Defamation and Blogging - The 9th Circuit Has Spoken

Fri, Jan 24, 2014 - 4:23pm
What First Amendment protections are afforded a blogger sued for defamation? This was the question presented recently in a case just decided in the most liberal appellate court jurisdiction in the USA, the 9th Circuit Court of Appeals.
The issue was one of first impression, and is a critically important legal decision in light of the emergence of bloggers and the alternative media. It is of obvious concern to anyone that blogs, like Mr. TF, all the guest posters and contributors here, too, so an in depth discussion is warranted.
The set up is here, courtesy of
“GRANTS PASS, Ore. (AP) -- A federal appeals court ruled Friday 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 9th 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 appeals 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.
Gregg Leslie of the Reporters Committee for the Freedom of the Press said the ruling affirms what many have long argued: Standards set by a 1974 U.S. Supreme Court ruling, Gertz v. Robert Welch Inc. [(1974) 418 U.S. 323, 350], apply to everyone, not just journalists.
"It's not a special right to the news media," he said. "So it's a good thing for bloggers and citizen journalists and others."
The jury in that case found against the blogger. The blogger lost BIG TIME, as the jury gave Padrick and his company $2.5 Million. 
That case is special to us all, because it shows the consequences of posting statements on the internet, any one of which could lead to an expensive lawsuit, and a huge verdict.
So, naturally, a pointed question must be asked, if we as a group are going to have any rights to stand up and say what we want without fear of crippling lawsuits that will chill our very free speech rights and squelch our dissent big time: “what, if any, legitimacy should be given to bloggers?”
The previous argument, advanced by the monopolistic legacy media,, witnessing their slow and inexorable demise, was that bloggers get no special protection, because they are nobody’s. Pure and simple. Only journalists–that is, credentialed elite from the nation’s liberal/progressive indoctrination camps, err, universities–get First Amendment protections, not some blogger or bloggers hammering away on mommy’s computer in the basement.
Bloggers, naturally, felt otherwise.
The critical cases on defamation law come from the US Supreme Court: the New York Times Co. v. Sullivan (1964) 376 U.S. 254, and Gertz v. Robert Welch, Inc. (1974) 418 U.S. 323, 350. Remember, defamation is a civil tort. Defamation is a non-contractual civil wrong, that we, as a society, seek to discourage. If one engages in defamation, by spoken words (slander) or written words (libel), then if there is any harm that such false statements of fact cause, then the person uttering the defamatory statements must pay for the harm caused by an award of money damages.
In California, the jury instructions on defamation are here [ ]. These elements are basically the same all across the USA:
A local attorney states this on his webpage/blog, and this is as good an explanation as I have found:
“What is Defamation?
In California, a claim for defamation involves a false statement made by one person about another person, which causes harm to a person’s property, business, profession or occupation. Defamatory statements are typically made using two methods:
(1) Slander: Making defamatory statements by a transitory (non-fixed) representation, usually an oral representation; or (2) Libel: Making defamatory statements in a printed or fixed medium, such as a magazine or newspaper.
In order to meet the elements for a defamation cause of action, a successful action must include:
1. A false and defamatory statement about another;
2. The unprivileged publication of the statement to a 3rd party (not including the person defamed by the statement);
3. Damage to the person defamed. Publication, in the context of defamation, does not mean it must be in print. Rather, it is considered published when it is made to a 3rd party.
California also recognizes “defamation per se”, or defamation that is presumed to cause damages without the need for any proof by the defamed person. Defamation per se is typically asserted in instances where there are attacks on a person’s professional character, allegations that an unmarried person is unchaste, allegations that a person is infected with an STD, or allegations that the person has committed a crime of moral “turpitude”.
“Truth” and “Privilege” Defenses to Defamation Claims
There are several defenses to an action for defamation: 1. Truth. If the person who made the alleged defamatory statement was telling the truth, it is an absolute defense to an action for defamation. For example, if a rumor being spread around about a person is actually true, passing along this rumor is not defamation. 2. Privilege. Another defense to a defamation claim is allowed when statements are made in court, by legislators on the floor of the legislature, or by judges sitting on a trial, no matter how false or outrageous.
“Opinion”, “Fair Comment” and “Consent” Defenses to Defamation Claims
Opinion. If statement is an opinion as opposed to a fact, there is no defamation. This distinction often depends upon the context of the statement being made, who made it and whether the community would perceive that person to be in a position to know it as fact. For example, a statement by your spouse or family member that you engaged in an act is far less likely to be considered opinion than a person’s statement who just met you.
Fair Comment. Similar to opinion, if a fair comment on a matter of public interest is made, then the person making the statement is not likely to be liable for defamation. For example, citizens discussing the allegations surrounding a local political scandal are likely exercising a free comment on the public situation.
Consent. On a rare occasion, a person may argue as a defense that the defamed person actually consented, or agreed to, the dissemination of the allegedly defamatory statement.
Public Figures” – Movie Stars, Pro Athletes, Politicians, Etc.
Under the First Amendment of the US Constitution, where a public figure brings an action for defamation, they must also prove the statement was made with “actual malice” in addition to the elements above. In other words, they must prove the person making the defamatory statement knew the statement to be false, or issue the statement with reckless disregard as to its truth. For example, a politician suing a newspaper over false allegations of corrupt conduct may prove the allegations were indeed false but receive no damages because the statements were not made with “actual malice”. In the defamation context, a public figure extends to a much broader range then celebrities and politicians. For example, a person may be “involuntarily” thrust into the public spotlight during a high-profile criminal case, or due to their relationship with a public figure, without ever intending to receive the publicity.
“The Supreme Court's landmark opinion in New York Times Co. v. Sullivan began the construction of a First Amendment framework concerning the level of fault required for defamation liability. 376 U.S. 254. Sullivan held that when a public official seeks damages for defamation, the official must show "actual malice"-that the defendant published the defamatory statement ''with knowledge that it was false or with reckless disregard of whether it was false or
not." Id. at 280. A decade later, Gertz v. Robert Welch, Inc., held that the First Amendment required only a "negligence standard for private defamation actions." 418 U.S. 323, 350 (1974).”
So, as one can see, there is a gray area which, as in this case, exists between the intersection of Sullivan and Gertz, an area “not yet fully explored by this Circuit, in the context of a medium of publication-the Internet-entirely unknown at the time of those decisions.”
