Third-Party financing and Colin Kaepernick’s opportunity.

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Colin Kaepernick’s refusal to stand for the national anthem in protest of racial injustice and police brutality has gained continuous support from other professional athletes since the 49ers’ quarterback first began his campaign in August.  One man taking a seat during a pre-season football game has fueled debate on the issue of race relations between the police and the Black community in our country.  It is rare to see this kind of protest being put forth by a football player at the highest level.  Unsurprisingly, it has been highly effective as a means of starting what appears to be a domino effect of high profile athletes speaking out.

Kaepernick first sat in protest of the national anthem during a pre-season game on August 26, 2016.  Following the game, the young quarterback – once a starter who led his team to a Super Bowl and now a back-up on the same team – responded to the NFL media in an exclusive interview.  When asked why he sat during the anthem, Kaepernick responded that he was “not going to stand up to show pride in a flag for a country that oppresses Black people and people of color.”  In the weeks following his initial protest, Kaepernick received everything from support from his colleagues, and even the President, to death threats from his dissenters.

Kaepernick has shown that he is completely devoted to helping the Black community through his on field demonstrations and his recent promise to contribute financially…but there may be a more effective route to the change he seeks.

Despite the negative backlash, Kaepernick has not faltered in his dedication to bring attention to the subject of police brutality in the Black community.  Each week NFL players have increasingly begun to embrace Kaepernick’s message.  To date, almost every NFL team has a player that has protested the national anthem in some way since Kaepernick started his movement.  Brandon Marshall, linebacker for the Denver Broncos, even lost an endorsement deal for kneeling during the anthem.  Regardless of the repercussions professional athletes may face, this campaign is showing no signs of slowing down.

Along with his protest of the anthem, Kaepernick has also pledged to donate over one million dollars to charities which support communities in need.  He stated that it would not be right, given the position he is in, and the salary he earns, to not help these communities in need.   Kaepernick has shown that he is completely devoted to helping the Black community through his on field demonstrations and his recent promise to contribute financially.  However, there may be a more effective route to the change he seeks.  Recent lawsuits against media outlet Gawker shows that continued litigation may be as effective – if not more effective – than simply donating money to a cause.

“It’s less about revenge and more about specific deterrence.”

In a December 2012 post, online media entity Gawker posted a brief article, outing billionaire venture capitalist Peter Thiel as gay.  If Gawker Media founder, Nick Denton, could go back to the day that article was published, he would certainly make sure it never saw daylight.  In the years following the publishing of this post, Peter Thiel would secretly declare war on Gawker.  Thiel made it his mission to bring down the media company by litigating it to death.

Thiel saw this post, along with other Gawker work product, and saw the need to fight back.  Following his outing by Gawker, Thiel reached out to other supposed victims of Gawker’s writing and hired a team of lawyers to mount cases against the media group.  In an interview with the New York Times, Thiel stated, “It’s less about revenge and more about specific deterrence.”  He went on to say, “I saw Gawker pioneer a unique and incredibly damaging way of getting attention by bullying people even when there is no connection to the public interest.”  This was the theory Terry Bolea’s lawyers advanced in his action against Gawker for invasion of privacy.

Terry Bolea, more commonly known as “Hulk Hogan,” was exposed in a video released by Gawker in 2012, showing Hogan having sex with his friend’s wife, Heather Clem.  The post garnered a huge amount of attention, racking up nearly four-million page views in around three months.  It is no surprise that the story was successful, seeing as Hulk Hogan, who has been out of wrestling for some time, is still a household name across America.

Hogan’s lawyers brought suit . . . citing the Gawker post as being a “shameful”, “malicious”, and an “outrageous” invasion of the wrestling star’s privacy.

Hogan’s lawyers brought suit in the United States District Court for the Middle District of Florida on October 15, 2012, citing the Gawker post as being “shameful”, “malicious”, and an “outrageous” invasion of the wrestling star’s privacy.  The diversity action was brought pursuant to 28 U.S.C. § 1332 for invasion of privacy, intentional and negligent infliction of emotional distress, and violation of right of publicity.  Hogan was permitted to file his claim in Florida due to the parties having complete diversity of citizenship and the amount in controversy exceeding the statutory requirement of $75,000.

The lawyers for Hogan made comments publicly, mirroring the pleadings they submitted, stating the publications of the video “exceeded the bounds of human decency.”  According to Ryan Mac of Forbes, however, Hogan’s attorneys left out the detail of who exactly was paying them.  It was not Hulk Hogan.

In the months following the initial filing of the action, Gawker Media founder and owner Nick Denton floated rumors that someone was secretly funding Hogan’s lawsuit against the company.  It did not make sense that Hogan himself could be paying for the expensive litigation, seeing as he had just gone through a costly divorce and money appeared to be tight.  Additionally, Hogan refused to settle and even dropped the negligent infliction of emotional distress claim, which would have forced Gawker’s insurance company to pay part of the potential reward money.  There were many signs that this lawsuit was not intended to compensate Hogan, rather it was intended to completely dismantle Nick Denton and his Gawker empire.

