A federal jury has ruled an "investigative blogger" defamed a central Oregon attorney in a case that raises questions about press protections and the nature of the press itself in the Internet age.



The jury found that Crystal Cox, a real estate agent and blogger from Eureka, Mont., defamed Kevin Padrick when she accused him of tax fraud, bribery and other crimes.



Padrick was awarded $2.5 million.



Cox's scathing criticism stemmed from Padrick's time as trustee of Summit Accommodators, a Bend-based financial firm that collapsed in late 2008 amid charges of fraud.



Federal prosecutors have charged the four senior executives of the company with fraud and other charges, claiming they conspired to take millions of dollars from their clients.



A bankruptcy judge in early 2009 appointed Padrick and his firm, Obsidian Finance, trustee of Summit. His job: try to gather as much money as possible for Summit's customers.



Cox became convinced the real story was not the alleged fraud, but rather Padrick and his conduct as trustee. In a number of websites, with domain names like ObsidianFinanceSucks.com, Cox repeatedly blasted Padrick and Tonkon Torp., the Portland law firm that represented him in the Summit matter.



"I'm trying to expose the corruption in the Summit bankruptcy," Cox said Tuesday. "I was telling other people's story as a journalist and I was denied media standing."



Cox's key source for information on Summit and Padrick was Stephanie DeYoung, a Bend CPA who happened to be the daughter of Mark Neuman, the former Summit CEO who was ultimately indicted, she said.







Slew of accusations



Padrick says Cox's accusations of wrongdoing are nonsense. "She's accused me of bribing the media, of bribing judges and the Deschutes County DA." Padrick said. "Crystal Cox has no journalistic standards."

On one of her sites, Cox posed the question: "Did Oregon Attorney Kevin Padrick hire a hit man to kill me?"

When asked if she had evidence to back up her claims, Cox said she didn't accuse Padrick of committing crimes. "I think I was just calling the question here, calling for an investigation," she said.

Padrick said Obsidian Finance's advisory business is off 80 to 90 percent this year, forcing it to cut jobs. He attributed the drop in business to the barrage of accusations from Cox.

"The damage to me is forever," Padrick said. "The Internet is not capable of being undone. Google 'Kevin Padrick' and you'll see the first 10 pages are from Crystal Cox."

The specifics of this story aside, media lawyers worry that

's rulings in this case could be bad news for bloggers and, to a lesser degree, the traditional media. Hernandez decided separately from the jury on several matters of law in the case.

He ruled that Cox does not qualify for certain protections given journalists. He rejected Cox's arguments that she even is a member of the media.

Cox argued that to collect damages, Padrick had to prove that she printed erroneous information and that she was negligent. This significantly higher standard of proof is one of several protections the law extends to journalists.

Hernandez disagreed, saying that Cox doesn't qualify as a journalist.

"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," Hernandez wrote of Cox.

"Investigative blogger"



Of course, the media landscape has been changed permanently by the rise of thousands of bloggers. A handful have risen to mass popularity, some of them precisely due to their status as journalistic outsiders.

Cox calls herself an "investigative blogger" and operates more than 400 websites, many focused on corporate corruption. "I've been doing this for five years," she said. "It's what I do for a living every day. If any one blogger is media, it's me."

Hernandez also ruled that Cox wasn't subject to Oregon's retraction statute or its shield laws. State law allows newspapers and broadcasters to dodge defamation claims if they run a retraction within a certain amount of time after publication.

The statute does not apply to Cox, Hernandez wrote, as the Oregon Legislature "has not expanded the list of publications or broadcasts to include Internet blogs."

, a media lawyer with the Davis Wright Tremaine firm in Portland, said the ruling presents some concerns, particularly for bloggers. To the extent that Hernandez suggested that postings from a blogger are subject to fewer legal protections, that's also a concern for mainstream media operations as virtually all of them now also operate websites.

"There's a little bit of concern about the statements on the Internet," Bosworth said. "I don't think this creates real issues for traditional media. They have the constitutional protections. It's a very ripe issue for bloggers."

Cox vows to appeal. Even if she doesn't, the bizarre and bitter back-and-forth between Padrick and Cox seems destined to continue.

In an interview Tuesday, Padrick said Cox last January offered to end her campaign against him if he paid her $2,500 a month. "So I want to let you know that I am now offering PR services and search engine management services starting at $2,500 a month," Cox wrote in a January 2011 email to David Aman, Padrick's Portland attorney.

Cox said she was "set up" by Aman who came to her asking about hiring her. "I emailed him in response to his wanting to know my rates and services, and in no way to extort him," Cox said.