Obsidian Finance Group v. Cox, No. 12-35238 (9th Cir. 2014)
Annotate this CasePlaintiffs filed a defamation suit against defendant where defendant published blog posts on several websites that she created accusing plaintiffs of fraud, corruption, money-laundering, and other illegal activities. The court joined its sister circuits in concluding that the protections of the First Amendment did not turn on whether the defendant was a trained journalist, formally affiliated with traditional news entities, engaged in conflict-of-interest disclosure, went beyond just assembling others' writings, or tried to get both sides of a story; therefore, the court held that the Gertz v. Robert Welch, Inc.'s negligence requirement for private defamation actions was not limited to cases with institutional media defendants; because defendant's blog post addressed a matter of public concern, even assuming that Gertz was limited to such speech, the district court should have instructed the jury that it could not find defendant liable for defamation unless it found that she acted negligently; the district court also should have instructed the jury that it could not award presumed damages unless it found that defendant acted with actual malice; the court rejected defendant's argument that plaintiffs are public officials; and the court found no error in the district court's application of the Unelko Corp. v. Rooney test and rejected plaintiffs' cross-appeal. Accordingly, the court affirmed in part, reversed in part, and remanded.
Court Description: Defamation. The panel affirmed in part and reversed in part the district court’s judgment awarding compensatory damages to a bankruptcy trustee on a defamation claim against an Internet blogger. The panel held that Gertz v. Robert Welch, Inc., 418 U.S. 323, 350 (1974) (holding that the First Amendment required only a “negligence standard for private defamation actions”), is not limited to cases with institutional media defendants. The panel further held that the blog post at issue addressed a matter of public concern, and the district court should have instructed the jury that it could not find the blogger liable for defamation unless it found that she acted negligently. The panel held that the bankruptcy trustee did not become a “public official” simply by virtue of court appointment, or by receiving compensation from the court. The panel remanded for a new trial on the blog post at issue, and affirmed the district court’s summary judgment on the other blog posts that were deemed constitutionally protected opinions.
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