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Defamation Law for Business: an Explainer

What do you do if your reputation, or the reputation of your business, is subject to online defamation? Some businesses turn to online reputation management firms and SEO services. But sometimes, you may need to hire a lawyer.

The First Amendment affords Americans the most robust speech protection in the world. But freedom of speech is not unlimited. Well-known examples of speech categories that U.S. jurisprudence does not protect, or protects less than other forms of speech, include false advertising, obscenity, and incitement to violence.

But the list of legal restrictions on speech is actually quite lengthy. Federal securities law, for example, defines categories of fraud that are inherently speech based. Assault can be a form of speech. Noise ordinances can restrict freedom of speech. Criminal statutes against perjury, extortion and harassment likewise restrict speech. Zoning laws and “time, place and manner” restrictions limit when and where protests can be held or where artwork or signage can be displayed. Trademark and copyright protections restrict speech. Codes of conduct in universities and rules of decorum in courthouses restrict speech, too.

Defamation: The Basics

Perhaps the most well known category of unprotected speech is called defamation. Defamation, at its most basic, is defined as a false statement about a person, made to a third party, which harms the subject’s reputation. In essence, the law of defamation recognizes the reality of reputational harm and that you can’t just go around lying about people. Although some states still have criminal statutes against defamation on the books, these laws are archaic and widely regarded as unconstitutional. Thus, defamation is generally a civil wrong, meaning that you can be sued for it.

“Libel” refers to defamation that is published in a fixed medium like print or online. “Slander” typically refers to defamation committed verbally—although that definition is somewhat misleading because verbal defamation committed in a fixed medium like a YouTube video, or “published” via television or radio broadcast, would be considered libel. Thus, slander really only refers to defamation committed in a dynamic medium such as an interpersonal conversation or a telephone call. Because the lines distinguishing libel from slander have blurred with the advent of new technology, some states, such as New Mexico, have simply done away with the distinction.

To say that defamation is an “unprotected” form of speech is also not quite accurate. Defamation is slippery—it can be incredibly difficult to prove, especially the element of damages. This is because, oftentimes, a tangible economic loss must be proven, whereas the bulk of the damage is intangible, such as loss of business goodwill. To make matters even more challenging, over the years, courts and legislatures have erected significant barriers to even bringing a defamation suit in the first place.

First, in 1964 the U.S. Supreme Court “constitutionalized” defamation law, in a case called New York Times Co. v. Sullivan. Before Sullivan, going all the way back to the colonial days before the Constitution was ratified, the law of defamation was defined by state law. In Sullivan, the Supreme Court decided that, in order for a government official to hold someone liable for defamation, the plaintiff would need to show “actual malice,” i.e., that the defamatory statement was an intentional lie, or was made with “reckless disregard for the truth.”

In subsequent cases, SCOTUS extended this requirement to so-called “public figures,” which it divided into two categories: “general purpose” public figures, and “limited purpose” public figures.

A “general purpose” public figure is a household name celebrity—tycoons, Hollywood stars, and the like. A “limited purpose” public figure is someone who seeks out public attention for a limited purpose, such as weighing in on a public controversy. Local activists, or business owners who feature themselves in television commercials, may qualify as limited purpose public figures. Some federal appellate courts have even recognized a category of “involuntary limited public figure,” such as disaster survivors or witnesses to crime whose accounts of widely reported events become part of the news cycle. There are problems with this category, because Supreme Court jurisprudence suggests an element of voluntariness to being a limited purpose public figure. But some federal courts do recognize this category.

Second, state legislatures in forty states have enacted what are called “anti-SLAPP” laws. “SLAPP” stands for “strategic lawsuit against public participation,” and refers to lawsuits filed in retaliation for the exercise of First Amendment rights. Anti-SLAPP laws permit a defendant who claims he is being sued for protected speech to bring an expedited motion to dismiss, and collect his attorney fees from the plaintiff if he wins the motion. Washington was the first state to enact such a law, in 1989. These laws raise the bar to bringing a defamation suit considerably. Defamation is the main cause of action that tends to elicit anti-SLAPP motions from defendants, but they also pop up in invasion of privacy cases, interference with contract cases, intellectual property disputes, and even civil cases alleging fraud.

