Citation Numbers: 464 Mass. 517
Judges: Spina
Filed Date: 3/13/2013
Status: Precedential
Modified Date: 6/25/2022
The present action concerns a claim for commercial disparagement arising from the publication of an article in the Journal of the American Medical Association (JAMA).
On February 15, 2008, HipSaver filed a complaint in the Superior Court against Kiel, alleging that he had disparaged HipSaver’s product in the JAMA article and was liable for monetary damages.
1. Background. We briefly summarize the undisputed facts contained in the summary judgment record, reserving additional facts for later discussion in conjunction with specific issues.
HipSaver was incorporated in 1995 and is one of at least twenty-three companies that markets hip protectors. There are two varieties of the device, one designed to divert the energy of a fall (hard shell type) and another designed to absorb the energy of a fall (foam type). HipSaver’s product is made of “soft pen cell foam.” Its customer base is, and always has been, long-term care facilities, and its largest client is the United States Veterans Administration. HipSaver advertises its product on a national basis, including through its own Internet Web site, and it also markets its product through distributors in eight foreign countries.
Kiel is a licensed physician in Massachusetts who is board certified in internal medicine and geriatric medicine. He has done research on osteoporosis, falls, and related bone fractures; has published over 125 papers in peer-reviewed journals; and is regarded by others as an expert on hip protectors. In February, 2001, the National Institutes of Health awarded Kiel a five-year grant, in the amount of $8,424,636, to study the efficacy of hip protectors in reducing the risk of hip fractures when worn by nursing home residents. The findings of at least twelve earlier studies on the efficacy of hip protectors had produced mixed conclusions.
A clinical trial was conducted between October, 2002, and
JAMA is a highly respected, peer-reviewed, general medical journal whose key objective is to “promote the science and art of medicine and the betterment of the public health.” It is the most widely circulated medical journal in the world and has been published continuously since 1883. Following submission of the article, JAMA undertook a seven-month peer review process, after which it proceeded with publication. The following statement appeared in the conclusion of the article: “In summary, this large multicenter clinical trial failed to demonstrate a protective effect of a hip protector on hip fracture incidence in nursing home residents despite high adherence, confirming the growing body of evidence that hip protectors are not effective in nursing home populations” (emphasis added). Similarly, the following statements appeared in the abstract summarizing the article: “In this clinical trial of an energy absorbing/shunting hip protector conducted in US nursing homes, we were unable to detect a protective effect on the risk of hip fracture, despite good adherence to protocol. These results add to the increasing body of evidence that hip protectors, as currently designed, are
In its action against Kiel for commercial disparagement, Hip-Saver alleged that, prior to publishing the results of the clinical trial, Kiel knew or had reason to know that the product he had tested had a design that was different from and inferior to Hip-Saver’s product, that persons likely to read and write about the article would be unaware of this distinction, and that these people would believe that the challenged statements, which were false, applied to all hip protectors, including those made by HipSaver. HipSaver further alleged that Kiel published the article with malice and with reckless indifference to the fact that his conduct would injure the company. HipSaver claimed that, as a direct and foreseeable consequence of the article’s publication, it has suffered and will continue to suffer severe economic damages, including, but not limited to, the loss of sales and the costs of advertising to mitigate the harm caused by the challenged statements.
In her memorandum of decision and order allowing Kiel's motion for summary judgment, the judge first stated that Hip-Saver had not introduced any evidence demonstrating the falsity of the challenged statements. Proposed testimony from two expert witnesses that, in their opinions, the design of the clinical trial was flawed did not necessarily mean that its scientific conclusions were false. Therefore, HipSaver had failed to produce evidence to satisfy its burden of proof with regard to this essential element of its claim. Next, the judge pointed out that the issue whether “malice” is a required element of the tort of commercial disparagement has not been decided definitively in Massachusetts. Nonetheless, proceeding on the assumption that it is a required element, see Dulgarian v. Stone, 420 Mass. 843, 852 (1995), the judge concluded that HipSaver had not demonstrated that Kiel published the challenged statements with intentional or reckless disregard for their truth or falsity. Finally, the judge determined that, where HipSaver had failed to introduce evidence to support two essential elements of its claim
2. Standard of review. Summary judgment is appropriate where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. See Mass. R. Civ. P. 56 (c), as amended, 436 Mass. 1404 (2002). See also Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991). “[A] party moving for summary judgment in a case in which the opposing party will have the burden of proof at trial is entitled to summary judgment if he demonstrates, by reference to material described in Mass. R. Civ. P. 56 (c), unmet by countervailing materials, that the party opposing the motion has no reasonable expectation of proving an essential element of that party’s case.” Id. See Flesner v. Technical Communications Corp., 410 Mass. 805, 809 (1991) (moving party’s burden “need not be met by affirmative evidence negating an essential element of the plaintiff’s case, but may be satisfied by demonstrating that proof of that element is unlikely to be forthcoming at trial”). We review a decision to grant summary judgment de novo. See Miller v. Cotter, 448 Mass. 671, 676 (2007).