At last, this case would set a true precedent regarding blogging and the internet as concerns standards governing the liability, if any, of bloggers who post defamatory material.
So, getting to the issue at hand, there has always been friction with regard to whether bloggers should be afforded traditional journalistic protections.
Is there any surprise that the legacy media HATES the bloggers, and wants them NOT to have any protections? Keep reading. 
So, the confrontation finally resulted in a trial, then an appeal. See, if a blogger gets sued for defamation, and settles, there is NO LEGAL PRECEDENT, AND NO DEFINITIVE RULING. The ONLY way the case law changes is when a blogger courageously steps up and commits to having a jury decide the case, and thereafter, if one or both decide to formally appeal the case to the appellate court. Naturally, the stakes are high, and stacked heavily against the blogger. There is NO huge news organization backing the blogger, so absent a kind soul volunteering his or her time, there usually is no chance for the blogger. But every now and then, there is a case that attracts some attention, and a volunteer steps from the shadows.
That is exactly what happened recently.
The issue came to a head in the Obsidian Finance Group, LLC, Kevin Padrick v. Crystal Cox matter, a case arising in the trial court in Oregon. There was a jury trial, a verdict against the blogger, and both sides appealed various aspects of the underlying jury verdict. There are two case numbers representing two appeals, 12-35238 and 12-35319, arising from the underlying district court case D.C. No. 3:11-cv-00057 HZ, and which were argued and submitted on November 6, 2013 in Portland, Oregon.
From the Opinion: “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 B 1. Padrick and Obsidian sent Cox a cease-and-desist letter, but she continued posting allegations. This defamation suit ensued.”
The trial court found that all but one of the blogger’s posts were “posts were constitutionally protected opinions because they employed figurative and hyperbolic language and could not
be proved true or false.”
The problem, though, was that there was at least some of the blogging that was a ““provable fact assertion”-i.e., that Padrick, in his capacity as bankruptcy trustee, failed to pay $174,000 in taxes owed by Summit.” 
As a result of that factual assertion [Padrick, as bankruptcy trustee, failed to pay substantial taxes], the trial judge allowed that single defamation claim to proceed to a jury trial. 
Hotly contested at trial of this issue was the legal standard that should govern a claim of defamation when the lawsuit involved a blogger and supposed matters of public concern. The blogger, Ms. Cox, raised two First Amendment arguments:
(1) Because the alleged false statement involved a matter of public concern, then Padrick and his company had to prove BOTH the blogger’s negligence (negligence is a legal concept that means a person had a duty to act reasonably under the circumstances, but did not; typically the argument is asserted that the person “knew or should have known” the statement was false, but published it anyway), AND that they could not recover PRESUMED damages absent proof that the blogger acted with ACTUAL MALICE (actual malice is SUPER DIFFICULT to prove, because it requires a showing that the blogger KNEW the post was false or acted with reckless disregard of its truth or falsity);
(2) Ms. Cox, the blogger, also argued that Padrick and Obsidian were public figures [bankruptcy trustee and his company], and as public figures, the blogger argued that Padrick and Obsidian were required to prove that Cox made the statements against them with actual malice.
The trial judge rejected Ms. Cox’s legal arguments. The trial judge felt that ““Padrick and Obsidian were not required to prove either negligence or actual damages because Cox had failed to submit “evidence suggestive of her status as a journalist.” [citations]. The [trial judge] also ruled that neither Padrick nor Obsidian was an all-purpose public figure or a limited public figure based upon Padrick's role as a bankruptcy trustee, finding that they had not injected themselves into a public controversy, but rather that Cox had “created the controversy.””
In short, the trial judge REJECTED the notion that blogger is entitled to any sort of journalistic protection. Does that not sound like the same, tired meme from the legacy media, trying to protect the crippled, failing fiat ponzi scheme of the broken federal reserve system? Entrenched, legacy bureaucrats protecting THEIR tired, worn system at all costs, is that not readily apparent? Newspapers? What’s that? Blogging? We ARE IT, and it is time the old school judges and legacy media embrace us.
Anyway, back to the analysis.
After closing arguments, the judge read the law to the jurors. This part of the trial is known as jury instruction. The judge told the jury that under Oregon law, “"Defendant's [the blogger, Ms. Cox’s] knowledge of whether the statements at issue were true or false and defendant's intent or purpose in publishing those statements are not elements of the claim and are not relevant to the determination of liability.” The judge also told the jury that "plaintiffs [Obsidian and Padrick] are entitled to receive reasonable compensation for harm to reputation, humiliation, or mental suffering even if plaintiff does not present evidence that proves actual damages . . . because the law presumes that the plaintiffs suffered these damages." 
So, what happened, is that proof that the statement was made was all that was required, and it matter not one bit whether Ms. Cox knew or should have known of the falsity of the statement. Secondly, the most galling part, is that neither Obsian or Padrick had to prove any harm at all. The law “presumes”–legal gobbledygook for “makes up out of thin air because we say so”– that Obsidian and Padrick had suffered harm and therefore, the jury only has to make up a number out of thin air which they can guess at and which has no basis at all in fact. Kind of like fiat FRN’s come to think of it . . .
With that legal set up, there should be no surprise: the jury found against the blogger, and awarded substantial compensation in favor of Padrick and Obsidian.
Following the trial, Ms. Cox made some arguments in front of the trial judge, pointing out that it was wrong for the court to instruct the jury as it did, that is, by failing to tell the jury that Ms. Cox was entitled to certain First Amendment protections “including requiring plaintiffs to establish liability by proving that [she] acted with some degree of fault, whether it be negligence or 'actual malice."' The trial judge also rejected the blogger’s arguments that a showing of fault was required because the defendants were public figures and that the blog post referred to a matter of public concern," and thus concluded that a showing of fault was not required to establish liability, and that presumed damages could be awarded.
So, the only options were to pay the huge verdict or appeal the jury verdict and the judge’s instruction based on application of an incorrect legal standard.
At this point, also, the blogger managed to attract the attention of a UCLA law professor, who helped her in the effort to appeal the trial court’s ruling. [“Though Cox acted as her own attorney, UCLA law professor Eugene Volokh, who had written an article on the issue, learned of her case and offered to represent her in an appeal.” From the news article, here: ]
Law Professor Volokh came aboard, and the rest is history.
In the appeal, Volokh admitted both that (1) the blog post contained an assertion of fact which (2) the jury correctly concluded was false and defamatory. The appeal was only based on the trial court’s incorrect legal rulings that “liability could be imposed without a showing
