UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

OBSIDIAN FINANCE GROUP, LLC; No. 12-35238 KEVIN D. PADRICK, Plaintiffs-Appellees, D.C. No. 3:11-cv-00057- v. HZ CRYSTAL COX, Defendant-Appellant.

OBSIDIAN FINANCE GROUP, LLC; No. 12-35319 KEVIN D. PADRICK, Plaintiffs-Appellants, D.C. No. 3:11-cv-00057- v. HZ CRYSTAL COX, Defendant-Appellee. OPINION

Appeal from the United States District Court for the District of Oregon Marco A. Hernandez, District Judge, Presiding

Argued and Submitted November 6, 2013—Portland, Oregon

Filed January 17, 2014 2 OBSIDIAN FINANCE GROUP V. COX

Before: Arthur L. Alarcón, Milan D. Smith, Jr., and Andrew D. Hurwitz, Circuit Judges.

Opinion by Judge Hurwitz

SUMMARY*

Defamation

The panel affirmed in part and reversed in part the district court’s judgment awarding compensatory damages to a bankruptcy trustee on a defamation claim against an Internet blogger.

The panel held that Gertz v. Robert Welch, Inc., 418 U.S. 323, 350 (1974) (holding that the First Amendment required only a “negligence standard for private defamation actions”), is not limited to cases with institutional media defendants. The panel further held that the blog post at issue addressed a matter of public concern, and the district court should have instructed the jury that it could not find the blogger liable for defamation unless it found that she acted negligently. The panel held that the bankruptcy trustee did not become a “public official” simply by virtue of court appointment, or by receiving compensation from the court. The panel remanded for a new trial on the blog post at issue, and affirmed the district court’s summary judgment on the other blog posts that were deemed constitutionally protected opinions.

* This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. OBSIDIAN FINANCE GROUP V. COX 3

COUNSEL Eugene Volokh (argued), Mayer Brown LLP, Los Angeles, California, for Defendant-Appellant/Cross-Appellee. Robyn Ridler Aoyagi, Steven M. Wilker (argued), and David S. Aman, Tonkon Torp LLP, Portland, Oregon, for Plaintiffs- Appellees/Cross-Appellants. Bruce D. Brown, Gregg P. Leslie, and Jack S. Komperda, Arlington, Virginia, for Amicus Curiae The Reporters Committee for Freedom of the Press. Thomas C. Goldstein, Goldstein & Russell, P.C., Washington, D.C., for Amicus Curiae SCOTUSblog.com.

OPINION HURWITZ, Circuit Judge:

This case requires us to address a question of first impression: What First Amendment protections are afforded a blogger sued for defamation? We hold that liability for a defamatory blog post involving a matter of public concern cannot be imposed without proof of fault and actual damages.

I.

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 4 OBSIDIAN FINANCE GROUP V. COX 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 Obsi