Judge Rejects Sale of Infowars to The Onion

[ThatRobGuy]

Judge Rejects Sale of Alex Jones’ Infowars to The Onion

The decision means Jones can stay at the Infowars’ headquarters for now. The Onion had planned to kick him out and relaunch the site as a parody.

time.com

The bids were a fraction of the money that Jones has been ordered to pay in defamation lawsuits in Connecticut and Texas filed by relatives of victims of the Sandy Hook shooting. Lopez said the auction outcome “left a lot of money on the table”

“You got to scratch and claw and get everything you can"

Christopher Mattei, a lawyer for the Sandy Hook families who sued Jones in Connecticut, said they were disappointed in the judge’s ruling.



I think the judge made the right call here, considering the circumstances surrounding the ruling. He's not saying the Onion can't by it... it just can't be for the pennies on the dollar bid they originally submitted.

The basis of hitting him with such a hefty judgment was, in no small part, due to the valuation of that particular brand holding/intellectual property (obviously I use the word "intellectual" loosely here lol) that forensic economists valued at $270 million per their testimony in the original court case.

"Well, the whole reason we're hitting you for the billion is because you own this thing we determined was worth a quarter of a billion...but we're going to let it sell for $1.5 million, so you lost the thing that had value, but you're still on the hook for the remaining amount" would've been (whether you hate Alex or not) unfair and a bastardization of tort law and what it was seeking to accomplish.


To use an example (hypothetical, I'm by no means a multi-millionaire)

If I wronged someone in some way, and was found liable...

And the judge said "well, in order to be a deterrent, the ruling has to be tailored to your person situation. We see that you own a $2 million home, have 2 Ferraris, and currently own a business valued at 5 million dollars where you're currently earning $700k/year. We're going to set the judgment at $10 million dollars, if you can't pay it in liquid assets by X date, we'll be forced to liquidate holdings.

If they forced me to auction off my home for $300k
Forced me to sell my Ferraris for $100k
And forcibly auctioned off my business for $100k


They can't turn around and say "well, you still owe $9.5M", where is it? That's basically forcibly stripping away the things that have/had value (which the basis for the high settlement amount in the first place) for pennies on the dollar, zapped any opportunity for comparable future income, and then still uphold the amount as if I still owned those things.

 

[durangodawood]

The value of Infowars was mainly in the appeal of Alex Jones crooked personality.

Absent him, whats left? A bunch a stickers and leftover cases of "supplements"?

 

[ThatRobGuy]

The value of Infowars was mainly in the appeal of Alex Jones crooked personality.

Absent him, whats left? A bunch a stickers and leftover cases of "supplements"?

So then how do you make that "gel" with the basis and intent of the tort ruling? (which is, it's supposed act as a deterrent based on the offender's circumstances)

If the basis for the high amount was, in part, due to "he's a rich guy who owns this high-value thing that generates X amount of revenue"

Allowing the "pennies on the dollar" sale of that thing means the dynamic is shifting from
"Uber rich guy owes 1.5 billion"
to
"Broke guy owes 1.3 billion"

If they knew that liquidating and removing that revenue stream was going to happen, then that should've been taken into account in the judgement amount, yes?

Otherwise, it's just playing a game of "moving goalposts for the offender from now until eternity"

 

[durangodawood]

So then how do you make that "gel" with the basis and intent of the tort ruling? (which is, it's supposed act as a deterrent based on the offender's circumstances)

If the basis for the high amount was, in part, due to "he's a rich guy who owns this high-value thing that generates X amount of revenue"

Allowing the "pennies on the dollar" sale of that thing means the dynamic is shifting from
"Uber rich guy owes 1.5 billion"
to
"Broke guy owes 1.3 billion"

If they knew that liquidating and removing that revenue stream was going to happen, then that should've been taken into account in the judgement amount, yes?

Otherwise, it's just playing a game of "moving goalposts for the offender from now until eternity"

The court forced him to sell Infowars to fund the judgement against him, right? I dont know, and I'll assume so.

