LIABILITY FOR COMMERCIAL SPEECH
Driving Busin ess Advantage
Liability for
Commercial Speech:
A Guide to False Advertising, Commercial
Disparagement, and Related Claims
FALL 2010
Julia Huston, Foley Hoag LLP
Presented at the 2010 Association of Corporate Counsel Annual Meeting
is volume summarizes related bodies of law –
false advertising, commercial disparagement, and
defamation – that govern the conduct of business
communications. It sets forth elements, damages,
and related defenses for each of these causes of
action and suggests ways to reduce the risk of
liability in business communications, advertising,
and marketing. Related claims, such as trademark
infringement, copyright infringement, and
interference with contractual relations, are also
addressed. Risk management procedures, a checklist
for compliance training, and a sample complaint,
answer and jury instructions are provided.
Table of Contents
I. Introduction to Claims Based on Commercial Speech.........................................1
II. False Advertising ..................................................................................................2
A. Elements of False Advertising ...............................................................................3
1. False or misleading statements ......................................................................3
2. Proof of consumer reaction ............................................................................6
3. Commercial advertising or promotion ..............................................................8
4. Establishment claims .....................................................................................8
B. Damages and Remedies for False Advertising ........................................................9
C. Defenses to False Advertising ...............................................................................10
1. Opinion .........................................................................................................11
2. Puffery .........................................................................................................12
III. Defamation and Commercial Disparagement ......................................................13
A. Elements of a Defamation Claim ...........................................................................13
B. Defamation Defined .............................................................................................14
C. Examples of Defamatory Statements ....................................................................15
1. Dishonesty or fraud .......................................................................................15
2. Mental disorder .............................................................................................15
3. Crime or immorality .......................................................................................15
4. Injurious to business reputation .......................................................................16
5. Potential for bad behavior ..............................................................................16
6. Careless omission of a significant fact or name in a publication .........................16
D. Proving Fault Within a Free Speech Framework ......................................................16
E. Elements of a Commercial Disparagement Claim ....................................................19
1. Privileged statements ....................................................................................21
2. Corporations as public figures ........................................................................22
F. Damages and Remedies for Defamation and Commercial Disparagement .................22
1. Damages ......................................................................................................22
2. Special damages ...........................................................................................23
3. Presumed damages .......................................................................................24
4. Retraction .....................................................................................................24
5. Punitive damages ..........................................................................................25
6. Prior restraint ................................................................................................25
Attorney advertising. Prior results do not guarantee a similar outcome.
