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Obsidian Finance Group, LLC v. Cox
United States Court of Appeals for the Ninth Circuit
740 F.3d 1284 (2014)
Summit Accommodators, Inc. (Summit) used a Ponzi scheme to defraud its investors. Summit hired Obsidian Finance Group, LLC (Obsidian) (plaintiff) to handle the company’s resulting chapter 11 bankruptcy. Kevin Padrick (plaintiff), an Obsidian employee, was appointed as Summit’s bankruptcy trustee. Crystal Cox (defendant), an Internet blogger, wrote several blog posts stating that Obsidian and Padrick were committing fraud, money laundering, and other crimes in connection with the Summit bankruptcy. Obsidian sued Cox for defamation. The district court instructed the jury that Cox’s knowledge of the falsity of the statement and intent were irrelevant to Obsidian’s claim, and that the law presumed harm to Obsidian. The jury found in favor of Obsidian and awarded damages. Cox appealed.
Rule of Law
Holding and Reasoning (Hurwitz, J.)
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