of fault or actual damages and . . .Padrick and Obsidian were not public officials.”
Naturally, Obsidian and Padrick wanted the verdict upheld. They asserted various arguments. First, they argued that only the “institutional press”–that is, the legacy, mainstream media–were afforded protection under a negligence standard. What they were arguing is that BECAUSE the blogger was NOT mainstream press, then Obsidian and Padrick did not have to prove the blogger’s fault. They claimed that defamation against a blogger was governed by a standard of strict liability, that is, they claimed they only had to prove that the false statement was made, and voila, winner winner chicken dinner!
Not so fast said the Court. Gertz did instruct that there was a need to shield "the press and
broadcast media from the rigors of strict liability for defamation" [citation], but the Court in this case said: “holding in Gertz sweeps more broadly.”
The court said this:
“Like the Supreme Court, the Ninth Circuit has not directly addressed whether First Amendment defamation rules apply equally to both the institutional press and individual speakers. But every 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. [citations] We agree with our sister circuits.”
“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: "With 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, 558 U.S. at 352. 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.”
The Court then delivered a stunning victory to the blogger: “We therefore hold that the Gertz negligence requirement for private defamation actions is not limited to cases with institutional media defendants.”
This means that a private, basement-dwelling blogger or contributor, cannot be successfully sued under a strict liability standard, that is, for simply making the false statement of fact. Instead, the blogger must be shown to have made the statement on the basis that the blogger knew, or should have known of the falsity of the statement. This is a HUGE victory for internet bloggers on this point alone.
But, like any case, there was not just one argument. Obsidian and Padrick also argued that there was another reason why jury’s verdict should stand under the strict liability standard that the trial court applied [thus making their case easier to prove because there was no requirement of proving fault of the blogger in making the statement]. Obsidian and Padrick argued that the negligence standard, requiring them to prove fault, only arose, unlike here, in the context of defamation involving matters of public concern. They argued, that Obsidian and Padrick were not engaged in such matters of public concern, and thus, they should NOT have to prove fault. They argued that strict liability thus applied, and that they should win because they proved the false statement was made, even though they did not prove that the false statement was made by the blogger who knew or should have known the statement was false.
The 9th Circuit opinion, citing many other examples, disagreed with Obsidian and Padrick’s analysis that the blogger’s statement was about a purely private matter involving nothing of public concern [“Cox’s allegations in this case are similarly a matter of public concern.”] The Opinion summarized WHY the blogger’s statement involved a matter of public concern:
“Padrick was appointed by a United States Bankruptcy Court as the Chapter 11 trustee of a company that had defrauded its investors through a Ponzi scheme. That company retained him and Obsidian to advise it shortly before it filed for bankruptcy. The allegations against Padrick and his company raised questions about whether they were failing to protect the defrauded investors because they were in league with their original clients.”
This “public concern” rationale protects all sorts of potentially defamatory statements. Any one of us already has expressed statements relating to gold and silver being manipulated on the COMEX, about knowing stooges helping perpetrate the massive fraud and manipulation, that there are those in the pocket of the fraudsters who actively make their living spouting the constant stream of lies about gold and silver manipulation, etc. We should all rejoice at the 9th Circuit’s opinion, since at this point, it is beyond dispute that what we talk about here, metals, manipulation, currencies, central banking, all of it, are matters of public concern. Even that evil man JC is fair game for comment, because he actively is involved in the dialogue supporting the ongoing manipulative schemes. We all now have some protections that before we did not have.
In delivering another stunning victory to the blogger, on the issue whether the statement involved a matter of public concern, the Court said this:
“Because Cox's blog post addressed a matter of public concern, even assuming that Gertz is limited to such speech, the district court should have instructed the jury that it could not find Cox liable for defamation unless it found that she acted negligently. See Gertz, 418 U.S. at 350. The court also should have instructed the jury that it could not award presumed damages unless it found that Cox acted with actual malice. Id. at 349.”
Wow, what an amazing, crystal clear victory for the blogger!
The Court did give Obsidian and Padrick a slight victory, of no real consequence, because the Court found that neither Obsidian nor Padrick were public officials. The blogger argued that “the jury therefore should have been instructed that, under the Sullivan standard, it could impose liability for defamation only if she acted with actual malice. [citation].” The Court disagreed. To this is a big <yawn>, because the victories on the other arguments meant that the Court had no choice but to reverse the judgment and send it back to the trial court.
The Opinion wiped out the huge judgment for Obsidian and Padrick, and requires them to once again, have a trial, in front of a jury, where the trial judge has to instruct the jury that the jury can only find the statements defamatory IF Obsidian and Padrick PROVE that the blogger knew or should have known the statement was false. That is a very difficult standard to prove, far harder than a strict liability standard, which has no such requirement at all.
What will happen at the re-trial? Well, first, will there even BE a retrial under this heightened standard that Obsidian and Padrick must meet? Who knows. If there is a re-trial, what evidence will Obsidian and Padrick bring to bear on the question as to the fault of the blogger in making the statement? How can they prove Ms. Cox knew the statement was false? How can they prove that she should have known the statement was false? Isn’t it more likely that Ms. Cox was spouting an opinion based on inferences of wrongdoing, which means that there is proof that she had some basis to make her statement, or, in other words, there is at least some evidentiary basis to support her defense to the defamation claims, unlike what she faced in the earlier trial where the only defense was that she did not make the statement at all?
More realistically, Obsidian and Padrick will slink off into the distance and never appear again. How many thousands of dollars did Obsidian and Padrick spend, for naught, on this case taking the blogger to trial? What an utter waste of time and money, only to end up with the blogger not only winning, but convincingly so, and paving the way for the rest of the blogging community to enjoy freedom in posting with lessened fear of being sued! Hooray is what I say! 
I have been wanting to weigh in on this concept for a long time, and I thank TF for bringing this case to my attention. He graciously agreed to allow me to offer up this analysis, and I thank him profusely for the opportunity to be of service.
Keep these concepts in mind when posting and blogging. Oh yeah, and keep on stacking. 
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About the Author


