Judge orders disclosure of funders of lawsuit against CNN

A federal judge's order requiring lawyer and professor Alan Dershowitz to disclose the funders of his $300 million defamation lawsuit against CNN is "welcome news in an era where billionaires and politicians fund surrogate plaintiffs to punish media adversaries," writes Seth Stern, the Director of Advocacy at the Freedom of the Press Foundation.
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By SETH STERN | Freedom of the Press Foundation | November 28, 2022

A federal judge in Florida ordered lawyer and professor Alan Dershowitz to disclose who is funding his defamation lawsuit against CNN. The ruling is welcome news in an era where billionaires and politicians fund surrogate plaintiffs to punish media adversaries. More rulings like this one could go a long way in protecting newspapers from powerful entities who abuse the legal system to retaliate against stories they do not like.

Defamation suits are intended to compensate plaintiffs for real damages in the rare instances when papers publish something knowingly false — not to allow third parties to exact revenge on the press. Magistrate Judge Patrick M. Hunt got it right in crediting CNN’s argument that, “if Plaintiff has funders supporting this lawsuit to advance an agenda (whether for political, competitive, or other reasons), that information dramatically undercuts Plaintiff’s claim that he is seeking damages for injury to his reputation.”

Dershowitz’s $300 million lawsuit alleges that CNN misrepresented statements he made while representing former President Trump during his impeachment trial. The order to disclose funders came after Dershowitz revealed the existence of an “Alan Dershowitz Legal Defense Fund” in a deposition but subsequently refused to reveal the fund’s supporters.

Hunt’s ruling follows a similar one last year requiring associates of former Republican congressman Devin Nunes to reveal who funded their defamation lawsuit against Hearst Magazine Media — which Nunes himself had previously sued. In that case there were concerns over whether Nunes used the second suit, brought by his associates, to avoid legal defenses that only apply to defamation claims by public figures, like politicians.

Let’s hope this marks the beginning of a backlash against deep-pocketed financiers backing anti-press litigation. The best-known instance of this dangerous practice is Peter Thiel’s bankrolling of a series of lawsuits against Gawker, including one by wrestler Hulk Hogan that ultimately led to a $140 million verdict and bankrupted the publication before it could appeal.

But Gawker’s ordeal is far from the only instance. After losing a case against Mother Jones, for example, billionaire Frank VanderSloot announced a $1 million fund to pay the legal expenses of people seeking to sue the “liberal press.” In Chicago, a prominent police union subbed in five police officers to sue a newspaper after its own case was dismissed. It took eight years for the court to rule that the police officers had not suffered any harm justifying their lawsuit. Organizations and community leaders seeking to silence discussion of Polish collaboration with Nazis have backed lawsuits against media outlets and historians in the US and abroad. There are likely many others we’ll never hear about.

At one point, it was largely illegal for third parties to finance litigation if they had a financial stake in the outcome. Most states have repealed their prohibitions on the practice, called “champerty,” and for-profit litigation funding has become a lucrative industry. There may be solid arguments that, in most cases, litigation funding streams can be beneficial — even necessary — in light of the often prohibitive costs of prosecuting lawsuits. But the First Amendment should caution against treating media cases as “most cases.”

Court orders requiring disclosure of financiers are a good first step (although Hunt’s ruling alluded to a confidentiality order that might prevent their identities from becoming public). But more is needed to end the abuse of the court system to retaliate against the press at the behest of the rich and connected. Thirty two states and the District of Columbia have passed anti-SLAPP (Strategic Lawsuits Against Public Participation) laws and Rep. Jamie Raskin introduced the federal SLAPP Protection Act of 2022 in September. Perhaps legislators who value press freedoms should also revisit those archaic protections against champerty.

Seth Stern is the Director of Advocacy at the Freedom of the Press Foundation. He oversees FPF’s efforts to defend and protect press freedoms and stand up for journalists and whistleblowers who have been denied their rights. Prior to joining FPF, Seth practiced media and First Amendment law at the Chicago law firm Funkhouser Vegosen Liebman & Dunn Ltd. (FVLD). He remains affiliated with FVLD on an “Of Counsel” basis. He also chairs the Chicago Bar Association’s Media and Entertainment Law Committee and the American Bar Association TIPS Media, Privacy and Advertising Law Committee. Before law school, Seth worked as a reporter and editor in the Chicago and Atlanta areas. He lives in Evanston, Illinois.

This article was first published by the Freedom of the Press Foundation, a San Francisco-based a 501(c)3 non-profit organization that protects, defends, and empowers public-interest journalism in the 21st century. It’s republished here under a Creative Commons Attribution-NonCommercial 4.0 International license.

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