FEDERAL COURT RULES BLOGGERS HAVE 1ST AMENDMENT PROTECTIONS

FEDERAL COURT RULES BLOGGERS HAVE 1^ST AMENDMENT PROTECTIONS

 

For all of you bloggers, a Federal Appeals Court ruled that bloggers and the public have the same First Amendment protections as journalists when sued for defamation: If the issue is of public concern, plaintiffs have to prove negligence to win damages.

 

The 9^th U.S. Circuit Court of Appeals ordered a new trial in a defamation lawsuit brought by an Oregon bankruptcy trustee against a Montana blogger who wrote online that the court-appointed trustee criminally mishandled a bankruptcy case.

 

The Circuit Court ruled that the trustee was not a public figure, which could have invoked an even higher standard of showing the writer acted with malice, but the issue was of public concern, so the negligence standard applied.

 

THE FACTS

 

 Crystal L. Cox, a blogger who was from Eureka, Montana was sued for defamation by Bend attorney Kevin Padrick and his company, Obsidian Finance Group LLC after she made posts on several websites she created accusing them of fraud, corruption, money laundering and other illegal activities.  The appeals court noted Padrick and Obsidian were hired by Summit Accommodations to advise them before filing for bankruptcy, and that the U.S. Bankruptcy Court later appointed Padrick trustee in the Chapter 11 case.  The court added that Summit had defrauded investors in its real estate operations through a Ponzi scheme.

 

A jury in 2011 had awarded Padrick and Obsidian $2.5 million.

 

The 9^th Circuit held that liability for a defamatory blog post involving a matter of public concern cannot be imposed without proof of fault and actual damages:.

 

The appeals court upheld rulings by the District Court that other posts by Cox were constitutionally protected opinion.

 

Attorneys for Padrick stated that “Ms. Cox false and defamatory statements have caused substantial damages to our clients, and we are evaluating our options with respect to the court’s decision”, wrote Steven M. Wilker.