Chapter 6. Disparagement of Property 8/3/2017. Business Torts and Online Crimes and Torts. Slander of Title Slander of Quality (Trade Libel) Defenses

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1 Chapter 6 Business Torts and Online Crimes and Torts Disparagement of Property Slander of Title Slander of Quality (Trade Libel) Defenses Disparagement of Property Disparagement of property occurs when a party intentionally publishes an injurious falsehood about another s product or property. There are two torts in the disparagement of property family: 1. Slander of Title, and 2. Slander of Quality. Slander of Quality is also known as Trade Libel. 1

2 Slander of Title Occurs when there is either an oral or written false and unprivileged statement about the title to real or personal property that causes actual monetary damages to the plaintiff. It has four required elements: 1. The statement was published (often by recording a document in the county records.) 2. The statement was false. 3. There was an absence of privilege, and 4. There was a disparagement of another s property that a third party relied upon, resulting in a monetary loss. Slander of Quality (Trade Libel) An intentional disparagement on the quality of another s property (goods or services) that results in monetary damage. It has two required elements: 1. Plaintiff suffered actual monetary loss. This generally requires a showing that the false publication caused a third party to refrain from dealing with the plaintiff, causing an economic loss, such as lost profit. 2. The disparaging statement was (or statements were) false. Defenses to Disparagement 1. Truth. Only false statements can be said to disparage the quality of someone s products or title. True statements cannot. The plaintiff must prove falsity. 2. Absolute Privilege is available in judicial proceedings, legislative proceedings, and certain executive proceedings. 3. Qualified Privilege exists in statements impugning title for persons with a bona fide claim on the property. 2

3 Defenses to Disparagement 3. Qualified Privilege in statements impugning quality for competitors: The rule is that a competitor may compare her products favorably with those of a rival even though she does not believe her products are superior, provided she makes no false assertions of specific unfavorable facts about her rival s products. Appropriation of Likeness for Commercial Purposes Common Law Right of Publicity Our right to prevent others from using our name or likeness in their publications without our permission is one of the four aspects of our right to privacy that we learned about in chapter 5. This is called our common law right of publicity. It has four required elements: 1. The defendant has used the plaintiff s identity 2. To his (the defendant s) advantage 3. Without the plaintiff s consent, and 4. This has caused injury to the plaintiff. Example: Eastwood v. Superior Court Clint Eastwood sued the National Enquirer for publishing an article falsely reporting that he was involved in a love triangle. The trial court granted a demurrer for the defendant, but the California Court of Appeals reversed and remanded. 3

4 Statutory Right of Publicity In addition to our common law right of publicity; in 1971, California supplemented this right by adopting Civil Code section 3344, subdivision (a). This code section provides that any person who knowingly uses another s name, photograph, or likeness, in any manner, for purposes of advertising products, merchandise, goods or services, or for purposes of solicitation of purchases of products without that person s prior consent shall be liable for any (actual) damages sustained by the person injured as a result. To win a right of publicity lawsuit under this theory, plaintiff must prove the use of their name or likeness was done knowingly. That means mistake or inadvertence could be an effective defense. Interference With Economic Relations of Others 1. Inducing a Breach of Contract 2. Interference with a Contractual Relationship 3. Interference with a Prospective Economic Advantage of Another Inducement to Breach Another Person s Contract This theory is designed to protect a person from intentional acts that are undertaken with the intention of producing, and that do produce, an actual breach of a valid contract. To win, plaintiff must prove: 1. That there was an existing valid contract, and 2. That the defendant had knowledge of the contract and intended to induce a breach (a failure to perform,) and 3. That the defendant s wrongful conduct caused an actual breach to occur, and 4. That the plaintiff suffered damages as a result. 4

5 Interference with Contractual Relations This theory is designed to protect against intentional acts that do not result in a contract breach but make the plaintiff s performance of the contract more expensive or burdensome. Plaintiff must prove: 1. Plaintiff had an existing valid contract with 3 rd party, and 2. Defendant had knowledge of the contract, and 3. Defendant s intentional and unjustified acts were intended to interfere with or disrupt the contract, and 4. There was actual interference, and 5. Damages were suffered by plaintiff as a result of defendant s actions. Interference with a Prospective Economic Advantage Also known as Intentional Interference with Prospective Economic Relations and Tortious Interference with Prospective Business Advantage, this third theory is designed to protect against intentional acts, causing harm to an economic relationship that is likely to produce an economic benefit. Plaintiff must prove: 1. There was an economic relationship with a 3 rd party that offered the probability of a future economic benefit to the plaintiff 2. The defendant had knowledge of this relationship 3. Defendant intended to disrupt this relationship. 4. Defendant engaged in wrongful conduct that was a substantial factor in producing an actual disruption of the relationship and damages were suffered by the plaintiff as a result. Online Crimes and Torts Online Crime Cyber Torts 5

6 Online Crime Crimes that can be committed using computers: Hacking Spamming Fraud Identity theft Embezzlement Unlawful marketing of online pornography Definitions Hacker: The person who breaks into the computer on which the stored data is located. Spamming: Sending unsolicited bulk advertisements. Fraud: A family of crimes involving the deception of another person for the purposes of obtaining money or property from him. More Definitions Identity Theft: The unlawful use of another's personal identifying information (such as a credit card number) to commit other crimes, such as credit card fraud. Embezzlement: The unlawful conversion of personal property that is lawfully in your possession into your own property. 6

7 Federal Statutes to Combat Online Crime Include 1. The Computer Fraud and Abuse Act of 1984, amended by 2. The National Information Infrastructure Protection Act of The Communications Decency Act of The Identity Theft and Assumption Deterrence Act of The Fair and Accurate Credit Transaction Act of The Controlling the Assault of Non-Solicited Pornography and Marketing Act of The Identity Theft Penalty Enhancement Act of The U.S. Safe Web Act of 2006 More Definitions Cyber Espionage: The deployment of viruses that clandestinely observe or destroy data in the computer systems of government agencies and large enterprises. Industrial Espionage: The process whereby persons gain unauthorized access to the records or databases of private, for-profit companies for nefarious purposes, such as ransomware or theft of trade secrets. Two Federal Statutes That Fight Cybercrime The Computer Fraud and Abuse Act of 1984 makes it a federal crime to use a computer to commit theft, espionage, trespass, fraud, or damage to another computer. The Identity Theft and Assumption Deterrence Act of 1998 bars the use of false identification to commit fraud or other crimes. 7

8 One California Statute That Fights Cybercrime The California Anti-Phishing Act of 2005 makes it a state crime for any person, by means of a Web page, electronic mail message, or otherwise through use of the Internet, to solicit, request, or take any action to induce another person to provide identifying information by representing itself to be a business without the authority or approval of that business. Challenges in the Prosecution of Online Crime Include 1. Establishing jurisdiction, especially when perpetrated from an offshore server. 2. Obtaining physical evidence. 3. Obtaining the identity of the perpetrator. More Definitions Business Tort: The wrongful interference with the business rights of others. Includes but is not limited to engaging in unfair competition, and interference with the economic relations of others. Cyber Tort: The occurrence of a tort online. 8

9 Examples of Cyber Torts Online industrial espionage for the purposes of obtaining the trade secrets of others, or engaging in other wrongful forms of competition. Cyber Defamation and Product Disparagement: Tampering with the product reviews of one s competitors products in order to spread lies about them. 9