Analyzing Hulk Hogan’s stunning $115M win in lawsuit vs. Gawker
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In a stunning decision that will likely cause media companies to rethink the risks and rewards of posting videos of celebrities while they are engaged in private activities, a Florida jury on Friday awarded Hulk Hogan $115 million in damages in his successful lawsuit against Gawker Media.
Hogan’s lawsuit stems from Gawker obtaining, editing and posting a 2006 video of a then-married Hogan having intercourse with Heather Cole, the wife of Hogan’s friend Bubba “the Love Sponge” Clem, in a bedroom. The exact circumstances that led to Hogan and Cole having sex and the accompanying recording remain unclear, but all six jurors found that Hogan’s reasonable expectation of privacy was clearly violated. The jurors further reasoned that Gawker caused Hogan massive harm by posting the embarrassing video, which was seen by more than 2.5 million people.
Gawker’s defense, as explained more fully in an previous SI.com article, was one commonly used by media companies when faced with invasion of privacy lawsuits: Under the First Amendment, media companies have broad latitude in publishing information that could conceivably be regarded as “news.” The U.S. Supreme Court made this clear in the famous New York Times v. U.S. decision from 1971. In that case, the New York Times and Washington Post convinced six of the nine justices that publication of the Pentagon Papers—sensitive Department of Defense documents related to the Vietnam War—was warranted through the First Amendment’s broad conception of the freedom of the press. Writing for the majority, Justice Potter Stewart concluded that media companies in a democracy should have substantial discretion in determining what ought to be classified as “news.” Entertainment news, including personal news about celebrities, has consistently been viewed as of a sufficient newsworthy quality to warrant legal protection. Florida law reaffirms these ideas, finding that newsworthiness is found when a matter is “of legitimate public interest.”
Gawker likewise felt confident that it would prevail given that Hogan has lived an extremely public life and that he has repeatedly made his personal life—including his marital unfaithfulness—a topic in writings and broadcasts. In Gawker’s view, a video of Hogan, who in the trial was required to go by his real name, Terry Bollea, having intercourse outside of his marriage was consistent with his other personal disclosures. Gawker also stressed that it added newsworthy elements to the video. For one, Gawker edited the original 30-minute video into a 1 minute, 42 second video, only nine seconds of which showed intercourse, in hopes of making it more in line with expectations of Gawker readers. Gawker also featured an accompanying 1,400-word story that analyzed the video and its implications. Lastly, Gawker stressed that the video was labeled “NSFW” (not safe for work) and that Gawker does not generate advertising revenue for NSFW content.
During the trial, Hogan and his legal team overcame Gawker’s defense. Hogan delivered moving testimony in which he told jurors that he felt “extremely embarrassed” by the fact that millions watched a video of him in an intimate setting. Jurors also saw videotaped testimony of Cole, who similarly expressed that she felt severely humiliated by the video. Perhaps the most damning testimony for Gawker took place when its former editor in chief, A.J. Daulerio, testified. Among other controversial points, Daulerio stated he would not post a video of a sex tape involving a celebrity if that celebrity was under the age of four. While Gawker contends Daulerio was merely being sarcastic, it came at the wrong time. Daulerio's remarks might have unwittingly played into jurors’ suspicions of online media companies as indifferent toward boundaries between public and private so long as what they publish attracts clicks.
Understanding the damages of $115 million and how Gawker can fight it
Gawker being found liable for $115 million reflects the combination of two figures: $60 million for Hogan’s emotional damages and $55 million for economic damages to his career. Next week the jury will consider the possibility of imposing on Gawker another type of damages: punitive damages, which, if granted, would signify that the jury regards Gawker’s mistake as severe and outrageous. If the jury grants punitive damages, it would be sending a clear message: Gawker and similar media companies should not publish sex videos without the consent of those featured in the video.
Gawker does not immediately have to pay Hogan. Even if eventually ordered to pay, Gawker might be required to pay much less than $115 million. Under Florida law, a trial court has the right to order a “remittitur,” which refers to a judge concluding that the jury’s award is excessive. A judge can reach this conclusion if he or she finds that that the jury’s award “is indicative of prejudice, passion, or corruption” or reflects “speculation and conjecture,” among other conditions that would warrant a monetary reduction.
As with the recent jury award of $55 million to Erin Andrews for emotional harm suffered as a result of an unauthorized video of her changing in a hotel room, Hogan’s $115 million award far exceeds what successful plaintiffs normally receive in civil cases. Even when plaintiffs have suffered catastrophic physical injuries, their awards are often six or seven figures, not nine figures. Consider also the typical award for family members who lost a loved one due to a defendant’s negligence: In 2010, an article in the North Carolina Law Review found that the average award for the wrongful death of an adult male is $3.5 million. These numbers do not prove the jury award for Hogan is wrong or unlawful, but they suggest the amount is unusually high. Gawker will certainly raise such an argument as it fights the jury’s decision.
Along those lines, Gawker could file a motion asking the trial’s presiding judge, Circuit Court Judge Pamela Campbell, to consider remittitur. If she orders remittitur, Hogan would have the option of accepting the lower amount or rejecting it. If he rejects the lower amount, Campbell could order a new trial on the issue of damages.
Gawker can also appeal to a Florida appellate court on the question of whether the company violated the law. The company would insist that the six jurors mistakenly applied the law and misunderstood the legal concept of newsworthiness. An appellate court could reverse the verdict. It could also reduce the damages award. Keep in mind, the appeals process might take years to play out.
The problem for Gawker in posting bond
In order to appeal the decision, Gawker will likely have to provide a “supersedeas bond”—an amount of money that stays the execution of a judgment. Gawker, in other words, won’t have to pay Hogan until an appeal is decided. But in order to pursue such an appeal, Gawker will likely be ordered to place in an escrow an amount of money that shows it could pay Hogan in the event the company loses the appeal. If Gawker can’t afford to pay such an amount in escrow, it effectively can’t appeal.
Under Florida law, a supersedeas bond normally must be equal to the principal amount of the judgment plus interest. Per a state statute, the bond cannot exceed $50 million. Florida law, however, provides its judges with discretion in determining the necessity and amount of a supersedeas bond, especially when imposing a bond would cause the defendant substantial injustice. Attorney Dorothy Easley explores the topic of supersedeas bonds in a helpful Florida Bar Journal article. A judge’s discretion on the bond is crucial for Gawker. If the company is required to post tens of millions of dollars in escrow in order to pursue an appeal, the company might go bankrupt. If instead Gawker is required to post a much smaller amount, the company could more effectively wage an appeal.
Settlement always possible
While Hogan may not currently be in the mood to settle with Gawker after defeating the company in court, the analysis above indicates the various ways Hogan could ultimately receive much less, and possibly nothing, from Gawker. Instead of waiting out an appellate process that might take years and potentially end in defeat, Hogan could reach an out-of-court settlement with Gawker. A settlement would require Gawker to pay Hogan some amount of money in exchange for him dropping his case.
Lastly, if Gawker ultimately pays Hogan, he likely will not receive all of the money. While Hogan’s fee arrangement with his attorneys is unknown, a significant portion—perhaps 25% to 33%—of any money he receives from Gawker through a court order or through a settlement may be going to his attorneys as fees.
Michael McCann is a legal analyst and writer for Sports Illustrated. He is also a Massachusetts attorney and the founding director of the Sports and Entertainment Law Institute at the University of New Hampshire School of Law. He also created and teaches the Deflategate undergraduate course at UNH, serves as the distinguished visiting Hall of Fame Professor of Law at Mississippi College School of Law and is on the faculty of the Oregon Law Summer Sports Institute.