On Friday, Gawker Media lost a gigantic lawsuit over the publication of a sex tape in 2012, brought against it by former pro wrestler Hulk Hogan, who appeared in the footage.
The Florida jury found that Gawker had violated Hogan’s privacy by posting a 1 minute 41 second clip of the sex tape online along with commentary. They awarded Hogan $115 million in compensatory damages — $55 million in economic injuries plus $60 million for emotional injuries — with potential punitive damages to be assessed on Monday.
The jury also found Gawker founder Nick Denton and former editor A.J. Daulerio, who published the tape, personally liable.
Gawker has said it will appeal.
How did we get here?
The tape in question was recorded in 2006, and shows Hogan having sex with the wife of his former best friend, shock jock Bubba the Love Sponge, who allegedly filmed the encounter. Hogan has said the tape was made without his knowledge or consent. But Bubba was not given the chance to testify at trial, something Gawker pointed to in a statement regarding an appeal.
“Given key evidence and the most important witness were both improperly withheld from this jury, we all knew the appeals court will need to resolve the case,” Denton wrote in a statement.
Bubba had previously settled with Hogan for $5,000 for his part in the incident and used his Fifth Amendment right to avoid testifying in the Gawker trial, the Tampa Bay Times reported.
Hogan’s legal team has stated that Bubba has only testified once under oath, when he “confirmed that Terry Bollea [Hogan’s legal name] had no knowledge of being filmed or anything to do with it,” according to The New York Times. But Bubba has, in the past, given a conflicting statement on whether Hogan knew he was being filmed or not.
Bubba’s wife, for her part, testified that she had no idea she was being filmed.
The article that led to the lawsuit
Regardless, Gawker said it received a 30-minute DVD of the sex tape in 2012, anonymously through the mail. Gawker then published a short excerpt, along with commentary. The post has been viewed 7 million times, and Gawker maintains it was worth about $11,000 to the company — though Hogan’s lawyers have argued that it was worth hundreds of thousands, according to The Guardian.
Gawker’s legal argument for posting the clip was that it was newsworthy, and therefore protected by the First Amendment. The reasoning is that since Hogan is a celebrity and has discussed his sex life at length in the media, it had become a matter of public concern.
Hogan’s legal team has argued that it had no news value and was an invasion of privacy. One of this attorneys described Gawker’s actions as “morbid and sensational prying,” according to The New York Times.
Hogan originally filed a suit against Gawker in federal court in 2012 and asked a judge to grant a temporary injunction against the post, which would have made them take it down. Judge James Whittemore denied the motion, saying Gawker was protected by the First Amendment.
Hogan then changed tactics, dismissing the federal case in favour of pursuing one in Florida state court.
Hogan originally sought $100 million in damages. He said the video had caused him “lasting humiliation” and invaded his privacy.
Gawker knew that with the Florida jury, it would be a hard fight to win — initially.
“It’s probably difficult to win the case entirely, outright, knowing the jury that we’re facing, but it’s possible. More likely than not, we end up with a really small judgment that we can easily carry and we appeal that,” Gawker president and general counsel Heather Dietrick said in October, according to Capital New York.
But this loss doesn’t mean Gawker will necessarily have to cough up the $115-plus million.
The conclusion the Florida jury reached could be the complete opposite of the one the appeals court comes to.
“We feel very positive about the appeal that we have already begun preparing, as we expect to win this case ultimately,” Denton said in a statement on Friday.
There have been several indications that the Florida appeals court might favour Gawker’s legal argument, which have been outlined fully by Capital’s Peter Sterne
But in the meantime, will Gawker have to pay the $115-plus million? Not necessarily.
There is a Florida statute that caps the type of bond Gawker would have to put up while waiting for appeal at $50 million, and the court could also temporarily stay the judgment without having Gawker pay anything. It’s up to the court.
Of course, if Gawker loses the appeal, it could eventually end up paying all (or some) of the award. Or more.
Gawker does, presumably, have some cash on hand. In January, Gawker reportedly agreed to sell a minority stake in itself to Columbus Nova Technology Partners, partially to help with legal expenses (and also to fund growth into categories like ecommerce and video). Previously, Gawker had raised very little outside capital. Denton had mostly bootstrapped Gawker since its founding in 2002.
But the most pressing question for Gawker is exactly how much of the $115+ million, if anything, it will have to actually pay in the short term. Gawker has been forced to pay its legal fees for the case since at least mid-2015, after going over its insurance cap, according to The New York Times.
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