3. Discussion. An action for commercial disparagement is similar in many respects to an action for defamation, but there are important differences. Both torts seek to impose liability on a defendant for harm sustained by a plaintiff as a result of the publication of a false statement about the plaintiff to others. See White v. Blue Cross & Blue Shield of Mass., Inc., 442 Mass. 64, 66 (2004); Dulgarian v. Stone, supra. See also Restatement (Second) of Torts § 623A comment g, at 340-341 (1977). A defamation action, which encompasses libel and slander, affords a remedy for damage to the reputation of the injured party. See White v. Blue Cross & Blue Shield of Mass., Inc., supra; Ravnikar v. Bogojavlensky, 438 Mass. 627, 629-630 (2003). See also Restatement (Second) of Torts, supra at § 559. By comparison, an action for commercial disparagement affords a remedy for harm to the economic interests of the injured party that results in pecuniary loss.
In Dulgarian v. Stone, supra, this court adopted the language of the Restatement (Second) of Torts, supra at § 623A, regarding liability for commercial disparagement: “One who publishes a false statement harmful to the interests of another is subject to liability for pecuniary loss resulting to the other if (a) he intends for publication of the statement to result in harm to [the] interests of the other having a pecuniary value, or either recognizes or should recognize that it is likely to do so, and (b) he knows that the statement is false or acts in reckless disregard of its truth or falsity.” Thus, in order to prevail on a claim alleging commercial disparagement, a plaintiff must prove that a defendant: (1) published a false statement to a person other than the plaintiff; (2) “of and concerning” the plaintiff’s products or services; (3) with knowledge of the statement’s falsity or with reckless disregard of its truth or falsity; (4) where pecuniary harm to the plaintiff’s interests was intended or foreseeable; and (5) such publication resulted in special damages in the form of pecuniary loss.
a. Falsity of the statements. First, HipSaver has the burden of proving that Kiel published a false statement about HipSaver to a third party. See Dulgarian v. Stone, supra. See also Flotech, Inc. v. E.I. Du Pont de Nemours Co., 627 F. Supp. 358, 365 (D. Mass. 1985), aff’d, 814 F.2d 775 (1st Cir. 1987) (as matter of common law, plaintiff in commercial disparagement action must prove that offending statements are false). Given that the article was authored by, among others, Kiel, and appeared in the most widely circulated medical journal in the world, the focus of our inquiry is whether HipSaver has established that the challenged statements are false. See W.L. Prosser & W.P. Keeton, Torts, supra at § 128, at 967 (“the plaintiff must carry the burden of proving that the disparaging statement is false, and if he does not do so he has no claim”). HipSaver contends that the challenged statements are false because the design of the clinical trial was flawed.* ******
The genesis of the clinical trial was a recognition that nearly 340,000 hip fractures were occurring each year in the United States, with the highest incidence rates being reported in nursing home residents. In the article, Kiel pointed out that the results of past studies on the efficacy of hip protectors had been conflicting.
HipSaver has taken issue with Kiel’s statements that the results of the clinical trial “add[ed] to” or “confirm[ed]” the “growing body of evidence that hip protectors are not effective in nursing home populations.” However, it does not follow from HipSaver’s assertion that the design of the clinical trial was flawed that the challenged statements are false. The article plainly acknowledged possible flaws and limitations with the methodology that was used, and it suggested that further studies be conducted to evaluate the efficacy of hip protectors. Irrespective of any design flaws, the results of this particular clinical trial did not show that hip protectors reduced the occurrence of hip fractures in nursing home residents, and HipSaver has not alleged that Kiel inaccurately interpreted or reported the collected data. Given that thirteen studies had been published on the efficacy of hip protectors, more than one-half of which had demonstrated no statistically significant reduction in the number of hip fractures, the challenged statements did, in fact, “add to” or “confirm!]” a “growing body of evidence that hip protectors are not effective in nursing home populations.” This is not to say that Kiel’s statements are the definitive word on the subject, or that the results of his clinical trial are scientifically conclusive. Nonetheless, HipSaver has failed to present evidence that would satisfy its burden of proving that the challenged statements by Kiel are false.
b. Statements “of and concerning” the plaintiff. Given that a cause of action for commercial disparagement typically seeks to
“In Massachusetts, the test whether [an alleged defamatory statement] is of and concerning the plaintiff is met by proving either (1) that the defendant intended the words to refer to the plaintiff and that they were so understood or (2) that persons could reasonably interpret the defendant’s words to refer to the plaintiff and that the defendant was negligent in publishing them in such a way that they could be so understood.” ELM Med. Lab., Inc. v. RKO Gen., Inc., 403 Mass. 779, 785 (1989). See Eyal v. Helen Broadcasting Corp., supra at 430; New England Tractor-Trailer Training of Conn., Inc. v. Globe Newspaper Co., supra at 483; Driscoll v. Trustees of Milton Academy, supra. We have said that “if the person is not referred to by name or in such manner as to be readily identifiable from the descriptive matter in the publication, extrinsic facts must be alleged and proved showing that a third person other than the person [defamed] understood it to refer to him.” Brauer v. Globe Newspaper Co., 351 Mass. 53, 56 (1966). Further, in those circumstances where the alleged defamatory statement is directed at a group, rather than a particular person, “an individual member of the defamed class cannot recover for defamation unless ‘the group or class is so small that the matter can reasonably be understood to refer to the member, or . . . the circumstances of publication reasonably give rise to the conclusion that there is particular reference to the member.’ ” Eyal v. Helen Broadcasting Corp., supra at 430 n.6, quoting Restatement (Second) of Torts, supra at § 564A.
