by David Cosgrove
Winston Churchill supposedly once uttered that a lie gets halfway around the world before the truth has a chance to get its pants on. Ironically, many believe this statement was falsely attributed to him. It is more likely that Mark Twain usurped the famous saying from an 18th century evangelist. Regardless, the old idiom is an undeniable truth in the 21st century. A careless or malicious falsehood introduced to the World Wide Web in St. Louis or Boston will be digested by hundreds in Australia within the hour.
Sadly, folks carelessly or maliciously defame one another quite freely today, despite the potential ramifications of doing so. So why are the courts not awash in defamation litigation? A brief review of the Missouri legal precedent in this area answers that query. In short, the case law has narrowed the range of actionable utterances over the very period that enhancements in technology have proliferated the reach and impact of the false utterances.
This article will give a brief review of the various potential tort remedies implicated by false statements in Missouri commercial settings. Those potential torts include, of course, defamation, as well as tortious interference with a business expectancy. Personal, as opposed to commercial, torts may provide for additional causes of action for false light invasion of privacy and reckless infliction of emotional distress. Despite this array of similar but distinct avenues for relief, it is still difficult to get an “evil utterance” case before a jury or arbitration panel.
Before you agree to accept a client that is bereaved by an indisputably brutal falsehood, counsel must inquire about and research the facts and law regarding the following issues:
- Was the false statements protected by a privilege?
- Was the false statement sufficiently definite as to your client?
- Could the statement be construed in an “innocent” sense?
- Were there non-speculative damages to your client’s reputation, mental health, or a business relationship?
Is the falsehood innocent or vague as to subject?
The Missouri Court of Appeals addressed these two issues in Kennedy v. Microsurgery and Brain Research Institute, 18 S.W. 3rd 39, 43(Mo.Ct. App. 2000).First,the court must determine whether the alleged statement is defamatory at all. Id. Such a determination is a question of law. Id. To be defamatory, a statement must be clear as to the person addressed. Pape v. Reither, 918 S.W.2d 376, 380 (Mo. Ct. App. 1996). And, it must cast aspersions on that person’s reputation so as to lower him in the estimation of the community or to deter third persons from associating with him. Id. In determining whether a statement is defamatory, the words must be stripped of any pleaded innuendo. Nazeri v. Missouri Valley College, 860 S.W. 2d 303, 311(Mo. banc 1993). Furthermore, to find that a publication is defamatory, it must “be unequivocally so” and the words “should be construed in their most innocent sense.” Walker v. Kan. City Star Co., 406 S.W. 2d 44, 51 (Mo.Ct. App. 1966).
In Ampleman v. Schweppe, 972 S.W. 2d 329, 333 (Mo. Ct.App. 1998), the court stated that, “if a statement is capable of two meanings (one defamatory and one non-defamatory), and can reasonably be construed in an innocent sense, the court must hold the statement non-actionable as a matter of law.” One cannot sue for defamation unless the libelous portion of the publication is directed at him. May v. Greater Kansas City Dental, 863 S.W. 2d 941, 945 (Mo.Ct. App. 1993). But the court did cite to Nazeri in providing a good reminder:
“In a libel action a motion to dismiss for failure to state a cause of action is solely a test of the adequacy of the plaintiff’s petition. Nazeri v. Missouri Valley College, 860 S.W.2d 303, 306 (Mo. banc 1993). It assumes all of plaintiff’s averments are true, and liberally grants to plaintiff all reasonable inferences therefrom. Id. The first standard requires that the alleged defamatory words “must be stripped of any pleaded innuendo … and construed in their most innocent sense.” Id. The second standard requires that the words “must be considered in context, giving them their plain and ordinarily understood meaning.” Id. That is, the words “are to be taken in the sense which is most obvious and natural and according to the ideas they are calculated to convey to those to whom they are addressed.” Id. The court in Nazeri reversed the dismissal entered by the trial court there, holding that an objective reading of the alleged defamatory statement “simply does not allow these words an innocent sense.”
Id. at p. 331-32.
The Kennedy court also reversed the trial court’s granting of a motion to dismiss, stating in part:
We conclude that this matter is not sufficiently developed at this stage in the proceedings for us to make a decision as to whether the statements are statements of fact or expression of opinion. The record consists of Dr. Kennedy’s petition and Dr. Bailey’s motion to dismiss, along with memorandums in support of each. There are no depositions, affidavits, or other supporting documents which could expound on the circumstances surrounding Dr. Bailey’s making of the statements, allowing an informed decision on the matter. Id. at p. 7.
Does a Judicial or Opinion Privilege Apply?
