Blog Ipsa Loquitur

Published on under Legal Theory

From the wonderful folks at ShortFormBlog, whose site you should read daily:

Blogger told she’s not a journalist, fined $2.5 million: This is an important case. The Oregon blogger, Crystal Cox, runs a number of legal sites that play whistleblower to various firms. One of those firms, Obsidian Finance Group (they of, sued over defamatory postings.

Whoa, whoa, whoa. Let’s back this up a little bit and figure out what happened.

So essentially, a person connected with Obsidian was giving Cox information about the allegedly shady things Obsidian does. I’m not certain what exactly the shady things were, but she blogs about the things that she says Obsidian does. Or, put another way, she makes claims about shady things that Obsidian does. There’s a word for that: defamation.

Of course, it’s not defamation if these things are true. That’s one of my favorite quirks in the law. If I publicly accuse you of being a kitten thief, and we go to court to fight about it, the best thing I can do for myself is to prove to the whole world (in the public record) that you are, in fact, a kitten thief.

What She Said

Sadly for me, (I studied Law of Kittens extensively in law school) Cox’s statements about the head of Obsidian, Kevin Padrick, had nothing to do with kitten thievery. According to Judge Hernandez’s opinion (PDF), she claims Padrick failed “to pay taxes on taxable gain obtained by the bankruptcy estate.”

The judge actually found that most of Cox’s blog posts weren’t defamatory statements. From the excellent Seattle Weekly article, Cox

argued that her writing was a mixture of facts, commentary and opinion (like a million other blogs on the web) and moved to have the case dismissed. Dismissed it wasn’t, however, and after throwing out all but one of the blog posts cited by Obsidian Financial, the judge ruled that this single post was indeed defamatory because it was presented, essentially, as more factual in tone than her other posts, and therefore a reasonable person could conclude it was factual.

Emphasis added. For context, I’ll repost some of the sentiments on Cox’s blog post.

But first, an aside

In the interest of protecting myself from a defamation lawsuit, I will preface these quotes by saying that these statements are all false. They are presented here in the interest of scholarship and educational commentary.

Further, the New York State Court of Appeals has recently ruled in Shiamili v. The Real Estate Group of New York, Inc., that the federal Communications Decency Act shields interactive computer service providers (me) from liability for publishing defamatory statements on their blogs that were originally authored by a third party (Cox). I will again remind readers that these statements are false, and that the person that made these statements failed to prove their truth in court. (Yes, this is a two paragraph disclaimer. What do you want? I’m a lawyer.)

The Statements

That being said, Cox’s blog reads (in relevant part):

Kevin Padrick of Obsidian Finance Group - Tax Fraud? Fraud Against the Government? Gee ya Think?

When Kevin Padrick as Chapter 11 trustee did a turnover of all the assets to his liquidating trust, these deferred gains became tax liabilities to the liquidating trust. However, Obsidian Finance’s accounting staff is conveniently leaving these deferred gains out of their tax returns.

They make plugs to the capital accounts of the Summit Shareholders to get rid of the deferred gain upon the sale or disposition of the property. For an example, Kevin Padrick just gave away the Summit Shareholders’ interest in Century Drive Mobile Home Park to another owner named Jim Hull.

Upon Disposition, the trust should have recognized around $600,000 of taxable gain on behalf of the interest owned by Mark Neuman and Brian Stevens. No such gain was reported on this tax return and the tax of $174,000 (20% to IRS and 9% to Oregon ) was never paid by the liquidating trust. Why would Kevin Padrick of Obsidian Finance Group pay the tax when no one is monitoring his work?

It sounds like you could take those statements as factual, all right. But why does it even matter whether or not the statement is factual?

What Defamation Is

In Oregon, courts have held that defamatory statements are statements which expose their subject to hatred or ridicule, or ones that diminish the public’s esteem or respect held for the subject, or ones that excite adverse opinions about the subject.

However, any statement could conceivably have that effect on a person. Why, some really crazy people would just hate finding out that President Obama doesn’t wear plaid socks when he goes golfing! So just about every court has imposed a “reasonable person” test; only statements that would expose subjects to hatred by a reasonable person can be considered defamatory.