Why cant someone buy it, but Jones stays on as main attraction?

If the value has taken a dive just because people are starting to see through the entire lying and hysterical Jones personality, well thats Jones fault, and he should have thought twice before engaging in legally costly (and, tho not legally relevant - despicable) behavior.

 

[ThatRobGuy]

The court forced him to sell Infowars to fund the judgement against him, right? I dont know, and I'll assume so.

Why cant someone buy it, but Jones stays on as main attraction?

If the value has taken a dive just because people are starting to see through the entire lying and hysterical Jones personality, well thats Jones fault, and he should have thought twice before engaging in legally costly (and, tho not legally relevant - despicable) behavior.

But shouldn't the fluidity of a "brand value based on the person associated with it" be taken into account when assessing "punishment based on assets owned" at least to some degree?

If they knew the brand value was going to take a nosedive the moment he was no longer affiliated with it, then that means that should've been taken into account when deciding on a means-based tort amount.

Evidently, the "economic expert witnesses" they called that valued the brand at $270M and took into account his yearly income were way off the mark or weren't taking that into account.

It was their valuation assessment of those various things that, in large part, drove that $1.5 billion amount.

"You own something that's worth $270M, so that's why we're hitting you for a billion"

If they knew that the actual property was only going to sell for a fraction of that amount, then the property wasn't actually worth that.

They're basically viewing someone's assets in the way that kid in the 90's would value their Ken Griffey rookie card in the Beckett (for those who get that reference)

"According to this it's worth $150!!"
"How much would a sports card shop offer you for it?"
"Meh, they'll give me $25 and then sell it someone else for $40"

It'd be like valuing the Joe Rogan podcast at current market conditions, but knowing full well he's planning on quitting in 2 months.


And if the source of driving that past yearly revenue was something against the rules (as was proven in court) that he's not going to be allowed to do anymore moving forward, then not sure how they can factor that into the mix.


Judge: "These bank statements would indicate that you've been making $150k/year selling cocaine for the last 5 years. A guy who makes $150k/year in side-income can certainly afford to pay an $200k settlement over the next 3 years.

Defendant: "So are you going to let me continue to sell cocaine for the next 3 years?"

Judge: "Absolutely not, you're to have no involvement in those kinds of seedy things anymore"


Well...then that's a problem lol.


I understand the purpose of tort law, and what it seeks to accomplish. But it seems like the amounts set should be largely driven on liquid assets, real estate, and reasonably estimated future earning potential.

 

[durangodawood]

....
And if the source of driving that past yearly revenue was something against the rules (as was proven in court) that he's not going to be allowed to do anymore moving forward, then not sure how they can factor that into the mix.

Not sure the value was against the rules. I mean Infowars had massive ongoing popularity just based on extravagant lies and personal hysterics. It didnt need to cross the line into actual defamation.

I understand the purpose of tort law, and what it seeks to accomplish. But it seems like the amounts set should be largely driven on liquid assets, real estate, and reasonably estimated future earning potential.

I would think so too. But was Jones prohibited from staying on as the value generating asset? I dont know.

 

[ThatRobGuy]

Not sure the value was against the rules. I mean Infowars had massive ongoing popularity just based on extravagant lies and personal hysterics. It didnt need to cross the line into actual defamation.

I would think so too. But was Jones prohibited from staying on as the value generating asset? I dont know.

The source of the value was the lies, conspiracies, and defamation.

You strip him of the ability to do those (via precedent), then InfoWars is nothing more than the "Angry, sweaty guy yells about gay frogs and sells supplements show"

The fact that the financial experts testified that the brand was worth $270M, knowing full well they'd be watering down the brand (with or without him still a part of it), would seem to be a major miscalculation on their part.

When they put it up for auction, the bids ranging from $1-3M would indicate that.


I would say, at the very least, provisions where they force things into auctions (which, by their very nature, are unpredictable), they should have to give the person credit for the amount the experts testified that it was worth.


