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A version of this story first appeared in the April 22 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
On Oct. 4, 2012, Gawker Media posted a 1 minute, 41 second video of Terry Bollea, professionally known as Hulk Hogan, in a bedroom, sans clothing and engaged in a private activity with a woman. Gawker knew Bollea had been secretly filmed and objected to the video's release, but Gawker posted it anyway, claiming it was protected "journalism." What followed was three and a half years of litigation, a massive jury verdict and the possible end of a media company once valued at more than $250 million. If Gawker had simply removed the video, as Bollea's lawyers requested, litigation would not have ensued. But Gawker was defiant from day one and remains defiant today. It has never apologized or admitted wrongdoing and likely never will. This is why a lawsuit was filed, why the case went to trial and why a jury awarded $140 million in damages.
This is the story of how we won the Hulk Hogan sex tape case.
After Gawker posted the video in October 2012 and promoted it on its social media accounts, the press pounced on the story, and millions of people flocked to Gawker.com to watch the video. The next morning, Bollea's personal attorney, David Houston, sent a takedown demand stating that if Gawker would simply do the decent thing and remove the video, the matter would be considered resolved; no payment was requested. But Gawker refused.
A few days later, my firm in Los Angeles was retained. Among other types of clients, we represent major celebrities in civil litigation, including privacy and publicity rights cases. On Oct. 15, 2012 - eleven days after the video was posted - we filed suit for Bollea against Gawker Media, its founder/CEO Nick Denton and A.J. Daulerio, then Gawker's editor-in chief, who personally selected the footage for the 1:41 "highlight reel" (his words) from a larger, 30-minute video that Gawker had received. Denton approved the posting of the video.
Rarely do I recommend a press conference upon the filing of a new lawsuit, but this case was different. We wanted Gawker, and the many other entities (mostly porn sites) that had lifted and posted the same video, to remove it immediately. We needed to send a message. Our demand against the Gawker defendants was $100 million - a high number, no doubt, but one that we believed was justified, achievable and could help to persuade websites to remove the video. The lawsuit was followed by 60-plus takedown demands, and virtually all companies (except Gawker) complied and removed the video.
We filed two lawsuits on Oct. 15: one in federal court in Tampa, Fla., against Gawker, Denton and Daulerio; and a second in state court in St. Petersburg, Fla., against the couple who had set up Bollea in 2007 to be recorded without his knowledge. The couple was Bollea's then-best friend, Bubba the Love Sponge (ne Todd Clem), and his then-wife Heather Clem. (By 2012, the Clems had divorced.)
Why did we file two lawsuits? We wanted a federal court injunction to enforce in New York. We also believed the Florida state court would be a better forum for Bollea's claims against the Clems.
The federal court declined to grant a temporary injunction on grounds that it would constitute a prior restraint of free speech (the sex video). So we dismissed the federal action and amended the state court case to add the Gawker defendants with the Clems. In the meantime, a settlement was reached with Bubba Clem, but Heather Clem, represented by separate counsel, refused to settle.
We revised our injunction motion and filed it in state court. This time, a temporary injunction was issued, requiring the sex video to be removed from Gawker.com pending trial. Gawker took down the video but sought an immediate appeal and won: The Florida state District Court of Appeal (DCA) reversed the injunction on essentially the same grounds as the federal court - prior restraint. Gawker decided not to repost the video even after the appeals court vacated the injunction.
We then deposed Denton, Daulerio, several company employees and expert witnesses. Gawker's counsel did not adequately prepare their witnesses, and Daulerio, among others, made admissions that severely undermined the "newsworthy" defense and would later inflame the jury with their arrogance and defiance. Gawker took a "scorched earth" approach, deposing Bollea for three days, Bubba Clem for two days, Heather Clem, David Houston, a publicist for Bollea, a different publicist for a wrestling company, and several nonparties with knowledge of various issues such as how the video made its way to Gawker, and how Bubba Clem's hidden camera was set up.
Gawker sought invasive questioning regarding Bollea's sex life with all partners throughout his lifetime, his entire medical history (including eight spinal surgeries) and every financial document in his possession. Judge Pamela Campbell in the state trial court placed reasonable limits on the scope of inquiry. My firm sought and obtained Gawker's financials, advertising practices, internal emails and chats regarding Bollea, all of the hundreds of cease-and-desist demands received by Gawker Media from the preceding three years, and Gawker's complex (and dubious) corporate and tax structuring, including a parent company in the Cayman Islands and a sister company in Budapest, Hungary. (The arrangement is peculiar given that the company and its owner, Denton - a dual citizen of Hungary and the U.K. - wrap themselves in the U.S. Constitution to try to evade liability for their tortious activity.)
