If false statements said or published about your business harms it, you may have a legal right to seek damages and a retraction. Given we’re talking about legal action, with all the costs in time, energy, and money that come with it, the issue and loss should be substantial before you take this step. Our friends at Focus Law LA discuss defamation law in depth below.
Defamation is a tort where you allege that:
- The defendant made a false statement of fact
- About your business, its products or service
- That directly and negatively affected your financial interests
These legal actions are based on state law, so the requirements vary. Generally, verbal defamation is slander, and when it’s published, it’s libel.
If a court rules in a plaintiff’s favor and orders the defendant to pay them monetary damages because of what they said or published, that would be a branch of the government (the judiciary) taking action against someone because of their speech. That would arguably violate the Constitution’s First Amendment right to free speech and be free of government interference.
That’s not a problem because, in 1931, the US Supreme Court held that the First Amendment doesn’t protect defamatory statements. Speech isn’t an absolute right and its abuse by individuals or organizations can be punished.
Elements Of A Defamation Claim
The requirements differ from state to state, but common issues include:
- False Statement of Fact
There must be a false statement of fact about you or your business. It must be reasonably clear you or your business is the subject of the statement, and it can’t be an opinion or satire.
Someone saying they think you poorly manage your business is expressing an opinion. Someone saying you’re a terrible manager because you sleep half the day due to your heroin habit is stating something purporting to be factual.
A defense to a defamation claim is truth. If you have a heroin habit that makes you sleepy for a good part of the day, and your business suffers as a result, your defamation claim will be dismissed.
- It’s Published
There must be some publication, whether it’s spoken to another person, posted online on social media, text to someone, or part of the dialog of your TV ad.
- Fault
The standard depends on the jurisdiction and may vary depending on whether the plaintiff is a person or business. With personal defamation claims, a plaintiff may only need to show the defendant was reckless with the statement’s truth. A company may be held to the same standard as a public figure, so to win the case, you’d need to establish the defendant acted with “actual malice” (the defendant knew the statement was false or recklessly disregarded whether it was false or not).
- No Privilege
A defendant can assert privileges as defenses to defamation claims. They include the that they were made in the course of a legislative proceeding or as part of litigating a case.
- Harm to Economic Interests
The defamatory statement must cause actual economic damages, though some states permit plaintiffs to prove defamation per se. In these cases, statements are presumed to injure the plaintiff, so they need not prove financial losses. Losses might include lost business opportunities due to the false statement.
Whether you believe you’re the victim of defamation or the one accused of committing it, talk with your trade secret litigation lawyer about how to best handle the situation.