“They Said What?! I’ll Sue!” – Litigating Defamatory Claims – Speaking of Litigation Video Podcast

New episode of our video podcast, Speaking of Litigation: As the spotlight on high-profile judgments intensifies, terms such as “libel,” “slander,” and “defamation” permeate public discourse.

Former U.S. presidents, A-list celebrities, and even college professors and local business owners face the specter of defamatory statements broadcast and scrutinized worldwide. But what lies beneath the surface of these headline-grabbing lawsuits?

Join us on Speaking of Litigation as Epstein Becker Green litigators Jim Flynn, Teddy McCormick, and Lauri Rasnick dissect the intricate legal maneuvers deployed in defamation trials. From the realm of business to the intricacies of employment law, this episode offers a deep dive into the strategies employed when reputations are on the line.

Video: YouTube.

Podcast: Amazon Music / Audible, Apple Podcasts, Audacy, Deezer, Google Podcasts, iHeartRadio, Overcast, Pandora, PlayerFM, Spotify, YouTube.

Transcript

[00:00:00] Jim Flynn: Today on Speaking of Litigation we're going to examine the ins and outs of the law of defamation, sometimes referred to as libel, sometimes as slander, but what it really comes down to is what are the actions that you want to think about or bring if somebody says or writes something bad about you or your product or your company.

[00:00:25] Jim Flynn: We're going to examine that in the context of business cases, but we're also going to examine it in the light of the employment context. Hello everyone. I'm your host today, Jim Flynn. I'm an attorney at Epstein Becker and Green, a partner in its litigation practice, and I work out of the Newark, New Jersey office.

[00:00:46] Jim Flynn: So let's talk about defamation a bit. Defamation is in the headlines every day. We see that E. Jean Carroll has recovered a multimillion-dollar judgment against the former president, Donald Trump, for defamation. We see recently that a climate change scientist at the University of Pennsylvania, who a blogger compared to Jerry Sandusky, the child molester who was a football coach, recently recovered after 12 years of litigation, a million-dollar judgment against that blogger.

[00:01:24] Jim Flynn: Likewise, in 2022, we saw Johnny Depp and Amber Heard battling each other out in claims and counterclaims of defamation. And finally, in 2023, we saw a talk radio host who actually sued ChatGPT because a third party went and asked for information about that talk radio host and ChatGPT gave an incorrect recitation of facts and characterizations regarding that talk radio host’s role in a particular lawsuit, and that resulted in defamation claims.

[00:02:07] Jim Flynn: I'd love to tell you all about this myself, but you'd learn more if you dealt with our two guests, which I'm happy to introduce to you now. First, we have Theodora “Teddy” McCormick, from our Princeton office, who is a commercial litigator who does all kinds of things, including cases in this area. Teddy, welcome.

[00:02:28] Teddy McCormick: Thank you very much for having me, Jim. I'm excited to be here.

[00:02:30] Jim Flynn: Thank you, Teddy. Also joining us today from our New York office, where she is a partner in our labor and employment practice, is Lauri Rasnick, who deals with all matter of employment litigation, including claims regarding defamation and the like. So Lauri, welcome.

[00:02:48] Lauri Rasnick: Thank you, Jim. I'm so excited to be here today. It's my first podcast and I'm thrilled to be doing it with you and Teddy.

[00:02:55] Jim Flynn: Great. Teddy and I have done a couple podcasts together and separately before, so we'll make sure that you can follow along well with us.

[00:03:05] Lauri Rasnick: Thank you.

[00:03:17] Jim Flynn: So Teddy, we see a lot in the news about defamation and we see that term referred to all the time, and I gave you some pretty extreme examples in the opening of things that have been really at the front of the news, but just to level set for us, what is defamation?

[00:03:27] Teddy McCormick: Thanks, Jim. Defamation is a state law tort that allows the plaintiff to recover damages where a defendant has made an untrue statement of fact about or concerning the plaintiff published to a third party where that statement is susceptible of a defamatory meaning, is not privileged and causes damage to the plaintiff.

[00:03:46] Jim Flynn: Great answer. I'm sure all the lawyers loved it. Probably got an A+ in libel law in law school. [laughter] A lot of buzz, a lot of buzzwords in there. And we'll start to unpack that through this discussion. But are there different kinds of defamation?

[00:04:02] Teddy McCormick: Yeah. So defamation is defamation, but that is an umbrella term that covers written defamation or what is sometimes called libel, and spoken defamation which is known as slander.

