Peter Thiel vs Gawker

[The Minsky Moment]

I don't think it's a great development that media orgs may have to look over their shoulder every time they offend the "wrong" person.

If everyone else can live like this I'm sure media orgs can too.

Yeah I think this makes a lot of sense.

?
I took that as a tongue in cheek comment.  It doesn't make sense.  Media companies are private businesses.  Their reaction to financial risks is to manage them.  If certain classes of people have asymmetric abilities to foist costs on such companies, those people will benefit from less critical coverage.  That's a net negative to a free society.

[alfred russel]

I don't think it's a great development that media orgs may have to look over their shoulder every time they offend the "wrong" person.

If everyone else can live like this I'm sure media orgs can too.

Yeah I think this makes a lot of sense.

?
I took that as a tongue in cheek comment.  It doesn't make sense.  Media companies are private businesses.  Their reaction to financial risks is to manage them.  If certain classes of people have asymmetric abilities to foist costs on such companies, those people will benefit from less critical coverage.  That's a net negative to a free society.

But why is that dynamic limited to media companies? If an ability to foist costs (through the legal system) onto private entities exists for the wealthy, and they can use that to their advantage when dealing with those entities, isn't that a net negative to a free society? Regardless of whether the company is a media company or a developer or anything else.

[Sheilbh]

It's more of a net negative because there's a public interest in a free media that isn't necessarily afraid of the rich. It's something we all benefit from.

[The Minsky Moment]

$20 million in legal expenses? WTF?

Case has gone on for 4 years, multiple forums (federal/state), 10 days of trial, and the appeals are just getting started.  So we are talking about millions of dollars per side easy.

[viper37]

I am not convinced.  The ability to "just sue someone into bankruptcy" seems limited by the fact that frivolous (what you call "totally unjustified") lawsuits will be dismissed with costs.  If a lawsuit has merit and won't be dismissed, then it seems to me that there isn't a problem with appellants proceeding with it.

"dimissed with costs" implies basic legal costs, not full lawyers fee, no?  Out of 20 million$ expense, how much could you hope to regain by having the suit dismissed, a few thousand dollars?

$20 million in legal expenses? WTF?

that's what they said in the artcile posted.

[The Minsky Moment]

The judge sent this case to mediation with some strong hints about the virtues of settlement.  One can only speculate about what happened - it might be gawker played hardball and refused to make a decent offer.  But given their exposure probably not.  A common dynamic here is that the plaintiff wants to go to trial on principle, but the mediator impresses upon him the risks and the costs of trial.  But if a mystery benefactor agrees to take all that cost/risk away, it changes the dynamic a lot.

Again this differs from traditional litigation finance, where risks are shared not eliminated.

[Martinus]

I am not convinced.  The ability to "just sue someone into bankruptcy" seems limited by the fact that frivolous (what you call "totally unjustified") lawsuits will be dismissed with costs.  If a lawsuit has merit and won't be dismissed, then it seems to me that there isn't a problem with appellants proceeding with it.

"dimissed with costs" implies basic legal costs, not full lawyers fee, no?  Out of 20 million$ expense, how much could you hope to regain by having the suit dismissed, a few thousand dollars?

$20 million in legal expenses? WTF?

In big litigation going for several years it's not unheard of.

[viper37]

but the mediator impresses upon him the risks and the costs of trial. 

yeah.  They stop short at telling you a judge will not look kindly at you for refusing the mediation offer, because they are not allowed to do such a thing, and they would never talk to a fellow judge about how these negotiations went, but you get the clear feeling of what will happen if you refuse to settle there and your lawyer explicitely tells you judges will not balk at sharing such info with their comrades while in the bathroom.

[Admiral Yi]

Again this differs from traditional litigation finance, where risks are shared not eliminated.

Did the plaintiffs in the well known civil rights cases share in the risks?  I always assumed it was all on third parties.

[alfred russel]

It's more of a net negative because there's a public interest in a free media that isn't necessarily afraid of the rich. It's something we all benefit from.

But there is also a public interest that the rich can't intimidate other types of businesses into getting out of their way.

What is of note here is that while Gawker is by all accounts scummy and deserving of punishment, the award in this case of $140m is absurd. That is not in relation to the negative consequences of having a sex tape published.

If you have a jackpot justice legal system with wildly unpredictable juries, if you piss off someone with means, a serious enough grudge, and a mentality like Peter Thiel, you have a major problem. If you are a business owner, it isn't irrational to worry that some case with potential against your company will eventually come up, and you could lose everything. Better to steer clear of crossing the guy--be it in the media or anything else (including possibly competing against his business interests, developing his hometown in a way he disapproves of, etc).

[The Minsky Moment]

Did the plaintiffs in the well known civil rights cases share in the risks?  I always assumed it was all on third parties.

Yes but those landmark cases tended to be against state organs asserting constitutional rights, not money from private parties - that was the Supreme Court's distinction in NAACP v. Button.

[MadImmortalMan]

In this case, gawker is an entity that deliberately destroys people's lives and then makes money off of the publicity. If a government entity does that, then it's probably just a side effect of the real intent. Or wholly accidental.

[Berkut]

I am kind of torn on this.

On the one hand, at the basic level, Minsky is right. You can't have non-transparent entities engaging in the legal system to exact revenge. The system requires some basic level of disclosure about motivations and means of the players involved.

On the other hand, Gawker is one of those abhorrent entities that is using that very system's tolerance against it to engage in activities that are, IMO, clearly detrimental and harmful to society in general.

So on that note, fuck them. They *should* be looking over their shoulder at the people they completely screw over, and their ability to strike back within the system. They are being attacked by someone using the system to shield them, it seems like turnabout is fair play.

[Malthus]

I am kind of torn on this.

On the one hand, at the basic level, Minsky is right. You can't have non-transparent entities engaging in the legal system to exact revenge. The system requires some basic level of disclosure about motivations and means of the players involved.

On the other hand, Gawker is one of those abhorrent entities that is using that very system's tolerance against it to engage in activities that are, IMO, clearly detrimental and harmful to society in general.

So on that note, fuck them. They *should* be looking over their shoulder at the people they completely screw over, and their ability to strike back within the system. They are being attacked by someone using the system to shield them, it seems like turnabout is fair play.

True, Gawker is horrible - but isn't it often the case that protection of freedom of the press often involves horrible businesses or people?

Larry Flynt springs to mind. 

[alfred russel]

All of our press is horrible now. Even places like CNN are filled with clickbait and all about creating and riding the outrage cycle.