Defamation Is Tough (For) Business

October 12, 2008

A defamation decision from the Minnesota Court of Appeals of a few weeks ago should give online communicators pause.  The decision did not involve web sites, blogs, or other internet-based ways of communicating, but it did involve something that is so easy to do online: rant about a business.

Judging from the name of the case, Diversified Water Diversion, Inc. v. Standard Water Control Systems, Inc., you would be correct to guess that the matter involved Minnesota construction contractors — specifically, contractors that do drain-tile work at homes.  In the court’s words, there was “a great deal of ill will” between the companies, so bad that in 2002 Standard sued Diversified over its business practices.  The parties settled the suit and, as is customary, agreed that neither company would “disparage” the other.

In 2005 and 2006, when some homeowners received bids from both companies, Standard’s president warned the homeowners that Diversified did “terrible work,” would not honor warranties, and was “sleazy.”  Diversified sued Standard for defamation, even though the homeowners had hired Diversified anyway.  The claim was for “defamation per se,” which in Minnesota permits certain persons — chiefly businesspeople people and persons wrongfully accused of crimes — to win defamation suits even when they have failed to prove that they actually have been harmed.

Defamation per se is controversial, and rightly so.  The theory is that some defamation is so bad that the person who was defamed should not have to be burdened with proving that there was damage to reputation.  Falsely accusing someone of being a pedophile is one instance in which Minnesota courts have awarded defamation per se damages.  That makes sense.

But does it make sense to permit a business to recover these sorts of damages?  In Diversified v. Standard, both the Hennepin County trial court and the Minnesota Court of Appeals said yes, to the tune of $30,000.  The appeals court’s written ruling provides only a peek of what went on, but I am troubled that there is no explanation of how Diversified proved that the comments were false — something that is required even for “defamation per se.”  No one deserves to be accused of being “sleazy,” and I am not suggesting that anyone in this case was.  But still, Minnesota’s defamation law cannot be allowed to get so out of control that plaintiffs have to prove neither falsity nor damages.  Maybe falsity was proven in this case, but the appeals court’s unfortunate omission of that issue might mean trouble down the road.

Including for online communicators.  For now, be very, very careful about whining about businesses.  Because in Minnesota, you’re on notice that even true whining might mean trouble.

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11 Responses to “Defamation Is Tough (For) Business”

  1. Michael Says:

    As of 2-15-10 One of the owners did time in prison for possession of meth. That same owner has a judgment against him for over $800,000.00 ( THOMAS FALLEN v ARTHUR HOGENSON). DWD has been sued by yellow book for not paying their bill, Was sued by Wilson Mutual Ins for a truck accident.It seems they had no insurance at the time of the accident on the truck. Had a licensing censure from the MN Dept of Labor and Industry, Had outstanding withholding due from years past, They have an F rating with the BBB for not responding to a complaint, Was fined by the state of MN for not have the work comp at one point, most of their phone lines are disconnected and are not answering the others. It is also important to note that as of Dec 06 DWD had a combined lost more of over 250,000.00 for 04,05 and 06. With these facts you make your own conclusion.

    • M Says:

      This sounds completely unjust. Persons should not fear speaking out against persons’/business’ that commit immoral-unethical-unlawful acts. I hope that Standard appeals to a higher court.

      • Anonymous Says:

        M Sounds like a complete idiot and should keep his opinion to him self because you know what they say about opinions Dumb +++++ get a life

  2. Reddit Says:

    From http://www.superiortelegram.com/event/article/id/191109/publisher_ID/36/

    “Duluth man fights defamation suit by doctor he criticized”

    By Mark Stodghill. Published February 10, 2011

    A Duluth physician who sued a patient’s son for defamation was in court Thursday as the son attempted to have the case thrown out.

    Dr. David McKee, a neurologist with Northland Neurology and Myology, filed the lawsuit against Dennis Laurion of Duluth in St. Louis County District Court in June. McKee alleges that Laurion defamed him and interfered with his business by criticizing him by making false statements on websites and to various third parties including other physicians in Duluth, the St. Louis County Public Health and Human Services Advisory Committee, St. Luke’s hospital and professional organizations.

    Laurion’s father, Kenneth, now 85 and a Navy combat medic in the Solomon Islands during World War II, suffered a hemorrhagic stroke and was treated by McKee at St. Luke’s hospital April 19. He recovered from his condition. However, he and his family allege that McKee was rude and insensitive to the patient in his actions and comments.

