By Jim Rosenfeld, Ambika K. Doran, and Jeremy A. Chase
The 9th Circuit recently became the first federal court of appeals to find that bloggers are entitled to the same First Amendment protections as traditional print and broadcast media when sued for defamation. Obsidian Fin. Grp. v. Cox, 740 F.3d 1284 (9th Cir. 2014). The court also delivered a victory to online publishers by recognizing that their use of informal and hyperbolic language reduces their exposure to libel claims because such language is often protected opinion.
Cases involving traditional publishers set the groundwork for examining First Amendment issues in the digital age. In New York Times v. Sullivan, 376 U.S. 254 (1964), the Supreme Court held that public officials must show actual malice—that the speaker/defendant knew or acted with reckless disregard as to whether a statement was false—to prevail on a defamation claim. Courts later expanded that holding to public figures. Ten years later, Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974), established that private figure defamation plaintiffs must prove negligence, and may only recover actual (not presumed or punitive) damages with respect to statements about matters of public concern. In each case, the speaker/defendant was a traditional media outlet.
But as the Supreme Court has since observed, “[w]ith the advent of the Internet and the decline of print and broadcast media…the line between the media and others who wish to comment on political and social issues becomes far more blurred.” Citizens United v. Federal Election Commission, 558 U.S. 310, 352 (2010). Indeed, the Internet, which enables the publication of content through blogs, Facebook posts, tweets, and other modes of communication, has forced courts to examine whether the identity of the speaker matters to First Amendment protections. In Obsidian, the 9th Circuit answered that question with a resounding “No.”
Background and Court’s Decision
The case arose when Obsidian Finance Group and its principal, Kevin Padrick, sued blogger Crystal Cox for publishing posts accusing them of fraud, corruption, money laundering, and other illegal activities in connection with Padrick’s Chapter 11 trusteeship of a company called Summit Accommodations, Inc. The district court granted summary judgment in Cox’s favor on all but one statement, on the grounds that the majority of the statements were constitutionally protected opinions. Obsidian Fin. Grp., LLC v. Cox, 812 F. Supp. 2d 1220, 1232-34 (D. Or. 2011). At trial, the jury found for the Plaintiffs as to the one remaining statement—a post claiming Padrick committed tax fraud—and awarded $2.5 million in compensatory damages.
Ruling on pre– and post– trial motions, the district court found that Padrick and Obsidian were not required to offer proof of fault—whether negligence or actual malice—nor actual damages to establish liability against Cox because Cox failed to submit “evidence suggestive of her status as a journalist,” Obsidian Fin. Grp., LLC v. Cox, No. 3:11-cv-00057-HZ, 2011 WL 5999334, at *5 (D. Or. Nov. 30, 2011); Padrick and Obsidian were not public figures; and the blog post did not refer to a matter of public concern. Obsidian Fin. Grp., LLC v. Cox, No. 3:11-cv-00057-HZ, 2012 WL 1065484, at *4-7 (D. Or. Mar. 27, 2012). Cox appealed, and Plaintiffs cross-appealed from the district court’s dismissal of the remaining blog posts.
The 9th Circuit squarely rejected the district court’s first holding, finding the same First Amendment rules apply to all speakers, whether institutional media or individual speakers such as bloggers. “In defamation cases, the public-figure status of a plaintiff and the public importance of the statement at issue—not the identity of the speaker—provide the First Amendment touchstones.” Obsidian, 740 F.3d at 1292. The Court reasoned that the Supreme Court had not limited its holding in Gertz to institutional media and had repeatedly refrained from affording greater First Amendment protection to media in other contexts. Id. at 1290-91. Most recently, in Citizens United, 558 U.S at 352, the Supreme Court noted that it has “consistently rejected the proposition that the institutional press has any constitutional privilege beyond that of other speakers.” And while the 9th Circuit had not addressed whether the same First Amendment defamation rules apply to individual speakers as institutional media, every other circuit to consider the question had found that they do. Obsidian, 740 F.3d at 1291.
With respect to the level of fault, the Court found the allegation that Padrick committed tax fraud was a matter of public concern and, under Gertz, the trial court erred by failing to instruct the jury that it must show Cox acted negligently to find her liable for defamation. (Consumer review sites and their contributors will take comfort in the Court’s statement that “even consumer complaints of non-criminal conduct can constitute matters of public concern,” likewise warranting protection under Gertz). The Court refused to consider whether the result would differ if the statement was not a matter of public concern (a question Gertz left unanswered), and affirmed the district court’s ruling that the defendants were not public figures. Thus, the Court remanded for a new trial on the lone statement for which Cox had been found liable.
The Court also rejected the plaintiffs’ cross-appeal, finding that the trial court properly held that Cox’s other statements were non-actionable opinion, applying a three-part test announced in Unelko Corp. v. Rooney, 912 F.2d 1049, 1053 (9th Cir. 1990). As to the first prong, the Court observed that the general tenor of the blog posts and the fact they were posted on websites with names suggesting a one-sided viewpoint (e.g., obsidianfinancesucks.com) negated the impression that Cox was asserting objective facts. Second, Cox’s routine use of hyperbolic language dispelled any reasonable expectation that her statements asserted facts. Finally, viewed in the context of a non-professional website with hyperbolic language, the blog posts were not sufficiently factual to be proven false. Obsidian, 740 F.3d at 1293-94.
Obsidian is a major win for individuals who blog, share, tweet and otherwise publish their views online. While the Court initially framed the question as “What First Amendment protections are afforded a blogger sued for defamation?” (emphasis added), its decision applies the First Amendment protections it has bestowed on “institutional media” to all “individual speakers” or “other speakers.” The Court stated that the applicability of such protections does 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.” Id. at 1291. Under this reasoning, an individual blogger, website operator or social media users speaking publicly on the Internet enjoy the same First Amendment protections from defamation claims as traditional media publishers.
At the same time, the 9th Circuit’s affirmance of the district court’s dismissal of Plaintiffs’ claims as to most of Cox’s statements continues a judicial trend of considering the context and atmosphere of the Internet when distinguishing opinions from factual statements. See, e.g., Seaton v. TripAdvisor LLC, 728 F.3d 592, 600 (6th Cir. 2013) (based on hyperbolic nature and “general tenor” of “Dirtiest Hotel” ranking, as well as familiarity with such lists, which “appear with growing frequency on the web,” readers would understand the ranking to be opinion, not verifiable fact); Sandals Resorts Int’l Ltd. v. Google, Inc., 86 A.D.3d 32, 43-44 (N.Y. App. Div., 1st Dep’t 2011) (noting that Internet users have come to expect “casual, emotive, and imprecise speech” and “give less credence to allegedly defamatory remarks published on the Internet than to similar remarks made in other contexts”); Tener v. Cremer, No. 104583/10, 2012 WL 3230689 (N.Y. Sup. Ct. July 16, 2012) (“The culture of Internet communications, as distinct from that of print media . . . has been characterized as encouraging a freewheeling, anything-goes writing style…It is imperative that courts learn to view libel allegations within the unique context of the Internet.”) (quoting Sandals, 86 A.D.3d at 44); Redmond v. Gawker Media, LLC, No. A132785, 2012 WL 3243507, at *6 (Cal. Ct. App. Aug. 10, 2012) (unpublished) (article on technology weblog was opinion when the “sources upon which the authors rely for their conclusions are specified, and the article incorporates active links to many of the original sources”).