Blogger must pay $2.5 Million Libel Fee in Oregon's December Case

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A screenshot from crystal Cox's blog Dec. 28. (Credit:

Blogger Crystal Cox was ordered to pay $2.5 million for a defamatory posting on her blog.  The case brings up issues of defamation, anonymous sources, shield laws, and who is and isn’t a journalist. However, the main issue in this case was whether Cox defamed Padrick.

Cox has set up a few “law-centric blogs,” according to Seattle Weekly.  In question is her post about investment firm Obsidian Finance Group and one of its founders, Kevin Padrick.  Cox said in court 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,” according to Seattle Weekly.

However, the judge decided she did defame Padrick and his company because one blog post suggested she was publishing facts.  This is the post on Bankruptcy Corruption in question.  The Dec. 2010 post calls Padrick a “thug, thief and a liar” and notes that his attorney sent her “a Cease and Desist Requesting that I Stop saying such Facts about his Client” (capitalization in original).

She identifies herself as an investigative blogger. Cox defended her post and said the information in question came from an anonymous “inside source that was leaking her information,” and that she couldn’t reveal the source’s identity.

Forbes‘ Kashmir Hill summarizes the background:

“There is a rather complicated back story — involving his being appointed a Chapter 11 trustee for a business that went belly-up Ponzi-style in 2007, and some of those involved not being happy about misappropriated funds being reclaimed. After a failed attempt to get the Oregon Attorney General to investigate Cox, Obsidian filed a defamation case in January 2011, and Padrick first met Cox on the first day of the trial.”

According to Hill, Cox set up “dozens of sites…to write about Obsidian.” As such, Hill argued “This is not the work of a journalist, but the work of someone intent on destroying reputations.”  According to Hill, Padrick claims Cox’s practice “has been going on for three years.” Padrick is quoted as saying that Cox “decimated my business,” and “ruined my reputation, my life.”  According to Hill, the jury gave Padrick and his company more than twice what he was asking for .

Similarly, the New York Times’ David Carr argued that Cox “didn’t so much report stories as use blogging, invective and search engine optimization to create an alternative reality.”  According to Carr, Cox “has some 500 URLs at her disposal and she’s not afraid to use them.” According to Carr, Cox said “I’m glad I lost the case, because it gives attention to what I have been doing.” Cox said she will appeal and doesn’t have the $2.5 million the court ruled she must pay.

Cox has blogged several times about the ruling, defending herself and criticizing articles by the New York Times and Forbes about her case.

iMediaEthics asked Padrick what his reaction was to the considerable media coverage of the case. He told us by phone that at first reporters had a “somewhat negative view” toward the case and ruling, but that “within a very short period of time, literally hours, as people started to actually look at the facts, the coverage completely changed and as you probably are aware when you look at the Forbes article or the New York Times article or any of the other articles, the reporters are frankly somewhat aghast at the facts that underlie the case.”

Padrick added that “Initially, I was somewhat disappointed that the media didn’t focus on the facts but that was very shortlived, and upon further review by the media, I’ve been very impressed by the type of coverage, the diligence that they’ve done, the fact checking that they’ve done, and how the story has been reported…I guess it solidifies my faith in real media.”

Padrick told iMediaEthics that the verdict was only monetary and there is no injunction to take down Cox’s post in question.  He added he is “satisfied with the verdict.”  Padrick also mentioned that he thinks “it is is important to report the fact that she asked us for money.”  Forbes and the New York Times reported that Cox sent Padrick’s attorney a letter “offering PR Services and Search Engine Management Services starting at $2,500 a month.”   According to the New York Times, Cox “said that she sent that note in response to a request from Mr. Padrick’s attorney,” which Padrick’s attorney denies.


Oregon’s Shield Law

Padrick also spoke to Seattle Weekly about the case.  Padrick noted that the case doesn’t limit the shield law, but argues that Cox is not a media representative because she “presented no evidence that she was media.”

Padrick told iMediaEthics by phone that Cox requested the court rule on whether she would be able to get shield law protection.  However, that ruling wasn’t the crux of the case, which was that he said she defamed him.

In a Dec. 12 post, Seattle Weekly wrote that the ruling “sets a terrible precedent with a correct ruling.”  According to Seattle Weekly, the judge did make “the correct call, according to Oregon law.”  However, Seattle Weekly noted the “dire need to update media shield laws in states like Oregon.”