For instance, if I was on the hook for $1M in a civil suit. In large part due to a real-estate expert raising his right hand and testifying that my house is worth $600k by their expert opinion, and they force me to do a quick auction of it, and it turns out the expert testimony was way off, and the winning bid ends up being $150k, then I should still get credit for the $600k in that scenario.

Or, they hit the pause button and allow enough time to sell via traditional means for some amount that's a little closer to what the expert said. If they can't even get an offer that's 60% of the expert estimate, then that would indicate that maybe an appeal is in order and get a different set of experts in there for a second opinion.

 

[durangodawood]

The source of the value was the lies, conspiracies, and defamation.

Yes lies. Yes conspiracies. Not defamation tho. The company was very valuable for years before he crossed the line into getting sued successfully for defamation. He didnt need Sandy Hook.

You strip him of the ability to do those (via precedent), then InfoWars is nothing more than the "Angry, sweaty guy yells about gay frogs and sells supplements show"

Was he prohibited from going back to the highly lucrative lies, conspiracies, and supplements?

The fact that the financial experts testified that the brand was worth $270M, knowing full well they'd be watering down the brand (with or without him still a part of it), would seem to be a major miscalculation on their part.

No AJ, no value. But did the court ensure there would be no AJ up front?

 

[ThatRobGuy]

Yes lies. Yes conspiracies. Not defamation tho.

Many of those conspiracies were in the realm of defamation, it's just that the Sandy Hook parents were the first to actually go after him for it.

He'd been making false statements about specific politicians and people, by name, for years.

(Hillary running a sex ring in a pizza shop, Bill Gates trying to kill people with vaccines, Bush did 9/11 etc... etc...)

Very rarely did he ever toss out a conspiracy theory that didn't have specific names attached for fodder.

Was he prohibited from going back to the highly lucrative lies, conspiracies, and supplements?

In essence, yes... once the precedent is set that you can sue him for that kind of stuff, it severely throttles the kinds of content he was making the money off of.

 

[durangodawood]

Many of those conspiracies were in the realm of defamation, it's just that the Sandy Hook parents were the first to actually go after him for it.

He'd been making false statements about specific politicians and people, by name, for years.

(Hillary running a sex ring in a pizza shop, Bill Gates trying to kill people with vaccines, Bush did 9/11 etc... etc...)

You can lie your face off about people, by name, legally. The 1A is pretty broadly interpreted, and loads of people are still doing it and feel safe from lawsuit. But Sandy Hook parents crossed some kind of line. I think defamation requires more than just lying.

In essence, yes... once the precedent is set that you can sue him for that kind of stuff, it severely throttles the kinds of content he was making the money off of.

Did the judge or jury rule on all the other Infowars garbage? Probably the presumption was it was 1A protected, and business as usual (up to Sandy Hook) could continue. If AJ just became culturally toxic or something after the lawsuit, well thats on him for destroying his cash cow. Debts or penalties incurred on the basis of a business that hummed along for years are legit. Or should be.

Perhaps the judgement was too severe even if we stipulate that Infowars would retain most of its value? I could see that possibly. Its pretty huge. But we'd want it to sting, for sure.

 

[ThatRobGuy]

I would think so too. But was Jones prohibited from staying on as the value generating asset? I dont know.

All the evidence is pointing to "No" he would not be staying on.

Following a two-day hearing in Houston, U.S. Bankruptcy Judge Christopher Lopez said he would not approve the sale, while citing concerns about transparency in the auction. That clears the way for Jones to keep—at least for now—Infowars, which is headquartered in Austin, Texas. The Onion had planned to kick Jones out and relaunch Infowars in January as a parody.


Another sticking point that the judge zeroed in on is the lack of transparency and consistency with the auction process.
(which is why the judge said "no auction" for the next sales effort, and gave strict instructions to do what it takes to get as much as they can for it)

Not only was it up for auction, but the families themselves were quasi-dictating who could and couldn't be accepted bidders.

There actually were other bidders, who were bidding higher than The Onion, but the families were insisting that the trustee reject/disqualify them.