Third, under a well-known statute widely referred to as Section 230 (47 U.S.C. § 230) Congress has chosen to grant immunity to so-called “interactive computer services” such as message boards and social media platforms, meaning that these companies cannot be sued for content posted by their users.

Fourth, there are various other barriers to bringing a defamation suit. Many states do not allow a cause of action for defamation against government employees if the defamation was committed in the course of their employment. Some states, such as New Jersey, require a showing of “actual malice” in order to maintain a defamation suit over a false police report, whereas other states, such as Arizona, do not allow defamation claims for police reports at all. And in all states, the “absolute privilege” doctrine prohibits defamation lawsuits over statements made in court, or in close relation to a court proceeding.

Why Work With a Defamation Attorney?

With all those barriers in mind, what can a defamation attorney do for you if you are defamed or harassed online?

First, an attorney can serve what’s called a demand letter (or a “cease-and-desist” letter) on your detractor. This is a type of pre-litigation notice that threatens a lawsuit unless certain demands are met, such as the removal of defamatory content, or the cessation of defamatory publications. Although social media platforms enjoy broad immunity from suit under Seciton 230, demand notices can also be sent to these platforms when content violates their policies, or infringes on intellectual property rights. Oftentimes, interactive platforms may have had a role in creating the defamatory content, which effectively cancels out their immunity from suit. If you hire an attorney to serve a demand letter, you should be ready to follow through with your threat to file suit if your demands are not met.

Second, an attorney can bring a defamation lawsuit against your detractor. This can be done with the goal of a monetary recovery for actual damages, or to leverage the cessation of the defamatory behavior. Litigation is risky, and you should consult with an attorney to get a thorough sense of the rewards and possible pitfalls. In the defamation law context, the primary pitfall is publicity, because lawsuits are public proceedings and create public records. Thus, paradoxically, a defamation plaintiff can do his reputation more harm than good by filing suit and further publicizing the defamatory content. However, the flip side of this risk is that, when your reputation has been egregiously harmed by a liar, filing suit can generate publicity that shows you are fighting back and taking the initiative to publicly contest what’s being published about you, or about your business.

Third, when your business is being review-bombed (or is being subjected to any kind of defamatory review) by anonymous parties, an attorney can file what’s called a “John Doe lawsuit.” This is a lawsuit that names an anonymous defendant, for the purpose of serving a subpoena on a social media platform to compel the unmasking of the anonymous detractor’s IP address or other account information. A subpoena cannot be served by an attorney unless it is connected to a pending lawsuit, so this option does require you to initiate litigation. Social media platforms may object to the subpoena, which can increase time and cost of such litigation, but they may also accede to the subpoena. Once unmasked, the anonymous detractor can be named as a defendant and served process.

Fourth, in cases of cyberstalking and online harassment, an attorney can petition a court for a protective order. State courts have broad authority to enjoin online speech when it crosses the line into stalking or serious harassment. Usually, this will require you to make a showing of reasonable fear for your safety, or (in some states) substantial emotional distress. In many states, these petitions are heard on an expedited basis.

These are just a few of the options that a defamation attorney may be able to offer, depending on your unique situation.

If you or your business are being targeted by defamation, we may be able to help. Late Night Law® is a dedicated defamation, privacy and social media law firm. If you are the target of doxxing, defamation or cyberstalking in New Mexico, in Washington, or in Texas, contact us at (505) 225-2623 to schedule a free consultation with a defamation attorney today.

This article is not legal advice, and does not create an attorney-client relationship between the reader and Late Night Law. Please consult an attorney for individualized advice if you have a legal matter.

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