Early on in Bollea v. Gawker, we heard that the person who sent the video to Gawker simultaneously sought to extort Bollea with the same and additional sex tape footage. David Houston went to the FBI, which conducted a sting operation at a hotel in the Tampa Bay area. Arrests were made but ultimately no one was prosecuted.
Gawker aggressively pursued discovery, and even filed a federal lawsuit against the FBI to obtain (and it did obtain) all materials relating to the extortionist and the FBI sting and investigation, including access to additional sex tape footage that Gawker (and Bollea) had never seen before.
The discovery cutoff eventually came around, and experts were disclosed and deposed. Trial was originally scheduled for July 6, 2015, but two court days before that date, the appeals court granted an emergency motion by Gawker to vacate the trial date on minor procedural grounds, forcing a new trial date of March 7, 2016 - an eight-month delay.
About a month after the continuance, records that had been ordered sealed found their way to Daulerio's good friend Dylan Howard, chief content officer of the National Enquirer. News broke that in 2007, Bollea made racially insensitive remarks that were captured on the secret recording. Bollea issued an immediate public apology but was fired from WWE and scrubbed from its Hall of Fame. His commercial endorsement relationships likewise were terminated. This marked a very dark time for Bollea and his team. But Gawker had sealed its fate: Bollea became determined to take his case to a jury.
We filed a motion seeking leave to take several depositions and extensive electronic discovery of Gawker's systems (servers, hard drives, storage devices, emails, phone records, etc.), to allow us to locate the evidence connecting the Gawker defendants with the National Enquirer and the court-sealed materials. The motion was granted and the trial court selected a forensic company for this purpose. Gawker immediately sought interlocutory review with the DCA, which stayed the discovery order while the DCA reviewed the matter. The DCA has yet to issue a ruling as of the date of this article, after more than six months of review.
When the trial finally began March 7, attorneys Ken Turkel, Shane Vogt and I put on a persuasive case for Bollea. Our witnesses included Bollea, Houston, University of Florida journalism professor Mike Foley, an economist, an Internet expert and video deposition excerpts of Denton, Daulerio, two other Gawker editors (who displayed the same arrogance) and several nonparty witnesses. The now-infamous testimony of Daulerio was cringeworthy:
Q: "Can you imagine a situation where a celebrity sex tape would not be newsworthy?"
A: "If they were a child."
Q: "Under what age?"
Harder (right) celebrated the verdict at Marchand's in St. Petersburg with colleagues, from left, Turkel, consultant Michael Boucher, Ghatnekar, publicist Elizabeth Rosenthal Traub, Houston and Bollea.
The next week, Gawker presented its defense. Daulerio took the stand and tried to explain that he was only "joking" when he gave that testimony - but no one was laughing in the video. He also gave the same answer ("Was she under 4?") to a different question regarding the newsworthiness of a possible Miley Cyrus sex video. The jury was not impressed: Either he really believed that a sex tape of a young child celebrity is newsworthy or he was treating his deposition, Gawker's First Amendment defense and ultimately the entire lawsuit, as a joke.
Gawker's trial presentation was miscalculated. It tried to portray Daulerio as a "bold and brilliant" journalist; Denton as a publisher of important, nontabloid news; and the Bollea footage as necessary to telling the story of the sex tape's existence - but on the stand, Daulerio admitted the opposite. During cross-examination, Daulerio testified that each of the 10 reasons Gawker's counsel gave for the supposed newsworthiness of posting an uncensored, secretly recorded sex video were not even considered by Daulerio at the time he posted the video and thus were not part of the First Amendment defense.
On cross, Denton admitted the Bollea video was "pornography" and testified about his former pornography website, Fleshbot.com, which he sold earlier the same year that Gawker.com posted the Bollea sex video. Prior to the sale, Fleshbot.com posted uncensored celebrity sex videos; after the sale, Gawker.com posted (that same year) the uncensored Bollea video. (Thus, in 2012, Gawker.com had taken over Fleshbot.com's role.)
Also on cross, Denton testified about his many statements in news interviews, including telling the Washington Post that Gawker "might inadvertently do good" and "might inadvertently commit journalism" - as if it were a crime - "but that is not the institutional intention." The implication was important: Journalism is not Gawker's business. Denton also was asked about his prior statements to the media that privacy invasions are good for people, privacy does not exist in America, nobody "gives a f - " about privacy and anyone with a Facebook account is a public figure for purposes of Gawker's ruinous stories. Denton offered no coherent explanation for these statements; his extremist philosophy and practices were clear: No one is safe from Gawker.
