One legal case could open a can of worms for defamation suits against writers

April 23, 2018

Four not-so-simple words—“deemed to have received”—might determine the future of defamation suits against journalists in the United States. On April 9, journalist (and former Gawker freelancer) Ryan Goldberg appeared at a one-day bench trial at the US Bankruptcy Court for the Southern District of New York while lawyers tossed around the phrase until it lost all meaning. After two hours of back-and-forth, Judge Stuart Bernstein didn’t have a clear answer for the case, and chose not to issue a decision; he is expected to make one in the coming weeks.

Goldberg’s case is a continuation of Gawker-related suits since disgruntled billionaire Peter Thiel sued the legendary gossip site into oblivion. Memory refresh: Thiel secretly funded the lawsuit brought by former pro-wrestler Hulk Hogan against Gawker for publishing a sex tape of him and his friend’s wife. In 2016, a Florida jury awarded Terry Bollea (Hogan’s real name) $140 million in damages, eventually forcing Gawker into bankruptcy. was shuttered, but its assets—including Deadspin and Jezebel—were purchased by Univision to form Gizmodo Media Group LLC.

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In 2016, Goldberg penned an investigation of Las Vegas oddsmaker RJ Bell as a freelancer for Deadspin, months before Univision bought Deadspin and other Gawker properties. Bell, under the representation of infamous media lawyer Charles Harder—who also represented Bollea in his case against Gawker—filed a defamation lawsuit against Gizmodo Media Group and parent company Univision for the story a year later. This December, Judge Bernstein dismissed Bell’s defamation lawsuit against Gizmodo, but litigation proceeded against the story’s author, Goldberg.

The question, after years of the companies changing hands and several months of litigation, is who is legally responsible for the article—that is, who Bell has the legal grounds to sue.

Univision purchased the former Gawker properties under a section of the bankruptcy code, chapter 11, that protects the buyer. The money from Gawker’s sale funded a $31 million settlement to Bollea (Hogan), as well as other creditors and shareholders. The chapter 11 plan, which was approved in December 2016, also included a liability release to protect writers and editors from being sued for stories written before the sale. Dubbed the “third-party release,” it holds that any claimholder that’s received, or “deemed to have received,” money under the bankruptcy plan is barred from bringing a claim against writers. Bell never received a distribution from Gawker, but can he be “deemed to have received” one?

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At the public hearing two weeks ago, Sharon Levine and Dipesh Patel, the Saul Ewing LLP bankruptcy lawyers representing Goldberg, argued that because Bell never filed a proof of claim during the bankruptcy, but was aware of the bankruptcy, he can be “deemed to have received” his share. In other words, because Bell waited until after Gawker’s sale, his current suit has no legal merit. The third-party release language, in their opinion, shields writers like Goldberg from liability for stories written on Gawker. (The pair also represented all of the Gawker writers, Goldberg included, during the original Gawker bankruptcy proceedings.)

“It’s difficult for me to reach any conclusion other than that this lawsuit was intended to harass and intimidate me,” Goldberg tells CJR in a statement. “The plaintiffs in this case sent a libel demand letter within days of the article’s publication in June 2016 and had every chance to assert their claims in the bankruptcy court during Gawker’s liquidation, but chose to lie in wait until a year later, after Gawker was gone and there was no pool of money to defend its writers. The releases were our only protection, but they’re meaningless if they can’t be enforced.”

Harder continues his attacks on the Gawker empire and has expanded his collection of targets to include The Daily Mail, New York Magazine, The New York Times, The Hollywood Reporter, and a smattering of small blogs. He’s become one of biggest threats to press freedom in the US through his weaponization of litigation. “I think there needs to be a chilling effect on the irresponsible writers,” Harder admitted to writer Jason Zengerle in a 2016 GQ profile. (Harder did not respond to CJR’s request for comment.)

Should Judge Bernstein rule in favor of Bell, the effects could be devastating—it could expose journalists like Goldberg to assuming future liability and leaving them vulnerable to defamation suits in cases where the publisher no longer exists. According to Katie Townsend, litigation director at the Reporters Committee for Freedom of the Press, it would be deeply troubling.

“It could open up the possibility of additional lawsuits like this against individual reporters who had previously written for Gawker-affiliated publications,” she says. “Individual journalists always face that risk, even when stories are airtight. There’s greater concern when you have reporters who aren’t tied to specific organizations, or between them.”

If Harder gets his way, any content provider, freelance or otherwise, could be subject to defamation claims arising from Gawker content. The suit against Goldberg could proceed, and who knows how many others would emerge. Already, there’s been a ripple effect. Harder filed (another) defamation suit against Jezebel for a story about a self-help cult publishing in May 2016.

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Meg Dalton is a freelance journalist and audio producer based in Connecticut. She's reported and edited for CJR, PBS NewsHour, Energy News Network, Architectural Digest, MediaShift, Hearst Connecticut newspapers, and more. Follow her on Twitter: @megdalts. Find her on Twitter @megdalts.