[00:04:14] Jim Flynn: Okay, got it. Lauri, before we jump into more detail with Teddy, there's another term that we often hear people refer to, and that's the notion of defamation per se.

[00:04:29] Jim Flynn: And I assume that's about something more than defaming a particular good restaurant in New York City. What is defamation per se?

[00:04:38] Lauri Rasnick: You might hear that term, or libel or slander per se. What that just means is there are certain false statements that are so damaging that they're defamatory on their face, regardless of the context.

[00:04:51] Lauri Rasnick: It covers things like saying someone committed a crime, or engaged in immoral conduct, or that somebody had a contagious, infectious, or loathsome disease, or that someone engaged in sexual misconduct, or was unchaste, or, and this often comes up in the employment context, saying something harmful about somebody's business, trade, or profession.

[00:05:15] Jim Flynn: Thanks, Lauri. Teddy, back to you. The things that Lauri just talked about, and some of the examples that I gave at the top of the show, all seem to be pretty extreme circumstances. Is defamation really limited to those kinds of extremes? Or are there other ways to bring claims in different circumstances?

[00:05:39] Teddy McCormick: Jim, not at all. The notion of suing somebody else about what they said that caused you damage is in fact pretty common. We see it when a competitor says something untrue about a business service or a product, and someone makes a false advertising product disparagement or unfair competition claim, or somebody says things that impact on an agreement or other relationship.

[00:06:00] Teddy McCormick: And there may be claims of tortious interference. But sometimes in business, you get damaged by untrue things that are said or written by those other than competitors, or they're said or written by competitors that don't quite amount to advertising. And that is where defamation comes into play. So it isn't only about what gets said in or by newspapers, or in the media by famous people. Defamation has some business realities.

[00:06:25] Jim Flynn: So can you give me, you gave some nice general examples there. Do you have any sort of specific examples or particular cases that you can talk to us about that illustrate how defamation can work in the business context?

[00:06:41] Teddy McCormick: Sure. You may have a situation where someone, sometimes it's a competitor or sometimes it's a former business partner, who makes false statements about the CEO or another high-level employee to clients or vendors, that cause damage in the form of lost business relationships or reputational damage in the industry.

[00:07:01] Teddy McCormick: So I think the key distinction here is it's not a situation where you have neighbors gossiping and saying untrue or unflattering things about someone, but rather where the statements impugn the plaintiff's job performance or professional reputation in a particular industry, causing them harm.

[00:07:21] Jim Flynn: Thanks. Lauri, jumping over to you, we heard in what Teddy said, some references to professional reputation and job performance. Do those things bleed over into defamation arising in the employment context?

[00:07:35] Lauri Rasnick: They do. And we see it primarily coming up in two ways. So number one, there are claims from former employees who claim that they've been given a poor reference.

[00:07:49] Lauri Rasnick: That could be in the context of somebody reaching out to get a reference check or a background check, either formally or informally, and allegedly providing untrue negative information about them. It may also come up by employees who claim that they're being subject to untrue negative statements by workers that they work with, either through performance evaluations or through other types of performance feedback.

[00:08:24] Lauri Rasnick: The other type of claims that come up in the employment context are by employees who are accused of harassment or discrimination. And these individuals may often be very upset about these allegations, insulted by these allegations, and claim that these allegations are false and disparaging to them.

[00:08:48] Lauri Rasnick: They might want to bring a lawsuit against the accuser, and in that context, we really need to look at the context in which those statements were made, to whom they are made, where they are made, what was said, and then look at whether or not there might be a privilege or other defense that may come into play before bringing a claim or a counterclaim on their behalf.

[00:09:16] Jim Flynn: Thanks, Lauri. And we'll explore some of those defenses in a moment, but maybe just to set that up a little bit, Teddy, when you look, you know, you have a client who comes in and thinks they were wronged because somebody said or wrote something false and defamatory about them or their product or their company or their services.

[00:09:41] Jim Flynn: How do you go about determining with the client whether to bring a defamation claim in the business context? 

[00:09:50] Teddy McCormick: So you're going to need details. Who were the statements made to? When were they made? Was anyone else present? One thing that is important to keep in mind about a defamation claim is that most states have a very short statute of limitations.

[00:10:04] Teddy McCormick: Here in New Jersey, where I am, it's one year. So you want to make sure you aren't time barred from bringing a claim. And then most importantly, what exactly was said and what was the context. Another important factor about defamation is if the statement is made in the context of an ongoing litigation, then there is what's called the litigation privilege.

