Obsidian Finance Group, LLC v. Crystal Cox
740 F.3d 1284
| 9th Cir. | 2014Background
- Crystal Cox published multiple blog posts accusing Kevin Padrick (court‑appointed Chapter 11 trustee) and Obsidian Finance Group of criminal and corrupt conduct arising from their roles in a bankruptcy matter.
- Padrick and Obsidian sued Cox for defamation; the district court found only one post (Dec. 25, 2010) actionable and submitted it to a jury.
- The jury found Cox liable and awarded Padrick $1.5M and Obsidian $1M in compensatory damages.
- At trial the district court declined Cox’s First Amendment requests: it refused to apply negligence or New York Times actual‑malice standards and allowed presumed damages without proof of actual malice.
- Cox appealed the denial of a new trial; Padrick and Obsidian cross‑appealed the dismissal of liability for other blog posts.
- The Ninth Circuit reviewed whether Gertz/Sullivan protections apply to non‑media speakers, whether the Dec. 25 post involved a matter of public concern, whether Padrick was a public official, and whether the other posts were actionable facts or protected opinion.
Issues
| Issue | Plaintiff's Argument (Padrick/Obsidian) | Defendant's Argument (Cox) | Held |
|---|---|---|---|
| Does Gertz’s negligence rule apply only to institutional press? | Gertz applies only to institutional media; individual bloggers need not be treated the same. | First Amendment rules (Gertz/Sullivan) apply equally to non‑media speakers like bloggers. | Gertz’s protections extend to non‑media speakers; First Amendment standards do not turn on speaker identity. |
| Did the Dec. 25 post involve a matter of public concern (triggering Gertz standards)? | The post was not a public‑concern matter; no negligence/actual‑malice requirement. | The post concerned alleged tax fraud by a court‑appointed trustee—a public concern. | The Dec. 25 post addressed a matter of public concern; negligence is required for liability and actual malice required for presumed damages. |
| Was Padrick a public official (so Sullivan actual‑malice applies)? | Padrick is not a public official; ordinary standards apply. | Padrick (as court‑appointed trustee) is tantamount to a public official and thus Sullivan applies. | Padrick is not a public official; Sullivan actual‑malice standard does not apply to him as a public official. |
| Were Cox’s other blog posts actionable statements of fact or protected opinion/hyperbole? | The other posts alleged concrete criminal acts and were actionable. | The other posts were hyperbolic, figurative, and not objectively provable—protected opinion. | The district court correctly held the other posts were protected opinion/hyperbole; summary judgment for Cox on those posts is affirmed. |
Key Cases Cited
- New York Times Co. v. Sullivan, 376 U.S. 254 (1964) (actual malice required for public‑official defamation claims)
- Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974) (negligence standard for private‑person defamation involving matters of public concern; limits on presumed damages)
- Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472 U.S. 749 (1985) (distinguishing public‑concern cases for presumed damages; discussion of press/nonpress treatment)
- Milkovich v. Lorain Journal Co., 497 U.S. 1 (1990) (no blanket opinion privilege; statements implying provable facts can be actionable)
- Citizens United v. FEC, 558 U.S. 310 (2010) (institutional press has no special First Amendment privilege beyond other speakers)
- Partington v. Bugliosi, 56 F.3d 1147 (9th Cir. 1995) (three‑part test for distinguishing opinion from verifiable fact)
- Unelko Corp. v. Rooney, 912 F.2d 1049 (9th Cir. 1990) (framework for assessing whether statement implies provable fact)