bunch of random plaintiffs with terrible claims. He’d lose control of the litigation (each plaintiff could settle their nonsense claim at any time) and would have to invest at least some effort into finding people who had enough interaction with the target to claim a wrong. Whereas if the angry rich guy had direct interaction he could file a lawsuit directly, keep control, lie as needed to keep the claim alive, and do plenty of major damage via defense costs.

              Third, if this really is a sticking point, I think it is only one because of the work the word “frivolous” is doing in the hypothetical. There are already serious remedies in place (at least in Federal Court and California) once a Court determines a lawsuit is frivolous, and I suspect it would be difficult to engage in a scheme like you describe that is both sufficiently brazen to teach the desired lesson and sufficiently opaque to avoid discovery and punishment from a furious court. It just wouldn’t happen until the cases are actually litigated to the point that their frivolity is proven. (obviously the defendant might not be able to afford to defend the cases to that point, but they likely also wouldn’t be able to do so with one case from the real antagonist, so I think we are conflating separate concerns with justice in the civil courts on that point).

              Fourth, any time you are talking about defendants with limited resources there is a built-in protection: the party might well be essentially judgment proof. There are a fair number of assets a civil court can’t touch even if you lose (like, for example, your primary residence). So, practically, the target might not really have all that much to lose even after the antagonist goes through an expensive plaintiff hunt and several expensive litigations.

              In any event, the hypothetical feels remote (and requires a majorly economically-irrational hatred not usually seen in civil litigation — at least assuming you exclude Probate and Family Law from your definition of civil litigation)

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    • Here’s the thing to consider, : attorney-client privilege. This exists for a really, really good reason: attorneys and clients need to be candid with one another. Courts are appropriately solicitous about the sphere of privacy within which lawyers and their clients treat with one another. That (assuming an ethical attorney, which is not a high bar notwithstanding bitter jokes about attorneys) facilitates the presentation of truthful information to a finder of fact, which in turn makes a trial more efficient and facilitates out-of-court settlement discussions.

      A legal rule that asks Lisa the Lawyer, “Tell us, who’s paying your fees?” intrudes on that sphere of privacy. The opacity of that sphere is not absolute, even now. But there needs to be a good reason to shine a light into that sphere, some benefit gained from doing so that outweighs the intrusion into that private exchange of information.

      For instance, whether a defendant is being indemnified by an insurer is pretty relevant information to make known to the other side. It will significantly impact the plaintiff’s willingness to settle, and the terms upon which settlement will be agreeable, if nothing else. (Thiel’s activity is not indemnification, though, except to the extent that he might have indemnified Hogan for costs (not necessarily fees) in the even Hogan lost and Gawker prevailed.) Part of what makes that important information is that along with the knowledge that there is an insurance company is also the knowledge that the insurance company’s conduct is governed by laws: it has a duty to defend the case if there is even a colorable claim to indemnity; its duty to indemnify is limited by the amount of policy limit; it must disclose (at some point) whether there are disputes about the coverage; it owes its insured a duty to accept reasonable settlement offers.

      Plaintiff’s counsel can understand the dynamics of this litigation better with this knowledge, and gets armed with this knowledge for the purpose of facilitating out-of-court settlement discussions. So this much disclosure is thought, from a policy perspective, to outweigh the benefit of shielding the communications between attorney and client to the extent that a few facts about insurance are disclosed.

      So perhaps we might have a rule be that Lisa the Lawyer can be compelled to disclose, “I’m representing Paula the Plaintiff, but someone other than Paula the Plaintiff is paying my bills.” Under this version of the rule, Lisa needn’t disclose that it’s Benjamin the Benefactor, but does need to close that her fees are not being paid by Paula the Plainitff.

      Now, Donald the Defendant and his lawyers can make a few important deductions. They know that Paula the Plaintiff and Lisa the Lawyer have less incentive to settle, because someone else is bankrolling the litigation going forward. They know that Paula the Plaintiff has less to lose than some other ordinary plaintiff. And they know that Lisa the Lawyer is being paid a fee that is not contingent on the outcome of the case.

