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The Business of CAD   >   Issue #988   >   August 6, 2018

From the Editor

Next week, I plan to be at the annual Siggraph 2018 computer graphics conference in Vancouver, Canada. https://s2018.siggraph.org/conference/ 

Other upcoming conferences I have booked to attend include 
I hope to meet up with some of you at these events! Look for my live reports on the events on Twitter at @upfrontezine and the WorldCAD Access blog, and follow-up analysis articles here in upFront.eZine.

 

Conspiracy: 

Peter Thiel, Hulk Hogan, Gawker, and the Anatomy of Intrigue


Book written by Ryan Holiday; reviewed by Ralph Grabowski
(This issue is online at www.upfrontezine.com/2018/08/upf-988.html.)
During high school English, we bored teenagers were taught about three kinds of conflict presented by fiction: man vs nature, man vs man, and man vs himself. All three present themselves in that odious short story we were to read, Leiningen Versus the Ants. Odious, because I don't care for fiction. There is so much that fascinates me in the real world of non-fiction for me to devour during my three-score-and-ten. One beloved topic of non-fiction is the corporate biography: man vs corporation.

A man by the name of Peter Thiel was outed as gay by a corporation by the name of Gawker Media. Mr Thiel's friends knew about his orientation, but it was not more widely known. He resented the outing, as he wanted to be known as the most significant technology investor, and not be relegated to the sub-category of most significant gay technology investor. 

Peter Thiel (image source Business Insider)

The result is a thriller of what happens when the very rich turn on the other very rich.

Mr Thiel spent three years fuming about the unwanted outing, wondering how he could get back at Gawker, or if he even should get back at Gawker. One day in Berlin he met with a 25-year-old Wunderkind who bravely told him, Give me access to ten million dollars and I will figure out how to take Gawker down.

After a few questions, Mr Thiel agreed. (We never learn how the two got to meet.) Mr A (as the unknown Millennial is known) had no plan except to look for a plan. His thesis was that given (effectively) unlimited funds and a few years, a crack could be found, and the offending party attacked.

Mr A found a lawyer who proved in the long run to be a loyal compatriot. Loyalty is a sure thing, I am sure, when it is priced at $550/hour.

The lawyer began formulating his strategy. The offense could not be based on the First Amendment (Freedom of Speech), as America's legal precedents fiercely protect the media's right to be odious. The attack had to be based on another strategy, but what?

Nick Denton, owner of Gawker Media (image source New York Times)
 

Wanted: Total Annihilation

A team of paralegals and interns poured over a million stories posted by and about Gawker Media, looking for the angle. There were plenty of sleazy stories to sue over, but the team was looking for the knock-out punch, a story so serious that it would drive Gawker Media out of business and leave owner Nick Denton ruined.

Meanwhile, Gawker survived the many law suits it faced over its hateful stories. No legal action ever got further than a negotiated settlement; none ever reached the discovery stage. The maximum payout for one reached $100,000, which the company could afford with its $1-million liability insurance policy. 

The repeated losses gave the abused loss of hope. The repeated wins gave Gawker writers permission to be ever more explicit in posting illicit sex tapes, without seeking permission from those involved. Their revenge porn was slimed with the veneer of editorial truth-telling.

These were writers who had no editors. The job of the editor is to filter, but Gawker writers were expected to post eight stories a day, with the size of the paycheques directly attached to the numbers of page-views. The baser the story, the more it fascinated some Americans, the bigger the miserly paycheque. There was no time for editors, whose sensible rewrites would have reduced payouts.

Gawker's non-stop wins, however, finally presented Mr Theil's legal team with a willing victim, Hulk Hogan, who claimed to have been enticed to have sex with his best friend's wife, while the "friend" recorded it with two hidden cameras onto DVD discs. The discs were kept secret, but somehow, after some years, they leaked to TMZ, who begged Gawker to post the videos -- so that TMZ could link back to them with sanctimonious leering. 

Terry "Hulk Hogan" Bollea during the trial (image source Market Tamer)

Mr Theil's lawyer gave Mr Hogan an offer he couldn't refuse: we'll cover all your legal expenses. They posted their law suit against Gawker in federal and Florida court (where Mr Hogan lived), asking for $100 million in damages. The case was based on the Fourth Amendment, the right to privacy. Federal court quickly threw out the case, while the Florida court eventually accepted it, but did not require Gawker to take down the videos. Later, when the court reversed itself, Gawker mocked the court in print and kept the videos running anyhow.

Then Mr Hogan's Los Angeles-based lawyer learned a fortuitous fact: if Gawker lost the case in Florida and if they then wanted to appeal it, they would have to post a bond for the amount that they lost, to a maximum of $50 million. As Mr Hogan was asking for $100 million, Gawker would have to post a $50-million bond, ensuring the bankruptcy for the company. A loss would be the win.
 

Wounded by a Thousand Blows

Gawker's lawyers thew up all kinds of delaying tactics, naturally, but much to Mr Denton's shock the case finally got to the discovery stage. He (and his other senior staff, who also had to answer questions) had never done this before, didn't think the case would go any further, and so didn't take discovery seriously. (Discovery is when lawyers on each side interview witnesses separately and outside of court to learn more facts before starting the format court case.) This lead to the infamous, off-hand remark by one editor who acknowledged, under oath, sure, he would run a video of sex with children, but the child couldn't be younger than four years old.