    The defendants claim that when McKee didn’t find Kenneth Laurion in the Intensive Care Unit, he said: “I had to find out whether you had transferred or died.” McKee confirmed in deposition that he made the statement, but claimed it was a jocular comment meant to relieve tension.

    Kenneth Laurion, his defendant son and daughter-in-law were in the courtroom Thursday, as was plaintiff McKee.

    McKee is asking for more than $50,000 in damages. Laurion claims that any statements he made about the doctor were true and that he is immune from any liability.

    Duluth defense attorney John Kelly argued that his client’s statements were substantially true, were statements of opinion and couldn’t be demonstrated to be false.

    “He is standing up and speaking out for his father. That is his motivation … in the hope that something gets done,” Kelly told the court.

    McKee is represented by Minneapolis attorney Marshall Tanick. Tanick told the court that Laurion used the websites as a “weapon of mass destruction” to injure the reputation of McKee, place the doctor in a negative light and impugn his professional practice.

    In a written motion, Tanick wrote, “The totality of statements made on these websites would be injurious to the reputation and standing of a doctor in the eyes of others who might see it, including patients or prospective patients, colleagues, peers, referral sources, and others.”

    Sixth Judicial District Judge Eric Hylden is presiding over the case. As the parties introduced themselves to the court, Hylden told them it was a “very interesting type of case.”

    Thinking out loud, Hylden suggested that Laurion has a constitutionally protected right to an opinion, but “isn’t there some limitation on what a person can say in that public forum?”

    Kelly said his client made his statements of opinion in good faith and they were not demonstratively false. “There has to be a protected area in which someone like Dennis Laurion can come forward, stand up and speak for his father and say, ‘Look, in this particular instance, my father didn’t get treated very well and you ought to know that.’ ”

    Tanick argued that Laurion’s criticism goes much farther than that.

    “He chose to tell the world at large in a way that was injurious to Dr. McKee’s reputation,” Tanick said.

    Hylden took the motion for summary judgment under advisement. He has 90 days to issue his ruling.

    A Duluth physician is suing the son of a former patient for publicly criticizing his bedside manner. Dr. David McKee, a neurologist with Northland Neurology and Myology, filed the lawsuit, which was made public Friday, in St. Louis County District Court. McKee alleges that Dennis Laurion of Duluth defamed him and interfered with his business by making false statements to various third parties, including the American Academy of Neurology, the American Neurological Association, two physicians in Duluth, the St. Louis County Public Health and Human Services Advisory Committee and St. Luke hospital, among others.

    Laurion claims that any statements he made about the doctor were true and that he is immune from any liability to the plaintiff. He referred questions to his Duluth attorney, John Kelly.

    McKee is asking for more than $50,000 in damages. The doctor was paged Friday but did not return a call seeking comment. He is being represented by Minneapolis attorney Marshall Tanick, who in a phone interview alleged that Laurion defamed his client in several ways, including posting negative reviews of McKee on various websites. The basis for the lawsuit is the defamatory statements that were made on websites and to other sources, Tanick said. However, by no means does Dr. McKee want to in any way prevent or affect any kind of communications that may be made to the Board of Medical Practice or any other regulatory agencies. The purpose of the lawsuit is to prevent defamation being made on the websites and through other sources.

    Kenneth Laurion, 85, a Navy combat medic in the Solomon Islands during World War II, suffered a hemorrhagic stroke and spent four days at St. Luke hospital from April 17-21. He recovered from his condition.

    McKee also alleges that the defendant made false statements about him to others including:

    McKee seemed upset’ that Kenneth Laurion had been transferred from the Intensive Care Unit to a ward room.

    McKee told the Laurions that he had to spend time finding out if [the patient] had been transferred or died.

    McKee told the Laurions that 44 percent of hemorrhagic stroke victims die within 30 days. McKee told the patient that he did nott need therapy.

    McKee said that it didn’t matter that the patient gown was hanging from his neck with his backside exposed.

    McKee blamed the patient for the loss of his time. McKee didn’t treat his patient with dignity.

    Defense attorney Kelly said it was a tense and emotional situation for the Laurion family. They were worried about Dad and the doctor comes along and, from their point of view, of what they saw and what they heard, they felt that the doctor didn’t act appropriately toward the father, Kelly said. So, among other things, they saw fit to report it to the hospital and to the Board of Medical Practice, which they have every right to do under the patient Bill of Rights, and they get sued.

