Posts Tagged ‘Obsidian Finance Group’

Blogger Hit With $2.5 Million Judgment

I guess she could consider it a victory.  A blogger by the name of Crystal Cox was sued for $10 million by Obsidian Finance Group for comments Ms. Cox posted on  Representing herself, she managed to keep the judgment to just $2.5 million.

Seriously though, nothing in the case went Ms. Cox’ way.  She brought an anti-SLAPP motion and claimed that she was protected by the New York Times actual malice rule, as well as the reporter’s shield.  But the judge was not convinced.  Judge Marco Hernandez of the U.S. District Court in Portland held that a blogger is not a journalist.  As such, Cox was caught in a catch-22.  She would not be required to reveal her source if she fell under the shield law as a journalist, but without such protection she could not reveal her source without subjecting him to liability, and without that background information, could not prove what she was saying was true.

As to the New York Times actual malice rule, which holds that defamation can be found only upon a showing of actual malice where the plaintiff is a public figure, the court concluded that the plaintiffs were not public figures.

Complicating the matter further, Cox was late in bringing her anti-SLAPP motion (although the judge stated the result would have been the same even if it had been filed on time).

The concerning part of the decision arises from the court’s discussion of what makes one “media.”   Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974), held that a plaintiff should not be able to recover damages from a media organization without proof that the reporter was at least negligent and may not recover presumed damages absent proof of “actual malice.”  After rebuking Cox for failing to specify any authority for the proposition that a blogger can be media, the court then proceeds to set forth seven indicators that make one “media” without absolutely no authority for those points.

According to Judge Hernandez, Cox failed to show she was media because there was no evidence of “(1) any education in journalism; (2) any credentials or proof of any affiliation with any recognized news entity; (3) proof of adherence to journalistic standards such as editing, fact-checking, or disclosures of conflicts of interest; (4) keeping notes of conversations and interviews conducted; (5) mutual understanding or agreement of confidentiality between the defendant and his/her sources; (6) creation of an independent product rather than assembling writings and postings of others; or (7) contacting ‘the other side’ to get both sides of a story. Without evidence of this nature, defendant is not ‘media.'”

In my never to be humble opinion, those made-up criteria by Judge Hernandez are about 20 years out of date.  “Affiliation with a recognized news entity”?  The reason that so many “traditional” news outlets are folding is because of the rise of citizen reporters, with no affiliation with any organization and who may or may not have any journalistic background or education.

Nonetheless, the takeaway here is that bloggers are not immune from liability if they stray across the line and engage in defamation.  I don’t know what Cox reported about Obsidian Finance Group, so the judgment may have been well deserved.  Still, it gives pause to know that a blogger is now straddled with a huge judgment that cannot be discharged in bankruptcy and therefore will likely dog Ms. Cox for at least the next 20 years.

Go here for a more detailed discussion of the judgment, as well as a copy of that judgment.

Aaron Morris, Attorney
Aaron Morris
Morris & Stone, LLP

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