[00:10:24] Teddy McCormick: So if someone sues someone, one company sues another, saying that they breached an agreement or sold faulty products, the person being sued can't turn around and file a counterclaim for defamation. The statements made in the context of the lawsuit are subject to that litigation privilege. There's a policy concern there that it would have a chilling effect on people bringing potentially valid claims if they were always going to be met with a defamation claim in return.

[00:10:53] Teddy McCormick: Also important is the nature of the statement. Is it a factually false statement? Or is it something that's really, arguably opinion? So if I say someone is a liar, that's probably going to be considered opinion. It would not be actionable. However, if I say that someone is not honorable and they don't pay their vendors or live up to their business obligations, and those statements are false, and the person who comes to me could show that they lost business as a result of my statements, that would definitely give rise to an actionable defamation claim.

[00:12:00] Jim Flynn: I assume that that's, as you described, the rule in New Jersey, but other states might have different rules. Is that right? 

[00:12:07] Teddy McCormick: Most states do follow the discovery rule, so that when you discover something, that's when your statute of limitations runs. But different states will, may have different statute of limitations.

[00:12:24] Jim Flynn: Does the statement have to expressly, like if I wanted to bring a claim, would it have to expressly say Jim Flynn did X or Jim Flynn is Y, or can the context provide the identification for the plaintiff?

[00:12:40] Teddy McCormick: It doesn't have to expressly name an individual person. As I said earlier, the challenged statement has to be of or concerning the plaintiff. So in other words, it need not expressly name the defamed person, actually or legally, but has to be a statement that a reasonable person would understand to refer to that plaintiff.

[00:13:00] Teddy McCormick: So as I also mentioned, there are concepts like product disparagement and trade libel. There are forms of defamation that can be brought by businesses for untrue statements about the business or its products.

[00:13:11] Jim Flynn: Lauri, Teddy mentioned in passing as she was responding to my questions, some things about privilege and other defenses.

[00:13:23] Jim Flynn: So I had asked Teddy, how does she deal with a client to figure out when to bring a claim. Let me give you the sort of flip side of that, which is if somebody comes to you who's been accused of defamation, what are you looking at from the defense side?

[00:13:40] Lauri Rasnick: So from the defense side, one of the first things we look at is whether or not the statements were actually false.

[00:13:48] Lauri Rasnick: So truth is a complete defense. And if the statements were actually true, then that's going to be a defense right there. Beyond that, there are certain privileges, as Teddy already indicated, where the law provides protection around statements, even if they're arguably false. For example, there are situations where the statements are made in the context of litigation, either in the pleadings or surrounding the litigation that may be absolutely privileged.

[00:14:20] Lauri Rasnick: There may be statements that are made within the employment context, inside a company, that may be subject to a qualified privilege as well. So we look at whether or not there is a privilege that attaches to it. There are states like Colorado and Florida and other states that actually have job reference immunity laws that protect employers who speak openly about former employees in the context of answering questions or a reference or a background check.

[00:14:57] Lauri Rasnick: Those laws don't protect statements that are false and where the employer knew that they were false or had reason to know they were false but they do provide protections for employers. And then we need to look at the other circumstances, like the timing of the statement, as Teddy mentioned.

[00:15:16] Lauri Rasnick: There may be a very short statute of limitations in effect so do we have a statute of limitations defense. Publication, where were the statements allegedly published? Were they published or were they simply made within a company? Many times in the employment context, the alleged statements may have been intra-company made.

[00:15:41] Lauri Rasnick: And of course the statements have to have been damaging. So if there's no damage from the alleged statements, that may also be a defense that we can assert.

[00:15:55] Jim Flynn: So the concept of publication is interesting to me because people hear that, and I think in common understanding might think it has to be in a newspaper or, you know, on a radio show or something like that, but that's not what you mean at all, is it, I mean you're really referring to the notion that it's being projected to a third party, right?

[00:16:18] Lauri Rasnick: That's exactly right, Jim, and as we started talking about in the beginning of the podcast, these statements may be made through writing or verbally. So it could be as much as one conversation between two different people where the information is spread in that manner.

[00:16:40] Jim Flynn: Right. But in some context, as you described, what I say to somebody else may not be considered publication to a third party because it was within the context, as you said, of a single company or a single business unit.

