1.31 XII. Trade Libel and Product Disparagement

• Library: NY Counseling Content Providers in the Digital Age 2010

Xii. Trade Libel and Product Disparagement

While most defamation actions involve statements made about individuals or businesses, practitioners should be aware that some jurisdictions recognize libel and/or slander actions for product disparagement—that is, statements concerning goods or services created by or offered from competitors in their market place and disparagement of edible food.⁶⁹

Product disparagement claims can arise from false claims made against goods or services. To recover for disparagement of goods (also known as “trade libel”), a plaintiff must show that the defendant published a defamatory statement that denigrated the quality of the plaintiff’s goods or services.⁷⁰ However, in most states, such as New York, California and Massachusetts, a plaintiff must show that the defendant acted with actual malice.⁷¹ Some jurisdictions, including New York, also require the plaintiff to prove special damages, which may be demonstrated only by proof of the defendant’s intent to harm the plaintiff.⁷²

Food disparagement laws (often referred to as “veggie libel laws”) create civil, and in at least one jurisdiction, criminal⁷³ liability for defamatory statements made against perishable food. The most well known is the Texas False Disparagement of Perishable Food Products Act, which has been a model for other states adopting this protection.⁷⁴ Veggie libel laws have been adopted by only 13 states,⁷⁵ not including New York. Under some statutes, plaintiffs must demonstrate the statement is not based on reliable scientific facts and data, and that the disseminator knows or should have known the falsity of the statement.⁷⁶ However, veggie libel laws vary on issues such as standing, the culpability standard triggering liability and the available recovery.⁷⁷

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Notes:

<sup>69. Ruder & Finn, Inc. v. Seaboard Sur. Co., 52 N.Y.2d 663, 671, 439 N.Y.S.2d 858 (1981).
70. See, e.g., id.; Suzuki Motor Corp. v. Consumers Union of United States, Inc., 330 F.3d 1110 (9th Cir. 2003); Flotech, Inc. v. E. I. Du Pont de Nemours & Co., 814 F.2d 775 (1st Cir. 1987); see also Bose Corp. v. Consumers Union of United States, Inc., 466 U.S. 485 (1984) (requiring proof of actual malice in product disparagement claims is not unconstitutional).
71. See, e.g., De Marco-Stone Funeral Home v. WRGB Broadcasting, 203 A.D.2d 780, 610 N.Y.S.2d 666 (3d Dep’t 1994).
72. Colo. Rev. Stat. Ann § 35-31-101.
73. Tex. Civ. Prac. & Rem. § 96.001 (defining “perishable food” as “a food product of</sup>...