Denton also confirmed his deposition testimony that he thought Daulerio's article accompanying the Bollea sex video was "sweet," portrayed Bollea in a "sympathetic" and "humanizing" way, and was "almost perfectly judged." Denton then was asked to read aloud in his most "humanizing tone" several salacious, cringe-worthy passages from the article describing oral sex and intercourse in graphic detail, showing that Denton's description of the article as "sweet," "sympathetic," "humanizing," and "perfectly judged" were anything but.
Our approach to damages was threefold: (1) Gawker.com increased in value by $15 million based on increased traffic to the site during the six months the video was posted there, according to our economist expert; (2) Bollea was entitled to a market-value license fee of $35 million, based on an analysis from our Internet expert that 7-plus million people watched the video on the web (two-thirds of them on porn sites), and the minimum price for access to an authorized celebrity sex video (at VividCeleb.com, the largest of these sites) is $4.95 for a four-day trial membership, thus additional damages of $35 million; (3) emotional distress damages in an amount entirely at the jury's discretion, to compensate Bollea for the short- and long-term emotional distress from Gawker's posting of the video.
The night before the verdict, I had dinner with my associate, Seema Ghatnekar, and we discussed our predictions for the verdict. We agreed that our team had put on an excellent case, the Gawker defendants and their counsel had missed the mark, and the jury seemed receptive to our position. But predicting a number was, of course, impossible.
I will never forget when the verdict was read. The court clerk read the entire 10-page verdict form, word for word. We had asked the jury to check "Yes" to the first 13 questions and "No" to the 14th. Any inconsistent check marks could doom an entire cause of action, and a "No" to Question 2 (the newsworthy defense) would have killed the entire case.
The clerk read the questions, and after each, the answers were exactly as we requested: Yes, Yes, Yes, Yes. ... By the fourth "Yes," I was breaking down. Three and a half years of litigation, scores of motions, more than a dozen matters taken up on appeal; dozens of days of depositions in Florida, New York, California, Oregon and Tennessee, and many more days preparing for them; my dozen or more trips from L.A. to Tampa for court hearings, being away from my wife and two young children for several days each time; preparing for trial in July only to get a last-minute eight-month postponement; and my client's burden of distress from the video's publication, having to explain it to family, friends and fans, having to discuss it in a public court with press writing his every word, as well as having to deal with an extortionist, the FBI sting, the onslaught of articles relating to his ill-chosen words in 2007, his firing and working to put his career and legacy back on track.
And then there was Question 14: No - the defendants did not have a good-faith basis to believe their actions were legal.
The clerk then read the jury's monetary awards. The verdict form had two fill-in blanks: one for economic damages and one for emotional distress damages. In our closing argument, we asked the jury for $50 million in economic damages ($15 million plus $35 million). The jury awarded $55 million. In the second blank (emotional distress), we left it entirely to the jury. They awarded $60 million. Total: $115 million. In the boxes for punitive damages, the jury checked "Yes" for each of the three defendants and also checked the box to indicate that the defendants acted with the intent to harm, which had the effect of removing the statutory cap on punitive damages. The next day, they awarded Bollea $15 million more from Gawker, $10 million from Denton and $100,000 from Daulerio. Total: $140.1 million.
Terry Bollea was sobbing - loudly - as the verdict form was read by the clerk. (He was not the only one overcome with emotion; I was right there with him.) When we returned to our "breakout room" in the courthouse, Bollea asked what the amount of the verdict was. He did not even hear it when it was read in court because he became so emotional. We told him the number, and he was ecstatic: "Oh, my!" He hugged and thanked everyone in the room many times over and expressed how grateful he was that we took the case all the way, and that the jury had validated his position and did not accept Gawker's that the First Amendment allowed them to post a secretly recorded sex tape.
It has been a remarkable journey, but the journey continues. We expect Gawker to appeal and do everything in its power to stop us from collecting. Time will tell how successful each side will be at their respective tasks.
Beyond the legal issues, the jury's verdict sends a message to irresponsible websites: Think twice before you invade someone's privacy or violate their rights. Just because rules might seem more relaxed on the Internet, the same laws that protect people still apply.
This victory would not have been possible without the tireless and invaluable work of the attorneys and staff who worked on this case: the partners, associates and staff at Bajo Cuva Cohen & Turkel LLP in Tampa, Fla; David Houston of Reno, Nevada; and the attorneys and staff at my law firm in Los Angeles including, in particular, my partners Douglas Mirell and Jeffrey Abrams, and associates Dilan Esper, Sarah Luppen, Matthew Blackett and Seema Ghatnekar.