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Hulk Hogan's victory over Gawker raises stakes for liability

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Growing public distrust has resulted in increasing exposure for media companies, as evidenced by the lawsuit former professional wrestler Hulk Hogan won against Gawker Media L.L.C.

In March 2016, a six-person jury awarded $60 million to Terry Gene Bollea, aka Mr. Hogan, for emotional distress and $55 million for economic damages, after Gawker in 2012 published a one-minute, 41-second edited sex tape. The jury then slapped another $25 million in punitive damages on Gawker founder Nick Denton.

A tort claim can be filed for public disclosure of private facts, which means that media organizations can be found liable if the publication of private facts is offensive to a reasonable person, according to lawyers.

Newsworthiness is a “complete bar to liability,” except when it comes to the disclosure of such private information, said Lee Brenner, Los Angeles-based chair of the media and entertainment practice group of law firm Kelley Drye & Warren L.L.P.

“One of the issues that goes into that is the extent to which an individual voluntarily took a position of public notoriety,” he said. “Did they inject themselves into the public? Did the person give up some of their privacy? Just because you’re a celebrity doesn’t mean you give up all of your privacy.”

Although Mr. Denton initially vowed an appeal, the case was later settled for $31 million after Gawker filed for Chapter 11 bankruptcy in June 2016.

“The folks at Gawker were not in a position to fight it anymore, and the bankruptcy group ended up really driving the resolution of the case rather than taking it to appeal,” said Emily Caron, vice president of media liability claims for entertainment division for OneBeacon Insurance Group Ltd. based in Overland Park, Kansas. “Those of us who were following it feel like there were some very compelling and strong arguments that could have been successful on appeal, but we’ll never know.”

The Gawker case does highlight the importance of engaging attorneys when there are questions about the legality of publishing information — even if the answer isn’t always clear-cut, according to experts.

“Reasonable lawyers who practice in this area don’t even agree among themselves whether or not it was appropriate to publish the video,” Mr. Brenner said. “The First Amendment protects matters of public concern, but there’s less rigorous First Amendment protection for purely private matters. Sometimes you don’t publish. You have to make a choice.”

Mr. Bollea’s lawsuit was bankrolled by billionaire investor Peter Thiel, whose sexual orientation was allegedly outed by Gawker. George Freeman, executive director of the Media Law Resource Center in New York, called Mr. Thiel’s funding of the case “nefarious” and done “for the purpose of destroying a media entity which he doesn’t like. That is a very dangerous threat.”