[00:16:56] Jim Flynn: So that's very interesting. Teddy, I know that in addition to sometimes bringing cases affirmatively, you're obviously on the defense side. Anything that you would add to what Lauri has said about defenses that may be raised in the defamation context or as to related claims?

[00:17:17] Teddy McCormick: Sure. Yeah. In addition to all the great points that Lauri made, I would just add that while truth is a defense to defamation in the business context, sometimes literal truth is not always an absolute defense. For example, a statement can be literally true but presented in a misleading manner that makes it a form of false advertising.

[00:17:36] Teddy McCormick: Similarly, there are common law torts in some states, like invasion of privacy torts, false light publicity, or public dissemination of private facts that could, again, be literally true statements that are nonetheless actionable.

[00:17:51] Jim Flynn: One of the things that Lauri alluded to previously and that Teddy has mentioned is this notion of fact versus opinion, or the notion that a defamation claim has to be based on an assertion of fact.

[00:18:08] Jim Flynn: But people all the time get insulted by being called names. Somebody may be called a bad employee, quote unquote, or a jerk. Or as in a case that I had in the employment context one time, a [bleep]. So Lauri, do those kind of just scatological expressions of opinion amount to defamation claims?

[00:18:33] Lauri Rasnick: No not necessarily. A defamation claim has to be based on an untrue statement of fact that's capable of a defamatory meaning. Saying somebody's a bad employee or a jerk are more likely going to be seen as statements of opinion and non-actionable. But the lines aren’t that easy to draw. So if I were to say that somebody is a bad employee, that in and of itself may not be actionable.

[00:19:01] Lauri Rasnick: But if I were to say that somebody is a bad employee because he's dishonest, that may be a closer case because it's implying that I have some sort of knowledge of facts that illustrate that dishonesty. Similarly, if I were to say, “in my opinion he does not have the qualifications to be a vice president.”

[00:19:26] Lauri Rasnick: That may not be actionable. But if I were to say, “in my opinion, he does not have the qualifications to be a vice president because he's untrustworthy or dishonest, or he has a poor record,” again, that is going to be more questionable, and you're not going to save your statement by merely saying, “in my opinion.” It's similar to the advice that we give in the anti-harassment training, just because you preface an offensive statement with “no offense” or “just kidding,” that doesn't magically protect the speaker from the ramifications of the offensive statement that follows it, and in my opinion, won't protect a statement in the same way.

[00:20:14] Jim Flynn: Understood. And so that's really interesting because again, oftentimes in the cases that make the news, we see very expressed statements put forth very starkly and they get covered. I take it from what you're saying about context, is that in the real world or the more common cases, the line drawing can be a little more difficult, especially when you add in what Teddy noted.

[00:20:43] Jim Flynn: Which was, hey, sometimes you don't even have to expressly mention the person, it's figured out from context. So it sounds like there can be challenges on both sides of these things. Teddy, how does the fact/opinion dichotomy play out in the business context? Everything Lauri said about the employment context I think will resonate with people, but talk to me about the business context.

[00:21:08] Teddy McCormick: Sure. The judge and the jury, and/or the jury, sometimes get hung up on this question of fact versus opinion. But it's really better to just look at the statement made and decide whether the statement contains or implies a verifiable fact, and whether the statement is reasonably susceptible to being understood as an actual fact.

[00:21:27] Teddy McCormick: There was an interesting federal court case in Colorado a few years ago. It's called Examination Board of Professional Home Inspectors vs International Association of Certified Home Inspectors. So this is a case between two competitors in the home inspection field. And in that case, the Examination Board of Professional Home Inspectors sued the defendants, a gentleman named Nickifor Gromicko, and his company the International Association of Certified Home Inspectors, because Mr. Gromicko claimed that the plaintiff's certification test was, quote, “not even a psychometrically valid exam.” And the legal question was whether his statement was one of fact or opinion.

[00:22:11] Teddy McCormick: That particular court found it to be a statement of fact because Gromicko had claimed he could prove in court what he had said and could obtain an injunction against the test. So picking up on what Lauri said, maybe in this context you can get away with calling the test a bad one, but saying it is a bad one because it's psychometrically invalid could cause you a problem.

[00:22:34] Jim Flynn: Let me turn to Lauri, because I have a little bit of a problem with the analysis and the result in that particular case. It seems to me that the defendant there, who was sued for defamation, came to a scientific or a legal conclusion that he wanted to argue. Now, he may be right or wrong, make that argument, win or lose in court on that question.