Meanwhile, the glib world of Gawker was under attack from within and without. Its underpaid writers were fond of mocking wealthy people and firms who stored their riches overseas; to their horror, they learned that their boss, Mr Denton, stored his firm's vast profits overseas in Hungary. The writers were keen to uncover firms that did not pay interns, and so unpaid interns at Gawker sued to form a union in order to get paid. Gawker writers enjoyed outing both gays and non-gays (as alleged gays), but Mr Denton had been paying his writers to keep his gay wedding secret. In the court of public opinion, Gawker fell in status from scrappy underdog to junkyard dog.

There were some attempts at a reconciliation. In an early one, Gawker mocked Mr Hogan with an arrogant settlement offer: stop irritating us and we might consider taking down the videos. The insult gave Mr Hogan new determination, as he had been getting dispirited over the slow pace of justice. In turn, from behind the scenes Mr A's lawyer rev'ed up more law suits from people hurt by Gawker, firing them off as a distraction tactic from the true aim: destroy Mr Denton. 

At some point, the merciless Mr Denton showed a modicum of remorse over what he had done to a fellow gay man, and so reached out by email to Mr Theil, but his request to perhaps have a coffee together was ignored. It was too late for sorry. 

Gawker's lawyers next offered Mr Hogan a series of settlements that eventually reached $10 million -- but none was ever accompanied by an apology. They were mistaken in thinking that their enemy was the Hulk; the real enemy could not be bought. Mr Hogan rejected the eight-figure settlement as an insult, as he felt that Gawker was paying him to be a quitter, which he wasn't. He instinctively felt that the huge settlement size meant that Gawker was frightened of the upcoming trial.

At this point, we are seven years into the story.

Mr Thiel remained hidden from the frontline activities, communicating with Mr A only by telephone or in-person in homes, dis- and approving strategies, and signing cheques. Mr A passed on instructions to the lawyer. There could be no accidental sighting at a local restaurant, and so Mr A stayed largely in Germany, the lawyer from Los Angeles fought the case in Florida, and Mr Thiel hovered in places like San Francisco and New Zealand, deliberately physically disconnected from Gawker in New York City. (A leak occurred, however, when Mr A posted a picture of himself on social media, with the location marked as a Florida county near the courthouse.)

To prepare for the trial, Mr A spent $100,000 on two mock courts, with local jurors, to learn the archetype most sympathetic to the Hulk's plight: overweight women, who also are mocked on the Internet. When the actual jury selection was completed, Mr Hogan's lawyer ensured that three of the six jurors were overweight women; two others were aw-shucks kinds of guys who resented the sleek elite descending from New Yawk City. 

In both mock trials, the juries awarded the plaintiff nearly $150 million in damages. In the real trial, the jury awarded $141 million after just six hours of deliberation. In part, Gawker lost because of the location of the trial, but also because their strategy assumed there would be a settlement on the courthouse steps. Their lawyers hadn't even bothered to prep their witnesses properly.
 

The Aftermath

The end of the trial was not the end of the trials. Some two years later, Forbes magazine outed the billionaire behind the destruction of Gawker. The mainstream media flipped from being incensed over Gawker to being incensed over billionaires bringing about the end of the free press. The mainstream media never, ever reminds its readers that most of them are owned by billionaires. And they conveniently got a case of amnesia that the case was not about freedom of speech, but freedom of privacy.

Mr Denton used his platform (while he still had one) to lash out at Mr Thiel. In turn, Mr Thiel's bankruptcy lawyers harassed Gawker over bankruptcy expenses, such as limiting the cost for the Gawker shut-down party to $1,000. Mr Thiel's lawyers launched even more law suits against Gawker, such as one one behalf of a man Gawker had disparaged as the inventor of email. At one point, the bankruptcy receivers threatened to sue Mr Thiel for having caused the bankruptcy. The two antagonists did meet in person, because they felt they had an obligation to do so as men, but nothing came of it. 

The mainstream media today feels comfortable characterizing Mr Thiel, a conservative gay Christian, as a weirdo. If instead Mr Theil had taken down Brietbart, he would be celebrated as a hero, the author speculates.

After ten years, the two sides spent $20 million on legal matters, with the Hulk in the end winning $30 million. The author summarizes the two sides like this: Gawker failed to plan for losing the trial, while the Theil-A-lawyer team failed to plan for what to do after winning the trial.
 

The Anatomy of Intrigue

Ryan Holiday is a terrific writer, one who makes you want to read non-stop to the end of 'Conspiracy'. But every so often he ruins his style with too much philosophizing about whether conspiracies are legit -- sure, discuss it once, and then leave it alone, but he can't! 

There is w-a-a-a-y too little detail about the climax of the story. For the two-week-long court case, the author quotes exactly one exchange with a witness, but makes us suffer in every single chapter over Was it wrong? Was it right? Maybe it was wrong? Maybe it was right? Perhaps the word "Anatomy" in the title serves as a warning.

Nevertheless, this incident will remain an important event in the history of Western Civilization -- of spurned rich man vs arrogant rich man -- and so I look forward to a retelling by an author with an eye for detail.
- - -
Conspiracy: Peter Thiel, Hulk Hogan, Gawker, and the Anatomy of Intrigue
by Ryan Holiday
336 pages
Published by Portfolio, February 2018
ISBN-10: 0783118457
ISBN-13: 978-0735217645

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Notable Quotable

"We turn the handle and – boof! – out comes a number."
    - Margrethe Vestager, competition commissioner, EU
www.theregister.co.uk/2018/07/18/european_commission_fines_google_over_android/
 

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Editor: Ralph Grabowski 
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