Should bloggers have the same legal protection as other media outlets? One might think that the lack of a requirement for credentialing in the First Amendment would mean yes, but a federal district court disagreed in 2011. In a case involving a blogger crusading against what she saw as fraud in a bankruptcy-counseling firm, a judge ruled that the plaintiffs in the libel suit did not have to prove malice to win punitive damages. Yesterday, the Ninth Circuit unanimously overruled that decision:

A federal appellate court ruled Friday that the author of a blog post deserves the same treatment in a defamation case as “institutional media.”

The three-judge panel of the 9th Circuit Court of Appeals held unanimously that there is no difference between a journalist for a media outlet and another speaker when it comes to First Amendment protections. …

“The protections of the First Amendment do 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. As the Supreme Court has accurately warned, a First Amendment distinction between the institutional press and other speakers is unworkable,” Hurwitz wrote.

The subject of Cox’s blog posts were a matter of public concern, the court held, so in order to prove defamation, the plaintiffs would have to show she acted with negligence or malice in making false statements against them.

Eugene Volokh, who argued for the blogger in the appeal, notes the victory (via Instapundit):

I think that’s right, not just as a matter of First Amendment principle but also as a matter of history and precedent (as I documented at length in Freedom for the Press as an Industry, or for the Press as a Technology? From the Framing to Today, 160 U. Pa. L. Rev. 459 (2012)). The specific legal issue that the Ninth Circuit was confronting in this passage, by the way, is whether all who speak to the public are equally protected by the Gertz v. Robert Welch, Inc. rules, which are that

1. libel plaintiffs suing over statements on matters of public concern must prove that the defendant was negligent about the falsity of the statement, and

2. libel plaintiffs suing over statements on matters of public concern and seeking presumed or punitive damages (as opposed to identifiable compensatory damages) must prove that the defendant knew that the statement was false or recklessly disregarded the possibility that it was false.

Well, of course he’s right, although it was disturbing to see a district court get this so wrong. The media protections that have developed by legal precedent under the First Amendment must apply equally, as does the First Amendment itself. In fact, the media protections should probably apply equally to all speakers, and not just those who publish their works via paper, broadcast, or the Internet. One can make the argument that the media has to put itself in a more vulnerable position in order to function as communication sources and therefore should have more leeway, but that applies to bloggers at the very least as well as newspapers and television news outlets. It might apply even more, since bloggers are much less apt to have legal resources readily available and are much more vulnerable to intimidation.

Volokh notes, though, that the court stuck to the First Amendment, and not ancillary statutes on the state and federal level that offer additional protections to the “media.” Will those apply to bloggers as well, even if the statutes don’t explicitly include them? We’ll see, but this precedent will make a pretty good argument for their inclusion if a legal fight arises.  That may be especially true if this gets appealed to the Supreme Court and make for an even broader precedent (assuming it’s upheld), but the plaintiffs may choose to pass on an appeal and wait for the new trial ordered in this decision instead.

This, however, does not let the original respondent off the hook in the lawsuit.  The First Amendment protection does not mean that bloggers (or anyone else) are completely immune to libel suits. The original court case determined that one of the posts in question did not fall cleanly under the category of opinion but asserted factual knowledge that turned out to be false. This time it will take a finding of both falsity and either malice aforethought or reckless disregard for the court to grant a large punitive award, rather than just proving her allegations false. A reading of the court opinion suggests that such an argument may be available:

Kevin Padrick is a principal of Obsidian Finance Group, LLC (Obsidian), a firm that provides advice to financially distressed businesses. In December 2008, Summit Accommodators, Inc. (Summit), retained Obsidian in connection with a contemplated bankruptcy. After Summit filed for reorganization, the bankruptcy court appointed Padrick as the Chapter 11 trustee. Because Summit had misappropriated funds from clients, Padrick’s principal task was to marshal the firm’s assets for the benefit of those
clients.

After Padrick’s appointment, Crystal Cox published blog posts on several websites that she created, accusing Padrick and Obsidian of fraud, corruption, money-laundering, and other illegal activities in connection with the Summit bankruptcy. Cox apparently has a history of making similar allegations and seeking payoffs in exchange for retraction.  See David Carr, When Truth Survives Free Speech, N.Y. Times, Dec. 11, 2011, at B1. Padrick and Obsidian sent Cox a cease-and-desist letter, but she continued posting allegations. This defamation suit ensued.

The district court held that all but one of Cox’s blog posts were constitutionally protected opinions because they employed figurative and hyperbolic language and could not be proved true or false. Obsidian Fin. Grp., LLC v. Cox, 812 F. Supp. 2d 1220, 1232–34 (D. Or. 2011). The court held, however, that a December 25, 2010 blog post on bankruptcycorruption.com made “fairly specific allegations [that] a reasonable reader could understand . . . to imply a provable fact assertion”—i.e., that Padrick, in his capacity as bankruptcy trustee, failed to pay $174,000 in taxes owed by Summit. Id. at 1238. The district judge therefore allowed that single defamation claim to proceed to a jury trial. The jury found in favor of Padrick and Obsidian, awarding the former $1.5 million and the latter $1 million in compensatory damages. …

Cox does not contest on appeal the district court’s finding that the December 25 blog post contained an assertion of fact; nor does she contest the jury’s conclusions that the post was false and defamatory. She challenges only the district court’s rulings that (a) liability could be imposed without a showing of fault or actual damages and (b) Padrick and Obsidian were not public officials.

This is an important decision, and a win for bloggers. The core case, though, should serve as a cautionary tale. When a blogger or a reporter goes on a crusade, especially against targets who are not “public persons” (the appellate court rejected Cox’s appeal on that point), he or she had better take care to get the facts right or at least demonstrate a responsible approach to finding them.