When a Florida jury awarded $115 million to Hulk Hogan, Gawker Media’s head honcho signaled that he had seen the ruling coming.
Moments after the verdict was announced Friday night, the company’s founder Nick Denton issued a statement saying he “knew the appeals court will need to resolve the case.”
Representatives for Gawker had long assumed that the jury, selected from the area where Hogan grew up and currently lives, might be inclined to rule in the plaintiff’s favor. But the verdict clearly sent shockwaves through the company. One senior source at Gawker conceded it was “much worse than anybody expected.”
Gawker’s enemies celebrated the ruling, which appeared to bring financial ruin to an online news organization they would prefer to see vanquished from cyberspace.
But it might be premature to dance on Gawker’s grave. Attorneys for the company are confident that they can land a more favorable decision on appeal, and many legal experts agree.
At first glance, the $115 million ruling does indeed look apocalyptic for Gawker.
Denton, for his part, certainly never took the case lightly. The spectre of the lawsuit is what prompted him to sell a minority stake in Gawker earlier this year, a first for a company that had been proudly independent.
Hogan, whose real name is Terry Bollea, had sued Denton, former Gawker.com editor A.J. Daulerio and the site’s parent company for $100 million over the publication of excerpts from his sex tape in 2012.
“We don’t keep $100 million in the bank, no,” Denton said last summer.
The six-person jury — comprising four women and two men — decided to award Hogan $15 million more than that. The amount could possibly swell. Those same jurors will return to the St. Petersburg, Florida courthouse on Monday to determine whether to impose punitive damages.
Complicating the matter for Gawker is a Florida state law that requires appealing parties to post a bond for the full amount of monetary damages. That requirement is capped at $50 million, a burden that would obviously still be onerous to Gawker. Denton told Politico Media last year that the company made $6.7 million of profit on $45 million of net revenue in 2014.
Gawker will likely appeal the bond, but eschewing the requirement might be tricky.
“I would expect that this issue will be litigated, and they might receive some relief, but in the end if a Florida jury finds them liable a Florida judge really has no reason to treat them with kid gloves on the issue of the bond,” said Charles H. Rose III, the director of Stetson University College of Law’s Center for Excellence in Advocacy in Gulfport, Florida.
To avoid posting the bond — or at least to get it substantially reduced — Gawker will first need to ask the judge who presided over the trial, Pamela Campbell.
Campbell has repeatedly ruled against Gawker throughout the case, raising doubts that she will grant relief from the bond requirement. Assuming she doesn’t, Gawker will then turn to the Second District Court of Appeals, which has been a far more hospitable venue to the defendants than Campbell’s court.
The appeals court, based in Lakeland, Florida, has already reversed a number of Campbell’s rulings in the case, most notably her 2013 injunction requiring Gawker to remove the video. Earlier this week, the court overturned Campbell’s previous ruling to seal an enormous number documents pertaining to the case. Gawker believes those records could well have tilted the trial in its favor, and will bolster its chances on appeal.
Mark Spottswood, an assistant professor at Florida State University’s college of law, said that past rulings from the appeals court suggest Hogan “may still have an uphill battle” to collect the damages.
The court has indicated it’s sympathetic to Gawker’s position: that the publication of excerpts from the tape is protected by the First Amendment due in part to how much Hogan talked about his sex life in public..
For example, the court said in a 2014 opinion it was “clear” that Gawker’s video and accompanying commentary addressed “matters of public concern” due to the controversy surrounding the sex tape, which was partly “exacerbated” by Hogan himself.
Len Niehoff, a professor who specializes in civil procedure at the University of Michigan Law School, said a losing party in Gawker’s position will generally ask for both a stay of judgment and an appeal.
In cases that implicate the First Amendment, Niehoff said stays play an important role because “appellate courts typically have a duty to review the result very carefully.”
Niehoff said the verdict has potential to set a “dangerous” precedent “where a celebrity can make his sexual exploits an open book then sue for invasion of privacy when a media entity wants to add a chapter.”
That could loom large in the case’s next chapter.
“I think that Gawker’s central argument has substantial legal appeal, even if a jury doesn’t like it,” Niehoff said.
CNNMoney’s Brian Stelter contributed to this report.