Jan 22, 2014 - 4:41pm



Jan 22, 2014 - 4:42pm

Surely not?


Jan 22, 2014 - 4:43pm

i disagree

I can't see why someone should be allowed to make a false allegation against someone without the offended person having recourse. While we all have suspicions about manipulations of the metals, etc, I don't see how falsely stating, for example, that Jamie Dimon hasn't paid his taxes gets anyone anywhere. And if such a false statement was made, why shouldn't the man have the protection of law?

Jan 22, 2014 - 5:25pm


Immense gratitude from all of Turdville for taking the time to write up such an extensive review.

Jan 22, 2014 - 7:43pm


Thanks for the comment. It is a most rational, normal comment, one that is heard in law school during first year torts, when the concept of defamation is taught.

See, there is tension between outright free speech, which many (USA) people believe exists, and the reality that restrictions on speech do exist.

Everyone knows of one common limitation on free speech, that is, it is illegal to yell fire in a crowded movie theater. It is part of the concept of "time, place, manner" restrictions on free speech.

The First Amendment is designed to protect POLITICAL speech, not ALL speech. So, there are contours as to what is allowed.

Another restriction on free speech, which you argue for, is that defamatory speech should be restricted.

Indeed, you said:

"I can't see why someone should be allowed to make a false allegation against someone without the offended person having recourse. While we all have suspicions about manipulations of the metals, etc, I don't see how falsely stating, for example, that Jamie Dimon hasn't paid his taxes gets anyone anywhere. And if such a false statement was made, why shouldn't the man have the protection of law?

Ok, let's analyze your comment. You must use precision when dealing with this concept. There is NO, and I mean NOT ONE BIT of recourse one may have for someone else exclaiming an opinion. By definition, defamation is only a false statement of fact. An opinion, is thus definitionally excluded from the prohibition.

So, assuming you mean a "false allegation OF FACT", then you are on the right track. As to your use of the phrase "offended person," well, you are now going to the heart of political speech. The concept of the "free exchange of ideas" means that speech should be encouraged, even radical speech, with radical opinions and viewpoints, based on the theory that sound ideas and opinions will win out in the end. The other side of that coin is if ANY opinion speech is outlawed, then the powers in charge at the time can censor any idea, thus making the concept of free speech nonexistent.

Thus, like most things in the law, there is a continuum along which a factual scenario may fall. Purely private things, with no public interest, hardly measure up to the ideals of political speech, so a person making a false statement of fact about a private person, about a subject that is purely private, should enjoy no free speech protections at all, and a defamation lawsuit should be allowed. That is at one end of the spectrum, or continuum.

