Billionaires vs. the Press in the Era of Trump

A small group of superrich Americans — the president-elect among them — has laid the groundwork for an unprecedented legal assault on the media. Can they succeed?

By EMILY BAZELON



In 2005, Tim O’Brien, then a financial reporter at The New York Times, published the book “TrumpNation: The Art of Being the Donald.” O'Brien talked to sources with an up-close view of Donald J. Trump’s finances, who concluded that the real-estate developer’s net worth was $150 million to $250 million, rather than the $2 billion to $5 billion Trump had variously claimed. Trump, who had courted O’Brien by taking him for rides in his Ferrari and private jet, sued O’Brien for libel in New Jersey in 2006. Trump called O’Brien a “wack job” on the “Today” show — while, O’Brien says, continuing to curry favor with him privately. O’Brien’s publisher, Warner Books, was also named in the suit and hired top lawyers who put Trump through an unsparing two-day deposition. Asked about his finances, Trump was caught lying or exaggerating 30 times. “He thought he’d get a friendly judge, and we would roll over,” says O’Brien, who is now the executive editor of Bloomberg View. “We didn’t.” The case went through four judges and was dismissed in 2009.

Trump’s suit against O’Brien is one of seven forays President-elect Trump and his companies have made as libel plaintiffs. He won only once, when a defendant failed to appear. But the standard measure — defending his reputation and achieving victory in court — isn’t how Trump says he thinks about his investment. “I spent a couple of bucks on legal fees, and they spent a whole lot more,” he told The Washington Post in March about the hefty sum he spent on the case against O’Brien. “I did it to make his life miserable, which I’m happy about.”

Trump was wrong: Warner Books spent less than he did, and O’Brien paid nothing. But that doesn’t make Trump’s central idea any less jarring: that libel law can be a tool of revenge. It’s disconcerting for a superrich (if maybe not as rich as he says) plaintiff to treat the legal system as a weapon to be deployed against critics. Once installed in the White House, Trump will have a wider array of tools at his disposal, and his record suggests that, more than his predecessors, he will try to use the press — and also control and subdue it.

As a candidate, Trump blustered vaguely that he wanted to “open up our libel laws.” I asked his spokeswoman, Hope Hicks, by email what he meant by that, but she didn’t answer the question (or others I posed). It’s not within the president’s direct powers to change the rules for libel suits. But our legal safeguards for writers and publishers aren’t foolproof. In the last few years, Trump has been joined by at least two billionaires who are determined to exploit cracks in the wall of defense around the press. The members of this club are innovators. They have sued or funded suits to defend reputations or protect privacy. But an underlying aim appears to be to punish critics like O’Brien or even destroy entire media outlets.

This kind of manipulation of the law is unfolding at a keen moment of weakness for the press, which has already been buffeted by falling revenue and mounting public disaffection. Only 40 percent of the public — the lowest rate since at least the 1990s — trusts the media “to report the news fully, accurately and fairly,” according to a Gallup survey conducted in September 2015. This mistrust has been growing for a long time, but it was stoked by Trump during the campaign. He called the reporters who covered him “scum” and whipped up yelling and booing crowds. There is no consensus among his supporters that the press should hold those in power accountable. A recent Pew survey found that only half of Trump backers agreed that it was important in a strong democracy that “news organizations are free to criticize political leaders.”

Media outlets have won many cases by persuading a judge to dismiss them. But since 2010, they have succeeded in only 39 percent of the libel and privacy suits that have gone to trial, a dip from 52 percent in the previous decade, according to the Media Law Resource Center. The median damage award has increased fivefold since the 1980s, to $1.1 million. The figure includes three big verdicts over the last eight months, against Gawker, Rolling Stone and The News & Observer in Raleigh, N.C. These include run-of-the-mill libel suits, and it’s too early to say that the sky is falling on the press. But it’s darkening.

The high bar for winning a libel case in the United States was set in 1964, when the Supreme Court decided New York Times v. Sullivan. In that case, widely hailed as one of the court’s strongest stands for free speech, L.B. Sullivan, a city commissioner who supervised the police in Montgomery, Ala., sued The Times over an ad in the newspaper signed by 100 civil rights supporters. The ad turned out to include minor factual errors. Sullivan said its depiction of how the Montgomery police responded to civil rights protests made him look bad. Under the rules at the time, a libel plaintiff was entitled to victory if he could show that the content that harmed his reputation was false. The Alabama jury agreed with Sullivan on that point and awarded him $500,000 in damages (the equivalent of about $4 million today). With similar cases pending, The Times pulled its reporters out of Alabama.

But when the newspaper appealed to the Supreme Court, the justices threw out the Sullivan verdict and set a far stiffer standard for proving libel. The court wrote that a public figure has to prove that a false and damaging statement about him was published with “actual malice,” translated as “knowing or reckless disregard for the truth.” By the 1980s, the number of libel suits decreased, and if suits did go to trial, they frequently ended in defeat for the plaintiff. In two examples from that era, Gen. William Westmoreland sued CBS, and Ariel Sharon, the Israeli defense minister, sued Time magazine. Neither man won damages. Those outcomes, as well as losses in other high-profile cases, “were a major deterrent for plaintiffs and their lawyers,” says George Freeman, executive director of the Media Resource Law Center (and formerly a lawyer for The New York Times).