The educational organization Open Oregon notes that there are some statements that, as a matter of law, cannot create those feelings in a reasonable person. Specifically, opinions.

Opinions — defined as statements that cannot reasonably be interpreted as stating actual facts — are protected by the United States and Oregon constitutions and are therefore not defamatory. Nevertheless, when an “opinion” implies the existence of undisclosed defamatory facts, it is actionable as a defamatory statement. Statements that are not defamatory per se nor capable of a defamatory meaning are considered reasonably capable of a defamatory meaning and are almost always resolved by the jury.

So I can say that in my opinion, Kevin Padrick is no better than a kitten thief, and that’s probably not defamatory. But if I say that in my opinion, Kevin Padrick should really stop stealing kittens, that implies undisclosed defamatory facts. So the “in my opinion” defense is hardly ironclad, especially when you say things like “Why would Kevin Padrick of Obsidian Finance Group pay the tax when no one is monitoring his work?” Once your statements are ruled “factual” and not “opinion,” then you have to start thinking of other ways to defeat defamation. Like proving the truth of your statements.

Bloggers As Not Journalists

Let’s put that on hold for a second. The really troubling fallout of this decision, and the one ShortFormBlog is most concerned about, is the denial of the media shield law’s protection to a blogger. Cox was trying to claim its protection in a roundabout way. She claimed her statements were true, because she had an inside source. She also claimed that she didn’t have to name the inside source under the media shield law. However, without naming the source and verifying what the source said, she couldn’t otherwise prove the truth of her statement that Padrick was committing tax fraud.

Of course, telling a judge what some other guy told you is usually hearsay. Cox has to get the source into court herself – but she wants to protect her source. So, the media shield law comes in. (Well, almost.)

The media shield law protects members of the media from having to turn over their sources, but Judge Hernandez pointed out that according to state law, the definition of media includes but is not limited to:

“any newspaper, magazine or other periodical, book, pamphlet, news service, wire service, news or feature syndicate, broadcast station or network, or cable television system.”

Cox’s blog doesn’t fall under this definition. The Oregon state legislature simply lets its citizens-journalists down here. If I were her lawyer (and so, so, so much more on this later), I’d have framed blogs as a kind of “wire service” that provides news reports to traditional news agencies. I’m not sure if that argument was tried or not, but Judge Hernandez definitely didn’t buy it if it was.

Frankly, I think the judge interpreted the law correctly. The definition of media as cited by Judge Hernandez is state law, published in O.R.S. 44.510(2), and last updated in 2005. Blogs existed in 2005. If the state legislature had intended to protect its bloggers, it could have added that language in 2005. It could have taken up an amendment in 2006. It could have followed Washington’s lead when the latter passed its media shield law in 2007. Washington’s law explicitly protects bloggers, and the guy that drafted the law has written a nice comparison of the two for the Seattle Weekly.

Then Judge Hernandez points out that the media shield law doesn’t apply to defamation actions, so even if Cox were a journalist, she’d still be out of luck. So framing this decision as if it were an attack on bloggers is dishonest at best. Even if Judge Hernandez ruled that Cox was a journalist for the purposes of this law, she’d still be liable because she’s being sued for defamation.

No Way Pro Se

Pro se is the term for a party representing themselves in court, acting as their own lawyer. Crystal Cox doesn’t have a lawyer, and Judge Hernandez’s opinion is riddled with references to the elementary errors she’s committed that even a first-year attorney would know to avoid.

For instance, Oregon has passed Anti-SLAPP legislation; any defendant may:

make a special motion to strike a claim in a civil action that arises out of a written statement presented in a place open to the public or a public forum in connection with an issue of public interest.

Let’s run this down element by element.

This lawsuit is a civil action; the defamatory statements were written; Cox’s blog is almost certainly a public forum; and cutting down on tax fraud and bankruptcy fraud are both in the public interest. Even better: nowhere does it require the defendant to be a member of the media. This special motion is available to citizens-journalists as well as regular journalists.

