Free Speech Isn’t Always Free

The 1st Amendment, inter alia, protects citizens from prior restraint of speech by agents of the federal government and was incorporated to the states through the 14th Amendment; however, freedom of speech is not absolute.

Numerous lawsuits are filed for torts involving “free speech,” including defamation, negligence, false light invasion of privacy, and tortious interference with a business expectancy, to name a few.

Recently, the Nebraska Supreme Court decided Steinhausen v. HomeServices, 289 Neb. 927 (2015). In Steinhausen, the plaintiff, in both his personal and business capacity, sued a defendant over an email a defendant’s employee sent out to the rest of the company’s realtors two years after plaintiff’s services were provided.  It referred to the plaintiff as a “total idiot” and, with a string of emails, suggested plaintiff was not competent. The plaintiff testified the email cost him $30,000 per year in lost revenue.

The plaintiff, without counsel, filed a complaint for economic loss, emotional suffering, and unlawful discrimination.  The lower court sustained motions for summary judgment against the plaintiff and he appealed.

In reaching its holding against the plaintiff, the Nebraska Supreme Court noted the plaintiff was not an attorney and, while he could represent himself, he could not represent the LLC he created. As such, that portion of his suit was a nullity.

The Court also ruled the false light invasion of privacy was subsumed by the libel claim because they were based on the same statement.  The libel claim failed because the email was based on an opinion, not fact, and the tortious interference with a business relationship claim failed because the plaintiff didn’t have a business relationship or expectancy that could be interfered with.

In reaching its holding, the Court illustrated a number of important principles of law. For example, once a business entity is created, it takes on a life of its own.  Owners cannot sue or defend a lawsuit in the name of their business entity or they are practicing law without a license.

Second, a business can be held liable for the action of an employee under vicarious liability. Even when no liability is established, the costs of defending a suit are significant. Every company should have policies in place regarding company email.

Third, the threshold question in defamation claims is whether a reasonable fact finder could conclude that the published statements imply a provably false factual assertion.  Rhetorical hyperbole – an exaggeration rather than as a statement of fact – is not actionable.

Finally, to succeed on a claim for tortious interference, a plaintiff must prove (1) the existence of a valid business relationship or expectancy, (2) knowledge by the interferer of the relationship or expectancy, (3) an intentional act of interference on the part of the interferer, and (4) proof of harm, (5) to the party whose relationship or expectancy was disrupted.

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