    Kelly said his client did post ratings of McKee on some websites but said he asked to have them removed, and they were. The defense attorney thinks that the lawsuit is without merit. I think it is an unfortunate incident of someone attempting to punish a person who has spoken out of concern for a family member, Kelly said.

    According to the Minnesota Board of Medical Practice website, McKee has had no disciplinary action brought against him.

  3. Reddit Says:

    The Duluth doctor defamation suit has been dismissed:

    http://www.onpointnews.com/docs/Mckee-v-Laurion.pdf


  4. Doctor David McKee, a neurologist with Northland Neurology and Myology, practicing at St. Luke’s Hospital, told the Duluth News Tribune he was disappointed and frustrated. “We need to change the law so someone with a personal vendetta who is going to use the Internet to make defamatory statements can be held responsible,” he said.

    The Star Tribune said it’s a frustrating end for McKee, 51, who said he’s spent at least $50,000 in legal fees and another $11,000 to clear his name online after the story went viral, resulting in hundreds more negative postings about him — likely from people who never met him. He hasn’t ruled out a second lawsuit stemming from those posts.

    “The financial costs are significant, but money is money and five years from now I won’t notice the money I spent on this,” he said. “It’s been the harm to my reputation through the repeated publicity and the stress.”

    McKee’s lawyer, Marshall Tanick, told the Associated Press that he and McKee plan no further appeals and that they were disappointed with the ruling. “We feel it gives individuals undue license to make disparaging and derogatory statements about these people, particularly doctors and other licensed professionals, on the Internet without much recourse,” Tanick said.

    From the American Health Lawyers Association: In this case, the court found the six allegedly defamatory statements were not actionable because the “substance, the gist, the sting” of plaintiff’s version for each of the statements as provided in deposition and defendant’s version essentially carried the same meaning, satisfied the standard for substantial truth, did not show a tendency to harm the plaintiff’s reputation and lower his estimation in the community, or were incapable of conveying a defamatory meaning (e.g., when a nurse told defendant that plaintiff was “a real tool”) based on “how an ordinary person understands the language used in the light of surrounding circumstances.”

    From the Business Insurance Blog: The Minnesota high court said, for instance, that Dr. McKee’s version of his comment about the intensive care unit was substantially similar to Mr. Laurion’s. “In other words, Dr. McKee’s account of what he said would produce the same effect on the mind of the reader,” the court said. “The minor inaccuracies of expression (in the statement) as compared to Dr. McKee’s version of what he said do not give rise to a genuine issue as to falsity.”

    From the Duane Morris Media Blog: The doctor said in his deposition that with regard to finding out if Mr. Laurion was alive or dead, “I made a jocular comment… to the effect of I had looked for [Kenneth Laurion] up there in the intensive care unit and was glad to find that, when he wasn’t there, that he had been moved to a regular hospital bed, because you only go one of two ways when you leave the intensive care unit; you either have improved to the point where you’re someplace like this or you leave because you’ve died.” The court said the differences between the two versions of the statements about death or transfer by both plaintiff and defendant were so minor that there was no falsity in the website postings. In other words, the court indicated that the allegation about the statement was true.

    In reply to an e-patients.net article “Minnesota Supreme Court sides with patient on social media defamation suit,” Attorney Marilyn Mann said, “I think McKee’s lawyer is incorrect. The case turned on standard principles of defamation law and doesn’t really break new ground.”

    Jane Kirtley, a professor of media ethics and law at the University of Minnesota School of Journalism, told the Star Tribune that the ruling stems from “an elementary principle of libel law.” She said that this isn’t a blank check for people to make false factual statements. She said, rather, that it’s “an endorsement that statements of opinion are protected under the First Amendment.”

    According to the Duluth News Tribune, Minnesota Newspaper Association attorney Mark Anfinson, who watched the oral arguments before the Supreme Court in September, said that the justices made the right decision. Anfinson also told the News Tribune, “What this case really exemplifies is not so much legal precepts in libel law, but the impact of the Internet on the ability to publish unflattering comments about people.”

    The Mankato Free Press said in February 2013: “It’s puzzling why McKee’s defamation lawsuit — filed nearly four years ago — was still in court. It’s long been established that people may spout any opinion they want without fear of being sued . . . It’s unsettling that the Appeals Court earlier ruled to allow the suit to continue.”

