As the internet evolves the rights and responsibilities of its users become more clearly defined. Courts have found themselves in the position of having to apply the common law precedent to the Internet. A recent case out of the Ninth Circuit Court of Appeals is helping to legally define the protections of bloggers on the Internet. Obsidian Fin. Grp., LLC v. Cox, No. 12-35238, D.C. No. 3:11-cv-00057-HZ (9th. Cir. Jan. 17, 2014).
The facts are not as clear as I would have liked, so I will try my best to distill them. Summit Accommodators voluntarily petititoned for Chapter 11 bankruptcy in late 2008. The defendant Kevin Padrick, a senior principal and co-founder of Obsidian was appointed as a bankruptcy trustee. Crystal Cox is a self-appointed real estate whistleblower. Cox created and wrote content for blogs: http://www.obsidianfinancesucks.com and http://www.summit1031sucks.com. Some of the claims Cox made about Padrick on the blog, he is: corrupt, committed tax fraud, and called him derogatory names. Obsidian Fin. Grp., LLC v. Cox, CV-11-57-HZ, 2011 WL 2745849 (D. Or. July 7, 2011). Obsidian Financial Group and Padrick sent Cox a cease and desist letter, but she continued anyway.
One observation the district court made was Cox did not try to attempt any neutrality. With domain names like http://www.obsidianfinancesucks.com visitors should know that the blog will take a critical stance, “which expressly discloses its bias against bankruptcy courts, bankruptcy trustees.” Obsidian Fin. Grp., LLC v. Cox, CV-11-57-HZ, 2011 WL 2745849 (D. Or. July 7, 2011) adhered to in part on reconsideration, 812 F. Supp. 2d 1220 (D. Or. 2011) aff’d, 12-35238, D.C. No 3:11-cv-00057-HZ (9th Cir. Jan. 17, 2014). Many of the blog posts were not counted as libelous because they were based upon opinion rather than fact. However, the district court found one blog post libelous in nature because it made “fairly specific allegations [that] a reasonable reader could understand . . .to imply a provable fact assertion.” Obsidian Fin. Grp., LLC v. Cox, 812 F. Supp. 2d 1220, 1233 (D. Or. 2011) aff’d, 12-35238, 2014 WL 185376 (9th Cir. Jan. 17, 2014).
Cox then asserted that the First Amendment offered her protections from liability deriving from New York Times Co. v. Sullivan, 376 U.S. 254 (1964). First, she claimed that the subject matter was of public concern. Second, both Padrick and Obsidian were public figures. The judge rejected both of these arguments saying that neither Obsidian nor Padrick sought to be a public or limited public figure. Instead, Cox created the controversy around them.
Both parties appealed.
The Ninth Circuit Court of Appeals reasoned that since the New York Times case, courts have not given any extra protection to journalists than they have anyone else. “[E]very other circuit to consider the issue has held that the First Amendment defamation rules in Sullivan and its progeny apply equally to the institutional press and individual speakers. . . We agree with our sister circuits.” Obsidian Fin. Grp., LLC v. Cox, 12-35238, D.C. No. 3:11-cv-00057-HZ (9th. Cir. Jan. 17, 2014).
The Court went even further by saying that Padrick’s actions were a matter of public concern. Since Padrick was the trustee of failed ponzi scheme that involved tens of millions of dollars his actions were of public interest. Furthermore, because Cox accused Padrick of fraud among other things, her accusations were also a matter of public concern.
One thing the Ninth Circuit Court of Appeals did not address is how she made her accusations. Some individuals have asserted that Cox’s motives are not all that pure and even go so far as to call her manipulative with financial motives, rather than a journalist. Critics say because her day job is to manage people’s reputations on the internet and when acting as an investigative journalist, Cox has registered dozens of domain names to negatively influence the search results of a person’s name. Cox will then ask for a fee in order to repair one’s reputation. See Complaint at 2-4 Randazza v. Cox, 920 F.Supp.2d 1151 (D. Nev. 2013) (No. 12-02040).
In my opinion, part of the issue is definitely how Cox made the speech. By linking together multiple websites together to voice her opinion, Cox manipulated the search engine results. Professor Eugene Volokh, who represented Cox at the oral argument in front of the Ninth Circuit Court of Appeals, argued previously that search engine rankings are a type of corporate speech made by the search engines. If Professor Volokh’s argument is believed, then Cox’s speech should not be considered pure at all.
I do not believe there is any case law on whether search engine manipulation can be considered defamation or not. However, this technological part of the argument is something that the Court missed in their analysis. In a later post, I will analyze Professor Volokh’s argument about search engine rankings being considered speech, and the logical extension, if search engine rankings are manipulated can that be considered defamation.