Ninth Circuit Provides Important Protection To Bloggers

In an important victory for free speech advocates, the Ninth Circuit has joined other courts in establishing that authors protected by the First Amendment need not be journalists to have such robust protections.

In Obsidian Finance Group, LLC v. Cox, — F.3d —- (2014) (filed Jan. 17th, 2014), the Ninth Circuit overturned a lower court decision that limited certain First Amendment protections to institutional journalists. The Court explained that “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.”

In aligning the Ninth Circuit with other circuits which have addressed the issue, the court reaffirms that negligence is the minimum legal standard for any case involving matters of public interest (and possibly all cases). To receive general damages without suffering specific harm and to receive punitive damages, the plaintiff must establish that the defendant published the statements with actual malice, meaning intentional knowledge of falsity or reckless disregard of the truth.

In New York Times Co. v. Sullivan, 376 U.S. 254 (1964), the Supreme Court established the modern First Amendment framework. Public officials must prove actual malice to prove liability. Curtis Publishing Co. v. Butts, 388 U.S. 130, (1967), then extended this standard to public figures. A decade later, in Gertz v. Robert Welch, Inc., 418 U.S. 323, 350 (1974), the Supreme Court held that the First Amendment required a negligence standard for private defamation actions. Significantly less than the actual malice standard, it nonetheless established that there could not be liability without fault.

In Obsidian Financial Group, the Ninth Circuit does not suggest the defendant is blameless:

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 B1. Padrick and Obsidian sent Cox a cease-and-desist letter, but she continued posting allegations.

The accusations and statements, however, were difficult to view as factual assertions. Where there were assertions of fact, the court explains, the plaintiff must establish the negligence of the statements.

The Ninth Circuit also sidestepped the issue whether the Gertz negligence standard applies to matters of purely private concern. It noted the unresolved question, when it stated that “the Supreme Court has ‘never considered whether the Gertz balance obtains when the defamatory statements involve no issue of public concern.’” (quoting Dun & Bradstreet, Inc. v. Greenmoss Builders, 472 U.S. 749, 757 (1985) (plurality opinion)).

Instead, the Ninth Circuit noted that the blog was made available to the public at large, just as every blog does. Moreover, the court noted that “public allegations that someone is involved in crime generally are speech on a matter of public concern.” So instead of answering whether the negligence standard applies to private matters, the court expanded the realm of public discourse to almost any public accusation.

This strategy has the effect of expanding the negligence standard to almost any claim. It may leave certain personal matters personal, though this is unclear. It could also leave certain formats, such as personal emails, texts, and friends’ lists as matters of purely private concern, but undoubtedly many of allegedly defamatory posts on such platforms will also be matters of public concern.

The distinction between matters of public concern and purely private matters has less and less meaning, and the distinction is likely to continue to erode in the context of defamation, though perhaps remain relevant in some issues involving privacy.

Nonetheless, the case is an important victory for free speech interests. Of course, this does not mean anything can be published with impunity. Negligence is not a terribly difficult test to meet and those plaintiffs who have truly been harmed will still have their day in court. It is difficult to be the subject of online attacks, but the rules of law should apply equally to all speakers, journalists, bloggers, and citizens alike. In the Ninth Circuit, it now does.

One Internet or Many – Questions on Censorship Grow

When a hateful fourteen-minute video was created intentionally to depict the prophet Mohammad in a manner designed to offend, the awareness of this trivial effort sparked worldwide protests against the United States and Western governments. It was used as a rationale for attacks against NATO forces in Afghanistan and was manipulated to put U.S. ambassador Chris Stevens in a vulnerable position where he was attacked and killed.

Is the response to stop offensive speech on the Internet?

Internet censorship is hardly new. China has laws designed to promote harmony and prosecutes cases to limit the risk of internal rebellion – whether aimed at the government or at ethnic minorities. Germany prohibits Nazi propaganda. Most Islamic states bar publications that insult the prophet Mohammad. The response to the recent video echo the 2005 controversy regarding a dozen editorial cartoons with depictions considered offensive. First Amendment scholar Eugene Volokh has noted some U.S. analysts suggesting a growing international norm in favor of censorship.

The same week, the British royal family is bringing suit for invasion of privacy related to nude photographs of Kate Middleton, citing French censorship laws. This could be another example of this international norm.

From the U.S. perspective, with our strong values in Free Speech, the debate seems odd. But the U.S. is actually the odd man out.

