Why dark money in the Sarah Palin libel case could distort justice

Peter Thiel. Photo (cc) 2012 by Hubert Burda Media.

Jack Shafer asks an important question: Who is funding Sarah Palin’s legal battle against The New York Times? As Shafer observes in his new Politico Magazine piece, Palin’s legal team overlaps with the lawyers who represented Hulk Hogan in his lawsuit against Gawker. That effort turned out to be funded by Facebook billionaire Peter Thiel, who was aggrieved at having been outed by a Gawker-owned website. Shafer writes:

Nobody can criticize Palin for passing the hat to finance her case — if that’s what she did. Lawsuits are expensive and crowdfunding them without naming the funders is a time-honored practice — civil liberties groups do it routinely — and the practice is especially praiseworthy when the litigation is of the “impact” variety, designed to change the law and protect rights. But as the Gawker case demonstrated, such lawsuits can also be seen as punitive exercises, financed by a third party as payback.

The problem is that when lawsuits are funded by vast sums of dark money, they can have a distorting effect. Hogan’s invasion-of-privacy suit after Gawker published video of him having sex without his permission was certainly worthy of pursuing. But in the ordinary course of such matters, it would have been settled and life would have gone on. Instead, Hogan’s lawyers used secret Thiel money to push the suit all the way to its conclusion, with Gawker ultimately going bankrupt and shutting down. (The site has since been relaunched under new ownership.)

Unlike Hogan’s case, Palin’s libel suit against the Times is entirely lacking in merit. The Times published an editorial falsely tying Palin’s rhetoric to the 2011 shooting of then-congresswoman Gabby Giffords and the killings of six others. But there was zero evidence that the Times acted with “actual malice” (knowing falsehood or reckless disregard for the truth), which is the standard for public officials and public figures.

Palin’s suit shouldn’t have gotten as far as it did, and the devastating defeat she suffered this week ought to put an end to it. But if she’s backed by an endless stream of screw-you money, she can keep pushing, and perhaps get her case eventually heard by the U.S. Supreme Court — where Justices Clarence Thomas and Neil Gorsuch have indicated they’re prepared to overturn or pare back the libel standards that have protected the press since the landmark 1964 Times v. Sullivan decision.