Media and Entertainment Law Newsletter, February 2014

02/06/2014

First Amendment Protections Aren't Just for the Press, Ninth Circuit Says
by Nick Nelson

When blogging became mainstream, many wondered if blogging would have an effect on the legal protections afforded to professional journalists.

Would courts treat every blogger as a journalist? Or would the influx of bloggers undermine the protections afforded to the press by landmark court rulings and state shield laws?

Happily, courts seem to have moved toward expanded First Amendment protection for non-journalists, rather than diminishing protection for the traditional press. A notable example is the Ninth Circuit's recent opinion in Obsidian Finance Group, LLC v. Cox.

In Obsidian Finance, defendant Crystal Cox had published blog posts accusing Obsidian and Kevin Pradick, its principal, of fraud in connection with a bankruptcy case.  Cox was not a professional journalist, and the appeals court would later note, citing to a New York Times column about Cox, that she “apparently had a history of making similar allegations and seeking payoffs in exchange for retraction.” (Cox has since asked the court to amend its opinion to remove this statement, which Cox says is not supported by adjudicated evidence and is not an accurate representation of the New York Times column.)

Obsidian and Pradick sued Cox for defamation. A jury awarded the plaintiffs $2.5 million, and Cox appealed.

The "Third-Party Allegation" Rule May Not be Dead Yet
by Tom Williams

To paraphrase Mark Twain's famous quote, it appears that reports of the death of the third-party allegation rule in Texas defamation litigation may have been exaggerated.

In the Texas Supreme Court case of Neely v. Wilson, media defendants in a libel suit contended that the 1990 Texas Supreme Court decision in McIlvain v. Jacobs "shield[s] media defendants from defamation liability for publishing third-party allegations if the defendants show that the underlying allegations (1) were made, and (2) were accurately reported." In reversing a summary judgment granted to the media defendants and remanding the case for trial, the Texas Supreme Court, in its original opinion issued on June 28, 2013, said in response to that claim: "We disagree." That straightforward sentence, coupled with other language in the June 28, 2013, opinion, led many to conclude that the third-party allegation rule would not apply in Texas and a media defendant defending a story which reported allegations made by others would have to establish the substantial truth of the underlying allegation, not simply that the allegation was made, in order to urge the defense of substantial truth.

For more information contact Laura Lee Prather at laura.prather@haynesboone.com or 512.867.8476 and Tom Williams at thomas.williams@haynesboone.com or 817.347.6625.

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