      But they don’t know the terms of the engagement between Paula the Plaintiff, Lisa the Lawyer, and the (to-them) unknown third party paying for the litigation. Their assessment of the other side’s willingness to settle seems less clear than it was before: the reality of the division of control of the litigation, as between Benjamin the Benefactor, Paula the Plaintiff, and Lisa the Lawyer is unclear.

      Which is to say, I don’t see how this knowledge educates defense counsel as to the dynamics of the plaintiff’s case in any tangible or useful way. Is there some other likely benefit to the litigation coming from this disclosure that we can articulate?

      What if the rule were even more intrusive, fully “Benjamin will pay Lisa’s bills for all reasonable expenses, subject to auditing, review and adjustment to be handled directly between Benjamin and Lisa. Lisa shall be paid $350 per hour for her time, up to total expenses of not more than $1,000,000. Paula has full and final settlement authority, and Benjamin shall not have any input or control over any decision to settle or requests for judgments made to the court. In the event of a favorable settlement or judgment, Paula shall reimburse Benjamin for all fees thus advances and may keep for herself the remainder, if any, of any proceeds of the litigation.”

      I see a lot of bad things happening here: the obvious one being that now the defendant knows the upper limit of Benjamin’s contractual obligation to pay Lisa, and can engage in burdensome tactics to attempt to swamp that. (Such tactics would necessarily tax the Court’s resources as well.) Indeed, given that now the defendant knows Lisa has a “free” lawyer, the defendant has less incentive to make a reasonable settlement offer, since it appears that the third party fee arrangement is designed to drive the case to final judgment rather than settlement — and, the fact that Benjamin gets reimbursed out of the settlement means that for Lisa, a “reasonable” settlement must be in excess of $1,000,000.

      What we have here is an intrusion into the sphere of attorney-client privacy which enhances rather than minimizes the judicial resources needed to be consumed to guide the matter to some kind of final resolution. So what benefit will this rule produce which outweighs this harm?

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      • The point is not to educate the defense about anything. The point is to make sure we all know that this isn’t some genuinely-aggrieved party trying to obtain restitution, this is a Bigshot Fat Cat using some doof as a meat puppet for his own personal games. This will, presumably, swamp any feelings the jury has about the actual merits of the actual case, and let them know that this is their chance to really put the screws to some rich bastard with more money than sense.

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        • Well, telling the jury about Thiel bankrolling the plaintiff is a different thing altogether — while plaintiff’s counsel gets to know whether there’s insurance or not, the jury is specifically not told about whether there’s insurance and if the subject ever comes up, it’s instructed to disregard the existence of insurance completely. The policy reason for that is precisely because the existence of insurance will swamp whatever feelings the jury has about the actual merits of the actual case, and instead let them know that the harmed sympathetic plaintiff can get money and it isn’t going to hurt the defendant at all. Which is fine and dandy as between the plaintiff and the defendant, but not even the tiniest bit fair to the insurance company, which is obligated to indemnify for what the defendant actually did.

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          • This. Especially since I thought we all agreed (correctly) upthread that Thiel’s interest has nothing to do with Gawker’s liability to Hogan.

            A contrary rule, given that we have a verdict against Gawker, would be to say we think companies SHOULD get away with breaking the law against those without deep pockets, and that we are deeply troubled when legitimate victims are able to obtain sufficient resources to vindicate their rights. That… seems backwards.

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            • A contrary rule, given that we have a verdict against Gawker, would be to say we think companies SHOULD get away with breaking the law against those without deep pockets, and that we are deeply troubled when legitimate victims are able to obtain sufficient resources to vindicate their rights. That… seems backwards.

              Yes. It’s pretty much this that had me dig in my heals on the subject. I can’t imagine that logic working in most contexts.

