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Ellsworth v. Martindale-Hubbell Law Directory, Inc

    Brief Fact Summary. Ellsworth (Plaintiff) alleged that Martindale-Hubbell Law Directory, Inc. (Defendant) misstated Plaintiff’s professional and financial rating in its directory. Plaintiff sued Defendant for libel.

    Synopsis of Rule of Law. In an action for defamation, Plaintiff may be able to prove special damages by prove of reduced business revenue.

    Facts. Plaintiff alleged that Defendant misstated Plaintiff’s professional and financial rating in its directory. The directory is widely read by lawyers who forward legal business. Plaintiff claimed that this was defamatory and his reputation was injured. Plaintiff entered into evidence, Defendant’s listings for the years 1928 and 1929. In 1928 Defendant downgraded Plaintiff. In 1929, Defendant left his rating blank. Plaintiff also introduced evidence that his earnings were substantially lower in 1928. When the case was first before the court, it was held that the alleged defamation was not actionable per se and that Plaintiff would have to prove special damages. Plaintiff amended his complaint and alleged that his earnings were substantially lower and that he was damaged by more than $2,500.00. This was an appeal from an order overruling a demurrer to the amended complaint.

    Issue. Does the mere allegation of reduced business revenue suffice for a pleading of special damages in a defamation action?

    Held. No. Judgment affirmed.
    * It is not always necessary for Plaintiff to call as his witnesses those who have ceased to deal with him. He may be able to show by his books or otherwise, a general diminution of business as distinct from the loss of particular known customers. It is still required for Plaintiff to connect that diminution of business with Defendant’s words. Sometimes the connection can be established by the nature of the words themselves. Where Defendant has published a statement about Plaintiff’s business that is intended or reasonably calculated to produce a general loss of business, evidence of such loss of business is admissible and sufficient special damage.

    Discussion. In this case, the claim of a general loss of business sufficed for special damages under a claim of libel.



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