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Peter Thiel, Gawker and why all of this could matter during a Trump presidency

Hulk Hogan won a lawsuit against Gawker Media in March. (Dirk Shadd/Tampa Bay Times/Pool via Reuters)

This post has been updated with Peter Thiel's confirmation of earlier reports.

The admission by Silicon Valley billionaire Peter Thiel that he secretly bankrolled Hulk Hogan's lawsuit against Gawker Media represents the latest twist in a sordid legal drama that began with publication of the wrestler's sex tape.

Peter Thiel, tech billionaire and co-founder of PayPal, spent $10 million dollars helping Hulk Hogan win his case against Gawker Media. (Video: Daron Taylor, Jhaan Elker/The Washington Post)

But there is more to consider than who picked up the tab in this celebrity soap opera — and it has implications for Donald Trump and freedom of the press, writ large.

Thiel, a co-founder of PayPal and a Facebook board member, is a Trump supporter. Actually, he's a bit more than that; he'll be on the ballot in California as a Trump delegate on June 7.

Trump is a big fan of suing media companies. In fact, the presumptive Republican presidential nominee said in February that as commander-in-chief he will "open up" federal libel laws to make it easier to sue news outlets like The Washington Post and New York Times.

Legal experts agree it would be hard to do that, but they say Trump and wealthy allies like Thiel could still wreak havoc on journalists by footing the bills for other people's lawsuits.

"You don't have to change the law to make life difficult for your critics, particularly if your critics don't have the money to defend themselves," said Lyrissa Lidsky, a law professor at the University of Florida who specializes in First Amendment and media law. "It's one thing to know that you can litigate a libel case and win, but the litigation costs can be enormous before you get that victory. So if you can't finance the cost necessary to win, then you're as effectively silenced as if the law were against you."

Public figures suing news outlets for libel must clear a high bar to win. Allow the the Legal Information Institute at Cornell University Law School to explain:

Since the U.S. Supreme Court's 1964 decision in New York Times v. Sullivan, defamation claims have been limited by First Amendment concerns. Thus, for instance, public officials and public figures (people who are famous) must show that statements were made with actual malice to recover in an action for defamation. Actual malice means that a statement was made with knowledge that it was false or with reckless disregard of whether or not it was false. In addition, a plaintiff must show actual malice by "clear and convincing" evidence rather than the usual burden of proof in a civil case, preponderance of the evidence.

In other words, proving journalists screwed up isn't enough. The "actual malice" standard means the plaintiff also must prove the screw-up was intentional or reckless.

But winning isn't everything and sometimes isn't even the aim. And if you need proof of that, look no farther that Trump's own words. Trump said in an interview with Megyn Kelly on Fox broadcasting last week that litigation is "a tactic for me."

"It's a business for me, and I have been successful, and I have, you know, used litigation," he added. "And sometimes I use it maybe when I shouldn't."

Remember, too, that Trump has on more than one occasion expressed his willingness to pay legal fees for supporters who "knock the crap out" of protesters. Also consider Trump's propensity for retweeting nasty things that he wouldn't say himself. Both habits suggest he isn't opposed to sharing his money or his platform with other people doing his dirty work.

Trump knows the pain a lawsuit can inflict. In one memorable instance, he sued a journalist for writing in a 2005 book that the real estate magnate was merely a millionaire, not a billionaire, as he claimed. Trump lost but managed to drag the case out for five years.

What really gets under Trump’s skin? A reporter questioning his net worth.

The lesson? As long as a suit isn't completely frivolous, it can cause a prolonged and expensive headache, especially at a time when many media companies are struggling financially.

"I don't think frivolous cases are the problem," said David A. Anderson, a former political journalist who is now a law professor at the University of Texas. "The problem are cases in which there is some merit. As everyone knows, defending them — even successfully — is extremely expensive. It's not just money; it's the drain on editorial resources, and your personnel are tied up in depositions. Just the cloud hanging over you of a potential large judgment is itself a problem. So there are a lot of costs. Rich people can cause a lot of trouble for anybody, including media, because they can afford to tie you up in expensive litigation."

It's worth noting that Hogan won his case against Gawker by alleging invasion of privacy, not libel; privacy cases are easier to win, Anderson said, adding that he believes "most of the public thought posting the sex tape was an outrageous thing to do and that Gawker ought to be punished for it."

Indeed, Gawker probably isn't the most sympathetic defendant the media could hope for. But it is a good example of a media company paying a heavy price in litigation. Founder Nick Denton told the New York Times that legal fees totaled about $10 million, and he seemed to acknowledge in a leaked internal memo that his decision in January to sell a minority stake in the company was motivated in part by a need for cash amid the lawsuit.

Now, Denton says he suspects Thiel is underwriting additional lawsuits against Gawker.

Thiel doesn't need Trump to tell him what to do, of course, but the GOP standard-bearer is promoting a litigious, anti-media agenda that could influence other people, Lidsky said.

"One of the alarming trends is the unpopularity of the press, and that really does affect how people see any contest between the press and a political figure," she said. "A lot of trial judges are elected, so they're very responsive to the public mood. Then you get a jury who is put in place to reflect the public mood. And when they think the media routinely abuse their power and invade privacy and don't provide unbiased coverage and should be punished, that potentially affects the outcome of lawsuits.

"I mean, it doesn't potentially affect them; it does affect the outcome of lawsuits."