Synopsis of Rule of Law. To sustain a claim for commercial disparagement, plaintiff must allege (1) that defendant made a false statement, which caused pecuniary loss to the plaintiff, (2) that defendant intended for publication of the statement to result in harm to Plaintiff’s pecuniary interests, or recognized or should have recognized that it was likely to do so, and (3) that defendant knew that the statement was false or acted in reckless disregard of its truth or falsity.
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Allowance of a cause of action for negligent interference with economic advantage would create an undue burden upon industrial freedom of action, and would create a disproportion between the large amount of damages that might be recovered and the extent of defendant's fault.
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Issue. Whether Plaintiff alleged sufficient facts to sustain its claim for commercial disparagement.
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Held. No. To sustain a claim for commercial disparagement, plaintiff must allege (1) that defendant made a false statement, which caused pecuniary loss to the plaintiff, (2) that defendant intended for publication of the statement to result in harm to Plaintiff’s pecuniary interests, or recognized or should have recognized that it was likely to do so, and (3) that defendant knew that the statement was false or acted in reckless disregard of its truth or falsity. The court found that the plaintiff had not specifically identified a pecuniary loss resulting from the false statements nor a general decline in business, and therefore could not make out a claim for disparagement. Accordingly, the court dismissed the commercial disparagement count without prejudice to the plaintiff’s right to file an amended complaint alleging facts showing specific types and amounts of damages.
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Discussion. Â
Commercial disparagement is a form of the tort the Restatement (Second) of Torts called injurious falsehood. The torts in this family involve assertions that disparage the plaintiff’s title or ownership rights or the plaintiff’s product, but do not qualify as ordinary libel or slander.