At the other end, a person commenting that Obummer is a socialist for his concept of Obamacare, well, that concept is a matter of huge public concern, and the person spouting the idea has a huge public platform with which to defend his idea.

Now you get the idea?

So, in analyzing your comment, one must conceptualize just who the "offended person" really is. If the "offended person" is a public figure, then the thinking goes that the public figure has a platform to defend his or her speech. So, the person spouting the allegedly defamatory material, should be allowed a little bit of leeway, so as to allow for vigorous debate. If the subject matter is one of public concern, and the person is a public figure, then there is very little that the law disallows. A defamation suit under those circumstances is almost never filed, because in that case, the public figure would have to prove actual malice and actual harm. This is a very difficult legal burden.

In contrast, a farmer in Olathe, Kansas, who says his next door neighbor stole a tractor, could very easily be sued for defamation and the alleged tractor thieving farmer would almost certainly win simply based on a showing that the false statement was made.

That concept, the tension, and the continuum, coupled with the legacy media not wanting to lose any more power or market share to the bloggers, is what was so important about the Obsidian case. Bloggers should be free to say what they want, about matters of public concern, and should not fear defamation lawsuits which do not have to prove fault or any harm from the statements.

The alleged person who was supposedly harmed by the false statements, has plenty of recourse. The allegedly defamed person can still go to court, file his lawsuit, and claim that the false speech harmed him. But now, the allegedly defamed person cannot use the lawsuit like a tool to chill free speech, because now the person has to PROVE the case, as opposed to merely filing the lawsuit.

In the scheme of things, this Obsidian case was overdue, and marks a very important milestone for bloggers everywhere. 

So, back to your concept of protecting Jamie Dimon against an accusation of not paying his taxes. Mr. Dimon, the scumbag, my pure opinion, has a huge, global platform, and loads of money, and a legal team that would sue me in an instant should I defame him. Go ahead. His filing of the lawsuit would be met by my 12(b) motion, following which I would ask for legal fees against him for the frivolous filing.

See, there is a remedy, and a counter remedy, and the system works as intended.

Jan 22, 2014 - 7:44pm


TF found the case, not me. I jumped at the chance to read it and offer my comments. Sorry it took so long.

Jan 22, 2014 - 7:44pm


Thank you for the tremendous effort. Written in a way that even I understood every word of it. That in itself is amazing!

One thing stands out to me that you said:

"The trial judge felt that ““Padrick and Obsidian were not required to prove either negligence or actual damages because Cox had failed to submit “evidence suggestive of her status as a journalist.” [citations]."

So carrying this forward to thinking about what we do here, what is our status as journalists? How does one become a journalist? 

The Breakfast Club - How does one become a Janitor?

It seems to me that we should all somehow find a way to become a journalist. I found this:

General “Press ID”

News organizations generally issue their own ID cards that identify employees and in some cases freelancers as working for that organization. Many photographers have created their own ID’s, using Photoshop and a laminated luggage tag (such as the ones available here: Stating "Press" or "Media" on the ID, along with your name, photo, company name (if you have one) may assist you in identifying yourself but will not necessarily provide any additional privilege or access beyond what is available to the general public. Do not make any false statements on the card (such as the name of an organization or company that you do not represent).

The NPPA also provides its members the opportunity to purchase a Member Photo ID. The NPPA Member Photo ID is for identification purposes only. The ID’s are available to NPPA members only. More information and application requirements are available at:

It is important to note that any press credential or ID will not necessarily entitle you to greater access than the general public. It may, however, help identify you to organizations and subjects who may be requesting such information.

Government-issued ID

A government issued press ID may provide improved access in some situations. It is another form of identification and in some communities may be acceptable to law enforcement agencies for purposes of access beyond police and fire lines (but this is always at the discretion of the officer in charge of the scene). Some courts may allow media with a court-issued ID or other government issued press pass to enter the courthouse without being screened (a big help when you are late for court and have lots of camera bags to run through the x-ray machine). Other courts may require a special ID

So can I just make my own ID and call myself a journalist?

Jan 22, 2014 - 7:45pm

@ Cal Lawyer

There is hope for us yet. Thanks for putting this all together!

Jan 22, 2014 - 7:46pm

Thanks TF for Alerting me to the Case

Thanks to you my friend. It was a great find at your end. I finally got to add something I can understand, unlike me trying to read and interpret a stupid candle chart . . .

Jan 22, 2014 - 8:48pm

Uncle Ted & TF

CL, Since you have researched this recent case, and know it well, may I assume correctly that Uncle Ted's specific allegations against JPM are only actionable if he has been negligent in his calculations or conclusions? (If so, by extension, this would apply to TF's mild mannered thoughts).

Jan 22, 2014 - 9:07pm


No, it is simpler than that. Uncle Ted's calculations are by his own words, his opinions, based on work he did from other work or figures. His conclusions, are but another moniker for "opinions," which by definition cannot be "false statements of fact." False statements of fact = defamation. Wrong conclusions, like, say from Jeffrey Christian, no matter how wrong, obviously wrong, and wrong headed, designed to dupe others, what not, no matter what, JC cannot be successfully sued for defamation for any of the absolute fermented tripe bile horseshi- that comes out of his mouth, unless there is a plain statement of fact that happens to be false, that also happens to only involve a private person and which involves nothing of public interest.

