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Opinion Angry about Peter Thiel’s pursuit of Gawker? Tort reform is the best solution.

Peter Thiel in Beijing on Feb. 27, 2015. (VCG/VCG via Getty Images)
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The response from the media to Gawker’s declaring bankruptcy after losing a lawsuit to professional wrestler Hulk Hogan funded by tech billionaire Peter Thiel has been slightly fractured, in large part because no one is saying two magic words: tort reform.

On the one hand, it’s nice to see members of the media realize that the courts can be used to silence and harass. One wonders where they were when a litigious convicted domestic terrorist was hounding conservative bloggers. Or when a scientist sued a magazine for questioning his data and saying hyperbolically mean things about him. Or when agents of the state sued conservative and libertarian nonprofit organizations in an attempt to chill their freedoms of speech and association.

To paraphrase a great American patriot: “Welcome to the party, pals.”

On the other hand, many of the complaints about Hogan and Thiel’s tag-team match against Nick Denton and the gutter press of Gawker didn’t really make much sense. Not even the staunchest of First Amendment supporters believes that the media should be exempted from lawsuits, period. And no one seemed particularly interested in defending Gawker’s publication of the Hogan-starring revenge porn. Liberals have long championed third-party sponsoring of lawsuits — if they didn’t, they’d have turned on the American Civil Liberties Union and other such groups ages ago — so there’s no principled objection to Thiel having funded these efforts.

There is an unprincipled objection, of course — one that runs something like “Well, it’s bad that this libertarian billionaire is funding such suits because he’s trying to silence his critics and future billionaires might use similar tactics to shut down organizations that we like, such as the New York Times.” These critics then frequently point to the recent trials and tribulations of Mother Jones, which racked up millions in legal fees after a GOP donor sued it in state court and employed a series of tactics designed to drag the process out.

Conflating what happened to Gawker and what happened to Mother Jones is a rhetorical trick that obscures more than it illuminates. For starters, the case against Mother Jones was frivolous in a way that the case against Gawker wasn’t, given that Mother Jones was being sued for actual newsgathering. Gawker lost because it deserved to, because it invaded someone’s privacy and published a sex tape obtained under shady circumstances without the permission of anyone in the sex tape. Mother Jones, on the other hand, lost by winning — defending itself was far more expensive than paying the damages would have been.

Still, we tort reformers should be pleased that members of the media are finally starting to realize something that conservatives have been arguing for quite some time with regard to our litigious culture, namely that the process itself is the punishment.

“Our system of civil litigation is a grotesque failure, a byword around the world for expense, rancor, and irrationality,” Walter K. Olson wrote way back in 1991 in his seminal book on the absurdity of our legal system, “The Litigation Explosion.” “America’s litigation explosion has squandered immense fortunes, sent the cream of a nation’s intellectual talent into dubious battle, reduced valuable enterprises to ruin, made miserable the practice of honorable professions, and brought needless pain to broken families.”

One of the causes that Olson argued most strenuously for in his book was a more aggressive regime of fee shifting — that is, crafting and enforcing “loser-pays” laws common in other countries. Given that he literally wrote the book on the topic, I emailed him and asked how news outlets could work to avoid ruin at the hands of the vengeful wealthy.

“In the nightmare scenario where an enemy gins up a range of lawsuits against a media company, fee shifting will discourage and compensate the ones that are destined to lose but chosen for cost infliction value,” Olson replied, noting further that some forms of fee shifting also would compensate defendants who lost if they offered a reasonable settlement that was rejected. “If the tormentor is left only filing meritorious cases, well, that’s an important constraint and makes the potential abuse much more self-limiting, meritorious cases not being free for the picking in unlimited numbers.”

That being said, Thiel was patient enough to bide his time and pick a meritorious suit. Even a decidedly Gawker-unfriendly writer/editor such as myself tugs at the collar a bit when he contemplates a single story being able to bankrupt a full-fledged media operation. But what does it mean to be “against the death penalty” for a media organization?

“The correct approach is not to say that a single case should not bankrupt a media company. While punitive damages can appropriately be scaled down to reflect corporate penury, the law ordinarily doesn’t scale down compensatory for that reason,” Olson said. Instead, there needs to be a more general discussion about scaling down awards.

“Many journalists who rightly recoil from the huge dollar amount the Florida jury assigned seem to be groping for the concept of a damage cap. And of course they don’t have to grope very far — business defendants have long pushed for damages caps for ‘non-economic’ damages (such as pain and suffering, emotional distress, humiliation, mortification, and so forth),” Olson noted. Similarly, judges should be quicker to scale down absurd awards from juries and we need to have a discussion about doing away with or limiting “appeal bonds, much fought over between tort reform/business interests and the trial lawyer lobby for decades now.”

If the media wants to protect itself, it’ll join libertarians and conservatives in the long-gestating effort to pass tort reform. As Olson prophetically noted almost a quarter-century ago in his book, “Litigation is equally a notorious weapon in the hands of wealthy and unscrupulous persons and enterprises for whom legal aggression is just another means of self-aggrandizement.” Without some sort of change, things are likely to get only dicier for media outlets at risk of angering the immensely wealthy.