    In his Technology & Marketing Law Blog, Eric Goldman said on February 4, 2013, “I’ve been tracking doctor v. patient lawsuits for online reviews. . . doctors usually lose or voluntarily drop these lawsuits. Indeed, with surprising frequency, doctors end the lawsuit by writing a check to the defendant for the defendant’s attorneys’ fees where the state has a robust anti-SLAPP law. Doctors and other healthcare professionals thinking of suing over online reviews, take note: you’re likely to lose in court, so legal proceedings should be an absolute last-resort option–and even then, they might not be worth pursuing.”

    Dan Hinmon, the principal of Hive Strategies, wrote for Health Care Communication, on March 21, 2013, “According to the Star Tribune, McKee is now ticked off at the people who posted hundreds more negative comments about him after the story went viral. Incredulously, the story reports that McKee ‘hasn’t ruled out a second lawsuit stemming from these posts.’ Yes, you read that right. After spending ‘at least $50,000 in legal fees and another $11,000 to clear his name online after the story went viral,’ McKee is considering suing the rest of the people who, exercising their right of protected speech, chimed in. I’m speechless.”

  5. Harry Nevus Says:

    This lawsuit, McKee v Laurion, was named among “The top lawsuits of 2013” by “Twin Cities Business Magazine” on December 20, 2013:

    Dr. David McKee, a Duluth neurologist, was not laughing when he saw what one former client wrote about him on a doctor-rating website. The reviewer, Dennis Laurion, complained that McKee made statements that he interpreted as rude and quoted a nurse who had called the doctor “a real tool.” As these statements echoed through the Internet, McKee felt his reputation was being tarnished. He sued, and so began a four-year journey that ended this year in the Minnesota Supreme Court.

    Laurion was unhappy with the way McKee treated his father, who was brought to the doctor after he had a stroke. Laurion went to several rate-your-doctor sites to give his opinion. That’s just free speech, isn’t it?

    It sure is, says Laurion’s attorney, John D. Kelly of the Duluth firm Hanft Fride. “The court held that what my client was quoted as saying was not defamatory,” he says. “I do think the Internet makes it much easier for persons exercising poor judgment to broadcast defamatory statements, however… a medium… doesn’t change the quality of a statement from non-defamatory to defamatory.”

    But McKee’s lawyer, Marshall Tanick, of Hellmuth & Johnson, says no matter where it was said, defamation is defamation. “The thing that’s often misunderstood is that this was not just about free speech, but about making actual false statements,” Tanick says. “The problem is today’s unfettered opportunity to express opinion, whether or not the substance of what’s said is true or not. We need some boundaries.”

    But boundaries were not on the minds of the Minnesota Supreme Court. Free speech was. Chief Justice Lorie Gildea wrote, “The point of the post is, ‘This doctor did not treat my father well.’ I can’t grasp why that wouldn’t be protected opinion.”

    As to referring to the doctor as “a real tool,” Justice Alan Page wrote that the insult “falls into the category of pure opinion because the term … cannot be reasonably interpreted as a fact and it cannot be proven true or false.”

    The takeaway from this case might be the knowledge that behind any rating service lie real people with real feelings. McKee spent more than $60,000 in the effort to clear his name, as he saw it.

    Dennis Laurion told the Star Tribune he spent the equivalent of two years’ income, some of which he had to borrow from relatives who supplied the money by raiding their retirement funds.


  6. In spite of Supreme Court disagreement and subsequent peer disagreement, Marshall Tanick is STILL saying about David McKee MD v. Dennis Laurion: “The thing that’s often misunderstood is that THIS WAS NOT JUST ABOUT FREE SPEECH, BUT ABOUT MAKING ACTUAL FALSE STATEMENTS. The problem is today’s unfettered opportunity to express opinion, whether or not the substance of what’s said is true or not. We need some boundaries.”

    See comments above from From the American Health Lawyers Association, the Business Insurance Blog, the Duane Morris Media Blog, Attorney Marilyn Mann, Jane Kirtley, attorney Mark Anfinson, the Mankato Free Press, the Technology & Marketing Law Blog, and Dan Hinmon, the principal of Hive Strategies.

    The Minnesota Supreme Court compared every statement I attributed to Dr. David McKee against every statement he claimed he really said. The Court concluded the impact of each set of statements was the same. For instance, the Minnesota high court said that Dr. David McKee’s version of his comment about the intensive care unit was substantially similar to mine..