As for TF, so long as he gives opinions, he is just fine. If TF were to stray off and say something, like Mr. so and such is a child molester, then that statement would for sure give rise to a most likely defamation lawsuit.

I barely touched the surface of the nuances of defamation, and there are literally hundreds of cases that go into much detail. I gave the basic rules, and discussed the tension over blogging and what, if any, protections bloggers deserve in this great marketplace of ideas.

I am ecstatic that blogging has been elevated to protected status, at least somewhat. There is no immunity yet, unlike for lawyers who comment during litigation.

Did you know that I have an absolute privilege to say what I want during litigation? No defamation, pure and simple. However, there are other punishments besides a defamation lawsuit: comments may get a mistrial motion granted, or lead to discipline from the State Bar. So, even though I have a pretty decent privilege to say what is on my mind, even lawyers have limits on what they can say and get away with.

Be happy we have some First Amendment protections, given the regime in charge and the trends of late.

Jan 22, 2014 - 9:18pm

Remember Marotta, the WS adviser who told people to "get a gun"?

I know it's not in keeping with this totally awesome analysis by CL, but.....

Marotta's latest:

In a memo to clients provided to Secrets, David John Marotta calculates the actual unemployment rate of those not working at a sky-high 37.2 percent, not the 6.7 percent advertised by the Fed, and the Misery Index at over 14, not the 8 claimed by the government.

Jan 22, 2014 - 10:01pm

Been said, but gotta add my own...

AWESOME WORK, CaliLaw! Thank you for this write-up, and of course to Turd for a) noticing the case, and b) providing the platform to discuss it. You really oughta get ZH to publish this. Can't find it now, but there was a really good early guest post (PrizeFighter?) on the topic of the legal status of anonymous speech and the role of blogs & 'citizen media'. This is a brilliant vindication, and like you I think (hope?) it can pave the way for more truth to be exposed and widely disseminated.

Mr. Fix
Jan 22, 2014 - 10:05pm

Obama is guilty of treason:

It's only defamation if it isn't true.

So sue me, I'll prove it.

Nice job CL.yes

Jan 22, 2014 - 10:20pm
Jan 22, 2014 - 10:34pm

Harvey's Up! (TFMR)

