Stuart Karle is a partner and general counsel of North Base Media, a venture capital firm. He was general counsel of the Wall Street Journal from 2004 to 2008.
Silicon Valley drives the future, but at the moment one of its more prominent members is getting attention for dragging us back to Alabama circa 1960.
Peter Thiel, a brilliant entrepreneur in the overlapping worlds of information and technology, hasn’t simply admitted to financing a litigation campaign intended to destroy a widely read news site — Gawker — he’s bragged about it. In an interview with the New York Times, Thiel described underwriting lawsuits alleging defamation and invasion of privacy against Gawker as “one of my greater philanthropic things that I’ve done.”
Thiel’s tactics in fact resemble nothing so much as the legal maneuvers white racists used to threaten the Northern press with ruin if it continued to cover the violent official response to efforts to desegregate the South in the 1950s and ’60s.
On March 29, 1960, the Times published an advertisement describing the “unprecedented wave of terror” by Southern officials trying to shut down protests by black students. Although the harsh criticism was accurate, the ad contained a number of factual inaccuracies.
Five Alabama elected officials filed libel actions against the Times over the advertisement, demanding a total of $3 million in damages for the harm it supposedly inflicted. This represented a remarkable sum at a time the newspaper’s own lawyer was told it was barely making a profit.
The Alabama officials sued knowing victory was almost guaranteed. First, they relied on defamation laws that required publishers to prove the literal truth of even minor factual assertions in articles and that presumed damage to reputation without any proof of harm. Second, they sued in state court, counting on judges and jurors invested in maintaining segregation, or at least irritated with the interlopers from the Northern press, to rule for them.
Theirs was not an isolated claim. They were part of a campaign by Southern officials that ultimately sought some $300 million in damages for libel, making coverage of the civil rights movement so expensive that news organizations would have to stop or risk bankruptcy.
In overturning the Alabama courts and ruling in New York Times v. Sullivan, the Supreme Court established a high bar. It held that public officials could recover damages for false and defamatory statements involving their official duties only if they could prove, by clear and convincing evidence, that the media knowingly lied or acted in reckless disregard of the truth.
The justices intended that high bar, later expanded to include public figures, to eliminate the threat of the kind of campaign attempted by Southern officials using the defamation laws to silence the independent press’s coverage of the realities of segregation. As Justice Hugo Black stated in a concurring opinion, “This technique for harassing and punishing a free press — now that it has been shown to be possible . . . can be used in other fields where public feelings may make local as well as out-of-state newspapers easy prey for libel verdict seekers.”
The justices thereby anticipated Thiel, though not his willingness to spend untold sums — in the sense of both amount and secrecy. With the goal of depriving Gawker of cash to run its business, it doesn’t matter whether Gawker’s money is spent on damages or legal bills. Either way, the money can’t be spent covering the stories that Thiel believes unworthy.
Criticism of Gawker and other media for coverage that is inaccurate or probes too deeply into someone’s private life is fair — even if reasonable minds could differ on both counts. Yet with Thiel secretly footing the bills, the playing field was tilted. His chosen plaintiffs did not have to spend their own money prosecuting their claims, subsidized to the tune of $10 million.
Meanwhile, Gawker and its owners confronted the threat of being bankrupted by legal bills and ensuing damages. Wrestler Hulk Hogan’s $140 million verdict is highly unlikely to hold up on appeal, but even so the damage to Gawker is immense.
For Thiel, anonymity was useful. He didn’t look like an obsessive hunting Gawker as Ahab hunted his whale. Yet that same anonymity prevented the judge overseeing the case from understanding that the scorched-earth litigation tactics unfolding in the case were advancing Thiel’s hidden agenda.
The powerful have always done their best to discourage an independent press from scrutinizing their behavior. Centuries ago libeling the king would lead to drawing and quartering; libel the aristocracy, and you were sure to lose.
One may sympathize with Thiel and Hogan when the media either behaves badly or publishes stories that seem unfair. And the business of Silicon Valley is unlikely to produce the human rights abuses in the South exposed by the Northern press.
But a concerted legal campaign by a powerful man to force a publisher to spend all its money on legal fees explicitly because that man wants to drive that publisher out of business deserves as much scorn when done by a tech mogul as when done by racist officials who embodied one of the more tragic aspects of our history.
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