Superrich plaintiffs, however, aren’t subject to the same market forces. They can treat suing the press as an investment, with the payoff being, at a minimum, the expense and time required for the other side to produce documents and sit for depositions. In February 2012, the magazine Mother Jones published a story about the Idaho billionaire Frank VanderSloot, a major donor to a “super PAC” that supported the Republican presidential candidate, Mitt Romney. In 1999, in response to a documentary, he sponsored billboards that asked, “Should public television promote the homosexual lifestyle to your children?” The magazine wrote that VanderSloot “outed” a gay reporter, Peter Zuckerman, and “bashed” Zuckerman and his reporting after he helped break a story in 2005 about a history of pedophilia by a Boy Scouts camp counselor in Idaho Falls. The portrayal of VanderSloot was based partly on several ads that he placed in The Idaho Falls Post Register. VanderSloot was upset at the story’s implications for the Boy Scouts, and the ads called Zuckerman a “homosexual” and attacked him for having “a personal ax to grind.”

VanderSloot sued Mother Jones for libel over the article. “They wanted to give me a public beating because I made a sizable donation to Mitt Romney,” he told me. VanderSloot, who owns an online health-shopping club, also said the Mother Jones article cost him customers.

Over three years of proceedings, which included turning over internal emails, Mother Jones racked up about $2.5 million in legal fees. Insurance didn’t cover the whole cost. “The suit was a huge drain on us,” Clara Jeffery, editor in chief of the magazine, told me. “We’re still digging our way out.”

Judge Darla Williamson finally threw out VanderSloot’s suit in October 2015, finding that Mother Jones’s statements about him were either substantially true or opinions protected by the First Amendment. But Williamson took the unusual step of including a section in her opinion partially supporting his underlying complaint, accusing the magazine of “mudslinging” rather than recognizing its approach as squarely within the tradition of investigative journalism. Despite his defeat, VanderSloot declared himself “absolutely vindicated” and announced that he was creating a “Guardian of True Liberty Fund” to aid other people who want to sue the “liberal press.” The fund has grown to between $1 million and $2 million, he told me, with five times that amount pledged, so that “as soon as something hits we think is worth it, we can go after it.”

It was another billionaire, Peter Thiel, who realized the full potential of bankrolling other people’s lawsuits. Thiel, an influential figure in Silicon Valley who was a founder of PayPal and sits on the board of Facebook, is now an adviser to Donald Trump. Thiel and other Silicon Valley executives were regular targets of Gawker’s aggressive reporting and mockery. In 2007, the site ran an article titled “Peter Thiel Is Totally Gay, People.” Thiel didn’t sue on his own behalf. But he secretly paid a Hollywood lawyer, Charles Harder, at least $10 million to sue Gawker on behalf of a suite of plaintiffs. Neither Thiel or Harder will say how many suits Thiel funded, but Harder has filed at least five against the website and its writers and editors. (He also represents Melania Trump in a $150 million suit in the United States against the British tabloid The Daily Mail and a Maryland blogger for calling her an “escort.”) When Thiel’s role was revealed by Forbes magazine, Thiel said his goal was “less about revenge and more about specific deterrence.” Asked in October about his secrecy, Thiel said, “Transparency would have turned it into this very different narrative” that “it’s this billionaire trying to squash the First Amendment.” (He declined to comment for this article.)

Last March, while Thiel’s role remained hidden, one of the suits he funded went to trial in Florida. The plaintiff, the aging wrestler-entertainer Hulk Hogan, sued Gawker for violating his privacy by publishing a brief video clip in October 2012 that showed him having sex.

Hogan, whose real name is Terry G. Bollea, testified that he was emotionally devastated. Yet when he learned of the existence of the sex tape seven months earlier, Hogan appeared on “TMZ Live,” joking about having sex with “several brunettes.”

Trump thrives on media attention, but he also knows that as the press sinks in the public’s estimation, any tough coverage of him becomes less credible.

It’s common for judges to dismiss privacy suits when the plaintiff has encouraged news interest.

In a preliminary ruling before trial, the Florida Court of Appeals said that Gawker posted the sex tape as part of an “ongoing public discussion,” citing Hogan’s appearance on “TMZ” and later on “The Howard Stern Show.” But Judge Pamela Campbell, who presided over the trial, instructed the jury to decide for itself whether the publication of the sex tape was “highly offensive to a reasonable person” and “not of legitimate concern to the public.”

The jury seemed to channel the public’s low regard for the press when they awarded Hogan $140 million in damages. “It just wasn’t about punishment of these individuals and Gawker,” one juror told ABC after the trial. “You had to do it enough where it makes an example in society and other media organizations.” Within two months, Gawker’s parent company declared bankruptcy. Gawker was sold and ceased publication.