  • Mark O'Byrne (Goldcore): A Wall Street Journal report cited the Fed may announce another $10 billion cut in its money printing programme during their upcoming meeting on January 28-29. This may have put pressure on gold. The IMF raised its global growth forecast for the first time in 2 years. It is worth remembering how the IMF, like the credit rating agencies failed to warn regarding the global financial crisis. New research from the Portola Group shows that currency debasement by the U.S., China, Japan and the Eurozone has increased the yearly money supply by a whopping $50 trillion in one year. Staggeringly, total annual global GDP is only $75 trillion. The result of endless currency printing will be currency devaluations and savers will again be hurt. Therefore, diversification into precious metals remains vital in order to protect wealth.
  • Harvey: The bankers have hit gold and silver in the access market so be prepared for another whacking tomorrow. Let us see if physical demand can overcome these crooks. GOFO rates are all positive.
  • Francesca Freeman: The five banks tasked with setting the benchmark price for gold have formed a steering committee to review how the so-called 'fix' is set and are meeting Tuesday, according to a person with knowledge of the matter. The committee, which will seek an external audit of the process, has been formed as regulators investigate possible manipulation of precious-metals prices. Gold in the spot market is traded over the counter 24 hours a day, and there is no central source for data on prices at which it changes hands.
  • Grant Williams: The evidence of suppression is everywhere, though most refuse to believe their elected officials are capable of such subterfuge. However, the recent numerous scandals in the financial world are slowly forcing people to realize that anything and everything can be manipulated. Libor, mortgage rates, FX -- all were shown to be rigged markets, but none of them has the importance that gold has at the center of the financial universe, yet all of them are far bigger markets than gold and therefore much harder to rig. "Gold is a manipulated market. Period. "2013 was the year that manipulation finally began to unravel. "2014? Well, now, this could be the year that true price discovery begins in the gold market. If that turns out to be the case, it will be driven by a scramble to perfect ownership of physical gold; and to do that you will be forced to pay a lot more than $1,247 per ounce. Count on it."
  • Koos Jansen: The Gold lease business in China works like this: eligible businesses can lease gold from banks and pay the same quantity and grade gold when the gold lease is due and pay the relevant gold lease rate. During the lease, businesses can sell the gold to get short-term funding. However, gold lease is not only a new financing tool but many business owners use it as a modern arbitrage means. “There are business owners investing tens of millions of RMB and play the gold lease risk-free spread arbitrage.” Chen Qian said. But in her opinion, this kind of risk free arbitrage may have unfathomable risks. 
  • John Hathaway on a gold short squeeze: The banking system is becoming increasingly oppressive, onerous, and intrusive. So I think we are in the very early days of recognition that banks are instruments of government policy. This policy has been made possible because of the huge amount of concentration among large institutions. They are basically arms of the treasury functions of various sovereigns. So I think people with wealth, with liquid assets, who want real safety for a portion of their liquid assets, they will choose to have physical metal. And God forbid that the story for gold gets better. For example, what if the stock market stops delivering these terrific returns that it’s had for the last few years? Investors will start to look for alternatives and one of those alternatives will be gold. So money on the sidelines, or money coming out of stocks, junk bonds, some of that is going to go into gold. If you combine a short squeeze in the metal itself with increased money flows from outside the gold sector, you have the makings of a huge move in the gold price. What that will mean is all-time highs in the gold price in a very rapid and disorderly manner. That’s what this short squeeze will be about.
  • Stephen Leeb: Between the end of World War II and 1971, the levels of growth and prosperity in the US were fantastic. Once we went off of the gold standard all hell broke loose in this country. At that point we lost all sense of discipline. Health care costs and inflation started to skyrocket and everything went nuts. The move to a lower standard of living for most Americans has taken place because our money has continued to be debased and destroyed. But the world is going back to a gold standard one way or another. This is why people have to own gold. People should also put away a lot of silver too. Those metals will be an economic fortress for investors. This is all going to end in tears for most people in the West because they will not be prepared for what is coming. The adjustment to the New World Monetary Order is going to destroy the savings and wealth of so many people in the West. It will be a sad day for those who are not prepared, and all of this is happening by design.
  • Keith Barron: As far as the West goes, this has been a very dangerous experiment to allow so much gold to go out of the hands of the West and into the East. But the game is now changing for the price suppression scheme, and last week I said that if entities wanted to raid what is left on the Comex, by forcing delivery, they would potentially put that exchange in a great deal of trouble.” Eventually America is going to look like a lot of South American countries, where most Americans will be living a second world lifestyle. Services have already been cut in the United States and these cuts will only accelerate in the future. Also, infrastructure is rapidly falling apart. When you see things like the Chinese sending probes to the moon, China moving to dominate the Pacific theater, and some of the American generals warning that America is losing its supremacy, this is what’s really happening right now. America is a very indebted nation and it cannot afford its empire anymore.
  • Dave Kranzler: Venezuela was able repatriate 160 tonnes of gold in four months. Why is it going to take the U.S. 7 years to ship back 300 tonnes to Germany when it would require just two trans-Atlantic cargo shipments via air? The cost of shipping and insurance is miniscule compared to the value of 300 tonnes. It's because the gold is not there. It's gone. No public official is willing to state the obvious and mostly oblivious Americans have no clue it's even an issue.
  • But it is an issue and the severity of that issue will grow with time. Already German politicians are preparing legislation that will demand the repatriation of ALL of Germany's gold from the U.S. and France. That will be fun to watch our Government if the legislation passes. But the bottom line is that the U.S. gold being held by the Fed - all of it - is gone. And soon the U.S. will not be making any rules in the global geopolitical arena.
  • Bill Holter: If it is true that 99 out of 100 "gold" investors really do not own gold and this "supposed gold" doesn't even exist...then shouldn't the price be 99 times higher (not even factoring in the 98 or 99% who either hate gold, are too afraid of it or cannot even spell it)? Or for rounding simplicity, shouldn't we just add two "zeroes" to the current price and we'd be pretty close? Are you crazy Holter? $125,000 per ounce? I know this will disappoint you because I cannot (wouldn't try) to make any price prediction other than "higher...multiples and multiples higher than we are now" and it will be done in a panic fashion.
  • Tyler Durden: According to Reuters the corruption investigation has been brought to a screeching halt, after Turkey's government 'purged' both the judiciary and police systems, firing and transferring dozens of judges and officers and making it impossible for any ongoing investigative efforts to continue.

All this and more on...

The Harvey Report! indecision


Jan 23, 2014 - 12:17am

Control what people see, hear, think....

"Defamation", that sure brings up the perpetrators of "spin". How about a class action against CNBC and Bloomberg re the daily mistruths they spew over us?

I think Bloomberg should be doing jail time, same the CNBC and CNN people, all of them are complicit, in my opinion, in leading us into chaos and confusion and wars and the deaths of many millions. And Financially MSM have backstopped the Banksters all the way.

MSM is Evil much of the time. They are immune, it seems, cuz the people are "the walking dead?" - and that is the result of been exposed and trained to think by let's attack them in court!

Fred Hayek
Jan 23, 2014 - 12:24am

It's so rare to see a very positive court ruling

This is terrific. Great work Cali!

At the top of the piece when you said it was the 9th circuit I was thinking "Uh oh. Those guys might be such lovers of the 'official' media (seeing as most of it pumps out 'news' along the general lines of thought usually attributed to the judges on the 9th circuit) that they fuck over everyone without an official press credential."

But they didn't. Good for them for getting it right. It's pretty much impossible to think that the founders only wanted to accord protection to official mainstream media. 

Jan 23, 2014 - 1:56am

Weasel Words...

I heard that some people would say that liberal use of weasel words might possibly keep you out of trouble?

  • "A growing body of evidence..."[12](Where is the raw data for your review?)
  • "People say..." (Which people? How do they know?)
  • "It has been claimed that..." (By whom, where, when?)
  • "Critics claim..." (Which critics?)
  • "Clearly..." (As if the premise is undeniably true)
  • "It stands to reason that..." (Again, as if the premise is undeniably true—see "Clearly" above)
  • "Questions have been raised..." (Implies a fatal flaw has been discovered)
  • "I heard that..." (Who told you? Is the source reliable?)
  • "There is evidence that..." (What evidence? Is the source reliable?)


Jan 23, 2014 - 2:09am

Ninth Circuit most liberal? Not so much....

