Michael Sean Quinn, Ph.D, J.D., Etc.

Quinn & Quinn
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Austin, Texas 78703

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 BLOGGERS’ DELIGHT

A blogger can easily count as something like a journalist and have First Amendment rights, when commenting on a matter of public concern, and when he/she/it does this, a defamation case is provable against that person only if the blogger is proved negligent.
The case is Obsidian Finance Group LLC v. Cox, 740 F.3d 1284 (9th Cir. January 17, 2014). One Kevin Padrick, a principal of Obsidian, had been appointed a Chapter 11 trustee for a client that may have been less than honest.  Cox accused the firm and him of a number of nefarious acts–fraud, corruption, money laundering, etc; many of Cox’s statements were obviously wild-ass carryings-on.  Mere opinions that do not involve an assertion of fact, even if the proposition asserted does not actually describe a fact, are not defamatory under constitutional law.
Cox defended herself.  All but one of the plaintiffs’ causes of actions were dismissed as not really factual statements and hence not defamatory at law. One count, however, remained; that case was tried; Cox defended herself, lost and got hit with big damages by the jury–$1.0 for the company, $1.5 for the principal, and a judgment was entered against her. The blog containing the one count was published on Christmas Day 2010.
Cox appealed the judgment, and the defendants appealed the district court’s dismissal of 19 out of 20 separate causes of action.
There were various procedural matters, but this blog is about only three of them. In addition, there were numerous cites by the appeals court of various background cases. In sum, the prevailing law is that under circumstances like this one, the finder of fact must conclude that the accused defendant asserted proposition motivated by “actual malice,” and under controlling authority that includes negligence.
First, defamation arising out of asserting a false proposition that would otherwise be “actionablely” defamatory is not actionable when the statement addresses a matter of public concern and the “speaker” is not negligently gathering a basis for making the assertion.(The burden is on the plaintiff to prove negligence This is true if made about a person who is not a public official.)
Second, the court of appeal held that the topic of Cox’s actionable statement was a matter of public concern even though the targets of the assertions were not public officials or tantamount to them, though they may have come close-ish to it, based on appearances, though not applicable sophisticated property law.
Third, the United States Supreme Court has repeatedly provided First Amendment protection to these sorts of statements, although not to blogging as yet. There is no reason to think that it would not apply that freedom to individuals as well as institutions operating on the Internet, a medium of communication unknown when the high court made its controlling decisions.
The problem was that the jury instructions did not warn the jury that “it could not award presumed damages unless it found that Cox had acted with actual malice.”  So the judgment was reversed and sent back for a new trial.
If I were the plaintiff in this case, I could well imagine blowing the whole thing off, or settling for policy limits, if there was an insurance policy with coverage.  I am certain that the insurance company, if any, that is defending under Coverage B, would like to get rid of the case.  Its defense costs have already far exceeded policy limits, probably.  (Of course, being certain does not make you right or even epistemo-logically rational.)  Obviously, this is “old-time” work for insurance defense and for insurance coverage lawyers.  It is a new kind of work for lawyer providing advice on defamation action matters, but it looks like the trial of these cases will be “same old, same old.”
 If the plaintiff has not lost business, why not focus on other matters?  The entire incident has completely discredited Cox, I would expect, and she may be, and  probably is, now regarded as a “crazy” “witch” in the “better” circles.  (Nota bene: I not saying that these proposition are true.  I am simply hypothesizing, and some might call it speculating.  An yet others might call it wondering.)
Of course, there may be an important component of the business community that has intensely negative fillings about her. Said the Ninth Circuit panel: “Cox apparently has a history of making similar allegations and seeking payoffs in exchange for retraction. See David Carr, When Truth Survives Free Speech, NYT, Dec. 1l, 2011, at B1.” I must say, I am surprised that this junk didn’t get into the trial below.  It is particularly odd, that if the judge prevented it from coming in, there is not a more case-centered discussion of it in the Ninth Circuit opinion.
So the question in the title of this piece is more-or-less this:  Does the coming of widely disseminated blogs create new work for lawyers since defamation is always a risk.  The answer is “No,” but there are three important points.  (1) The case is too good a story not to tell; (2) it will create lots of new type work, just not this type; but (3) it makes a blogger safer, and further clarifies the internet.
 (The reader must remember the key role of “public concern” in the Crystal Cox case.  Blogging falsely about you ex-wife having torrid affairs with her female tennis partner and her male gym trainer at exactly the same time and in exactly the same place, all happening under the nose of her new husband, a pansy and the guy she left you for, is not a matter of public concern, no matter how engrossing–and this does not mean “gross”–the lurid telling of the story may be. Remember! In this case, false equals defamatory. Also ask: How many assholes can be the ends of pins when it comes to being a plaintiff in a defamation case.)
[A blog-essay very similar to this one is to be fund on Quinn’s Commentaries on Insurance Law.]

Originally posted on 07/17/2014 @ 6:26 pm

Michael Sean Quinn, PhD, JD, CPCU, Etc

Michael Sean Quinn, PhD, JD, CPCU, Etc. (530)

One of Texas's leading insurance scholars, Michael Sean Quinn is a past chair of the Insurance Section of the State Bar of Texas and has a broad legal practice.

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