This Is What It Costs When a Tech Billionaire Declares War on You

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Photo: Pool/Getty Images

Months after declaring bankruptcy, Gawker Media founder Nick Denton announced in a blog post this afternoon that the company — that is, the shell that remains after the other six sites in the network were sold to Univision this summer — had settled three outstanding lawsuits and would not be pressing further appeal.

Of the three lawsuits being settled, only one — wrestler Hulk Hogan’s invasion-of-privacy suit, whose enormous judgment forced the company and its founder into bankruptcy — is known to have been funded by Peter Thiel, the Facebook billionaire who revealed this year that he had secretly funded a legal war against Gawker Media. But the other two suits — stemming from an article about Shiva Ayyadurai, a man who claims to have invented email but didn’t, and another about the founding of Tinder — were both represented by Hogan’s lawyer Charles Harder, whose bills Thiel has admitted to footing. All the articles will be removed from the web. According to court documents, Gawker settled the cases for a total $32.5 million: Hogan will receive $31 million and a percentage of proceeds from the sale; Ayyadurai $750,000; and Ashley Terrill, the plaintiff in the Tinder suit, $500,000.

It’s an enormously deflating end to the year’s most dramatic media story. Even people suspicious or dismissive of the Hogan story — concerning as it did a sex tape — should feel nervous about the fact that two indisputably true articles were taken down because their subjects were lucky enough to find a billionaire backer with a grudge. The Ayyadurai and Terrill suits were all but certain to have been dismissed when they came to trial early next year. Instead, Ayyadurai — whose claims to have invented email have been thoroughly discredited — will walk away from a billionaire’s proxy legal war substantially richer, and with an accurate but unflattering article about him deleted from the internet.

But this is what happens when a billionaire goes to war against you. As Denton writes, the drain of looming litigation had become unsustainable, in particular because the lawsuits personally targeted journalists — including former Gawker editor A.J. Daulerio, current executive editor John Cook, and former writer Sam Biddle.

For Thiel, an investor in Facebook and Palantir, the cost of this exercise is less than 1% of his net worth and a little additional notoriety. The other protagonists — including Hulk Hogan and A.J. Daulerio, the author of the Gawker story about him — had much more at stake. That motivated a settlement that allows us all to move on, and focus on activities more productive than endless litigation. Life is short, for most of us.

Thiel is so wealthy as to place him effectively outside the network of incentives that make the legal system a just forum for negotiating disputes. There is essentially no cost for him to wage an endless war on Gawker Media or Nick Denton personally; similarly, there is no reason for his lawyers, presented with the opportunity for endless billable hours, to do anything but make each case as extended and excruciating as possible, no matter its merits.

So even if the settlement is frustrating on free-speech grounds, it at least lets the individual journalists who were targeted for doing nothing but writing true stories off the hook. As part of the settlement, the individuals involved in the cases — former writer Sam Biddle, and John Cook, current executive editor of the reconstituted Gizmodo Media Group — will no longer be the subjects of litigation. Denton wrote, “I am sure they, and others, will continue to shed light on the new power.”

“As for Peter Thiel himself,” he added, “he is now for a wider group of people to contemplate.”

Other former Gawker employees refused to view the settlements with any sort of silver lining. In an emailed statement, former editor Tom Scocca was unsparing in his criticism.

The settlement is a disgrace. The failure to keep fighting against this bad jury verdict and the accompanying other malicious lawsuits is a betrayal of everyone who worked for Gawker Media and of the entire project of reporting true facts about public figures. It is a victory for perjury, fraud, and a ruling class that is ever more hostile to even a vague notion of accountability. It preserves and affirms the result of a trial run by an incompetent and star-struck judge who let herself be manipulated by corrupt and dishonest lawyers lying under oath about the central material facts of the case. It is the triumph of money over justice or the law. It leaves everyone less safe.

In a just world, Pamela Campbell would be thrown off the bench for her misconduct, Hulk Hogan’s lawyers would be disbarred for committing or suborning perjury, and Peter Thiel would be writing a very large check to A.J. Daulerio. We have known for a while that we do not live in a just world, but it is still shocking and disgusting that Nick Denton and the Gawker estate have capitulated to injustice.

“It is a great day for Terry Bollea and a great day for everyone’s right to privacy,” Thiel said in a statement.