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  9. In response to a newspaper article about David McKee MD V. Dennis Laurion, Dr. McKee, founder of Northland Neurology and practitioner at St. Luke’s Hospital in Duluth, Minnesota, said that money is money, and he wouldn’t remember the impact in five years.

    I wrote my review of Dr. David McKee five years ago. I still remember the financial impact.

    This entire experience has been distressing to my family. We were initially shocked and blindsided by “jocular” comments made so soon after my father’s stroke by somebody who didn’t know us. We were overwhelmed by my being sued after posting a consumer opinion, and we were shocked by the rapidity with which it happened. It has been the 800 pound gorilla in the room. My parents would be 88-year-old witnesses. My mother and wife prefer no discussion, because they don’t want to think about it. Conversation with my father only reminds him of his anger over this situation. My siblings and children don’t often bring it up, because they don’t know how to say anything helpful. I have been demoralized by three years of being called “Defendant Laurion” in public documents.

    While being sued for defamation, I have been called a passive aggressive, an oddball, a liar, a coward, a bully, a malicious person, and a zealot family member. I’ve been said to have run a cottage industry vendetta, posting 108 adverse Internet postings in person or through proxies. That’s not correct. In reality, I posted ratings at three consumer rating sites, deleted them, and never rewrote them again.

    What it’s like for a patient or family member to be caught up in a case like this was already described by the plaintiff’s lawyer in a Star Tribune newspaper article, “Company sues over info put on Yahoo message board,” August 27, 2001, and repeated in http://chronicle.augusta.com/stories/2001/08/27/bus_321610.shtml . It said in part: “If a company sues, alleging simple business disparagement or perhaps defamation, its goal isn’t necessarily to win,” said Marshall Tanick, a First Amendment expert at Mansfield & Tanick in Minneapolis. “The strategy is to force the other person to incur huge legal expenses that will deter them and others from making such statements,” he said … “yet very few (cases) go all the way to trial and verdict,” Tanick said.

    The plaintiff’s first contact with me was a letter that said in part that he had the means and motivation to pursue me. The financial impact of being sued three years to date has been burdensome, a game of financial attrition that I haven’t wanted to play. The suit cost me the equivalent of two year’s net income – the same as 48 of my car payments plus 48 of my house payments. My family members had to dip into retirement funds to help me.

    After receipt of a threat letter, I deleted my rate-your-doctor site postings and sent confirmation emails to opposing counsel. Since May of 2010, postings on the Internet by others include newspaper accounts of the lawsuit; readers’ remarks about the newspaper accounts; and blog opinion pieces written by doctors, lawyers, public relations professionals, patient advocates, and information technology experts. Dozens of websites by doctors, lawyers, patient advocates, medical students, law schools, consumer advocates, and free speech monitors posted opinions that a doctor or plumber shouldn’t sue the family of a customer for a bad rating. These authors never said they saw my deleted ratings – only the news coverage.

    It was not my intention to use any descriptions or conclusions. It was also not my intention to claim that I had proof. Only my family and the doctor were in the room. My intention was to portray my recollection of what happened in my father’s room. The public could decide what to believe and what – if any – impact it had on them: insensitive doctor or overly-sensitive consumer?

    Medical peer newsletters or magazines that interviewed the plaintiff did not approach me. Websites maintained by doctors for doctors or lawyers for lawyers often caused an inference that I was a zealot family member or somebody who had asked about my dad’s chances and then shot the messenger. Generally, however, those websites echoed other websites in advising public relations responses other than a lawsuit – for fear of creating the “Streisand Effect.” As a retired layman, I brought far less resources to the battle of financial attrition.

    The Minnesota Supreme Court compared every statement I attributed to Dr. David McKee against every statement he claimed he really said. The Court concluded the impact of each set of statements was the same. For instance, the Minnesota high court said that Dr. David McKee’s version of his comment about the intensive care unit was substantially similar to mine.

    I’ve learned that laws about slander and libel do not conform to one’s expectations. I’ve read that online complaints are safe “if you stick to the facts.” That’s exactly the wrong advice. I did not want to merely post my conclusions. I wanted to stick to my recollection of what I’d heard. I don’t like to read generalities like “I’m upset. He did not treat my father well. He was insensitive. He didn’t spend enough time in my opinion.” However, such generalities are excused as opinion, hyperbole, or angry utterances. If one purports to say what happened, factual recitations can be litigated. The plaintiff must prove the facts are willfully misstated, but the defendant can go broke while waiting through the effort.


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