Can someone defame my business without consequences?

Businesses who claim defamation do not always have a clear-cut path to victory, even if the statements are exaggerated or untrue.

Defamation is a serious matter in Washington and Oregon, and when it comes to businesses, may take many forms. For instance, take two rival surgical centers. If one center posts inflated, false numbers online about the surgical failure rate of the other clinic, that could seriously hurt the clinic and be defamatory. Similarly, a well-known blogger might present "evidence" that shows a company has cut corners on its manufacturing practices, only it comes to light later that the evidence was falsified.

When a business may be suffering due to defamation, it is absolutely well within its rights to seek legal remedies. But will it win? Perhaps. Perhaps not.

The speech must not be true (maybe)

Freedom of speech does not always extend to making harmful and false statements against businesses. For instance, people who work as reporters and bloggers should take extreme care to ensure that the information they publish is, in fact, true. Otherwise, they could face serious consequences in a lawsuit if the business is able to show that due diligence would have uncovered the falsity of the information.

Critical speech is okay, however. It just needs to be reported in a way that is fair and truthful. An example of critical speech that may have crossed the line into defamation occurred with a 2014 Oregon Court of Appeals ruling. The business in question was a wedding venue, and in 2010, a customer posted a negative online review. After the post, the business started taking a huge hit, and its defamation lawsuit was initially thrown out under the guise that the reviewer was simply being colorfully opinionated. However, the appeals court said that the lawsuit should continue because the statements made were untrue and that a reasonable person could discern that the review went past mere opinion. In a state such as California, though, the courts at this point may well have agreed that the suit should be thrown out.

And, in fact, a 2016 Oregon Supreme Court ruling went in favor of the online reviewer, saying that free speech protections covered the review. So, it can sometimes be unpredictable as to whether a defamation lawsuit succeeds. Unfortunately, in this age where online reviews are king, a business, particularly a small business, can be severely hurt by just one untrue review.

Business versus business

The odds of prevailing in a defamation suit may be better if it is another business being sued or a professional such as a blogger - in other words, someone who should have known better, versus an angry person dashing off an online review.

Lanham Act remedies

Another source of relief for a business owner who believes that his or her business has been falsely defamed may be a lawsuit brought under the federal Lanham Act, which forbids false advertising. The Lanham Act allows anyone harmed by misrepresentation in commercial advertising regarding the "nature, characteristics, [or] qualities ... of ... goods, services, or commercial activities" to bring a lawsuit for damages resulting from the false statements.

In any case, there is no reason for business owners in Washington and Oregon to cross their fingers and hope for the best if they have been hit by what could be defamation. At the very least, they can meet with a lawyer to get an idea of their options under state laws, the Lanham Act and other legal remedies.