Defamation and Trade Libel

Defamation is an invasion of the interest in reputation. It can be either libel or slander. The elements of this tort include: a false publication that, is defamatory and unprivileged, and has a natural tendency to injure to the victim’s reputation. In fact, some types of disparagement (e.g., a false claim of a felony charge) would be damaging towards the victim.

Usually, the defendant must have intended the defamatory publication since libel and slander are intentional torts. However, malice is not an element of defamation and is relevant in two situations: (a) It must be shown in order to obtain punitive damages; (b) lack of malice must be shown by a defendant whose defense is qualified privilege.

Defamation has constitutional ramifications. For example, liability for defamation of a public official or public figure, or concerning matters of public concern, is subject to First Amendment limitations. According to the state constitution, an elected official is constitutionally subject to disqualification for defamation during a political campaign if it is a major cause of an opposing candidate’s defeat.

So, a defamatory statement is one that injures the reputation of another. Also, a person who publishes defamatory statements may be liable for repetitions of the defamation as well as the original defamation. The original publisher may be liable even when he/she neither authorizes nor intends the republication. It is sufficient that at the time of publication, the republication was reasonably foreseeable.

The law protects an individual’s reputation. Now, this protection has a financial and emotional feature. First, the law grants compensation to individuals who sustain financial injury as a result of defamation. Second, the law grants compensation to individuals who sustain emotional injury as a result of defamation. Stated otherwise, besides financial harm, the other kinds of injury suffered by the victims include reputational impairment, loss of standing in the community, personal humiliation, and mental anguish. The law can place the burden of proof on the plaintiff to prove his or her financial loss as a prerequisite for recovering damages.

In some cases, business owners are targeted by competitors which is called trade libel. Trade libel is the publication of a false statement of fact that is an intentional disparagement of the quality of products or services of another’s business which results in pecuniary damages. It is a business tort that permits the injured party to seek compensatory and punitive damages. A competitor’s conditional privilege to make favorable comparisons of its products or services with others is lost if the statements include false statements of purported facts and if the statements are made with malice or without good faith.

In California, the statute of limitation for defamation is usually one year. The time period usually starts when the cause of action accrues. A cause of action for defamation accrues at the time the defamatory statement is published. The general rule is that publication occurs when defendant communicates the defamatory statement to a third party. In reference to books and newspapers, publication occurs when the book or newspaper is initially distributed towards the general public. However, the courts have determined that it may be appropriate to apply the discovery rule to delay the accrual of a cause of action or to impose an equitable estoppel against defendants who assert the defense after the statute of limitation has expired.

Finally, the Communications Decency Act plays an important role in online speech that is published on a third-party service provider’s website. This federal statute was passed to promote free discussion and private investment in the Internet. As such, Congress immunized providers of interactive computer services against liability arising out of content provided for publication by any other information content provider. This statute does not limit the application of intellectual property laws or criminal laws, but it protects Internet Service Providers and website operators against claims arising out of content created by third parties.

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