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Defamation Claims: A Growing Risk in Social, Digital and Traditional Media

Defamatory words uttered in an interview or posted online can come back to haunt business executives, attorneys, property owners and politicians, as the 2016 U.S. Presidential contest has clearly demonstrated. While public figures like Donald Trump and Hillary Clinton face significant legal hurdles in suits for false and defamatory remarks, it’s a very different story for private individuals, according to several leading South Florida attorneys.

“If you make false and damaging statements of any kind that are published to at least one other person using email, social media or in a newspaper interview, you could be the target of a defamation suit,” said Dana J. McElroy, partner with Thomas & LoCicero PL in Fort Lauderdale, whose trial and appellate practice includes defending newspapers, broadcast stations, journalists, companies and individuals against libel and defamation suits.  “Being able to self-publish your images and statements has many consequences, including personal exposure to defamation claims.”

With the rise of online reviews and ratings, as well as the widespread use of Twitter, Facebook, LinkedIn, Pinterest and dozens of other popular social media sites, professionals and businesses have become much more sensitive to their reputations, added McElroy.

“More and more private individuals, including lawyers, accountants, bankers and real estate professionals, are now subject to disparaging statements online.,” she said “While there are still suits against traditional media companies, the universe has expanded with all the online channels.”

McElroy notes that if a newspaper, radio or television station makes a mistake in reporting, a correction can be posted in the next issue or newscast. However, errors in online postings even with a correction often take on a life of their own. “An article that mistakenly says Mr. X was arrested will still be searchable years from now,” McElroy said. “It’s very difficult to make things go away.”

A Balancing Act

Under the First Amendment’s freedom of speech provision, print, broadcast and online publications have some protections against libel and other defamation lawsuits filed by public figures and public officials.

“The founding fathers saw the press as being a faithful watchdog over the political process,” said Jerold Budney, shareholder with Greenberg Traurig in Fort Lauderdale, who has represented media and non-media clients in defamation cases in both trial and appellate courts.  “However, there is always a balancing act between the rights of the press and the rights of individuals in our society to protect their reputation from being damaged by false statements.”

Budney says there is a clear difference in the standards for defamation claims brought by public figures or public officials, and those filed by private figures. “In a claim involving a public figure or public official, you have to show that the report was false, and either hurt the plaintiff’s reputation or caused financial damage,” he said. “But in addition, you also have to show actual malice – that the media defendant either knew the report was false, or published it in reckless disregard of the truth.”

The “actual malice” test dates back to the landmark 1964 ruling by the U.S. Supreme Court in New York Times Co. v. Sullivan and continues to protect the media in claims filed by public figures or public officials.

But under Florida law, a private individual, such as a private business owner or a professional who is not embroiled in a public controversy, would only have to show the publisher was negligent in publishing a statement that was false, damaging the plaintiff’s reputation or resulting in a financial loss.

“A key issue is these cases is what the journalist did to determine whether a statement was true,” said Sanford Bohrer, partner at Holland & Knight in Miami, who has an extensive media law practice and has represented publishers and broadcasters in approximately 100 defamation, privacy and intellectual property cases. “Good reporting involves digging into the situation to see if a potentially damaging statement can be supported.”

Careless use of words can also get writers and publishers into trouble. “If you’re writing or blogging about a new topic, be sure you understand the context,” Bohrer said. “It would be a mistake to say the mayor ‘passed a law’ after receiving a campaign contribution, for example, because it is really the county commission that passes ordinances.”

Another factor affecting the outcome of some defamation cases is whether the published statements are fact or opinion.  “An editorial writer at a newspaper might say, ‘The mayor is a crook,’ after reviewing a grand jury report on unlawful payments,” Bohrer said. “That would be considered a very defensible opinion if the mayor decided to file a defamation claim.”

On the other hand, a reporter who wrote, “Many people say the mayor is a crook,” or “The mayor is alleged to be a crook” would have less protection against defamation, added Bohrer. “Even if you only report on someone else’s comments, you could be sued along with the original speaker.”

Since there are two legal standards, there are a number of defamation cases that have turned on arguments over whether the plaintiff was a public or private figure.  “Sometimes private individuals get caught up in public controversies,” said McElroy. “In that case, they might be considered a limited-purpose public figure, only in that context.”

While U.S. law generally protects the media in defamation cases, private individuals can also file claims alleging invasion of privacy and win damages – even if the reports are true. In March, a Florida jury awarded $140 million in damages to former professional wrestler Hulk Hogan after published excerpts of a secret sex tape.  The ruling bankrupted Gawker’s parent company, which ceased publishing in August.