  • The U.S. is one of the few nations that bars prior restraint. In most of the world, the government can suppress offensive speech.
  • The U.S. has no laws to punish offensive speech, unless that speech falls into a very narrow set of exceptions (child pornography, obscenity, and invasion of privacy or defamation – only after the plaintiff wins in court, etc.).
  • The U.S. has no anti-blasphemy laws or any official state-sponsored religion.

While these points seem obvious to Americans, they are unheard of in much of the world. As a result, the Administration’s strong denunciation of offensive content seems intentionally weak to someone who believes that content is only published with a government’s prior approval or at least with the ability to arrest those who blaspheme, offend, or violate the State’s position.

This comes at a time when the Internet itself is under redesign. Changes to Internet governance has allowed the Internet to better recognize Arabic, Cyrillic and Simplified Chinese in the domain names of websites. New top level domains will complement .com, .org, and other long-recognized domains. These efforts were intended by ICANN, NGOs and international treaty organizations to further democratize the Internet but instead could be utilized as tools to segment the Internet, increase censorship, and cut down on public discourse – in the name of harmony and peace.

Pressures to legitimize government censorship in order to save lives and promote order may create opportunities for greater government censorship than ever before. The U.S., Western Governments and NGOs committed to the rule of law and expansion of individual freedoms must undertake a global effort to educate the public on the values of free speech and the role of tolerance regarding the speech of others.

Despite suggestions that the time to censor has arrived, the real obligation is to teach that the cost of democracy is tolerance and civil liberties. Democracy without tolerance is mob rule; revolutions without civil liberties are little more than window dressing. The lessons from the Arab Spring must continue to be learned in the form of greater understanding and respect for civil discourse which lies at the heart of any civil democracy.

NLRB updates reports on social media: Gripes not protected unless they are concerted; lesson is to Gripe with Friends

In August, NLRB Acting General Counsel Lafe Solomon released a summary report of National Labor Relations Board hearings involving social media. In the first report, four of the decisions found that employees were improperly fired for their online social media activity while five of those cases found no improper discharge. [I previously reported on this for the Cincinnati Bar Association – Recent NLRB Administrative Decision Affirms Board.]

The NLRB has updated the report with a new memo. As reported by the NLRB news release, the “Operations Management Memo covers 14 cases, half of which involve questions about employer social media policies. Five of those policies were found to be unlawfully broad, one was lawful, and one was found to be lawful after it was revised.” The NLRB reports that approximately 75 cases have been forwarded to the agency thus far.

Consistent with the earlier report, the updated summary continues to make these broad outline:

  • Employer policies should not be so sweeping that they prohibit the kinds of activity protected by federal labor law, such as the discussion of wages or working conditions among employees.
  • An employee’s comments on social media are generally not protected if they are mere gripes not made in relation to group activity among employees.

Although the report suggests that these cases are “very fact specific,” in truth the paradigm for many of these cases follows a similar pattern.

  • Step 1: An employee gets upset at work, responding by posting to Facebook, Twitter, YouTube or another social media site.
  • Step 2: Co-workers see the post. If they respond and suggest some action be taken against the employer, the posting will likely be considered concerted employee activity. If the co-workers do not respond (or make vague supporting comments like “hang in there,”) there will be no concerted activity and the employees complaint – typically expletive laden – will be unprotected.
  • Step 3: The employer will meet with the employee, identify the provision in the employment policies that identify either specific or general statement barring unprofessional behavior, and fire the employee.

At the NLRB, the first question is whether the posts are protected concerted activity within the meaning of Section 7 of the National Labor Relations Act. The conversation met the test as protected concerted activity because the posts were related to the terms and conditions of employment.

Section 7 of the Act (29 U.S.C. §157) provides that

employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection

The challenge for griping employees seems to be that the statement itself is not what will typically define protection in these cases. Of course, were the employee to start their social media post with “let’s get together to plan our unionizing strategy” such a post would be protected, even if ignored by fellow employees. But when an employee is swearing about one’s employer or fellow employee’s, the protection will depend on whether someone in the social circle responds with a suggestion that something affecting working conditions be done to address the problem.

For employees who post in frustration, the alternatives are to remove the post quickly or to be sure the post becomes part of a broader conversation on working conditions and employer engagement.

The second issue is the breadth with which the employment handbooks are being drafted. Policies that ban social media, ban the use of the employee’s affiliation with their employer or prohibit “inappropriate” language and behavior are too vague and overbroad to support a termination. Saving language that references the National Labor Relations Act without explaining what such reference entails, will not typically save the overly broad provisions. Instead, the policy should be more realistically tailored to prohibit the types of misconduct that are most likely to result in discipline or termination.

The NLRB press release also identifies three cases involving social media questions currently pending which will provide additional insights into this area. The cases can be found here, here, and here.

