Point: "The Statements made by Defendant, as fully laid out in the Complaint, constitute false and defamatory statements of and concerning Plaintiff and its restaurant business."
To prove commercial defamation, the plaintiff must demonstrate that the following elements are present:
(1) a false and defamatory statement of fact, that it not protected as an expression of opinion;New York courts have long defined defamatory statements as those that “tend to expose the plaintiff to public contempt, ridicule, aversion, or disgrace, or induce an evil opinion of him in the minds of right-thinking persons, and to deprive him of their friendly intercourse in society.” Rinaldi v. Holt, Rinehart and Winston, Inc., 42 NY2d 369 (1977). In Kimmerle v. New York Evening Journal, 262 NY 99 (1933), the Court of Appeals held that defamation is that which “exposes an individual to public hatred, shame, obloquy, contumely, odium, contempt, ridicule, aversion, ostracism, degradation, or disgrace or...induces an evil opinion of one in the minds of right-thinking persons, and...deprives one of...confidence and friendly intercourse in society.”
(2) of or concerning an existing business;
(3) that is published to a third party with the requisite degree of fault; and
(4) that is the proximate cause of damage to the reputation of that business.
See, e.g. Immuno AG v. Moor-Jankowski, 77 NY2d 235 (1991).
A: Defamation of a business:
For businesses, a more specific test also has been articulated: whether the language is “of so defamatory a nature as to directly affect credit and to occasion pecuniary injury.” Harwood Pharmacal Co. v. National Broadcasting Co., 9 NY2d 460 (1961); Hornell Broadcasting Corp. v. A.C. Nielson Co., 8 AD2d 60 (4th Dept. 1960), affirmed, 8 NY2d 767 (1960). Courts have also addressed this issue by inquiring as to “whether the published statement relates to the plaintiff’s business so as to affect the confidence of the public and drive away its customers.” Reporters’ Association of America v. Sun Printing and Publishing Association, 186 NY 437 (1906).
In the commercial context, defamation is per se when the statement in question “impugns the basic integrity or creditworthiness of a business.” Hamlet Development Co. v. Venitt, 95 AD2d 798 (2d Dept. 1983), affirmed 60 NY2d 677 (1983), citing Ruder and Finn Inc. v. Seaboard Surety Co., 52 NY2d 663 (1981). The test as for whether the statement is defamatory per se is whether it represents a direct attack on the reputation of the business, as opposed to denigrating the quality of the business, its goods or services. See, Drug Research Corp. v. Curtis Publishing Co., 7 NY2d 435 (1960). As indicated in such case law, where a statement is defamatory per se, special damages need not be proved by the plaintiff and damages are presumed.
It is New York law that the false statements that a kosher business which sells kosher meat is selling non-kosher meat and goods is actionable per se because the words tend to injure such proprietors in their business. See, Cohen v. Eisenberg, 173 Misc. 1089 (Sup. Ct., NY Co. 1940), affirmed 260 AD 1014 (1st Dept. 1940), reargument denied 261 AD 890 (1st Dept. 1941); Braun v. Armour and Co., 228 AD 630 (2d Dept. 1929), affirmed 254 NY 514 (1930), certified question answered by 228 AD 698 (2d Dept. 1930).
B: Evaluation of the statement itself:
In evaluating the defamatory nature of a statement, the court must evaluate it in its context (James v. Gannett Co. Inc., 40 NY2d 415 (1976)), should be interpreted fairly and reasonably based on its effect (Armstrong v. Simon and Schuster Inc., 85 NY2d 373 (1995)), as it pertains to the average reader. The “average reader” standard has been interpreted as including at least a substantial minority in the relevant community. Gjonlekaj v. Sot, 308 AD2d 471 (2d Dept. 2003).
It has been established that opinions, false or not, libelous or not, are constitutionally protected and may not be the subject of private damage actions. Rinaldi v. Holt, Rinehart and Winston, Inc., 42 NY2d 369 (1977), citing to Buckley v. Littell, 539 F2d 882, cert. denied 429 US 1062. In the Rinaldi case, the Court of Appeals held that whether a particular statement constitutes fact or opinion is a question of law.
In Millus v. Newsday, Inc., 89 NY2d 840 (1996), the Court of Appeals stated: “Whether a potentially actionable statement is one of fact or opinion is a question of law, and depends on ‘whether a reasonable reader or listener would understand the complained-of assertions as opinion or statements of fact.” In that case, the Court of Appeals held that the facts that the complained-of assertion was made on the editorial page of the newspaper, surrounded by other opinion pieces, and had a general “tenor” of editorialism, the assertion could not have been alleged to be a statement of fact, but rather one of opinion.
The Court of Appeals held, in Brian v. Richardson, 87 NY2d 46 (1995), that factors to be considered to distinguish between assertions of fact and non-actionable expressions of opinion are: (1) whether the specific language in issue has a precise meaning which is readily understood; (2) whether the statements are capable of being proven true or false; and (3) whether either the full context of the communication in which the statement appears or the broader social context and surrounding circumstances are such as to signal to readers or listeners that what is being read or heard is likely to be opinion, not fact.
C: Publication to a third party:
In order to constitute actionable defamation, the defamatory statement must have been disseminated or published to a third party. Swinton v. Safir, 93 NY2d 758 (1999); Memory Gardens, Inc. v. D’Amico, 91 AD2d 1159 (3d Dept. 1983). The publishing and posting of statements on both a website and blog constitute dissemination and publication to third parties. The same are readily available to anyone who searches the internet.
D: Statements are “of or concerning the plaintiff”:
The defamatory statements must be “of or concerning the plaintiff.” Gross v. Cantor, 270 NY 93 (1936).
E: Proximate cause of injury:
Private corporations (and similarly limited liability companies) are generally deemed a private figure in terms of the degree of fault necessary to place the burden of proof upon a party in a defamation action. Carlucci v. Poughkeepsie Newspapers, Inc., 88 AD2d 608 (2d Dept. 1982), affirmed 57 NY2d 883 (1982).
Did the Defendant Commit Injurious Falsehood?
To prove injurious falsehood, the plaintiff must demonstrate that the following elements are present:
(1) a false statement of fact;
(2) published to a third party;
(3) with malice; and
(4) that is the proximate cause of damage to the reputation of that business.
See, e.g. Penn-Ohio Steel Corp. v. Allis-Chalmers Manufacturing Co., 7 AD2d 441 (1st Dept. 1959).Case law has held that it is not necessary for the Complaint to allege that the sole motivation of the defendant was to injure the plaintiff; rather, it is enough if the falsehoods charged were intentionally uttered and did in fact cause the plaintiff to suffer actual damages in its economic or legal relationships. P. Kaufmann, Inc. v. Americraft Fabrics, Inc., 198 F.Supp.2d 466 (SDNY 2002).
by Richard A. Klass, Esq.
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copyr. 2012 Richard A. Klass, Esq.
The firm's website: www.CourtStreetLaw.com
Richard A. Klass, Esq., maintains a law firm engaged in civil litigation at 16 Court Street, 28th Floor, Brooklyn Heights, New York.
He may be reached at (718) COURT-ST or e-ml to RichKlass@courtstreetlaw.com with any questions.
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