She’s home free, right? Just move to dismiss and you can be home in time to watch the holiday episode of Community, right? (#SaveGreendale)

Well, no. Defendants are required to move to dismiss with their first response to the complaint, sixty days after receiving the complaint. If Cox raised it at trial, she waited waaay too long. In fact, she raised it back in July, but Judge Hernandez noted that it was too late even then. Five months later, it’s … well, it’s even later.

Broken Record

Judge Hernandez repeatedly notes that the record doesn’t support Cox’s arguments, which is judge-ese for “you cited no law, no case, and no legislative history in favor of your argument.” He says things like

The record does not support a conclusion that Obsidian Finance or Padrick are limited public figures…


…defendant cites no cases indicating that a self-proclaimed “investigative blogger” is considered “media.”


[the handling of this bankruptcy] had not, at least on the record in this case, generated public concern, controversy, or interest…

And so on. I’m sure Cox had great reasons why the law should be this way or that way, and I would probably agree with most of those reasons. But in the absence of case law agreeing with her, she can’t expect a judge to rule in her favor. A lawyer would know this and would have put something – anything – in the record to let the judge get on her side.

Shield Is Not For Defamation

Earlier, I discussed why Judge Hernandez was probably right to conclude, under Oregon state law, that bloggers are not protected by the media law.

I just want to bring this up again to mention that the section right after the section on the media shield law points out that it doesn’t protect journalists against defamation claims. Literally, the next one in the sequence of statutes. How bad a lawyer would you have to be to miss that?

Well, you know the old saying about being foolish enough to represent yourself.

In Conclusion

Cox isn’t a lawyer, clearly, and that’s okay. Some of my best friends aren’t lawyers. Most of them don’t even steal a lot of kittens. But for lawsuits where you’re staring down a $2.5 million dollar judgment, I can’t imagine not getting a lawyer. I hear there are a lot of us looking for work – you could probably get a really good deal on low-cost lawyers.

And Oregon – what’s the hold up? Why this antiquated media shield law that hangs bloggers out to dry? A judge just straight-up told you that he wouldn’t let defamatory statements be shielded by it if bloggers were media. Get on that! There are probably investigative bloggers in your state that need some shielding for non-defamation lawsuits!

Lastly, I think Judge Hernandez did a good job in this case. The state legislature hasn’t protected bloggers. Even if it did, the law wouldn’t protect bloggers who published defamatory statements.

I think it’s unnecessarily alarmist to say that this is a case that spells doom for bloggers everywhere. For one, not all states leave their bloggers out to dry like this, and the ones that do probably don’t protect defamatory statements against private figures made by journalists, whether they’re bloggers or dead-tree journalists.

Update: Yeah, this looks really bad for Ms. Cox.

Published on under The News

Remember a couple of weeks ago, when the news over Carrier IQ was that they sent meaningless cease and desist orders and threatened legal action against a guy who was researching their software? The EFF stepped in to defend free speech and liberty pretty much like Superman, except their underwear goes inside their pants. It was kind of a feel-good moment for everyone. Then came the horror stories about what this software was doing, and on how many millions of phones it was installed.

140 million installs? It knows what I’m texting and to whom? The world went crazy enough when Apple was just logging the location of cell towers on my iPhone. Now that you’re telling me that Carrier IQ knows what web sites I’m on, we can pretty much expect western civilization to collapse immediately. Somebody start the lawsuits!

All hope is not lost, however. Security researcher Dan Rosenberg is here with some good news:

Since the beginning of the media frenzy over CarrierIQ, I have repeatedly stated that based on my knowledge of the software, claims that keystrokes, SMS bodies, email bodies, and other data of this nature are being collected are erroneous. I have also stated that to satisfy users, it’s important that there be increased visibility into what data is actually being collected on these devices. This post represents my findings on how CarrierIQ works, and what data it is capable of collecting.

The rest of his post is actually pretty reassuring. They’re collecting a lot of metrics, and there are some surprising ones, but the contents of your dirty text messages are safe. Which is good, because mine are pretty dirty.

