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Gawker’s Bankruptcy and the .1%

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Hulkamania

As many of you will have seen, Gawker filed for bankruptcy, and whatever you think about Gawker media this is a disturbing precedent.

I would recommend this Twitter colloquy between Tom Scocca and yes-that David Simon. I share Simon’s position that Gawker showed poor judgment in publishing the Hogan video. But otherwise, I think Scocca has much the better of the argument. A few points:

  • As I’ve said before, Theil’s involvement really is a big deal. If people with essentially unlimited resources are determined to bankrupt media organizations, it is going to be very difficult to stay afloat. (Consider Mother Jones, which was placed in serious jeopardy by a genuinely frivolous lawsuit.)
  • I wouldn’t say that Hogan’s lawsuit against Gawker was frivolous, although AFICT it’s more likely than not to be thrown out entirely on appeal than not. It’s also not a particularly compelling case, and the fact that Hogan and Theil venue shopped to get the case before a state court in rural Florida rather than a federal court in New York is important.¬† And it’s also important because it’s that choice of venue that meant that the initial jury verdict led to Gawker’s bankruptcy even though there’s a good chance the verdict will be thrown out on appeal and it is virtually certain that the Gawker’s financial liability will be greatly reduced.
  • Even if you believe that there was a tort against Hogan, the amount of the judgment is obviously absurd. As Scocca says, it’s hard to maintain that “there’s $141,000,000 difference between publishing stills and video excerpts” (other media outlets published stills) or “a $140,995,000 difference between recording the video and publishing a short clip” (Hogan settled with the person who recorded the video for $5,000.) It is, for example, about $100,000,000 more than O.J. Simpson had to pay in the wrongful death verdict that resulted from him brutally murdering two people. The fact that an award that obviously has no chance of holding up on appeal¬† was able to bankrupt a media organization is seriously disturbing.
  • If this case can bankrupt a media organization, it’s a serious problem.
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