Silicon Valley drives the future, but now one of its more prominent members is getting attention for dragging us back to Alabama circa 1960.
Entrepreneur Peter Thiel, co-founder of PayPal, hasn’t simply admitted to financing a litigation campaign intended to destroy a widely read news site – Gawker – he has bragged about it.
Thiel’s tactics resemble the legal maneuvers white racists used to threaten the Northern press if it kept covering the violent official response to efforts to desegregate the South in the 1950s and ’60s.
In 1960, the New York Times published an ad describing the “unprecedented wave of terror” by Southern officials trying to shut down black students’ protests. Although the harsh criticism was accurate, the ad contained factual inaccuracies.
Five Alabama elected officials filed libel actions against the Times over the advertisement, demanding $3 million in damages for the harm it supposedly inflicted.
The Alabama officials sued knowing victory was almost guaranteed. They relied on defamation laws requiring publishers to prove the veracity of even minor factual assertions in articles and that presumed damage to reputation without proof of harm. They sued in state court, counting on judges and jurors invested in keeping segregation, or irritated with the Northern press’s interloping, to rule for them.
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 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 created 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 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 press’s coverage of segregation.
The justices anticipated Thiel but 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 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. Yet with Thiel secretly footing the bills, the playing field was tilted. His chosen plaintiffs did not have to spend their money prosecuting their claims.
Meanwhile, Gawker and its owners confronted the threat of being bankrupted by legal bills and damages. Wrestler Hulk Hogan’s $140 million verdict is unlikely to hold up on appeal, but even so the damage to Gawker is immense.
Thiel’s 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 triedto discourage an independent press from scrutinizing their behavior.
One may sympathize, though, with Thiel and Hogan when the media behave badly or publish stories that seem unfair.
But a legal campaign by a powerful man to force a publisher to spend all its money on legal fees 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.
Stuart Karle was general counsel of the Wall Street Journal from 2004 to 2008.