I believe in freedom of speech. I fight for freedom of speech. I feel that I must tell you that up front because every time I report a victory in court on a defamation action, I inevitably get some push back, as though I am preventing someone from speaking their mind. Give me a few minutes to explain this case and you’ll see that freedom of speech is served by the fight against false speech.
In this case, my clients were a business (a corporation) and the individual who owns that business. The defendant was starting a business and traveled to an overseas company owned by my client (we’ll call that the "foreign company") and entered into a contract for the creation of some custom software.
And that is where the divergence in the two versions of the story begins. My clients assert (and proved at trial) that the software was fully functional and delivered on time by the foreign company. For reasons not important to the story, the defendant was unable to implement the software and blamed the failure of his start-up business on the software.
Let’s pause there. As I told the jury, if the defendant had elected to go onto Yelp or any other site and post a TRUTHFUL review of my client's business, no matter how harsh and critical, there would have been no action. Indeed, I said that if this was a case where a business was trying to silence a critic for an honest review, then I would have been sitting at defendant’s table in the courtroom defending him.
But that is not what defendant did.
This is the scenario that I see over and over in defamation cases. Someone becomes unhappy with a business or individual, and decides to criticize them on-line. It might even begin with a pure motive – just putting out the word to the public to avoid a business that did not satisfy the customer. But as the person types the words, he or she decides it’s just not stinging enough. In this case, the defendant must have felt that a legitimate review stating that in his opinion the software did not work as promised or was not delivered on time just wasn't hurtful enough. So the reviewer begins to embellish (which is a polite way of saying he lies).
In this case, the defendant took to the Internet and created blog posts about my clients on his own blog, and sent an email to my clients’ customers. Instead of saying the software was late, which is what he claimed at trial, he falsely claimed that the Plaintiffs had taken his money and never delivered anything. Late delivery would have been a breach of contract, but by claiming my clients never delivered anything, that turned it into fraud.
But that wasn’t enough.
He added the false statement that my clients had failed to pay vendors "hundreds of thousands of dollars."
No, still not damaging enough.
He falsely claimed that my client had "funneled work" to his own companies while employed by another company.
Better, but someone might still do business with them.
So he added the false statement, "They are swindlers of the highest kind and have milked many of their clients of money and time."
That should do it.
At his deposition and at trial, the defendant could not show that the software was late, he could not identify any work that was "funneled" away from my client’s former employer, he could not name one vendor who was not paid (or indeed even name a vendor), and he could not name a single client who was "milked of money and time."
Today, an Orange County jury, known for being very conservative with damage awards, awarded $1.5 million jointly and individually to both of my clients for the damage to their reputations.
The jurors got it. Afterwards, some of them expressed their concerns that they do not want people constrained from being critical on the Internet, but they all agreed that false speech like this does nothing to promote the "marketplace of ideas" that we all hold so dear. Even after spending so much time with this case, I still don’t know why defendant was so vicious toward my clients, but the jury agreed with me that a claim of free speech cannot be used as a defense by someone who only sought to destroy another with lies.