The Volokh Conspiracy

Mostly law professors | Sometimes contrarian | Often libertarian | Always independent

Volokh Conspiracy

Nothing shameful about threatening to copy someone's business model


In libel cases, the plaintiff must show more than that the statement was false (even setting aside the question of the speaker's mental state); the plaintiff must also show that the statement tends to damage his reputation by exposing him to "hatred, contempt, ridicule, or obloquy."

Sadeghi v. Snell (Cal. Ct. App. Dec. 24, 2014) offers an interesting illustration. A local newspaper, the OC Weekly, wrote an article that mentioned Shaheen Sadeghi, a local real estate developer, and his projects. Much of the article was positive, but some was negative, including this:

[Delilah Snell] believe[d] her store is the model for the Camp's SEED People's Market, … [which plaintiff] owns …. [Defendant] claims that SEED has approached many of the vendors featured at [Road Less Traveled, Snell's store,] … and even used a photo of her shop in a promotional email sent out to customers. (The Weekly has a copy of the email.)

When [plaintiff] warned [defendant] he would copy her, [defendant] was stunned-and then furious. 'I just thought, "Go ahead and try,"' she says. 'Because I will tell you, having a green store isn't about going out and buying a whole bunch of products….'"

Plaintiff denied this, but the court said that, regardless of whether Snell's statement is true, it's not defamatory:

[T]he statement plaintiff would copy defendant's business model did not subject plaintiff to "hatred, contempt, ridicule, or obloquy." A reasonable member of the public would not be shocked or troubled on reading that. There are businesses familiar to the public that copy their competitors. The trial court mentioned Pepsi and Coke. Fast food hamburger restaurants are another prime example. Those businesses are not subject to obloquy or shame but rather are heavily patronized. That is the nature of competition among businesses.

(Some false statements about people that aren't defamatory might be actionable under the "false light" tort, but that is limited to falsehoods that would be "highly offensive to a reasonable person." Presumably, given the court's reasoning, that too would be absent for this statement.)