That adds another twist...which is, should the wronged parties (even though they were victimized through no fault of their own) be able to try to seek out additional "vengeance" above and beyond the adjudicated impact using tactics like these? We're getting into some murky territory there.


If you and I were in a civil case for some way that you had wronged me, and judge/jury awarded me $1 million.

If they demand was that you had to put your $700k home up for auction to put toward that amount, it seems like giving me a say in who the trustee can allow/disallow as bidders can allow me to game the system a bit for additional revenge (which isn't supposed to be the purpose).

If a bidder steps forward and offers a fair market value for your home (which would cover $700k of what you owe me), and I tell the trustee "No, don't give it to them, I insist that you only consider the bidders that are offering $100k". That would seem like me "playing some games" would it not?

You'd still end up losing your home, but in that case would still owe me another $900k, instead of only owing me another $300k, after the sale.


The point is to deliver justice and fair compensation and future deterrence, it's not supposed to be "open season" for the originally wronged parties (and opportunistic 3rd parties) to take it beyond that for additional revenge measures.

 

[ThatRobGuy]

You can lie your face off about people, by name, legally. The 1A is pretty broadly interpreted, and loads of people are still doing it and feel safe from lawsuit. But Sandy Hook parents crossed some kind of line. I think defamation requires more than just lying.

If we go by Cornell's definition:
To prove defamation, a plaintiff must show four things: 1) a false statement purporting to be fact; 2) publication or communication of that statement to a third person; 3) fault amounting to at least negligence; and 4) damages, or some harm caused to the reputation of the person or entity who is the subject of the statement.

It would seem that most of his conspiracy theories that mention people by name (which is a lot of them) would check all 4 of these boxes.

 

[durangodawood]

If we go by Cornell's definition:
To prove defamation, a plaintiff must show four things: 1) a false statement purporting to be fact; 2) publication or communication of that statement to a third person; 3) fault amounting to at least negligence; and 4) damages, or some harm caused to the reputation of the person or entity who is the subject of the statement.

It would seem that most of his conspiracy theories that mention people by name (which is a lot of them) would check all 4 of these boxes.

OK. I agree with that. The "negligence" part is the obvious hang up. A lot of mind reading has to take place, and I think that why successful defamation suits seem pretty rare.

I could see a case for both the initial judgment, as well as some kind of adjustment/appeal once the new net worth shakes out. Im ok with the court just using current net worth as a basis for judgment and then letting reality reveal the new net worth rather than trying to adjudicate at trial among dueling economists about whats going to happen.

 

[zippy2006]

And the judge said "well, in order to be a deterrent, the ruling has to be tailored to your person situation..."

Should the justice system be punishing individuals irrespective of actual damages? The whole concept is quite odd - a very strong moralizing of the justice system. "You did something naughty, therefore we're going to make sure you squeal." It's not clear why how much someone owes depends on how much they have, and it is already natural that more powerful individuals will incur more costly damages. When deterrence is made person-based the impartiality of the rule of law may well be lost.

(Nevertheless, you are right that a penalty based on personal holdings should be a penalty based on personal holdings. If the verdict destroyed a reputation which in turn destroyed the value of an asset, then that can presumably be calculated into the penalty.)

 

[durangodawood]

.....When deterrence is made person-based the impartiality of the rule of law may well be lost......

It could be a completely impersonal formula based on assets - something objective that doesn't depend on who you are, or how much people love/hate you.

 

[zippy2006]

It could be a completely impersonal formula based on assets

I take it that assets are themselves something personal. If the law is written such that the penalty is a percentage of one's assets, then the law itself is not impartial with respect to wealth.*

* Although a law that accommodates the poor by way of an exception or alternative, percentage-based or otherwise, is clearly permissible. "$1500 fine, and if you cannot pay then..." But judges themselves already alter penalties based on special circumstances. It is the upgrading of penalties based on wealth that is odd.

(This is an interesting question that may deserve its own thread in Ethics & Morality.)

