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Saturday, March 19, 2016

Hulk Hogan and Complete Diversity

My best guess is that the $ 115 million verdict (likely to be substantially increased when the jury considers punitive damages next week) in favor of Hulk Hogan (ne, Terry Bollea) against Gawker will not stand. From what I have read, the judge made a number of questionable evidentiary rulings and gave a jury instruction that minimized the role of the First Amendment. And some facts will be subject to independent appellate review because they implicate the First Amendment.

But I want to discuss a different question that I missed two years ago--why the case was in a Florida state court at all, where Hogan seems to have gotten some home cooking. Hogan sued Gawker and Heather Clem, the woman in the video; Clem and Hogan are both Florida citizens, destroying complete diversity. Gawker removed anyway, but the district court remanded, rejecting Gawker's argument that Clem was fraudulently joined (as well as an argument that the First or Fourteenth Amendments were necessarily raised by Hogan's state tort claims, creating federal question jurisdiction).

The common defense of the complete diversity requirement, most recently reaffirmed in Exxon Mobil, is that the presence of non-diverse adverse parties eliminates the local bias that is the primary rationale for diversity jurisdiction; Hogan would not receive the benefit of local favoritism because a Floridian is on the other side of the case. But that argument ignores the risk of prejudice against the outsider (as opposed to bias for the local), which is not eliminated by the presence of a local co-party. This is exacerbated when there is disparity in the regard in which the locals are held in that community, such that one side is more of the local community than the other. And it is exacerbated when the outsider-defendant is the real target of the action, the deep-pocketed "big bad."

For jurisdictional purposes, this case looks very much like New York Times v. Sullivan: You have a well-known southern local plaintiff suing a New York-based media outlet, with a locally unpopular individual defendant thrown-in to destroy complete diversity and keep the case in state court. And you have a jury rendering a verdict that sends a pretty clear message about what it regards as outrageous speech. The problem for Gawker is that SCOTUS is unlikely to bail it out the way it did The Times. So Gawker will be relying on the Florida courts to get it out of this First Amendment bind (from all reports, paying anything close to this amount will bankrupt the company).

Posted by Howard Wasserman on March 19, 2016 at 11:52 AM in Civil Procedure, First Amendment, Howard Wasserman, Law and Politics | Permalink

Comments

I have not kept up with this case but what 55M economic harm he showed is something I'm somewhat curious about. Ditto the 60M emotional distress. Not to belittle his problems here, but seems a TAD excessive to me. In fact, given how people with let's be blunt a lot more serious problems get a lot less, even on the levels of judgments that will not be obtained.

Posted by: Joe | Mar 19, 2016 12:23:43 PM

... this judgement is a tad obscene on some level.

Like the Anna Nicole matter, there is as suggested various technical concerns beyond the tabloid facts.

Posted by: Joe | Mar 19, 2016 12:25:18 PM

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