201705.28
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Everyone is entitled to his opinion, but false statements—not so much

A key question in determining if a statement is defamatory is whether it can be proven to be true or false. If you can prove the statement is false, then defamation exists, and the speaker will be liable for the damages caused by the statement. On the other hand, if a statement is based on opinion or can be interpreted in different ways, the statement is not defamatory and does not create liability for the speaker.

A recent Ohio case provides a good illustration of the difference.  An association of steel framing manufacturers made a series of public statements about a new coating process developed by ClarkDietrich. This new process, called G40EQ, allowed ClarkDietrich to manufacture its products at a lower cost, which caused some competitors to reduce their prices.

The association released a publication entitled, “Opinion: EQ Coatings Are Not Recognized by the Code,” with a secondary title, “Substituting G40e Presents Potential Liability for Contractors on Jobs.”  Within the publication were several statements, such as, the G40EQ process does not comply with International Building Code (IBC) standards, the G40EQ coated products are inferior to products coated with another process, and the G40EQ process cannot withstand intensive corrosive environments.

After ClarkDietrich filed suit for defamation, the association defended on the basis that its statements were protected by the First Amendment and filed a motion in an attempt to prevent the case from going to trial. The trial court overruled the motion, finding the statements were not protected by the First Amendment, on grounds that every statement in the publication could be verified and proven as either true or false. The court held the statements were all precise and “did not lack meaning in a way that would cause the reader to understand the statement as mere opinions.”

Having overruled the motion, the trial court allowed the case to go to trial. ClarkDietrich proved the association’s statements were false, and the jury awarded $43 million in damages.

The trial court’s decision to allow the case to proceed to trial was affirmed on appeal. The association argued that its statement were merely opinion “given that the IBC requirements for coating specifications are open to interpretation.”

The appellate court didn’t buy it. As the court saw it, no matter what interpretation you give to the IBC requirements, the association’s statements could be verified as either true or false, and  the association publicized its statements as being true based on any reading of the IBC requirements. For these reasons, the court concluded that the publication’s readers would understand the association was presenting facts and a “warning regarding the perilous use of G40EQ, rather than trying to persuade customers to believe in an interpretation of the IBC code advocated by the Association.”

It didn’t matter to the court that the publication carried the title, “Opinion.” What mattered is how publication attempted to convey its statements as fact.

Bottom line: everyone is entitled to her own opinion, but when you make public statements of fact, you better be right or be ready to pay for your mistake.

[Clarkwestern Dietrich Bldg. Sys., L.L.C. v. Certified Steel Stud Assn., Inc., 2017-Ohio-2713.]

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