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A Media Report Slammed Our Product — Should We Sue?

A negative media report about your company or product can have a devastating and lasting impact on your business. Your initial reaction may be to defend your company’s reputation by filing a lawsuit against the media outlet. But there are steps you should take beforehand to determine what exactly makes the media report defamatory or disparaging, if you have a viable claim, and whether filing suit is in your company’s best interest.

Consider the totality of the report 

Before taking any sort of action, take a hard look at the media report. Identify the specific statements in the article or video segment that are demonstrably false as well as aspects of the report that make false implications. These statements and implications will form the basis for a potential claim. 

Further, look for statements that, while technically true, are made without the necessary context to give an accurate impression. For instance, a media report may state that your company’s product was defective in 10 instances. If that is true but the article fails to explain that your company’s product has the best safety and performance record in the industry, and that a series of 10 defective instances is an incredibly low percentage of the overall number of sales, that lack of context may create a false and defamatory impression.

Consider the sources of information in the report 

You should also consider the sources cited in the media report. Look into their background and any bias they may have against your company or product. Did the media report disclose information that shows the source lacks credibility or has an agenda? 

If not, this could be helpful evidence for a claim. If a report about your company cites a source who is actually a disgruntled former employee that your company fired and fails to disclose this conflict of interest, the story may be creating a misleading impression about the information conveyed by the source. 

How to tell if you have a claim 

Let’s say you’ve identified the statements and implications that give rise to a potential claim. Now you have to consider whether you can meet the requirements to prove defamation or disparagement.  

Was the media report about your company or product? 

To succeed on a defamation or disparagement claim, you must prove that the media report was “of and concerning” your company or product. There are a number of ways to prove this element: 

  • Your company or product was mentioned by name; 
  • Your company or product was pictured;
  • Other identifying information about your company or product was given; or
  • Third parties understood the report to be about your company or product.  

Did the report, as a whole, state or imply false facts about your company or product? 

For a claim to succeed, you also must be able to show that the statements or implications made in the media report are false. For specific statements in the report, the question is simple: Can you prove the statement is not true? 

Proving that implications are false is more difficult and will rely on the totality of the information contained in the report and others’ reactions to it. Ask yourself the following questions when analyzing the potential false implications of a media report: 

  • What is the headline or introduction?
  • What is the overall message?
  • What information did the media fail to include in the report?
  • What have others — such as commentators or third parties — said about the report? 

Does the publication express a “pure opinion” or, instead, a fact about the company or product?  

Even if you’ve identified statements and implications that you believe give rise to a claim, you must consider whether they are fact or opinion. Statements or implications that are pure opinion cannot form the basis of a claim. 

For instance, there is a difference between a report stating that your company’s product is defective and another stating that a particular customer does not like your company’s product. The former is demonstrably false, while the latter is pure opinion because you cannot prove the statement — one of an individual’s preference — to be false.

Did the publisher know the statements or implications made in the report were false? 

In many defamation and disparagement cases, a plaintiff must prove that the publisher of the media report knew that the statements and implications were false, or that they published them with reckless disregard as to the truth or falsity of the statements and implications. 

This is a high burden, but there are a few ways you can prove knowledge. One way is to show that you sent the publisher factual information that contradicts statements or implications made in the report. 

Did the publisher avoid learning the true facts about your company or product?

Even if you can’t prove that the publisher in fact knew about the untruths in the media report, you can also succeed on a claim by proving that the publisher acted with a reckless disregard for the truth. That is, if you can prove they purposefully avoided learning the truth. 

For instance, if there was an industry expert or another third-party source available to the publisher and the publisher failed to speak with that source, that can be evidence of reckless disregard for the truth.

This type of evidence can also be developed if you can show that public information contradicting the statements or implications was easily available to the media outlet. Think about the ways the publisher could have learned about all sides of the story. Ask if they actually took those steps or avoided taking them.  

Have you suffered lost sales or reputational harm?  

Finally, you must prove that you suffered some sort of harm because of the media report. Damages can come in different forms. The more concrete the better. 

To start, you may have suffered reputational harm. Damages from certain false statements or implications can be more easily alleged than others. Reports of criminal activity or fraud can require less proof of reputational harm. 

For others, additional proof in the form of financial or economic loss may be necessary. You may have had specific monetary losses in the form of lost sales. Maybe potential new customers or clients are no longer willing to work with your company because of the media report. 

Before taking any action, you should have a good sense of what damages you have suffered and how you will prove those damages. 

Next steps if you think you have a claim  

Consider putting the publisher on notice 

Begin a dialogue with a media outlet, and seriously consider using legal counsel to facilitate that dialogue. This can go a long way toward resolving the dispute without the time and expense of a lawsuit, or determining whether litigation is the best route. Most US states also often require notice or an opportunity to retract or correct false information before a suit can be filed.

Make sure you are committed  

While it is understandable that your company’s leaders may want to strike back to stop the damage a negative media report can cause, taking legal action is a big and often expensive decision. Taking time to assess the specific claims made in the report and understanding, with counsel’s guidance, whether those claims satisfy the requirements to prove defamation or disparagement, will help you determine the best course of action. 

Once a lawsuit is filed, it may be difficult to turn back, and there may be unexpected costs associated with proving elements of the claim and damages (i.e., if experts or economic surveys are required). Discovery in defamation cases can be extensive and can drain the time and resources of your company’s business leaders. It’s important to make a thorough and informed decision about the costs and benefits before venturing into litigation. 

Act quickly

While it is important to take the time to make an informed decision about next steps, your company should not wait too long before taking action. Many states have short statutes of limitations on defamation claims. Even when a claim is timely, if your company waits too long to put the publisher on notice or to bring suit, the delay may be used to undercut a claim that your company was really damaged by the publication. Bringing in an experienced counsel early will help your company make timely and informed decisions to preserve all legal claims and arguments.

About the Authors

Kevin McCormickKevin P. McCormick is assistant general counsel of global litigation at Groupon, where he leads a worldwide docket of litigation matters. McCormick has represented clients in all stages of complex commercial litigation in a variety of areas, including Lanham Act and related intellectual property disputes, class action defense, breach of contract, and securities litigation.

Nicole WrigleyNicole Wrigley is a Benesch partner and serves as vice chair of the firm’s Trial Practice Group. Throughout her career, Wrigley has litigated some of the most high-profile cases in the country, including representing the plaintiff in the largest defamation case in US history. Wrigley’s experience in “bet the company” cases in unmatched and her litigation and trial practice is diverse, ranging from nine-figure business disputes to multibillion-dollar class actions.  

Erik ConnollyJ. Erik Connolly is a Benesch partner and also serves as executive committee member; vice chair of the Litigation Practice Group; and co-chair of the Securities Litigation Practice Group. For over two decades, he has litigated complex, high-profile cases, and has had success for clients at every stage of litigation. Connolly has obtained dismissal of multibillion-dollar class actions, won summary judgment in precedent-setting decisions, and prevailed in marathon-length trials.  

Kathryn ClausingKathryn Clausing is an associate in Benesch’s Litigation Practice Group. She focuses her practice on complex commercial litigation matters in federal and state courts across the country. Clausing is a skilled litigator representing institutional and individual clients in disputes such as defamation, products liability, and breach of contract.

The information in any resource collected in this virtual library should not be construed as legal advice or legal opinion on specific facts and should not be considered representative of the views of its authors, its sponsors, and/or ACC. These resources are not intended as a definitive statement on the subject addressed. Rather, they are intended to serve as a tool providing practical advice and references for the busy in-house practitioner and other readers.