Obsidian Finance Group, LLC v. Cox
812 F. Supp. 2d 1220
D. Or.2011Background
- Plaintiffs Obsidian Finance Group, LLC and Kevin Padrick sue Crystal Cox for defamation over blog postings.
- Judge previously held some statements were protected by the First Amendment in a July 7, 2011 Order.
- Plaintiffs filed a July 22, 2011 opposition and submitted new blog posts for reconsideration as a supplemental motion for summary judgment.
- The court applies the Ninth Circuit three-part test to determine whether statements are statements of opinion or provable assertions of fact.
- The court grants summary judgment for Cox as to all posts except one December 25, 2010 post on bankruptcycorruption.com.
- A scheduling conference will be set for trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the posts are protected as opinion | Cox’s posts convey serious factual claims about misconduct | Posts are part of heated debate and use hyperbole, not provable facts | Most posts are protected as opinion; not actionable |
| Whether the posts contain provable factual assertions under the three-part test | Posts imply objective facts about wrongdoing by plaintiffs | Context and language negate objective-fact implication | Context negates provable factual assertions for the majority of posts |
| Whether the December 25, 2010 post on bankruptcycorruption.com is actionable | Post contains specific allegations of tax fraud and wrongdoing | Post is presented as commentary within a blog context | Post may contain actionable assertions; not granted summary judgment for this post |
| Whether the July 22, 2011 Opposition is a proper supplemental motion | New postings warrant reconsideration of liability determinations | New submissions do not overcome protection; prior ruling stands | Supplemental motion denied as to all posts except the December 25 post |
| What is the court’s overall liability ruling | Defendant liable for defamation based on blog posts | First Amendment shields most statements | Grant summary judgment to defendant on all posts except December 25 post |
Key Cases Cited
- Gardner v. Martino, 563 F.3d 981 (9th Cir. 2009) (three-part test for whether statements imply provable facts)
- Underwager v. Channel 9 Austl., 69 F.3d 361 (9th Cir. 1995) (clarifies the opinion/fact inquiry and context importance)
- Nicosia v. De Rooy, 72 F.Supp.2d 1093 (N.D. Cal. 1999) (heated-debate context reduces likelihood of factual assertions)
- Art of Living Found. v. Does 1-10, 2011 WL 2441898 (N.D. Cal. 2011) (online-communication context lowers likelihood of factual assertions)
- Phantom Touring, Inc. v. Affiliated Publ’ns, 953 F.2d 724 (1st Cir. 1992) (hyperbolic or rhetorical statements not actionable as fact)
- Old Dominion Branch No. 196, Nat’l Ass’n of Letter Carriers v. Austin, 418 U.S. 264 (U.S. 1974) (figurative language can negate factual assertions)
- Greenbelt Publ’g Ass’n v. Bresler, 398 U.S. 6 (U.S. 1970) (rhetorical hyperbole not actionable as statement of fact)
- Knievel v. ESPN, Inc., 393 F.3d 1068 (9th Cir. 2005) (contextual reading may negate literal factual meaning)
- Milkovich v. Lorain Journal Co., 497 U.S. 1 (U.S. 1990) (rejected bright-line protection for opinions in defamation)