The Ninth Circuit Court of Appeals at one time may have been extremely liberal, but not so much these days. When president, George Bush packed the court with plenty of conservative judges more than happy to rule in favor of corporate America in any case where individuals have been wronged. I kind of doubt you can still make sweeping assumptions that the court leans exclusively liberal. I had a case in front of the Ninth Circuit, and trust me, this court can certainly lean conservative and very corporate. Times have changed.....

Jan 23, 2014 - 7:49am

Thanks Cal Lawyer...Great work!

Much appreciated.

The merger of State and Corporate power is the foundation for thriving fascism.

Doesn't matter if the corp is a big media corp. or not.

Thanks for your work CL!

Jan 23, 2014 - 8:22am
Jan 23, 2014 - 8:25am
Jan 23, 2014 - 8:35am

Nice Job CL

You do an excellent job of setting out the law. Truth be told, when I've read (excerpts) of Sullivan and Gertz, it seems clear to me that in each instance the Court has selected its winner and loser, and then engages in contortions to reach the intended results. Of such is our law made.

Jan 23, 2014 - 8:36am
Jan 23, 2014 - 8:47am

What A Great Article

Outside of Stacking this article really got my attention, I guess I love law and our rights which I never new. Anyway thank you California Lawyer for this great article and getting my mind of the Metals. Keep Stacking O! Yea and your opinions. Lol

Jan 23, 2014 - 8:51am

Well Done Counselor / Gold & Interest Rates

Pretty intense/informative piece CAL, nicely done yes


Jan. 22, 2014, 6:16 a.m. EST

The incredible gold-interest rate correlation

Opinion: One model pegs gold’s fair value at $800 an ounce

AFP/Getty Images

CHAPEL HILL, N.C. (MarketWatch) — If the 10-year Treasury yield rises to 5%, gold will fall to $471 an ounce.

And if that yield rises to just 4%, from its current 2.8%, gold will still plunge — to $831

Those sobering forecasts come from an econometric formula based on the last decade’s relationship between gold and interest rates. Assuming this past is prologue, the only way for gold to make it back to its all-time high above $1,900 an ounce is for the 10-Year Treasury yield to fall to 1%.

To be sure, a comprehensive model of gold’s price needs to include more than just interest rates. But, according to Claude Erb, who conducted these statistical analyses, we should not be too quick to reject his simple “behavioral” model relating gold’s price to the 10-Year Treasury yield. Erb is a former commodities portfolio manager for Trust Company of the West and the co-author (with Campbell Harvey, aDuke University finance professor) of a recent National Bureau of Economic Research entitled “The Golden Dilemma.”

Erb says we should not blithely dismiss his simple gold-interest rate model because it has had impressive explanatory power in recent years. Consider a statistic known as the r-squared, which reflects the degree to which fluctuations in one thing predicts or explains changes in another. The r-squared ranges between 0 and 1, with 1 indicating the highest degree of predictive power and 0 meaning that there is no detectable relationship.

In the case of the gold-interest rate correlation over the last decade, Erb told me in an interview, the r-squared is a very high 0.78. ( Click here for a summary of his findings. )


Imagine using Erb’s model one year ago to forecast where gold would be trading when the 10-year yield rises to 3%. At the beginning of 2013, of course, that yield stood at 1.76%, and gold bullion stood at nearly $1,700. He told me that the model at that time would have predicted bullion’s price would be $1,196.70 when the 10-year yield hit the 3% point.

That point was reached on Dec. 26 of last year, and the London Gold Fixing price on that day stood at $1,196.50.

That counts as hitting the bulls eye.

Impressive as his simple model has been, however, Erb stresses that he is not recommending that gold traders focus only on interest rates when determining whether they should be in or out of the gold market. Nevertheless, he reminded us, the gold bulls shouldn’t now be claiming that bullion responds to lots of factors besides interest rates. That’s because it was the gold bulls who were quick — so long as interest rates were declining — to claim that the impressive gold-interest rate correlation justified a higher gold price.

As Erb puts it, “if gold traders want to live by the sword, consistency requires them to be ready to die by it as well.”

What factor or factors does Erb suggest that gold traders focus on? The one that he and his co-author Campbell Harvey suggested in their NBER study is the ratio of gold’s price to the level of the consumer price index. Since that ratio historically has averaged 3.4-to-1, a rule of thumb could be that gold is overvalued when the ratio is above that level and undervalued when below.

Currently, the gold-CPI ratio stands at 5.3-to-1, suggesting gold remains quite overvalued. That in turn suggests that gold’s fair value is just under $800 an ounce.

Jan 23, 2014 - 9:03am

Epic article, CL

Just wanted to pile on and say what a valuable contribution this is- I love that we have our own in-house council! I was particularly gratified to hear that my half-assed opinions and wild rantings now have a slightly smaller chance of landing me in the hole.

Thanks, my man!

Motley Fool
Jan 23, 2014 - 9:09am


I hope he has the balls to go short gold then. I'd like extra reasons to laugh at the above. :D

I wonder what the fair value of gold was during the 80's when US interest rates were high...5$? xD

Jan 23, 2014 - 10:18am

Well done counselor gold & interest rates

does it not follow that it would be important to understand how you calculated your CPI index? Some claim that the math used today for calculating CPI is understating the real inflation numbers, for which anyone who is shopping today for energy and groceries might tend to agree, me included, so I keep on stacking.

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