[00:23:02] Jim Flynn: But should that make him subject, or my thought is should that make him subject to a defamation claim rather than just a losing argument? So shouldn't there be some leeway there in that context to be making arguments, like, hey, what if I just asserted you defamed me? That's a legal conclusion. If I'm wrong, should I also be guilty of defamation?

[00:23:28] Lauri Rasnick: You have a good point there, but the courts are much more likely in the commercial and the employment context to find these implied statements of fact, than in some of the more well publicized defamation claims that we often see involving public figures or politics and entertainment.

[00:23:48] Lauri Rasnick: In those cases, there may be First Amendment issues or protections or other concerns that may result in these sharper distinctions. In the cases that we often see, they don't have that whole other veneer. They're not about public figures, they're not about well-known events. They're about, oftentimes, unknown people and private matters.

[00:24:14] Jim Flynn: I appreciate that context. I still feel pretty bad about that particular case. [laughter]

[00:24:16] Lauri Rasnick: Sorry Jim.

[00:24:18] Jim Flynn: That's just the way it is. So let me turn to Teddy and start the discussion of, okay, we've talked about the elements, we've talked about the defenses and the challenges and how you bring these cases.

[00:24:33] Jim Flynn: But Teddy, talk to me a little bit about what they're about in terms of what can you recover? What kind of relief can you get in these cases? How do you go about that?

[00:24:44] Teddy McCormick: You could get compensatory damages that are directly linked to injury caused by false and defamatory statements.

[00:24:51] Teddy McCormick: These are sometimes called special damages and they can be a decline in revenue, a decrease in customers, lost jobs or contracts, or potentially costs incurred in mitigating the effects of the defamatory statement. That can be things like reputation management, corrective advertising, increased marketing campaigns.

[00:25:11] Teddy McCormick: You can also get reputational damages and emotional distress damages. And those are what they sound like. Emotional distress damages can be a little bit more complicated. As Lauri knows, you have to then show that you actually suffered emotional distress and you're probably going to need an expert or somebody to try to quantify the harm that you suffered, which can be much more challenging than showing that you lost certain revenues or that you lost certain contracts.

[00:25:39] Lauri Rasnick: Yeah, if I can jump in on that, it's important to note in the context of defamation per se that we were talking about earlier, reputational damage is presumed. It doesn't necessarily make it easier to prove or to specify an amount, but it does mean that you have gotten over that significant legal hurdle.

[00:26:01] Lauri Rasnick: And what you often see in defamation cases is that there may be a nominal award of the reputational or special damages. But that opens the door to punitive damages that can then be awarded, and those could be quite significant in certain circumstances. So that's exactly what happened in the recent case brought by the climate change scientist that Jim mentioned earlier in the show.

[00:26:30] Teddy McCormick: That’s a great point, Lauri. And of course, in addition to damages, parties often want to stop the statements from continuing to be made, which sometimes means you want to obtain an injunction, and other times merely means that the party who made the statements is deterred by the time and expense of litigation from saying such things again and again.

[00:26:47] Jim Flynn: So I appreciate what each of you have contributed to informing me and helping my understanding of these defamation claims. And we're coming up to the close of our program. So one final question for each of you. I'll start with Teddy. So Teddy, before we sign off, what's the one warning that you would give to a business owner who's thinking about bringing a defamation case and coming to see you, and I want justice and what's the warning you give them before they start that case?

[00:27:25] Teddy McCormick: I would caution them that proving reputational damages is hard, and discovery on your reputation can be very invasive. And if you bring such a claim, you're opening the doors to that discovery. So just be ready for that.

[00:27:40] Jim Flynn: Appreciate that. So Lauri, again, giving you the flip side of that question. A business owner or an employer comes to you and they're facing a defamation claim. What's the kind of out of the box warning that you give them that differentiates this kind of case for them from a run of the mill employment matter?

[00:28:00] Lauri Rasnick: People react really negatively and strongly to the perception that people are bad mouthing others or talking behind their backs. So in defending the employer, we're really going to want to find the best possible way to explain the statements and put them in a light that takes them outside of those kind of analogies.

[00:28:27] Jim Flynn: Thank you. Thanks each of you for participating today, and obviously thank you to the audience for watching and listening. This has been a very interesting topic today. And if you like this and what you've heard, please subscribe to Speaking of Litigation on YouTube or wherever else you get your podcasts. Thank you.