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Texas Business Disparagement

©2014 Mark Courtois

Business disparagement is similar to a defamation claim. The two torts differ in that a defamation claim serves to protect the personal reputation of an injured party, while a business disparagement claim protects economic interests. Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167, 170 (Tex 2003). To prevail on a business disparagement claim, a plaintiff must establish the following elements: 1) the defendant published false and disparaging information about it, 2) with malice, 3) without privilege, 4) that resulted in special damages to the plaintiff. Id. A business disparagement defendant may be held liable "only if he knew of the falsity or acted with reckless disregard concerning it, or if he acted with ill will or intended to interfere in the economic interest of the plaintiff in an unprivileged fashion." Id. (citing Hurlbut v. Gulf Atl. Life Ins. Co., 749 S.W.2d 762, 766 (Tex. 1987).

Malice. If the plaintiff is a public figure, then ill will or intent to interfere with Plaintiff's economic interest is not sufficient to establish malice. Forbes Inc. at 171. Rather, the public figure plaintiff must establish malice by showing the defendant published the statements with knowledge that they were false, or with reckless disregard as to the statements' truth. Id. To establish reckless disregard, a public-figure plaintiff must prove that the defendant "entertained serious doubts as to the truth of his publication." Huckabee v. Time Warner, 19 S.W.3d 413, 420 (Tex. 2000)(quoting St. Amant v. Thompson, 390 U.S. 727, 731, 20 L. Ed. 2d 262, 88 S. Ct. 1323 (1968)). Actual malice must be proved by clear and convincing evidence at trial. Huckabee, 19 S.W.3d at 420. Obviously misleading statements, without more, is not enough evidence to constitute clear and convincing evidence of actual malice against a public figure plaintiff. Turner v. KTRK Television, Inc., 38 S.W.3d 103 (Tex. 2000).

Privileges. Privileges are of two types, absolute and conditional. Hurlbut v. Gulf Atl. Life Ins. Co., 749 S.W.2d 762, 768 (Tex. 1987). An absolute privilege is based on the personal position or status of the actor, and the actor's motivation is irrelevant. Id. This is essentially an immunity which attaches to a select number of situations which involve the administration of the functions of the branches of government, such as statements made during legislative or judicial proceedings. Id. Conditional privileges arise out of the occasion upon which the false statement was made and do not rise to the level of immunity. Id. The Texas Supreme Court referred to the Restatement (Second) of Torts § 594-598A for situations which may give rise to a conditional privilege. Id. Conditional privileges can be lost if abused such as when making the statement with malice. Id. So when a Plaintiff is able to establish malice as a part of the elements of business disparagement, even if made in a situation where a conditional privilege might exist, the malice showing will defeat the conditional privilege. Id.

Special Damages. Special damages are economic damages such as lost income. Hancock v. Variyam, 400 S.W.3d 59, 65 (Tex. 2013).