The second part of defamation analysis is if the words are considered defamatory does a privilege apply to bar the claim. Pape v. Reither, 918 S.W. 2d at p. 380. If an allegedly defamatory remark can be characterized as an opinion, it should be subject to First Amendment privilege. Mandel v. O’Connor, 99 S.W. 3d 33, 37-8 (Mo. Ct. App. 2003). The determination of whether a statement is a pure opinion or an assertion of fact is a question of law. Ribaudo v. Bauer, 982 S.W. 2d 701, 705 (Mo. Ct. App. 1998). To determine whether a statement can be construed as a factor opinion, the trial court should look to the totality of the circumstances. Henry v. Halliburton, 690 S.W. 2d 775, 788 (Mo. banc 1985).
In Henry v. Halliburton, the Missouri Supreme Court identified factors which trial courts should refer to when evaluating the totality of the circumstances. Id. The factors include, but are not limited to, considering the common usage or meaning of the allegedly defamatory statement,the statement’s verifiability, the full context of the statement,the broader context in which the statement appears, the facts surrounding the publication, circumstances in which the audience may anticipate efforts by the parties to persuade others of their positions by use of epithets, fiery rhetoric, or hyperbole, and the language of the allegedly defamatory statement. Id. Specifically, the Henry Court determined that an assertion may only suggest to the ordinary reader that the defendant disagrees with the plaintiff’s conduct and used pejorative statements or vituperative language to indicate his or her disapproval. Id. Furthermore, courts should also examine the statements themselves to determine whether they are too imprecise. Id.
Henry involved a case in which the defendant sent an article, which he had authored, to prospective clients of a life insurance agency. The article described actions taken by the plaintiffs which defendant referred to as, “the agents acting with greed…to fleece a consumer,” to which the Court, as well as the parties, conceded to be permissible expressions of opinion. Id. at 789. Plaintiffs additionally focused on the statement that the, “general agent was a fraud and twister.” The Court found that unless it can be established that by use of the words “fraud” or “twister” the defendant was accusing plaintiffs of having committed a specific crime, then the use of these words would be too imprecise, undefinable and no more actionable than the use of the words “with greed” or “to fleece a consumer.” Id. The Court determined that these words in light of all relevant circumstances were the author’s opinion that one who does the described acts that the author deems objectionable is greedy, fleeces his customers, and is a fraud and a twister. Id. at 790. Furthermore, the Court stated that it was clear from the context of the words that the defendant was not charging the commission of any specific crime, and broad, unfocused, wholly subjective comments that do not suggest to the ordinary reader that the plaintiff committed a crime are not actionable. Id.
Defamatory statements made during judicial proceedings that are pertinent to the proceedings are privileged, even if made maliciously. Riley v. Riley, 340 S.W. 2d 334, 338 (Mo.App.2011). For the Absolute Privilege doctrine to support dismissal of a defamation action, the allegations within a petition must conclusively establish entitlement to this affirmative defense, Id. at p. 339. It is not necessary to plead the affirmative defense of absolute privilege if the facts giving rise to the defense of privilege are established by Plaintiff’s pleadings. Wright v. Truman Road Enterprises, 443 S.W. 2d 13 ,16 (Mo.Ct.App.1962).
The absolute immunity defense, however, applies only when the statements are made during the judicial proceeding and are pertinent to it. Riley v.Riley, 340 S.W. 2d at p. 338. Whether statements are pertinent to the judicial proceeding is a question of law. Riley v. Riley, 340 S.W. 3d at p. 338. Pertinent or pertinence means that the statement is,“fairly relevant to the issue, or responsive to some fact apparently bearing on the issue to which it is directed.” Id. at p. 339.
Pertinence is determined based on the context in which the statements are made. Id. Statements commenting on pleadings may be pertinent to the judicial proceeding. Wright v. Truman Road Enters, Inc., 443 S.W. 2d at p. 15. See also, Wunsch v. SunLife Assurance Co.of Can., 92 S.W. 2d 146, 156 (Mo. Ct.App. 2002) (Defendant’s statements were pertinent because they were explanations to the court for its conduct) and Trachsel v. Two Rivers Psychiatric Hospital, 883 F.Supp. 442, 443—444 (D.C.W.D. Mo.1995) (applying Missouri law) (alleged defamatory letters accusing Plaintiff of sexual harassment sent prior to filing of lawsuit were related to the contemplated litigation).
In Pape, a letter containing a defamatory statement was not submitted to or communicated before the court. Not withstanding that fact,the Court applied Missouri’s qualified version of the judicial privilege citing Roberson v. Beeman, 790 S.W. 2d 948, 951 (Mo. Ct. App. 1990) (“qualified” judicial privilege held to attach even though allegedly defamatory statements were made before suit was actually filed, and thus not made to or before the court.)