In the half-century since New York Times v. Sullivan, the United States has often held itself up to the world as a beacon for the free press. American libel law, the theory goes, protects writers and publishers better than the laws of countries like Britain, where it’s easier to win a libel judgment. Yet giant jury awards don’t topple publications in the United Kingdom: The country has an unofficial damages cap of about £250,000 (plus legal fees). British publishers can, in essence, treat compensating someone whose reputation they have harmed as a cost of doing business. And it’s less risky for them to apologize for a story that turns out to be wrong. “There are limits on damages for malpractice suits against doctors,” says Robert Post, dean of the Yale Law School. “Why not for journalists?”

It’s tempting to treat Gawker’s demise as unique or deserved. But that’s a false form of reassurance, a former editor of the site, Tom Scocca, argued in August. Every publication “is prepared to absorb the damage when it makes a mistake,” he wrote on Gawker. “What Thiel’s covert campaign against Gawker did was to invisibly change the terms of the risk calculation.”

The lesson, Scocca told his readers, is that “you live in a country where a billionaire can put a publication out of business.”

What’s new here are two forces squeezing journalism like pincers. The first is a figure like Thiel, willing to place bets on lawsuit after lawsuit until he hits on a winning combination of facts, judge and jury. The second is the public’s animosity toward the press, now fueled by the soon-to-be president. Juries tend to reflect public sentiment and have recently penalized not just an irreverent new-media site like Gawker, but also a newspaper doing investigative work.

In September, The News & Observer, which is more than 100 years old, went to trial over a libel claim brought by a former state ballistics agent in North Carolina, who sued regarding two articles from 2010 that included suspicions, by independent firearms experts, that she had falsified evidence to help prosecutors win a murder trial. The agent said that the suspicions were untrue and that she was effectively being accused of a crime. The News & Observer stands by its reporting. But the jury found against the paper and ordered it to pay about$9 million; the amount exceeded the state’s cap on damages and is likely to be lowered to $6 million. The News & Observer plans to appeal.

In the week before the election, Seth Stevenson, a writer for Slate, followed the Trump campaign, which meant sitting in the pen where reporters were confined at rallies. He realized that the pen’s function was to turn the press into a prop. “Behold,” he imagined Trump saying to his fans. “I’ve rounded up a passel of those elites you detest. And I’ve caged them for you!”

Trump has continued to treat the press as a prop, or a punching bag, since his election. The weekend after his victory, he railed against The New York Times on Twitter for its “poor and highly inaccurate coverage of the ‘Trump phenomena.’ ” Trump thrives on media attention, but it’s also clear that as the press sinks in the public’s estimation, any tough coverage of him will come to seem less credible. The media also serves as an all-purpose receptacle for blame.

Asked on “60 Minutes” why African-Americans, immigrants and Muslims have expressed fear of his presidency, Trump didn’t reckon with any of his own statements. He said, “I think it’s built up by the press.”

Whatever Trump’s feelings about the media, New York Times v. Sullivan will surely survive his presidency. The case is revered, and in the last several years, the Supreme Court has moved to expand, not contract, the reach of the First Amendment. And states have taken steps, too: To prevent people from using the courts, and the discovery process, to silence or retaliate against their critics, 28 states and the District of Columbia have enacted anti-Slapp laws — the acronym stands for “strategic lawsuit against public participation.” It’s possible, however, that Trump could appoint judges who would find a way around the usual press protections. More immediately, he could ask his Justice Department to prosecute journalists who report leaks from his administration. (President Obama’s Justice Department investigated reporters, but didn’t charge them.) It’s also possible that the press will be a meeker watchdog because of subtler changes that are harder to track. As the head of the executive branch, the president exerts a great deal of control over access to information. Federal agencies have power to shape the state of the union; they also describe it for us by producing reams of facts and statistics, which in turn shape our assessment of our elected leaders. Trump could hire people who cancel funding for government reports or research that doesn’t serve his interests, or who suppress findings the administration doesn’t like.

The new president will be a man who constantly accuses the media of getting things wrong but routinely misrepresents and twists facts himself. “Their single goal will be to burnish their reputation,” Tim O’Brien predicts of the Trump administration. There are signs, too, of new efforts to harness the law to the cause of cowing the press. Trump’s choice for chief adviser, Stephen Bannon, ran the alt-right Breitbart News Network before joining Trump’s campaign last summer. Breitbart announced last week that it was “preparing a multimillion-dollar lawsuit against a major media company” for calling Breitbart a “ ‘white nationalist’ website.”

Even if Breitbart is bluffing, the threat will discourage other news outlets from using that term to describe it, and that will in turn help Breitbart and Bannon seem more acceptable to the mainstream. Trump was right about one thing: You don’t have to win every case to advance in the larger legal war.


Emily Bazelon is a staff writer for the magazine and the Truman Capote fellow at Yale Law School.

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