Is There A Different Standard Of Proof For A Defamation Suit Between Two Businesses?
In a recent Illinois Supreme Court decision, the court addressed the issue of defamation between competing businesses where a menswear store brought suit against a competing menswear store alleging a newspaper advertisement was defamatory. Imperial Apparel, Ltd. v. Cosmo's Designer Direct, Inc., 227 Ill. 2d 381 (2008). The trial court dismissed the complaint, however, on appeal, the Illinois Supreme Court held that assuming that First Amendment protection against defamation claims extended to nonfactual statements made by one private party about another, on a matter of purely private concern, defendant's newspaper advertisement could not reasonably be interpreted as stating actual facts about plaintiffs. Id. Under Illinois law, commercial competitors are privileged to interfere with one another's prospective business relationships provided their intent is, at least in part, to further their businesses and is not solely motivated by spite or ill will. Id. The court found that in Illinois, ordinary negligence suffices as the degree of fault, for purposes of the principle that in a defamation action brought by a private figure against a defendant, the First Amendment protection of speech precludes imposition of liability without a showing of fault. Id. In conclusion, the court reasoned that special standards for fault and falsity in defamation actions, by the First Amendment protection of speech, did not apply in the defamation action brought by the menswear store against the competing menswear store in the absence of allegations that the plaintiff’s store was a public figure, or that statements made in the advertisement addressed a matter of public concern. Id. The court did note that the privilege to compete does not, however, encompass the use of improper competitive strategies that employ fraud, deceit, intimidation, or deliberate disparagement. Id.
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