Implied Undisclosed Facts as Basis for Defamation Claim

As a general rule, statements of opinion are not actionable as defamation. It’s also true, however, that indirect implications from a statement can form the basis of a defamation claim. When a person prefaces a statement with “in my opinion” or “I firmly believe,” it has no effect on whether the statement carries defamatory implications or innuendo. If a speaker expresses an opinion under circumstances that would cause a reasonable listener to understand that the opinion is based on the speaker’s knowledge of undisclosed facts, that “opinion” can be treated as an implied assertion of fact. And if that factual assertion isn’t true and conveys a defamatory meaning about someone, defamation liability may arise.

This isn’t really an exception to the rule that you can’t sue someone for defamation based on an expression of opinion. Pure opinions remain protected by the First Amendment. The question is whether a reasonable listener or reader would infer from a particular statement (whether couched as an opinion or otherwise) that the speaker or writer knows certain facts, unknown to the audience, which support the opinion and are detrimental to the reputation of the person about whom the statement is made. This is going to depend heavily on context, the identity of the parties, and the specific words used.

If an opinion fully discloses its factual predicate, the statement would retain its protection as a non-actionable opinion. (See Biospherics, Inc. v. Forbes, Inc., 151 F.3d 180, 185 (4th Cir.1998) (opinions fully disclosing their factual bases constitute a subjective view and are not actionable); Schaecher v. Bouffault, 290 Va. 83, 105 (2015)). Of course, if the disclosed facts are untrue, those facts could form the basis of a defamation claim, but the opinion based on those untrue facts would retain protection.

By way of example, let’s look at a hypothetical taken from the Restatement (Second) of Torts). Suppose Dave writes to Will about his neighbor Paul: “I think he must be an alcoholic.” That’s it; no other information is disclosed. Assume Will knows that Dave and Paul are neighbors. If that’s the whole statement, Will might reasonably assume that Dave knows something about Paul that would justify his conclusion that Paul was an alcoholic. That could be defamatory. On the other hand, suppose Dave were to disclose the full basis for his opinion: “Paul moved in six months ago. He works downtown, and I have seen him during that time only twice, in his backyard around 5:30 seated in a deck chair with a portable radio listening to a news broadcast, and with a drink in his hand. I think he must be an alcoholic.” This time, Will couldn’t reasonably assume the existence of question-mark-1872665_960_720-300x165other, undisclosed facts supporting the opinion. So assuming those supporting facts are true, the “alcoholic” conclusion would not be defamatory.

In the real world, it’s usually not so obvious whether a statement of apparent opinion implies the existence of undisclosed facts supporting that opinion. It’s up to judges to determine as a matter of law whether a defamatory meaning can reasonably be inferred from a particular statement. Often it’s a close call, and in such situations, the jury is often called upon to decide whether a defendant’s statement implied the existence of undisclosed defamatory facts.

A federal court sitting in Virginia dealt with this issue last month in the case of Heidi Meredith v. Nestle Purina Petcare Company–a case I would put in the “close call” category. Here’s what happened, according to the allegations of the complaint. Meredith worked for Nestle Purina for about four years, when she was fired for unspecified “conduct.” A few months later, she took a job with an outside storage company and distribution center (“ODW”) that Nestle Purina used to house and distribute its products. On her first day at her new job, a Nestle Purina employee called her new boss at ODW and conveyed words to the effect that (1) Meredith had been fired from Nestle for insubordination; (2) she was a disgruntled former Nestle employee; (3) she might sabotage Nestle’s products; and (4) Nestle didn’t want someone working at the warehouse who might sabotage its products. (Note: this was in federal court, so the plaintiff was not required to plead the exact words used.) Meredith sued for defamation per se and per quod.

Notably, there were no allegations that Nestle told the warehouse directly that Meredith had previously “sabotaged” its products. The question, though, when Nestle moved to dismiss these claims, was whether Nestle’s statements occurred under circumstances that would cause a reasonable listener to infer that the concerns of sabotage were based on undisclosed, potentially defamatory facts (such as a history of sabotage). The court found a reasonable listener could interpret the statements that way and denied the motion to dismiss.

With respect to the “insubordination” comment, the court observed that while true that whether certain conduct amounts to insubordination is a matter of opinion, here the allegation was that her new employer was told that she was fired from Nestle because of insubordination, which was untrue. The court agreed that whether she was fired for insubordination was a matter of fact, not opinion, and could support a defamation claim.

As relevant to the topic of this blog post, the court found that the phone call to Meredith’s new boss, taken in its entirety (using words like “insubordination,” “disgruntled,” and “sabotage”) conveyed an implied message that Nestle knew more than it was revealing and that those undisclosed facts justified its concerns about likely sabotage. “Viewing the statements in context,” the court wrote, “the Court finds that the ‘sabotage’ and ‘disgruntled’ statements plausibly convey factual content.”

The court appeared to rely primarily on the unpublished case of Baylor v. Comprehensive Pain Mgmt. Ctrs., 2011 WL 1327396 (W.D. Va. Apr. 6, 2011), which held that “defendants can be held liable for defamation when a negative characterization of a person is coupled with a clear but false implication that the author is privy to facts about the person that are unknown” to the listener. Applying that standard, the court laid out its reasoning as follows:

Specifically, those statements reasonably communicate that Plaintiff had sabotaged Defendant’s products in the past – especially when viewed in light of Defendant’s statement that it fired Plaintiff for insubordination. Indeed, Defendant initiated the conversation with ODW in an alleged attempt to encourage ODW to terminate Plaintiff from her employment. Moreover, Defendant did not merely express a general opinion that Plaintiff should not work at ODW, but instead articulated a specific grievance – i.e., that Plaintiff “might sabotage” Defendant’s products and that Defendant did not want that sabotage to take place. The particularity of that grievance could well have led ODW to conclude that Defendant “is privy to facts about [Plaintiff] that are unknown to [ODW].” Additionally, given the context of the conversation, ODW could reasonably conclude that Plaintiff “was disgruntled” as a result of Defendant having fired her for insubordination, the factual basis for which constituted alleged attempts at “sabotage.” In short, the statements, when read together, are plausibly tied to a provably false factual underpinning. Accordingly, these statements constitute opinions based on untrue facts, and therefore reasonably communicate factual content.

The reason I view this case as a close call is that another judge could easily have found (in my opinion) that Nestle’s statements did not imply undisclosed facts. Any employee who is terminated for conduct is likely “disgruntled” to some degree; nobody likes to be fired. And any disgruntled former employee might be tempted to extract a bit of revenge on a former employer when faced with an easy opportunity. I would think that a reasonable listener in ODW’s position might very well have concluded that all Nestle was saying was that Meredith “might sabotage” its products not because she had done so before, but simply because she had been terminated and might harbor a grudge. To be clear, though, I don’t disagree with the court’s ruling; in close cases, the matter should be presented to a jury. It will ultimately be up to them to decide whether the statements are defamatory.


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