Federal Court Officially Protects Blogger’s Freedom of Speech!

Are internet blog posts afforded the same 1st amendment rights granted to those working with traditional news media?  Yes, according to this recent 9th Circuit Court case which appears to be the the first federal case that specifically addresses and protects the rights of bloggers. Internet writers can now take a deep breath and write a little more freely.

In defamation suits, bloggers and citizen journalists are at par with the professional journalists. The legal standards for judging their actions should be the same in relation to the First Amendment.

Crystal Cox, the blogger in question, was taken to court by Obsidian Finance Group, for having allegedly defamed the company.  In her blog, Cox accused the Finance group of fraud, corruption and other deeds of misconduct.  While Cox posted various blogs about this company, the one post that went to trial contained allegations that one of the company’s principals had failed to pay taxes for a company that filed Chapter 11 bankruptcy.

During the initial trial, the court stated that this was not the first time Cox had made such allegations against a company in the hopes of gaining a payoff in exchange for a retraction. Subsequently, the jury awarded Obsidian Finance Group $2.5 million for damages allegedly caused by her posts. Cox then appealed.  She never argued the validity of her posts or the fact that such posts did cause damage, but rather claimed that the trial court could not allow any damage award without proof of negligence on her part.

The 9th Circuit Court of Appeals agreed with Cox’s argument stating that the jury should have been instructed to determine whether Cox had acted negligently because the subject of her comments were of public interest.  Furthermore, the harm the jury claimed was brought upon the plaintiffs could not be proved and thus the jury lacked the power to grant such awards.  The court voted unanimously that the defamation award brought against Cox be overturned.

“The protections of the 1st Amendment do not turn on whether the defendant was a trained journalist, formally affiliated with traditional news entities,”

Case citation: Obsidian Finance Group v. Cox, Nos. 12-35238 & 35319 (9th Cir. Jan 17, 2014)

I am Invincible at the SF Coin Summit – This Week!

Get your Bitcoins on!

Excited to be attending Coin Summit this week in the city by the bay.

And proud to finally be able to announce that I am attending as Co-Founder and Director of an exciting new high tech start up in the crypto digital currency security space.

InvincibleWallet LLC is developing a web-based, BIP32 wallet. It’s next-generation. It’s hierarchical. It’s deterministic. And, it will fundamentally alter the security landscape for Bitcoin storage and transactions.

Stay tuned as we approach our launch and Follow the fun on my Twitter feed:  https://twitter.com/RauschLaw


When Insurance Fails, Can you Look to Your Broker?

Business clients are always managing risk.  Just about everything they do is overshadowed by risk assessment and risk management.

Appropriate insurance, both as to kind and amounts, is sometimes a critical tool for business risk management.  But buying insurance can be complicated and businesses frequently do so though the use of an insurance broker.  When the broker “gets it right”, the client is adequately protected.  When the broker “gets it wrong”, the client suffers the non-insured risk.  When insurance fails, clients will typically look to their broker to see if he or she is at fault.  Instructing your broker correctly, and documenting the relationship, are critical if a claim against the broker ever needs to be asserted.

In the latest case law pronouncement of the nuances involving broker liability, California’s Third District Court of Appeal held this week that while a broker may be liable for misrepresenting the nature, scope, or extent of coverage, he has no duty to ascertain the financial soundness of the insurer or to advise an insured of adverse changes in the insurer’s financial capability.  An insurance broker’s duty is no greater than to use reasonable care and diligence in procuring insurance. Thus, a broker who obtained coverage for a client through a self-insurance program that failed was NOT liable to the client for placing that coverage.

The case is Mark Tanner Construction, Inc. v. Hub International Insurance Services, Inc. – filed March 10, 2014, Third District Court of Appeal, California.

Employment Arbitration Clauses Limiting Discovery are Allowed

I draft a lot of employment agreement for clients and always recommend some kind of ADR (Alternative Dispute Resolution) provision or separate agreement.  An Arbitration arrangement, for example, is many times preferable to public trial to resolve employment related disputes because it is faster, less expensive and more private than the public trial alternative. But drafting these ADR agreements or clauses can be tricky and we have many cases on the books that have stricken some or all of such provisions as invalid or illegal.

In a recent case from the Second District in California, the Court of Appeal has clarified the extent to which some of the details of these arrangments are deemed permissible,.

In Sanchez v. CarMax Auto Superstores California, LLC – the Court found that an arbitration agreement was not rendered substantively unconscionable by limitations on discovery, where the limitations were applicable to both parties, and employee failed to show that the limitations would prevent him from obtaining necessary evidence.  Additional provisions in the agreement requiring a written award, and that the proceedings remain confidential, and prohibiting consolidation of claims of different employees were all held not to be unconscionable – which means they were allowed.

Properly crafted ADR agreements in employment relationships can save both sides time and expenses if a dispute arises either during or after the employment.

Can you get busted for using a Map App while driving?

Well, here’s good news, and a bit of clarification about what you can do in your car with your phone without violating the hands free rules.

We actually now have a case on this.  In People vs Spriggs, filed February 27, 2014, the Fifth District Court of Appeal held that a driver who – while stuck in traffic – took out his wireless phone to check a maps application to find a way around the heavy traffic did not violate Vehicle Code Sec. 23123(a), which prohibits use of a wireless phone for conversation unless a hands-free device is employed.

Glad that got cleared up:)