Published on under Legal Theory

Jim Dedman, posting from Abnormal Use, points us to Jim Dedman, posting from the North Carolina Law Blog, asking if emoticons can beat the hearsay rule:

Carole Gailor of Raleigh, North Carolina recently spoke at a North Carolina Bar Association conference on the rules of evidence as applied to electronically generated information. […] Ms. Gailor noted that an emoticon might, in fact, assist in the analysis of whether a digital piece of evidence is admissible.

As a preliminary matter, we could turn to Wikipedia or Urban Dictionary or the like to find a formal definition of the term “emoticon.” But that’s not really necessary, is it? But everyone knows that they are the little smiley or frowny faces – or sometimes far more complex textual graphics – utilized by writers on the Internet to convey all sorts of present emotions.

But why bother with a lay definition? A number of courts have already tackled the term.

This is a fun little read; I had no idea 26 court cases have used the word emoticon. Presumably, a court wouldn’t bother to use the word unless the case turned on it.

The rest of the article is a fun thought exercise on why your texting should be as dour as possible. Seriously! :)

Published on under The News

Karl Smith, via Matthew Yglesias:

Yesterday, Toyota announced that they’re going to start exporting U.S.-built Camrys from Georgetown, Kentucky to South Korea.

As a side note, this is what a functioning market does when you have spent beyond your means or you’re not as rich as you thought you were.

You produce things that get to be consumed by other people. You don’t shutter factories and send your workers home to eat Cheetos and watch the Real Housewives.

I guess the real question is how big a tax break we need to give millionaires for them to consider buying Camrys.

Published on under The News

The new Galaxy Nexus S is one of those straight-from-the-source-code Android phones. You know, the ones that show off what Android could be if OEMs spent less time deciding whether to bundle NASCAR or Blockbuster apps (before deciding to bundle both) on your phone. Or if they spent less time trying to lock down the bootloader to prevent you from loading custom ROMs to delete those apps. Android’s “open” in the sense that the OEMs get to screw it up as badly as they like before handing it to a consumer.

So, Google likes to sell demo phones that shame their OEM buddies once in a while. The brand new Galaxy Nexus S comes with the brand new Android, and Google’s showing off a ton of new features. One of them is Google Wallet, which lets users pay for things in a store by tapping their phone on the cash register. It’s definitely one of those “oh my god we live in Jetsons time” moments. I bet we’re all doing it in like five years, but for the time being, it’s just crazy futuristic. I’m looking forward to this feature making its way into other phones.

But it probably won’t, because Verizon just blocked it from working on their network. This might not have anything to do with Verizon’s competing and identical feature, called ISIS. Bloomberg News says

the move comes amid intensifying competition between services that let consumers pay for goods with mobile phones. Verizon Wireless and partners AT&T; Inc. and T-Mobile USA plan to invest more than $100 million in a joint venture called Isis, which competes with the Google service, people with knowledge of the project said in August.

Boy, I bet Google’s really glad they’ve got such a firm understanding of the value of Net Neutrality with Verizon. Just imagine the sorts of troubling things that Verizon could do if they were allowed to run about unchecked!

Published on under Irreverently Irrelevant

I never thought I would see the day when pornography would be on the internet. From The Verge:

Following a couple of months of pre-sales, adult-industry-centric .xxx domains will go on general sale at 11:00AM ET / 9:00AM PT / 4:00PM GMT today. ICM reports that over 50,000 .xxx domains have been pre-registered, with around 100,000 more names up for grabs from the general sale.

The Verge also reported on the lawsuit between porn industry giants and the registrar for the new .xxx domains. While the cost of a regular .com domain is just about $10 a year, and registrars have many registries to work with, the .xxx domain has a single registry. That’s kind of steep, I guess, but I’m sure they wouldn’t take advantage of the–

$60 dollars a domain? And GoDaddy is charging $99 to registrants? Wow, no wonder they’re upset. Fortunately, my new domain,, is not taken. Unfortunately, it’s going to take me a while to find enough change in the couch cushions to pay the $99 registration fee. Heck, for that price, I could pay for for the next decade.

So when do you think the first pornography will start being uploaded to the internet? That’s going to be kind of a weird adjustment.