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Obsidian Finance Group, LLC v. Cox

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Obsidian Finance Group, LLC v. Cox, 2011 WL 2745849 (D. Or. July 7, 2011).

Factual Background

Plaintiff Padrick is a senior principal with Obsidian Finance Group, LLC, an “advisory and investment firm that specializes in unique and difficult business situations, including distressed enterprises and distressed assets.” As part of his work with Obsidian, Padrick was appointed the bankruptcy trustee of the Summit 1031 bankruptcy case. Defendant Crystal Cox is a self-proclaimed “investigative blogger,” who maintains and operates and, among a other websites relating to these Plaintiffs.

Plaintiffs sued for defamation. They moved for summary judgment on the issue of liability.

Trial Court Proceedings

A defamatory statement is a false statement that would subject another to “hatred, contempt or ridicule or tend to diminish the esteem, respect, goodwill or confidence in which the other is held or to excite adverse, derogatory or unpleasant feelings or opinions against the other.”[1] To prevail on a claim of defamation under Oregon law, a plaintiff must establish (1) the making of a defamatory statement; (2) publication of the defamatory material; and (3) a resulting special harm, unless the statement is defamatory per se and therefore gives rise to presumptive special harm.[2] Statements which are expressions of opinion are protected by the First Amendment and are not actionable.[3] Statements of opinion, however, may be actionable if the recipients could reasonably have concluded that the statement was based undisclosed defamatory facts.[4] The Ninth Circuit has articulated that statements should be evaluated by considering the “totality of circumstances in which [they were] made.”[5]

First, a court reviews the statement in its “broad context,” which includes the general tenor of the entire work, the subject of the statement, the setting, and the format of the work. Next, the court turns to the “specific context” and figurative or hyperbolic language used and the reasonable expectations of the audience in that particular situation. Finally, the court inquires whether the statement itself is sufficiently factual to be susceptible of being proved true or false.[6]

The Defendant did not dispute that she posted the statements at issue, rather, she contended they were comprised of statements by “experts,” her own opinions, commentary, and tips submitted by her readers. In evaluating the statements at issue, the court found it determinative that the Defendant made excessive use of hyperbolic accusations without supporting facts. Given the context and nature of her blogs and reporting style, the readership was much less likely to consider statements to be verifiable facts. Furthermore, the Defendant’s “use of question marks and her references to proof that will allegedly occur in the future negate any tendency for her statements to be understood as provable assertions of fact. Her statements contain so little actual content that they do not assert, or imply, verifiable assertions of fact. They are, instead, statements of exaggerated subjective belief such that they cannot be proven true or false.”

Based on the foregoing classification of the Defendant’s statements, the court denied Plaintiffs’ motion and, without motion from the Defendant, dismissed the Plaintiffs’ action in its entirety.


  1. Marleau v. Truck Ins. Exch., 333 Or. 82, 94 (2001) (full-text) (internal quotations, ellipses, and brackets omitted).
  2. National Union Fire Ins. Co. v. Starplex Corp., 220 Or. App. 560, 584 (2008) (full-text).
  3. Partington v. Bugliosi, 56 F.3d 1147, 1153 n.10 (9th Cir. 1995) (full-text).
  4. Slover v. Oregon St. Bd. Of Clinical Social Workers, 144 Or. App. 565, 568, 927 P.2d 1098 (1996) (full-text).
  5. Underwager v. Channel 9 Australia, 69 F.3d 361, 366 (9th Cir. 1995) (full-text).
  6. Art of Living Found. v. Does 1-10, 2011 WL 2441898, at *5 (N.D. Cal. June 15, 2011) (citing Underwager, 69 F.3d at 366).

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