The doctrine of attorney absolute immunity has historically been given broad application. But the minority view among courts is that absolute immunity applies to statements made by attorneys to the media. See Jones v. Clinton, 974 F.Supp. 712, 741 (D.C.Ark.1997) (statements made to the press by President’s aides and attorney were absolutely protected), Johnston v. Cartwright, 355 F. 2d 32, 37 (C.A. 8th 1966) (statements by lawyer to the press were absolutely protected), Prokop, M.D. v. Cannon, 583 N.W. 2d 51, 58-59 (Neb. App. 1998) (lawyer’s statements to the press after his client dismissed her case were absolutely privileged), Dallas Independent School District v. Finlan, 27 S.W. 3d 220, 239 (TX. App. 2000) (statements by lawyer in press release that related to allegations in the pleadings were absolutely privileged). Most courts flatly reject attempts to apply judicial proceedings privilege to statements made to the media. See e.g. Kennedy v. Zimmerman, 601 N.W. 2d 61 (Ia 1999); Jacobs v. Adelson, 325 P.3d 1282 (Nev. 2014); Kurczaba v. Pollock, 742 N.E. 2d 425 (Ill. App. 2000); Ball v. D’Lites Enterprises, Inc., 60 So. 637 (Fl. App. 2011); Helena Chemical Co. v. Uribe, 255 P. 3d 367 (N.M. App. 2011).
Does the Intra-Corporate Privilege Apply?
The qualified privilege afforded to intra-corporate communication. “A communication is held to be qualifiedly privileged when it is made in good faith upon any subject-matter in which the person making the communication has an interest or in reference to which he has a duty, and to a person having a corresponding interest or duty, although it contains matter which, without such privilege, would be actionable.” Rice v. Hodapp, 919 S.W. 2d 240, 244 (Mo. banc 1996) (internal quotation omitted). “The applicability of the defense of qualified privilege is a matter of law to be decided by the trial court.” Id. (internal quotation omitted). In order to be protected by the intra-corporate communication privilege, the statement must have been made in good faith and without malice. Malice is established if the evidence demonstrates that “the statements were made with knowledge that they were false or with reckless disregard for whether they were true or false at a time when defendant had serious doubts as to whether they were true.” Id. (internal quotation omitted). “Whether the defendant acted with malice is a question of fact for the jury.” Bugg v. Vanhooser Holsen & Eftink P.C., 152 S.W.3d 373, 377 (Mo.App. W.D.2004).
The Nazari case, discussed above, is a very good starting point for a survey of Missouri’s tortious interference precedent. “The elements of tortious interference with a business relationship are: (1) The plaintiff was involved in a valid business relationship; (2) the defendant was aware of the relationship; (3) the defendant intentionally interfered with the relationship, inducing its termination; (4) the defendant acted without justification; and (5) the plaintiff suffered damages as a direct result of defendant’s conduct.” Clinch v. Heartland Health, 187 S.W.3d 10, 14 (Mo.App. W.D.2006). “If the defendant has a legitimate interest, economic or otherwise, in the expectancy the plaintiff seeks to protect, then the plaintiff must show that the defendant employed improper means in seeking to further only his own interests.” Stehno v. Sprint Spectrum, L.P., 186 S.W.3d 247, 252 (Mo. banc 2006). “Using improper means to interfere will destroy any justification a defendant might otherwise assert no matter what sort of relationship was involved.” Clinch, 187 S.W.3d at 17. “Unreasonable use of a privilege for an improper purpose, such as perpetrating a deliberate lie, will forfeit the privilege.” Hensen v. Truman Med. Ctr., Inc., 62 S.W.3d 549, 557 (Mo.App. W.D.2001) (internal quotation omitted). Misrepresentations and defamation certainly constitute improper means that serve to destroy any justification the defendants had. Clinch, 187 S.W.3d at 17. See also Topper v. Midwest Division, Inc., WD No. 70323 (Mo. App. 2010).
Reckless Infliction of Emotional Distress
To recover for intentional infliction of emotional distress, a Missouri plaintiff must establish that (1) defendant’s conduct was extreme and outrageous; (2) defendant acted intentionally or recklessly; and, (3) defendant’s conduct caused extreme emotional distress resulting in bodily harm; additionally, plaintiff must establish that defendant’s sole intent in acting was to cause emotional distress. Central Missouri Elec. Co-op v. Balke, 119 S.W. 3d 627,636 (Mo. Ct. App. 2003). Balke is a summary judgment case in which the defendants bolstered their motion for summary judgment with affidavits. Like defamation, the defendant is subject to punitive damages. “A submissible case is made if the evidence and the inferences drawn therefrom are sufficient to permit a reasonable juror to conclude that the plaintiff established with convincing clarity-that is, that it was highly probable-that the defendant’s conduct was outrageous because of evil motive or reckless indifference.” Smith v. Brown & Williamson Tobacco Corp., 275 S.W.3d 748, 811 (Mo.App. W.D.2008) (internal quotation omitted). “It is not so much the commission of the intentional tort as the conduct or motives, i.e., the defendant’s state of mind which prompted its commission, that form the basis for a punitive damage award.” Hoyt v. GE Capital Mortgage Servs. Inc., 193 S.W.3d 315, 323 (Mo.App. E.D.2006). “Factual inferences which convincingly and clearly support the notion that the defendant acted with evil motive or reckless indifference to the rights of others are sufficient to meet the standard for submission of punitive damages.” Johnson v. Allstate Ins. Co., 262 S.W.3d 655, 666 (Mo.App. W.D.2008) (internal quotation omitted).