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      • ““I’m representing Paula the Plaintiff, but someone other than Paula the Plaintiff is paying my bills.””

        This is easily gotten out of. Paula the Plaintiff pays the bills but Ben the Benefactor pays Paula at the same time so TECHNICALLY Paula is funding the lawsuit.

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        • if it is less than $12k, then sure it qualifies as a gift…anything greater than that and it becomes income that must be reported. Sadly, we can’t just give money to non-dependents.

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          • “Sadly, we can’t just give money to non-dependents.”

            Of course you can. The tax man just needs his due. The funds can be “grossed up” to cover the taxes or they can not be identified or reported. I’m no tax lawyer, but I’m sure someone could structure a process that avoids income tax issues while avoiding the issue of reporting that the attorney was being paid by someone else.

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            • You’d need to get a loan, probably.

              I do actually know someone whose pet lawyer is paid for by someone else. (Lawyer’s job is to keep him from getting distracted with legal issues).

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          • In most states, though, there are privileges that would protect that sort of thing from disclosure in discovery and use at trial. Exact specifics vary from state to state, but the intrusion on the privacy of the transaction caused by tax reporting is minimal (and, of course, outweighed by the great public good taxes being paid).

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    • But up till now, we’ve collectively agreed that this in only ethical when the third party does so in a completely transparent way.

      Is there a citation for this?

      It seems like if the objection here were this cut-and-dried and this was it, then people would be blasting it out in these terms a little bit more than they are. Or, at least, making it in these terms, even if they also were saying that the problem was simply that a billionaire is allowed to do this at all, or can choose to do it and end up winning a huge judgement, or I guess cause someone one win it. But I really haven’t heard it argued that the ethical problem here is extremely clear and agreed-upon, and that this is simply a very clear violation of an existing heretofore-agreed-upon ethical standard, namely transparency in this type of third-party funding. Maybe I’ve missed it.

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      • I think what people are woogetting about is the fact that Hogan (and Thiel) won. If they’d lost nobody would have cared (or, probably, even known) that Thiel was involved.

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  9. Sarcasm and wordplay aside:

    Isn’t this case getting so much attention because the plaintiff was awarded 100 metric buttloads of cash? If the award were a more reasonable two orders of magnitude less, so that it didn’t threaten Gawker’s continued existence, would anyone much care that Hogan got help funding his entirely justified lawsuit?

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    • Point of fact you can’t use metric with butt load, as butt load is an older, non standardized form of measurement, based solely on the reigning monarchs posterier size. As this changes from monarch to monarch, male to female, one cannot use a measuring system that is desined to provide impartial standards.

      Thus, it must be Imperial Buttload for volume. Imperial Cankle is used for sizing on a distance scale. This system has fallen out of favor, but might be reintroduced at the end of the year.

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    • Yes, this amount seems completely absurd. What exactly was the justification here?

      From what I understand, the intercourse was with the full knowledge and consent of the woman’s husband, so it’s not like that did anything to his friendship with the guy. And Bollea, while married at the time of the tape, was already divorced by the time the tape came out, and his various affairs had already come out during that divorce.

      He’s also essentially retired from wrestling at this point due to health issues, *and* it’s hard to see how a sex tape would, in any manner, harm his ‘Hogan’ persona anyway. (I’m not a professional wrestling expert, but Hogan supposedly boasted about his sexual exploits.)

      So I’m not seeing any sort of harm besides ‘They published a sex tape of me’. There’s not any sort of personal *or* personal damages I can see.

      I mean, look, I’m all for ‘publishing nude images or a sex tape of someone without their consent’ to be a *lot* more punished than it is. And I also don’t think being a public figure has anything to do with it…that’s a standard for how *careful of the truth* you have to be when talking about someone, not whether or not you can publish unauthorized sex tapes of them.

      But $140,000,000? Really?

