Lies About Your Business: Litigating Corporate Defamation
Someone has been spreading lies about your business and suddenly you’re seeing a decrease in sales or some of your most trusted vendors and partners no longer want to work with you. Maybe this awful liar is communicating directly with your customers and vendors, or maybe they are posting untrue “reviews” online. Either way, what they are saying about your company is completely false and your income is measurably decreasing.
Fortunately, you have some legal options for dealing with this lying liar who lies. There are two principal causes of action that a business plaintiff can make against someone who is spreading damaging falsehoods in the community: defamation and tortious interference with a business expectancy. While similar in nature, the claims have different elements, and while you may not be successful with one, you might find success with the other. Everything depends on the specific facts of your case.
Defamation
One of the reasons that more people do not get sued over their negative online reviews is because most of those reviews are statements of opinion, and opinions cannot be challenged in court. To constitute defamation, the offending party must have made a statement of fact, and that statement must be provably false. Another reason more negative reviewers do not get sued is because they are telling the truth, or something close enough to the truth that the company would be foolish to
That untrue statement of fact must have been communicated to third parties, and those third parties had to take it seriously and believe it. Even if someone is going around telling the worst possible lies about your company, you have no basis to sue them if no one believes a word that they say.
Finally, these untrue statements communicated to third parties who believe them must cause your business actual damages. Speculation about how the lies could potentially hurt you someday is not enough. You must show the court proof that your bottom line has been injured through the loss of customers or valuable business relationships. And you must further be able to draw the line directly between the lies and the damage. Someone may have said untrue things about your business, and you may also experience decreased income around the same time, but you must prove that the decreased income is not the result of some other economic causes and is in fact directly related to the defamatory statements.
There are some rare exceptions to having to prove specific damages where the statements are “defamatory per se.” These are statements that expose a living person to hatred, contempt or ridicule, deprive them of the benefit of public confidence or social intercourse, and which clearly injure them in their business, trade, profession or office. This can be difficult to prove in a corporate or business context and is much more common where an individual, as opposed to a company, is the victim.
Tortious Interference with Business Expectancy
Even where you cannot prove all the elements of defamation, you still may have a claim for interference with your business expectancy. To do so, you must show first that you had a valid business expectancy, which means any prospective contractual or business relationship that would have measurable value. This cannot be something that amounts to hope or wishful thinking, but an expectation that was reasonable and likely under the circumstances.
Next, you must show that the person spreading the lies about your company knew that you had these business expectancies and that they knowingly and intentionally interfered by telling those lies. Then, as with defamation, you must draw a line of causation between the untrue statements and the loss of the business expectancy. The fact that they happened around the same time is not enough; instead, you must show that there is no other explanation except for the wrongful acts of the defendant.
Finally, as with defamation, you must be able to reasonably quantify your damages. Speculation and guesses will not win your case. You need hard numbers that show definitively the harm which your business has suffered because of the false statements.
If your company has been the victim of a liar who has actively driven business away, reach out to the attorneys at Beresford Booth. We stand ready to assist you with your claim, stop the spread of false statements, and help recover your losses.
To learn more about Litigation: Lies About Your Business: Litigating Corporate Defamation, please contact Beresford Booth at info@beresfordlaw.com or by phone at (425) 776-4100.