Seattle Weekly noted that Oregon has a shield law protecting anyone working “in any medium of communication to the public” to provide a source.  The judge said that since Cox isn’t “employed by an official media establishment” the law doesn’t apply to her.  As Seattle Weekly explained in a Dec. 12 post, that’s the law’s decision on journalists, and not the individual judge’s.

In response to the ruling, Cox said she will appeal and provide evidence for her blogged claims.

Media lawyer Bruce E.H. Johnson, who “drafted Washington state’s media shield legislation,” argued that Cox would have had shield law protection in Washington, in a follow-up post by Seattle Weekly.   “I believe the shield law would have been applied [in Washington state], “Oregon’s law was probably written before blogging was accounted for.”

Oregon’s shield law doesn’t mention online forms of publication, which is what may prevent the law from legally applying to Cox. Washington’s law does apply to “internet, or electronic distribution.”  Seattle Weekly noted that even Johnson said Cox would probably have had to identify her source in order to defend herself from defamation.   “In other words, the shield law, even if applied, might not have shielded Cox from the $2.5 million judgment she’s been ordered to hand over,” according to Seattle Weekly.

Forbes’ Hill noted that the judge’s opinion also noted that Cox:

“There is no evidence of (1) any education in journalism; (2) any credentials or proof of any affiliation with any recognized news entity; (3) proof of adherence to journalistic standards such as editing, fact-checking, or disclosures of conflicts of interest; (4) keeping notes of conversations and interviews conducted; (5) mutual understanding or agreement of confidentiality between the defendant and his/her sources; (6) creation of an independent product rather than assembling writings and postings of others; or (7) contacting “the other side” to get both sides of a story. Without evidence of this nature, defendant is not ‘media'”

In a post on the Guardian’s Comment is Free section, Dan Gillmor argued that the question isn’t “who’s a journalist” but “what is journalism?” In the Cox case, Gillmor indicated that while she may be doing journalism, no journalist “is entitled to libel anyone else.”


Similar Cases

This case reminds us of that of Shellee Hale in New Jersey, a case in which the New Jersey Supreme Court ruled that Hale, who identifies herself as a private investigator and blogger among other things, was sued for defamation after her comments on an online discussion board about New Jersey-based company Too Much Media, LLC.  She said her comments were made as part of her research for an article about TMM and that the information was based on an interview from an anonymous source.  The court ruled that she isn’t a journalist and therefore doesn’t receive shield law protections.  Hale spent two years appealing court rulings that she didn’t get that protection.  Once the journalist-shield law issue was resolved, the case moved to the issue of defamation.  Hale told us earlier this year that she will have to identify her sources to defend herself in the defamation case.

Forbes‘ Kashmir Hill likened Cox’s case to the Johnny Northside blog. In that March 2011 case, a Minnesota jury found that blogger John Hoff (aka “Johnny Northside”) didn’t defame or report inaccurate information about community leader Jerry Moore, but he still had to pay a $60,000 fee for “tortuous interference,” or “intentionally intermeddling with the business affairs of others.” Read about that case here.

We have written to Cox asking for any further comment and will update with any response.

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Blogger Crystal Cox must pay $2.5 Million Libel Fee in Oregon’s December Case

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3 Responses

  1. Crystal L. Cox says:

    I don’t Recall you asking me for a Comment on any of this, and I did NOT ask for money. I responded to a Cease and Desist, after the Lawsuit was filed with a Negotiation offer. Also there was NO fact checking on this and the NY Times and Forbes did not fact check. Read the documents of the case and of the Bankruptcy, the Truth is out there and not in the mouth of Keven Padrick.

  2. Sydney Smith, says:

    Thanks for your comment. I e-mailed you seeking comment 16 days ago. See the e-mail, to, below.

    Forbes published an e-mail it states is from you to Mr. Padrick’s lawyer ( ) . In the e-mail, you offer "PR Services and Search Engine Management Services starting at $2,500 a month." According to the New York Times, you confirmed sending the e-mail.

    Here is the email to you sent on on Dec. 21, 2011:

    Dear Ms Cox, I am a reporter for US media ethics news website iMediaEthics (see more about us below my signature).

    I am working on a brief report about the Oregon ruling for you to pay libel fees to Mr Padrick and I was wondering if you had any comment concerning the ruling. Do you have any update on any appeal?

    Thanks very much for your time.
    Sydney Smith

  3. Crystal L. Cox says:

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