Let me decisively and bravely say, “Maybe.”
The web is buzzing with the news that PayPal co-founder Peter Thiel bankrolled Hulk Hogan’s lawsuit against Gawker to punish it for “outing” Thiel ten years ago. Given that Hogan is now sitting atop a $140 million dollar verdict against the gossip site, I’d say that Thiel has indeed gained his vengeance. Thiel is victorious, but is he dangerous? I have three thoughts.
First, I agree with Eugene Kontorovich. It’s not problematic that Hogan received third-party financing for his case. Virtually every public interest legal organization or activist group finances litigation. There can be great value in third-party financing, and multiple key precedents have been won by lawyers whose bills are paid by someone else.
Second, not only is third-party financing appropriate in the abstract, it’s also appropriate in this case. Thiel’s desire to protect individual privacy even in the age of the Internet is certainly defensible, and making this case in court represents a justifiable use of his own funds. To borrow the language from Rule 11 of the Federal Rules of Civil Procedure, if the financed case represents a good faith effort to apply existing law or to extend, modify, or reverse existing law, then I’m fine with the use of private funds even if I often disagree with the legal argument.
Third, there is still of course a risk of abuse. It would be fairly easy for a wealthy individual or corporation to file a case or series of cases not so much to apply or test legal theories but as a “process-as-punishment” effort to grind media companies (or other foes) into the dust – exhausting their funds and energy in never-ending court battles. In such circumstances, the threat to a culture of free speech is obvious, and the funder’s conduct — while legal — would be destructive.
Thiel’s funds grant him opportunities (not many people can drop fat stacks of cash on someone else’s legal battle) but also carry with them certain civic responsibilities. He could abuse his financial power, but in funding Hogan’s case he stayed safely on the right side of the line.