Facebook IPO raises interesting legal disclosures

Companies engaging in public markets are under tremendous scrutiny as well as legal obligations to provide all material information related to the sale of those securities. In addition, beginning October 13, 2011, the SEC provided specific guidance on the types of cyber-security issues that must be disclosed to the public markets in various statements and offerings.

So it should come as no surprise that Facebook has provided the public a comprehensive blueprint for disclosure of all possible risks that might occur to a publicly traded social media enterprise in its initial IPO filing (its S-1 Registration).

In his Internet Cases blog, attorney Evan Brown noted that Facebook lists 40 risk factors. His informative blog describes six of the more interesting legal disclosures in the Facebook IPO regarding the intellectual property issues the company faces.

Among the risk factors of note were the reliance on Zynga – which accounts for 12% of company revenue, challenges of scalability, and the risk associated with the development of Facebook’s own technology.

  • We recently began to own and build key portions of our technical infrastructure, and, because of our limited experience in this area, we could experience unforeseen difficulties.

In 2011, we began serving our products from data centers owned by Facebook using servers specifically designed for us. We plan to continue to significantly expand the size of our infrastructure, primarily through data centers that we design and own.

Facebook also recognized the significant challenges created by intellectual property ownership – both as an owner of those assets trying to protect them – and as a target for others trying to cash in (since others could not be justifiably defending their own rights).

  • We are currently, and expect to be in the future, party to patent lawsuits and other intellectual property rights claims that are expensive and time consuming, and, if resolved adversely, could have a significant impact on our business, financial condition, or results of operations.

Companies in the Internet, technology, and media industries own large numbers of patents, copyrights, trademarks, and trade secrets, and frequently enter into litigation based on allegations of infringement, misappropriation, or other violations of intellectual property or other rights. In addition, various “non-practicing entities” that own patents and other intellectual property rights often attempt to aggressively assert their rights in order to extract value from technology companies.

Perhaps the most interesting disclosure is the attitude exhibited for rights of privacy and publicity.

  • Our business is subject to complex and evolving U.S. and foreign laws and regulations regarding privacy, data protection, and other matters. Many of these laws and regulations are subject to change and uncertain interpretation, and could result in claims, changes to our business practices, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.

Certainly one can understand the pressure Facebook feels to comply with privacy laws and keep up with the FTC practices that require privacy policies be respected and changes to those policies be enacted only after adequate notice.

Is it then at odds with the company to value itself at $100 billion if the value of its assets are so uncertain and complex? The risk does not seem to be diminishing the company from seeking the reward. So perhaps the risk factor serves another purpose – to suggest that any changes resulting in increased privacy protections are harmful to the economy and the country.

Either way: Buyer beware.

Case Against Hurt Locker Dismissed

Federal district court judge Jacqueline Nguyen finalized her ruling dismissing the claims by Sgt. Jeffrey Sarver that he was the person depicted in the film. The original claim included claims for violation of publicity rights, defamation, false light and intentional infliction of emotional distress, but most of those claims had been dismissed earlier in the proceedings.

For filmmakers, the case is particularly important because the California district court awarded the defendants attorneys’ fees in the case.

As a legal matter, narrative films can certainly be held accountable for defamation if the film is “of or concerning” the plaintiff. A similar issue arose at the end of the movie, American Gangster, the Ridley Scott film starring Denzel Washington. At the end of the film a tag line read “collaboration [with law enforcement] led to the conviction of three quarters of New York City’s Drug Enforcement Agency.” In reality, according the defamation suit opinion, Lucas’ cooperation, “did not lead to the conviction of a single agent of the New York City office of the USDEA or any member of the NYPD, or any other law enforcement official in New York or elsewhere.” Unlike many of the defamation lawsuits, the filmmakers were clearly caught making an outright fabrication. In this case, however, the suit was dismissed because the defamation was of a large group – 400 current and former DEA agents. No particular agent was identified.

A similar threshold issue occurs in with Sgt. Sarver’s claim. Although Sarver claimed screenwriter Mark Boal based the film exclusively on him, Boal denied the allegation. “The Hurt Locker was inspired by many soldiers I met and interviewed during my time reporting in Iraq and elsewhere,” Boal wrote.

Judge Nguyen noted “[d]efendants unquestionably contributed significant distinctive and expressive content to the character of Will James.” If the character is a composite of many individuals and further transformed though the writing, directing and acting process, it is hard to show that the threshold question of “of or concerning” can be met.

There must certainly be a balance between the rights of an individual to be free of defamatory attacks and the rights of journalists and artists to express themselves. But the court here struck the right balance.