A few days ago, I attended an absolutely fascinating court hearing—one where you could see the judge’s brain explode in real time. “Oh, good grief,” said Los Angeles Superior Court Judge Jay Ford as he slowly came to grips with the issues in play. He later exclaimed, “This is an important case” and predicted it would eventually be heard by the Supreme Court. It just so happens that I played a key role in helping instigate this unfolding drama.
The plaintiff is Ryan Kavanaugh, the well-connected Hollywood machinator who was anointed a wunderkind in the early 2000s for having developed a “formula” to guarantee movie profitability. Wall Street investors, including future U.S. Treasury Secretary Steve Mnuchin, flooded the venture with cash. Of course, the supposed algorithm didn’t quite work. Kavanaugh’s Relativity Media produced some hits like The Fighter and Limitless, but also made plenty of flops. When Relativity declared Chapter 11, in 2015, the bankruptcy court hosted more Wall Street bigwigs than a Bill Cohan pool party.
These days, Kavanaugh has a new company—Proxima Media, which is the controlling shareholder of Triller, a TikTok competitor which is being sued left and right for allegedly not paying its bills. The Washington Post recently published a 3,000-word article about how Triller is stiffing Black creators. But the more astonishing legal drama hanging over Kavanaugh dates back to the earliest days of Proxima, when Kavanaugh and his then partner, Elon Spar, were first getting the company off the ground. Kavanaugh and Spar originally had plans to run a Hollywood box office prediction market. But the two disagreed about the business, and Spar, who cashed out, later accused Kavanaugh of operating a “Ponzi scheme.”
That’s where I come in. Working for The Hollywood Reporter at the time, I discovered Spar’s complaint on the Los Angeles Superior Court media portal and quickly wrote it up. Variety did the same. Within hours, Kavanaugh and Spar settled. The complaint was withdrawn before it became an officially indexed lawsuit, and Kavanaugh’s publicist called me to demand a retraction because, in his view, no lawsuit had actually been filed. We refused, although not before I consulted with several lawyers about whether I would be covered under “fair report privilege,” which legally protects those who repeat statements from government proceedings such as court filings. I don’t think there’s ever been a speech case involving the judicial equivalent of Schrödinger’s cat, although maybe that lady who once insisted the media couldn’t report her expunged conviction comes close.
Last year, some time after this non-filing filing, Kavanaugh got into another feud, this time with podcaster Ethan Klein, who saw the old headlines and then repeated Spar’s “Ponzi scheme” charge on his show. Kavanaugh sued Klein for defamation. Of course, I wrote about all this, too, in a story titled, “Ryan Kavanaugh’s New Mind Bender: When Is a Lawsuit Not a Lawsuit?” Afterwards, Klein’s attorney Lincoln Bandlow asked me to provide a statement about the Los Angeles Superior Court media portal and how it works. After some hesitation, I agreed.
Judge Ford is now considering Klein’s bid to dismiss (which would also mean Kavanaugh pays his adversary’s legal bills). Before the hearing, the judge indicated that he was leaning towards rejecting the defamation lawsuit on the basis that the podcaster was merely offering an opinion about whether he believed Spar’s accusation. But the judge started thinking about republication, how facts are sorted, and what a jury might believe, and admitted to feeling shaky about his tentative conclusion. At the hearing, he told the parties that his thinking had evolved. The Ponzi scheme was true or not, and while he originally thought that no one would listen to this hyperbolic podcast and hear an assertion of fact, he wasn’t sure anymore that this point shouldn’t be decided later after some further fact-finding, possibly at trial.
As the hearing played out, Ford’s eyes widened as he listened to the various arguments about privileges for those who report and comment on court activity, and he rightfully grew increasingly interested in how we determine what’s outside the boundary of defamation liability. The judge has ordered more briefing and appears to have set his sights on a ruling that can survive appeal.
Meanwhile, Kavanaugh’s second act as an aspiring technology mogul appears to be going about as well as his rollercoaster career in Hollywood. Two years ago, when he spoke to Bill Cohan about urging the Trump administration to shut down TikTok, a multi-billion dollar SPAC exit seemed like a very real possibility. He still considers TikTok to be the “greatest enemy our country faces today”—and he might even be right—but Triller, which has been accused of inflating its numbers, seems less likely than ever to be its successor. The more interesting question for the media is whether Kavanaugh’s war on nosy journalists and podcasters results in some precedent about the type of salacious and questionable information that’s truly repeatable without getting into trouble.