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      • I think that the justification for the huge amount is tied to such things as a judge told them to take it down and they said “NO! WE’RE NOT GOING TO TAKE IT DOWN!”

        There was also a level of contrition/remorse that might have helped them at the trial and they failed to display anything even close to that. So the amount is also tied to the Martin Skrelli levels of jerkiness they radiated on the stand.

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      • Before everyone gets too concerned about this case, a few points are worth noting:

        1. The decision is a long way from final. Gawker, from what I’ve read, has some very strong arguments to be raised on appeal.

        2. One-off cases are great to talk about but rarely have that much influence on the legal world. The McDonalds genital burn case has lead to a great deal of press but relatively little change in how defective / unreasonably dangerous product cases are litigated.

        3. Shifting of defense costs to the plaintiff when the defense prevails is something that a lot of countries do. That would have helped Mother Jones a lot and Gawker not at all (at least not until the verdict is set aside).

        4. Popehat writes a lot about anti-SLAPP (strategic lawsuit against public participation) laws. California has a pretty strong anti-SLAPP law. I am aware from personal experience that real estate developers who used the court system as a tool for suppressing opposition to projects in other states were quite surprised to find that they could not do so in California. One easy way to get rid of nuisance cases cheaply is for states to expand their anti-SLAPP laws.

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        • 3. Defense costs are better under our system. If you shift them as a matter of course, you create plenty of perverse incentives (overlitigation by both sides assuming they will win, less incentive to settle early). If you don’t, you make it easier to file suit, but force immediate and ongoing pain (in the form of legal bills) that helps push the parties towards settlement.

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        • Gawker, from what I’ve read, has some very strong arguments to be raised on appeal.

          “Fish you, we’re not paying a fishing cent. And if you don’t like it, we’ll post a tape of your teenage daughter. And your grandmother. And it’s the same tape!”

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  10. Schadenfreude aside, and as much contempt as I have for the irredeemable cesspit that is Gawker, I do feel a little bit bad about how good I feel about this. It would be so much more satisfying to see them die for lack of an audience than from a ridiculously oversized judgment.

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    • Schadenfreude aside, and as much contempt as I have for the irredeemable cesspit that is Gawker,

      That is uncalled for. Cesspits can serve an important function, unlike Gawker.

      It would be so much more satisfying to see them die for lack of an audience than from a ridiculously oversized judgment.

      No kidding.

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      • Well, that’s not entirely fair. Gawker did acquire a handful of properties that it only rarely employees in service of its core goal of debasing public discourse.

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  11. I don’t know much about Thiel. He’s tge Paypal guy, right? Okay, that constitutes my knowledge. He’s gay, it seems? Bully for him. Gawker outed him? That was wrong. He’s mad at Gawker and wanted to get back at them? Understandable. He wanted to do so by funding a lawsuit? Er, okay I guess. Does the outcome of this lawsuit have a potentially chilling effect on free speech? Yes. Is that Thiel’s responsibility? No. Should Hogan have won? I struggle to see how but don’t know the in’s and out’s of the case.

    While I may not like the outcome of the case (and I think I don’t but again I don’t know the details), I am likely to feel similarly about Thiel’s actions here as I do about Citizen’s United: restrictions on what people do with their money will more likely hurt the poor than the rich. Thirl could get around any law by hiring Hogan for a week and paying him an exorbitant salary or giving him access to in house lawyers or nudging a lawyer friend to do pro bono work and then sending him a Christmas present.

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  12. Imagine if it had been Breitbart instead of Gawker who outed Thiel. I’d expect the conversation to be less “whuuuuh, free speach” and more “messed with the wrong queer, ho ho ho.”

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    • Yeah, if the sanction hypothetical-Brietbart had to pay was one of odium and scorn rather than money, because there is a species of right-winger that seems to confuse this with censorship. (A similar species is found on the left, true, but in my estimation it is a far rarer bird, though just as unlovely to behold.)

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