Companies that lose money from someone’s defamatory and malicious statements may be able to sue for “business disparagement” in Nevada. If successful, the company can get compensatory damages to make up for its:
- lost profits,
- decreased business traffic, and/or
- adverse employment consequences
The court may also award the business punitive damages, which can be far higher than compensatory damages. Note that there is a two (2)-year time limit to bring this lawsuit.
In this article, our Nevada personal injury attorneys answer frequently-asked questions about business disparagement in Nevada, including definitions, standards of proof, and statutes of limitations. Click on a topic to jump to that section:
- 1. What is “business disparagement” in Nevada?
- 2. What money can I get if I sue?
- 3. Whom can I sue?
- 4. How do I win a business disparagement case?
- 5. When can I sue?
- 6. How do defendants fight back?
- 7. Related claims
It is when someone falsely badmouths a business and causes it to lose money. Also called business defamation or trade libel, “business disparagement” has four (4) elements that the plaintiff has to prove in order to win a lawsuit:
- There was a false and disparaging statement (“injurious falsehood”) made about a business’s goods or services;
- The defendant published the statement (and this statement was not protected by a privilege);
- The defendant made the statement with malice;
- The statement caused the business to sustain special (actual) damages.
Note that a defendant acts with “malice” when he/she either:
- published the offending statement with the intent to cause monetary harm to the business, or
- the defendant knew the statement was untrue, or the defendant had a high disregard for the statement’s truth.
Also note that a defendant “publishes” a statement by telling or writing it to a third party. Publication can also occur through email, blogs or an online forum or website.1
Example: Kerry posts a review on Yelp about a local Las Vegas sushi bar. She claims that she ate there last night and was served rotten sushi, causing her to get food poisoning. It turns out these claims are completely false. Kerry is merely a disgruntled former employee of the business, seeking retribution because she was recently fired. If the restaurant loses business or suffers harm to its reputation because of the posting, Kerry would be liable for business disparagement.
1.1. Business disparagement versus Defamation per se
False statements about an individual person’s business reputation…and not the business itself…is not “business disparagement”; instead, it is the separate claim of “defamation per se.” Unlike business disparagement cases, a defendant can be found liable for defamation per se if there was no malice and no financial losses.2
A plaintiff may be able to recover compensatory damages for such losses as:
- Lost earnings and profits,
- Decreased business traffic, and/or
- Adverse employment consequences.
Depending on the case, it may also be possible to win punitive damages (which courts impose to “punish” the defendant for its wrongdoing). There is no cap on punitive damages in these situations, so they can be far greater than compensatory damages.3
The person(s) who made the allegedly damaging statement. If the statement was published such as in a magazine, the plaintiff may also be able to sue the publisher if the editor knew…or should have known…the statement was untrue.4
The most valuable evidence includes records of the offending comment and reduced business profits, such as:
- communications (such as sending emails or letters);
- published articles or broadcasts (such as in a newspaper or on television or the internet);
- witnesses; and/or
- business reports that show a drop in earnings that correspond with when the offending statement was made5
4.1. Burden of proof
If the case goes to trial, plaintiffs have to prove their case by a “preponderance of the evidence.” This means that it is more likely than not that the plaintiff is correct. In addition, the plaintiff has the burden to prove that the defendant acted with “malice” by “clear and convincing evidence.” This means a reasonable jury would have a firm belief that it is highly probable that the plaintiff’s claims are true.6
Within two (2) years after the statement was published.7
The most common defense is that the offending statement was factually true. Truth is always a defense to defamation claims. Statements that are clearly opinions, exaggerations or jokes are also legal.
Other defenses include the following.
- No malice. The defendant 1) had no intent to cause monetary harm to the business, and 2) did not know the statement was untrue.
- No actual damages. The business endured no adverse financial consequences. It does not matter if the defendant did make a disparaging claim.
- No publication. The defendant’s statement was never transmitted (“published”). For instance, untrue statements written in a personal diary for no one to see are not legally actionable.
- False accusation. The defendant was not the person who made the offending statement.
- Privileged statement. The defendant’s statement was privileged. One example of privilege is “absolute privilege,” which are statements people make during, or in anticipation of, judicial proceedings.
People who meddle in others’ businesses may face the following claims:
- Defamation lawsuits in Nevada
- Harm to reputation lawsuits in Nevada
- Intentional interference with prospective economic advantage lawsuits in Nevada
- Intentional interference with contractual relations lawsuits in Nevada
Law in other states…
If your matter is in California, please see our article on business and commercial disparagement (trade libel) under California law. For Colorado cases, please visit our page on commercial disparagement in Colorado.
- Clark County School Dist. V. Virtual Educ. Software, Inc., 125 Nev. 374, 213 P.3d 496, 504 (Nev. 2009); Pegasus v. Reno Newspapers, Inc., 118 Nev. 706, 722, 57 P.3d 82, 92-93 (2002); Restatement (Second) of Torts § 623A (1977).
- NRS 42.005.
- See PETA v. Bobby Berosini, Ltd., 111 Nev. 615, 619, 895 P.2d 1269, 1272 (1995) (quoting the Restatement (Second) of Torts: Elements Stated § 558 (1977)), modified on other grounds by Las Vegas Downtown Redev. Agency v. Hecht, 113 Nev. 644, 650, 940 P.2d 134, 138 (1997).
- Clark County School Dist. V. Virtual Educ. Software, Inc., 125 Nev. 374, 213 P.3d 496, 504 (Nev. 2009); the plaintiff may present evidence of a general decline of business, but the plaintiff also has to eliminate other potential causes of lost business in order to demonstrate that the general decline of business is attributable to the offending statement.
- See e.g., United States District Court for the Ninth District, Model Civil Jury Instructions 1.7.