Libel Per Se? Libel Per Quod? Neither, Says Virginia Court

March 14, 2012

Professional Timothy B. Hanks is a professional tax preparer who took offense at a television segment aired by WAVY Channel 10 in the Hampton Roads area that promised to inform viewers "how to avoid unscrupulous tax preparers," then proceeded to tell a story involving an admitted mistake made by his company, Reliable Tax & Financial Services. Hanks sued the station for libel, libel per se, and libel per quod, seeking five million dollars in damages. Judge Doumar (Norfolk) rejected all three theories and, last month, dismissed the entire case with prejudice.

Libel per se and libel per quod are variations of a defamation cause of action. Under Virginia law, a claim for libel per se may exist for certain categories of defamatory statements deemed serious enough to warrant presumed damages. This includes statements such as those accusing a plaintiff of committing a crime involving "moral turpitude," of being infected with a contagious disease, or, more commonly, of being unfit to perform the duties of his profession. Libel per quod, on the other hand, refers to statements the defamatory nature of which is not readily apparent, but which are understood by the recipient to be of a defamatory nature in light of extrinsic facts known by that person.

Hanks claimed the "unscrupulous" remark constituted defamation per se in that it imputed to him "an unfitness to perform the duties of office or employment for profit, a lack of integrity in the discharge of duties of such office, and the commission of a criminal Taxes.jpgoffense." The court disagreed for several reasons, holding that the statements (1) are not "of or concerning" Hanks, (2) are not capable of defamatory construction, and (3) are constitutionally-protected opinion. The court also found that Hanks failed to sufficiently plead actual malice or special damages.

First, the court pointed out that Hanks failed to explain why he was suing personally, rather than Reliable Tax, the company mentioned in the broadcast. Rather than dismiss the case for lack of standing, however, the court took judicial notice of the fact that Hanks was the president of Reliable Tax and proceeded to address the merits.

The court found that Hanks failed to show that the statement about "unscrupulous tax preparers" as a class was directed at him. Hanks never pleaded any facts to show how he was personally affected by this story or that it would be plausible for viewers to know that the story was about Hanks merely from the reference to tax preparers as a class.

The court also ruled that the term "unscrupulous" was not of a defamatory nature in that it was broad, unfocused, and constituted wholly subjective opinion. It did not, as Hanks argued, imply criminal behavior.