If you are the owner of a business, you know that the internet can be both a great friend and enemy to businesses. One of the most common problems for business owners is online reviews of their companies, or worse, false statements made by competing businesses to drive more business their way. While our Constitution allows for free speech, it does not allow anyone to make false statements about others in a public fashion. If you think you might have a possible defamation claim, read on.
What is Defamation?
Defamation is a type of legal claim that alleges someone has made a false statement of fact about the plaintiff which caused the plaintiff financial or reputational harm. Spoken defamatory statements are known as slander, while written defamatory statements (such as what you might see in an online review) are known as libel. Both individuals and business can file defamation lawsuits, but face different requirements. For a business to successfully allege defamation, it must show that the defamatory statement has affected its financial interests, such as by costing it business. For an individual to successfully allege slander, financial harm is not required, but the individual must show that the false statement caused damage to their reputation or standing in the community.
What Do I Need to Prove Defamation?
The requirements for a defamation claim vary from state to state, and this article focuses on Iowa law. Under Iowa law, a business owner plaintiff claiming defamation must prove: (1) that a false statement about the plaintiff was made, (2) that the false statement was "published," and (3) that the plaintiff was injured by the publication of the false statement.
False Statement
The basis of the defamation action must be that the defendant made a statement concerning the plaintiff that was false. There are important distinctions to be made here. First, an opinion is not a defamatory statement. For example, if a person states that "Bizzy's Haircuts" is "the worst hairstylist in the country," that is a statement of opinion, not of fact, and cannot constitute defamation. But if a person states that "Bizzy uses unsanitary products and shaved my head when I said I wanted a trim," and those statements are false, then that can be the basis of a defamation action. It must also be reasonably clear that the defendant is talking about Bizzy's Haircuts, and not any other business. And finally, the statement must be false. If Bizzy's Haircuts does use unsanitary products and in fact shaved a person's head when they only wanted a trim, those statements would not be defamatory because they are true.
Publication
The term "publication" can be misinterpreted; often, people assume this means that the statement must have been published in the media, when this is not true. "Publication" merely means that the statement must have been made to the public in some form, including simply telling another person, or posting it online. Publication in the media would also count but is less likely to occur.
Actual Damage
Unlike an individual, a business must show that the defamatory statement caused actual economic damage, unless the claim is for defamation per se, which is a very specific type of defamatory action where damages are presumed to be injurious (such as accusing a business of running a prostitution ring). Damages available to support a business defamation claim could include loss of current clients and loss of future business opportunities. If alleging future claims such as future business opportunities, the plaintiff must be able to show that there was a concrete chance of obtaining future business (such as being in the middle of a million-dollar deal that was revoked after the publication).
How Wandro & Associates Can Help You
At Wandro & Associates, we have both prosecuted and defended against defamation claims. We are experienced in knowing whether defamation has occurred and in recommending courses of action that both limit future damage to your business and help you recover for the damages that have already occurred. If you think you have been defamed, either as a business or an individual, reach out to us today.
Have questions? We have answers.
Call us at 515-281-1475 or email us at akanne@2501grand.com.
This Wandro & Associates Update is intended to inform firm clients and friends about legal developments, including recent decisions of various courts and administrative bodies. Nothing in this Practice Update should be construed as legal advice or a legal opinion, and readers should not act upon the information contained in this Update without seeking the advice of legal counsel.