Practical Insights for Business Owners
Client Q&A: A competitor just told a lie about me. Can I sue him?
A competitor just told a lie about me. Can I sue him?
In the rough-and-tumble of the marketplace, competitors often say things about each other that are less than complimentary. When your competitor's statements cross the line from providing truthful information (e.g., "we are the highest selling car dealership in New York") or puffery (e.g., "our restaurant is the best—better than that place down the street') to a defamatory statement (e.g., "ABC Carpet steals from its customers'), you may have a claim that can be brought in court.
What is Defamation?
A defamation claim requires a false statement, published without authorization to a third party, that is made with the required state of mind and causes injury by exposing the plaintiff to public contempt, ridicule, disgrace, or otherwise impugns character. A defamatory statement can be made orally (which is also known as slander) or in writing (also known as libel).
The defamatory statement must cause harm, which in the business context typically means an injury to reputation or loss of goodwill that causes the plaintiff to lose business or customers.
Defamation claims have a relatively short statute of limitations and must be brought within one year.
Required State of Mind.
The state of mind required for defamation depends both on who is doing the speaking, as well as the type of person or entity that is the target of the remark. The necessary state of mind ranges from statements that are made recklessly or negligently to purely malicious statements. It should be noted that in the defamation context, a statement made with "malice" does not have to be malicious in the ordinary sense, which is to say, spiteful. It can be made with "malice for the truth," meaning without regard to whether the statement is accurate.
Both natural persons and corporations and other entities may bring defamation claims. If the plaintiff is a public figure or has otherwise voluntarily put him, her, or itself into the spotlight on an issue of public concern, a higher level of intent, malice, is required to prove defamation. This is because people who have sought and achieved fame are considered less worthy of protection from defamatory remarks. By contrast, purely private individuals who have not sought to enter the public debate are considered more worthy of protection, and so a false remark that is made recklessly or negligently may suffice.
Defamation Defendants and Defenses.
Both natural persons as well as corporate entities can also be the subject of a defamation claim. Courts typically give more protection to newspaper publishers or other media defendants than they would to non-media defendants such as businesses or private individuals.
The most common defense to a defamation claim is of course truth, but it is by no means the only one. Statements that are purely matters of opinion are generally not considered actionable under defamation law; the statement, to be defamatory, must contain facts that are false. Other statements that are immune from defamation claims include statements made by public officials in their official capacities, and statements made in litigation or summarizing a party’s positions taken in litigation.
Our firm has a great deal of experience in both prosecuting and defending defamation claims. We would be happy to discuss your options with you if you are considering filing a lawsuit.