Private Defamation Claims

McElroy says many private defamation suits originate with a comment about a competitor from someone within the organization. It might be a sales person’s damaging remark, a disparaging email message or a negative online post.  “All it takes is for someone to get upset and blast something out,” she said.

For example, McElroy spent several years defending a trade industry group that posted derogatory comments about a competitor on its online message board. “None of the members who were participating in the chat room conversation realized how far their words would go,” she said.

Budney, Bohrer and McElroy agree that defending a defamation case can be expensive. Unless the individual or company has purchased a special insurance policy, the defendant will be responsible for paying attorney fees and court costs.

“Errors and omissions (E&O) policies usually don’t cover defamation claims,” McElroy said, adding that “special media” policies are available from several insurers.

From the plaintiff’s side, Budney says it’s important to take a careful look at all aspects of the matter before filing a lawsuit.  “Even if you recover damages, it’s still an expensive proposition,” he said. “Not only do you have to pay your own lawyers an amount that may be more than you recover in damages, but even if you recover more than that it still may not be worth all the time and aggravation involved in prosecuting your claim.”

Budney and Stephen Mendelsohn, a partner in Greenberg Traurig’s Boca Raton office, together with Stephen Binhak, a solo practitioner in Miami, defended a Palm Beach County homeowner against a defamation lawsuit filed by his former real estate agent against the homeowner and against a competitor of the agent in a case that lasted seven years.  The  Boca Raton homeowner had listed his home with the plaintiff without success, and then sold the home using a second agent in 2009. Statements by the owner about the first agent were included in a testimonial the owner had given for the second agent.  In April, a jury found in favor of both defendants, Budney said.

There are other issues that can increase the time and cost of defamation suits. For example, an Internet service provider (ISP) is immune under federal law from direct liability for statements made by its subscribers. “If negative comments are posted online anonymously or without a full name, the plaintiff first has to identify who made the statement,” Budney said. “They often do so by subpoenaing the ISP, and trying to get a court to order the ISP to provide the author’s name and contact information. If they succeed, then they can bring that person into the defamation case.”

Another concern for plaintiffs is that filing a defamation suit puts the original statement into public view. “Only a few people might have seen the original comments,” Budney said. “Now, you are making the public aware of these statements through media coverage of the defamation suit, and even if you win a victory in court, there could still be damage to your reputation in the eyes of people who heard about the comments only because they read articles about the lawsuit, but never read about the result.”

Calculating damages in defamation cases depends on the facts that form the basis for the claim, said Bohrer. “An individual who suffers emotional damage, and can prove it, could be entitled to a six or seven-figure award,” he said.  “An individual plaintiff might also substantiate the financial damage to his or her reputation from the statement.”

But winning damages for a company is much harder, Bohrer said. “There are no hurt feelings that come into play, and you have to show that the company lost revenue as a result of the statement.”

Bohrer represented a nationwide retail sales company that filed a defamation suit against an ex-employee who made disparaging remarks about the company. “Even though the company won a default judgment, I told the owner he would not receive any damages,” Bohrer said. “That proved to be correct because the company’s accountant could not show any loss of sales or revenue from the ex-employee’s remarks.”

Avoiding Defamation Claims

One of the best ways to avoid being the target of an expensive defamation claim is to take a deep breath and pause before publishing an angry email, tweet or Facebook post. “It’s good to be able to vent your feelings, but do so before you post a statement, photo or video,” McElroy said.  “Have someone else in your office take an objective look at your statements, or contact a media attorney for a pre-publication assessment of the legal risks.”

To reduce exposure to potential claims, Bohrer suggests that South Florida employers adopt written policies and educate their workforce about the legal risks.  That policy could include the following points:

  • Encourage employees to distinguish between fact and opinion.
  • Prohibit disparagement of the employer’s products, services or employees, including management.
  • Prohibit defamatory statements.
  • In fields like banking, securities, law and medicine, educate employees regarding disclosure rules and compliance regulations
  • Have a “friending” policy regarding social media
  • Prohibit statements that could violate employment discrimination laws
  • Consider rules relating to communications about other employees’ personal lives.
  • Prohibit discussion of all litigation involving the employer and all public disputes, even if not in litigation, relating to employer.

“Most people don’t realize the risk of a defamation claim until it happens to them,” said McElroy. “But you should be very sensitive to these issues. Take a close look at your statement and see if you can find a way to communicate your message in a way that lessens your risk of being sued for defamation.”

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