In the coming months, Gawker Media and Nick Denton would face loss after loss.  The trial court awarded Hogan a one-hundred and forty-million-dollar judgment to be paid by Gawker and Denton.  Denton attempted to argue that forcing him to pay before the appeals hearing was a threat to freedom of the press, but the court denied his claim.  This essentially forced Denton to declare chapter 11 bankruptcy.  At the same time, the media company also began its bankruptcy auction.

Gawker Media and its owner were forced to file for bankruptcy, the company was sold, and the entire world got to see how one man could bring down an entire media group by spending a little bit of cash to fund other people’s lawsuits.

In September 2016, Gawker Media’s assets were purchased by Univision Communications in the bankruptcy auction.  Gawker has since rebranded as Gizmodo Media Group.  In the end, it appears Peter Thiel got just what he wanted.  Gawker Media and its owner were forced to file for bankruptcy, the company was sold, and the entire world got to see how one man could bring down an entire media group by spending a little bit of cash to fund other people’s lawsuits.  Peter Thiel used litigation as a tool to silence his enemies and drain them financially.  While his campaign may not be seen as the most noble of causes, it was undoubtedly effective in reaching the desired results.  While Peter Thiel decided to spend his money to bring down a media entity he despised, many other groups are using third-party financing as a means of investment.  While the market for this type of litigation funding remains somewhat small, there are about twenty-five to thirty commercial cases per year in the United States that use an external funding source.

As exemplified in the case between Gawker and Peter Thiel, this type of funding practice can offer more than just financial benefit.  Civil litigation can cost a significant amount of money, and being on the losing end of certain cases can mean millions of dollars having to be spent to satisfy judgments.  Is it impractical to think that Colin Kaepernick and other NFL players could, rather than donate their money to a charity, begin funding wrongful death and wrongful imprisonment cases?

The Wall Street Journal reported that the cost of resolving police misconduct cases has risen dramatically over the last few years.  In 2014, the ten cities with the largest police forces paid out nearly two-hundred and million dollars in both settlements and court judgments in police misconduct cases.  That is a forty-eight percent increase from 2010.  Collectively, those ten cities paid over one billion dollars from 2010 to 2014.

City officials are also claiming that these large payouts are not coming just from wrongful death actions, but also from older cases involving wrongful imprisonment.  For instance, in 2013 and 2014, the city of Chicago paid over $60 million in cases where people were wrongfully imprisoned due to police misconduct.

Some are arguing that the rise in costs to resolve these cases is not due to an increase in police misconduct, rather it is due to several cases drawing large settlements, causing subsequent cases to follow a similar path to payment.

Some are arguing that the rise in costs to resolve these cases is not due to an increase in police misconduct, rather it is due to several cases drawing large settlements, causing subsequent cases to follow a similar path to payment.  Not surprisingly, this has caused a major impact on taxpayers and taxpayer dollars.  Cities worried about the rise of costs, as well as a rise in cases related to police misconduct, are probably more likely to consider making changes within their police departments and justice system in order to avoid these kinds of costs in the future.

Data provided by the Wall Street Journal also points out that many of these cases may be getting resolved quicker as a result of the effect of video.  When videos of police misconduct are known to be in existence, cities want the cases to go away as fast as possible.  When there is even a hint of a city being liable, compounded with the fact that there is a video of the incident, settlement can occur within two weeks.

At the end of the day, taxpayers are paying these settlement bills.  Some of the country’s largest cities like New York, Los Angeles, and Philadelphia are self-insured, meaning the money that is spent to pay these settlements and court judgments are coming directly out of city funds.  Other cities have insurance that can assist with payments beyond a certain payment level, but like a lot of insurance plans, costs of premiums can increase following incidents.

Albuquerque, New Mexico, is an example of a city that has changed its policing policy.  Over the past six years the city has spent over $25 million on civil-rights and police misconduct cases.  As a result of a 2014 incident involving the shooting of a mentally unstable homeless man, the city agreed in its settlement to change how its officers approach the use of force.  This seems to be the kind of change that Colin Kaepernick and those that protest with him truly want to see: acknowledgement of wrongdoing and an active change in policy.

The cases that are deemed too risky to spend time on may never be taken.  That is where Kaepernick, and others who have joined him, can seek to make a change.

With many lawyers taking wrongful death and wrongful imprisonment cases solely on contingency fees, this leaves a host of other cases that may never go to trial because a lawyer may deem it to be too risky.  Lawyers will typically only want to take a case under a contingency fee if they have relative certainty that they may win, and thus, actually get paid.  The cases that are deemed too risky to spend time on may never be taken.  That is where Kaepernick, and others who have joined him, can seek to make a change.

By funding the wrongful death and wrongful imprisonment lawsuits that attorneys are not willing to take on contingency, Kaepernick could turn the millions of dollars that he would otherwise donate into a vehicle for police reform.  It is purely speculative at this point, but the effects that competent lawyering with enough funding can have are clearly demonstrated in the Gawker case.  In the case of Peter Thiel, his morally questionable crusade to bankrupt Gawker Media and those affiliated with the entity proved to be largely successful.  It might not be right for Kaepernick to seek change in the same way as Thiel, but the doors are wide open for him to do so.  The reform he seeks may sooner be realized through this manner, than if he were to just continue kneeling on a sideline.