Few would dispute that we live in politically and socially acrimonious times. Online social media broaden the reach of ever more vile rhetoric aimed at individuals, ethnic groups, products and businesses. Although some forms of hate speech are constitutionally protected under the First Amendment, others aren’t. This article will discuss legal remedies available to persons or businesses who have been the subject of false and injurious statements, whether made online or in traditional forums.
Targets of lies may seek damages in court based on libel (applying to written statements) and slander (applying to verbal statements). In order to recover, a plaintiff must show that the untrue statement (1) is one of fact and not opinion, (2) was communicated to someone other than the plaintiff, and (3) harmed the plaintiff’s reputation and lowered him/her in the estimation of the community. Bahr v. Boise Cascade Corp., 766 N.W.2d 910, 919–20 (Minn. 2009). With limited exceptions, discussed below, a plaintiff must also prove financial injury in order to succeed at trial. Applying these principles, the court in McKee v. Laurion, 825 N.W.2d 725 (Minn. 2013) concluded that a patient’s description of a doctor as a “real tool” was a statement of opinion, not fact, incapable of supporting a defamation claim. By contrast, a mother’s statement to an emergency room doctor that she believed her child had been sexually abused by the child’s father during a parental visit was deemed a statement of fact, not opinion, for defamation purposes. Molitor v. Molitor, A16-1434 (Minn. Ct. App. April 24, 2017). The court in McKee emphasized the importance of context in which statements are made, concluding that a false statement about a doctor leaving a hospital room without saying goodbye to a patient and his mother “is not capable of conveying a defamatory meaning.” McKee, 825 N.W.2d at 732. In addition, a defamatory statement must be substantially inaccurate. Minor inaccuracies of expression or detail are insufficient. Id. at 730. Under federal constitutional law, an additional element of actual malice must be shown in defamation claims brought against public figures, including celebrities, politicians or business leaders. New York Times Co. v. Sullivan, 376 U.S. 254 (1964).
False statements about a person in their business, professional or trade capacity fall within the special category of per se defamation. Other examples under the common law are accusations of criminal activity, being afflicted by a loathsome disease, or sexual impropriety. Anderson v. Kammeier, 262 N.W.2d 366, 372 (Minn. 1977). In such instances, general damages are presumed, so a case will not be dismissed based on plaintiff’s inability to show actual harm. As a practical matter, cases in which a putative plaintiff cannot quantify his/her financial injury are seldom litigated because all but the wealthiest people would want to pay potentially tens of thousands of dollars in legal fees to achieve a token dollar award just to clear their name. This also applies in the non-business context. In Longbehn v. Schoenrock, No. 09-C5-01-000681 (Minn. Ct. App. Aug. 3, 2010), the Court of Appeals reversed a jury award of over $300,000 for embarrassment, mental anguish, health costs and wage loss in a case in which defendant referred to plaintiff as “Pat the Pedophile,” after which plaintiff lost his job with the Moose Lake Police Department. The court concluded that the jury had insufficient basis to determine that the statement caused the alleged damages. Among other problems, the trial court failed to allow jury consideration of the plaintiff’s reputation in the community before the defamatory statements were made.
Businesses as well as individuals are protected legally against false statements published online or in conventional media. Minnesota common law recognizes the tort of “product disparagement,” defined as false statements made about a thing of value (which could include services as well as products) made with the intent to cause financial harm. Lens Crafters, Inc. v. Vision World, Inc., 943 F.Supp. 1481 (D. Minn. 1996). Unlike per se business defamation, however, damages are not assumed. It is necessary to plead and prove prove the statements resulted in actual financial harm. The legal term for this is special damages: “pecuniary loss directly attributable to defendant’s false statements.” Advanced Training Systems v. Caswell Equipment Co., 352 N.W.2d 1, 7 (Minn.1984). An example of this might be spreading a malicious rumor, online or via other means. In 2007, for instance, Proctor & Gamble obtained a nearly $20 million jury award in a suit against Amway distributers who accused the company of Satanism in voicemail messages left with customers. More recently, ABC’s parent company in August 2017 paid out $177 million to settle a beef industry lawsuit over a story involving the industry’s alleged use of “pink slime” in hamburger meat. Plaintiffs in the suit were seeking over $1 billion in damages.
Minnesota’s Unfair Trade Practices Act, modeled under the Federal Lanham Act, provides a parallel track for redress for product disparagement by a business competitor, in advertising or otherwise. Unfair trade practices include disparagement of “the goods, services, or business of another by false or misleading representation of fact.” Minn.Stat. § 325D.44, subd. 1(8) (1992). It is in fact a crime to knowingly make a false or misleading claim in an ad. See Minn. Stat. § 325F.67. An injured party may bring a civil claim to recover damages for such a violation, as well as attorney fees, not available in common law claims of product disparagement or defamation. In one case, the court refused to dismiss statements by a building contractor to another contractor that an excavating company it had a dispute with “does this [breaches contracts] to people all the time.” Imperial Developers, Inc. v. Seaboard Sur. Co., 518 N.W.2d 623 (Minn. Ct. App. 1994).
Finally, parties may contractually agree to prohibit disparaging statements of opinion, not normally actionable under the laws of defamation. Such provisions often arise in the context of settlement agreements after one has threatened another with suit. Owing to difficulties of proving damages for a breach, these agreements often include liquidated damages provisions, requiring the breaching party pay a pre-set amount of money to the other (say, $5,000 per violation). Such provisions encourage good behavior, in theory.
Now if we could only apply this concept to bilious politicians, substituting votes for dollars…