 

[durangodawood]

I take it that assets are themselves something personal. If the law is written such that the penalty is a percentage of one's assets, then the law itself is not impartial with respect to wealth.

If you fail to adjust for wealth then the law isnt impartial with respect to punitive effect. The poor criminal suffers more than the rich criminal.

Also, the important value of deterrence can be lost when the impact of punishment is negligible for certain groups of people.

(This is an interesting question that may deserve its own thread in Ethics & Morality.)

Hmm. Yes.

 

[zippy2006]

If you fail to adjust for wealth then the law isnt impartial with respect to punitive effect.

On one conception law rights wrongs. On another it discourages actions. It is only when this second conception is given primacy that deterrence and pain/penalty become the central considerations.

"In order to properly deter and pain you, we are requiring that you pay X amount even though the damages and restitution were much less." That is the strange move, and it also raises the fraught question: Who receives this extra money?

 

[durangodawood]

On one conception law rights wrongs. On another it discourages actions. It is only when this second conception is given primacy that deterrence and pain/penalty become the central considerations.

"In order to properly deter and pain you, we are requiring that you pay X amount even though the damages and restitution were much less." That is the strange move, and it also raises the fraught question: Who receives this extra money?

1. compensation
2. deterrence

Is there a 3. punishment? Like society's sheer desire for the criminal to suffer as a result of the harms caused?

 

[ThatRobGuy]

Should the justice system be punishing individuals irrespective of actual damages?

That's one area where tort law difference from the traditional criminal code.

There is a deterrence apsect of it that does need to be means/asset based to a degree.


For instance, if you commit libel or defamation against someone,

The amount that would act as a deterrent for one person will not for another.

If there were just a fixed amount of $5,000 across the board, that could hit one person really hard, however, for a person worth 100 million dollars (and making $10M per year), they could commit libel or defamation, once a day, every day, for the next 10 years and still have tens of millions left over under those rules.


So, I understand tailoring the amounts to the net worth of the offender.

My issues with this case (and it sounds like the Judge had similar concerns) is the perversion of "asset values" and earnings potentials.

If the value of InfoWars being assessed at hundreds of millions of dollars, combined with Alex's earning potential, was the justification for a billion dollar penalty, then they can't deliberately allow those assets to be quickly auctioned off for a fraction of a fraction of that amount, to a buyer who openly stated they planned on getting rid of him and overhauling the product (which removes that earning potential) -- when there were other, bigger bidders who were already loosely affiliated with the brand and would've likely kept him employed in some capacity.


"You have this big asset, and you have this high paying job, so that's our basis for $X"
But if they're going to allow that asset to go out the window for 1/100th of their assessed value, to a bidder that stated they were going to remove him from that high paying job, then it's not fair to still leave him on the hook for $X if they know that conditions will be changing radically.


For instance, if Joe Rogan swooped in tomorrow and said "I'll buy InfoWars for $50 million, absorb it into my brand here at Spotify, and bring Alex on as an employee and pay him $2 million per year as a host of a new show, you can put the $50 million toward the amount owed, and garnish 60% of his wages to put towards the damage amounts on an ongoing basis"

And the trustee/families say "No, we insist that The Onion gets to be the ones to buy it for $1.5 million"

Then that means this is less about making the wronged party wanting to be made whole with financial compensation, and more about them bastardizing the tort system for revenge.


And while most reasonable people can understand why the families are angry and can certainly understand them wanting to see Alex be miserable for the rest of his life. It's the court's job to decide punishments, not theirs.

It's the same reason judges don't let the victims decide the sentences when the defendant is sentenced. Because, for example, many victims of car theft would say "lock them up and throw away the key, I'd like to see them rot in prison for decades" and just about any father of an assault victim is going to say "give 'em the chair". I think our legal system for criminal law acknowledges that victims (and victims family members) aren't the most clear-headed people to be deciding what kinds of punishments the defendant should receive.

Tort law should be no different, and the efforts by the families and the trustee seem to be centered around punishing Alex more above and beyond what the court decided the punishment should be.