Commercial Disparagement in Illinois
The First District Illinois Appellate Court has held that to state a cause of action for the common law tort of commercial disparagement, a plaintiff must prove that the defendant made a false and demeaning statement regarding the quality of plaintiff's goods and services. Schivarelli v. CBS, Inc., 333 Ill.App.3d 755, 766 (1st Dist. 2002). Moreover, an Illinois appellate court defined an action for common law commercial disparagement as “a statement about a competitor's goods or services which are untrue or misleading and are made to influence or tend to influence the public not to buy those goods or services.” Pekin Ins. Co. v. Phelan, 343 Ill. App. 3d 1216, 1220 (3d Dist. 2003).
Although commercial disparagement is similar to defamation of personal reputation in that both require a false statement to a third party which causes harm to the plaintiff, Illinois courts have recognized commercial disparagement as a tort separate and distinct from the tort of defamation. Imperial Apparel, LTD v. Cosmo's Designer Direct, Inc., 367 Ill.App.3d 48, 60 (1st Dist. 2006); 1-10 Illinois Tort Law § 10.02. A defamation action may lie when there is a false statement regarding the integrity of a business. Id. Whereas, an action for commercial disparagement lies when there is a false statement that demeans the quality of a business’ goods or services. Id. Moreover, defamation protects a personal interest in reputation, where as, commercial disparagement protects a property interest. 1-10 Illinois Tort Law § 10.02. In order to have a cause of action for commercial disparagement, the false statement that is the basis of the action must be directed at the products and services of a business rival. Illinois Jurisprudence, Commercial Law § 21:6. However, Illinois courts have found that “when a statement impugn the quality of goods and the integrity of a business, both an action for defamation and an action for commercial disparagement may lie.” Imperial Apparel, LTD, 367 Ill.App.3d at 60.
Commercial disparagement has consistently been applied to statements which disparage the quality of one's goods or services. Crinkley v. Dow Jones and Co., 67 Ill.App.3d 869, 876 (1st Dist. 1978). Common law commercial disparagement, which is a defamation of the quality of one's goods or services, requires proof that the statement be false. Soderlund Bros., Inc. v. Carrier Corp., 278 Ill.App.3d 606, 619-620 (1st Dist. 1995). In addition, commercial disparagement actions require a showing of malice and that defendant knew the statement to be false or acted in reckless disregard of its truth or falsity. Id. Furthermore, the plaintiff must allege some identified or identifiable third party which the disparaging statement was communicated to by the defendant, with whom the plaintiff had an expectancy of doing business. Suhadolnik v. City of Springfield, 184 Ill.App.3d 155, 184 (4th Dist. 1989).
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