False Light Invasion of Privacy
Missouri courts recognized a cause of action for false light invasion of privacy in Meyerkord v. Zipatoni Co., 276 S.W. 3d 319 (Mo. App.2008). See also Farrow v. Saint Francis Medical Center, 407 S.W. 3d 579, 600 (Mo. banc 2013). Despite the arguments against identifying such a cause of action, the Supreme Court did acknowledge that it may be possible in the future for Missouri courts to be presented with an appropriate case justifying its recognition. Sullivan v. Pulitzer Broadcasting Co., 709 S.W. 2d 475,480 (Mo. banc 1986).
False light invasion of privacy occurs when one “publicly attributes to the plaintiff some opinion or utterance, whether harmful or not, that is false, such as claiming that the plaintiff wrote a poem, article or book which plaintiff did not in fact write.” Id. at 480. The Supreme Court in Sullivan v. Pulitzer Broadcasting Co., 709 S.W 2d 475 (Mo. banc 1986) refused to consider the case presented before it as one sufficient for adopting a cause of action for false light invasion of privacy. In Sullivan, the plaintiff filed suit alleging that on five occasions defendant broadcast over its television station a story concerning plaintiff conveying the false impression that the plaintiff, an administrator for a city hospital, was unlawfully and improperly building a home with materials stolen from the City of St.Louis. The plaintiff alleged in jury to his reputation and an in jury to his right to be left alone. The Supreme Court found such claims were insufficient to require the recognition of the proposed tort. Id. at 481.
After Sullivan, the Missouri Court of Appeals for the Eastern District was presented with a case which it felt was factually sufficient to recognize a cause of action for false light invasion of privacy. Meyerkord, 276 S.W. 3d 319. In Meyerkord, a former employee sued his former employer when the employer failed to remove the employee’s name as the registrant from a website the employer created that launched a viral internet marketing campaign for a gaming system. Id. at 321. After the campaign began, bloggers, consumers and consumer activist groups began voicing on blogs and websites their concern, suspicion, and accusations over the campaign and those associated with it, including the former employee. Id. The employee filed an action for false light invasion of privacy because his former employer failed to remove his name as a registrant when he no longer worked for the employer. Id. at 321-322. The employee alleged his privacy had been invaded, his reputation and standing in the community was injured, and he suffered shame, embarrassment, humiliation, harassment, and mental anguish. Id. at 322.
The court of appeals used Section 652(E) of the Restatement (Second) of Torts to identify the elements for the tort of false light invasion of privacy. Id. at 323. Such a tort occurs when an individual gives publicity to a matter concerning another that places the other before the public in a false light,where the false light in which the other was placed would be highly offensive to a reasonable person, and the actor had knowledge of or acted in reckless disregard as to the falsity of the publicized matter and the false light in which the other would be placed. Id. The court distinguished defamation from false light invasion of privacy by analyzing the protected interest. In defamation, the interest sought to be protected is the objective one of reputation, either economic, political or personal, in the outside world. Id. at 324. On the other hand, in privacy cases, the interest affected is the subjective one of injury to the person’s right to be let alone. Id. Further, the court stated that where the issue is truth or falsity, the marketplace of ideas provides a forum where the answer can be found, while in privacy cases, resort to the marketplace merely accentuates the injury. Id. at 325.
In sum, false utterances, even in a competitive commercial context, may give rise to an array of causes of action. It is critical at the outset, however, to evaluate the statement(s) at issue to determine whether or not they were sufficiently specific and whether or not they fall within the parameters of a legal privilege. Whether or not an arbitration panel would give any deference to such a purported “privilege to malign” is a question for another day. Regardless, business entities as well as individuals have a legal right to defend their reputations and business relationships.
 Cosgrove Law Group, LLC spends much of its time before Financial Industry Regulatory Authority (FINRA, formally NASD) panels on behalf of financial advisers that have been defamed by their previous employers. These are commonly referred to as “U-5 cases.” If defamatory statements have caused you substantial financial harm, please give us a call.