Here, HipSaver was not mentioned in the JAMA article, and its product was not the one that was used in the clinical trial. At the time the article was published, the hip protector that was studied was not commercially available, unlike HipSaver’s
To the extent that the challenged statements referred to the inefficacy of “hip protectors” in general, this reference was insufficient to give rise to a conclusion that Kiel was specifically discussing HipSaver’s product. Although HipSaver has alleged that it is the second largest manufacturer of hip protectors in the United States,
c. Publication of the statements with knowledge of or reckless disregard for their falsity. Next, HipSaver has the burden of proving that Kiel published the challenged statements with knowledge that they were false, or with reckless disregard for their truth or falsity. See Dulgarian v. Stone, 420 Mass. 843, 852 (1995).
This particular element of a cause of action for commercial
Expounding on the “reckless disregard” aspect of “actual malice,” the United States Supreme Court has said that “reckless conduct is not measured by whether a reasonably prudent man would have published or would have investigated before publishing. There must be sufficient evidence to permit the conclusion that the defendant in fact entertained serious doubts as to the truth of his publication. Publishing with such doubts shows reckless disregard for truth or falsity and demonstrates actual malice.” St. Amant v. Thompson, 390 U.S. 727, 731 (1968). See Garrison v. Louisiana, 379 U.S. 64, 74 (1964) (defining “reckless disregard” as “high degree of awareness of . . . probable falsity”). See also Murphy v. Boston Herald, Inc., 449 Mass. 42, 48 (2007), and cases cited.
At the outset, it is important to recognize the scientific oversight that was an integral part of the clinical trial and the subsequent JAMA article. The National Institutes of Health appointed a DSMB to review and secure its members’ agreement on the design of the study, to approve the protocol for the clinical trial and the consent forms for participants, and to oversee the conduct of the trial. Four institutional review boards (three at clinical centers and one at a data coordinating center) also assessed the trial protocol and the consent forms to ensure that they satisfied guidelines established by the United States Department of Health and Human Services. As acknowledged in the article, twenty months after the commencement of the clinical trial, the DSMB recommended that it be terminated “due to lack of efficacy and the low probability of being able to demonstrate efficacy in the remaining years of the study.” The researchers involved with the trial then decided to submit an article for publication in JAMA, at which point the article underwent a seven-month peer review process. Where appropriate, the authors made changes to their draft of the article in response to the reviewers’ comments and suggestions. Once this process had been completed, JAMA proceeded with publication.
The challenged statements in the article reflected Kiel’s interpretation of the accurately reported data of this particular clinical trial, as it was designed and conducted, including any perceived or actual flaws. That concerns may have been raised about the chosen design does not mean that Kiel entertained serious doubts about the truth of the challenged statements as they were a reflection of the achieved results. Kiel candidly discussed the underlying flaws in and limitations of the clinical trial when he included the following statements, among others, in the article: “[T]he pad we chose, while believed to be the best available at the time of the study based on biomechanical testing, may not have been good enough to prevent hip fractures. . . . Our study design, while overcoming potential biases . . . does not completely generalize to the clinical setting where 2-sided hip protectors are used. Even adherence data for [one]-sided hip protector use may not be generalizable to the setting of [two]-sided hip protector use. . . . [W]e cannot
d. Intent or likelihood that publication will result in pecuniary harm. As to the next essential element of a cause of action for commercial disparagement, we have said that “[o]ne who publishes a false statement harmful to the interests of another is subject to liability for pecuniary loss resulting to the other if ... he intends for publication of the statement to result in harm to [the] interests of the other having a pecuniary value, or either recognizes or should recognize that it is likely to do so . . . .” Dulgarian v. Stone, 420 Mass. 843, 852 (1995), quoting Restatement (Second) of Torts § 623A. See 3 D.B. Dobbs, P.T. Hayden, & E.M. Bublick, The Law of Torts § 658, at 622 (2d ed. 2011). The Restatement (Second) of Torts, supra at § 623A comment b, at 336, explains that “[t]he publisher . . . should as a reasonable man recognize the likelihood that some third person will act in reliance upon his statement, or that it will
HipSaver contends that Kiel recognized, or should have recognized, that publication of the article was likely to result in pecuniary harm to HipSaver.
e. Special damages. Finally, we turn to the last essential element of a cause of action for commercial disparagement. Hip-Saver has the burden of proving that it sustained “special damages” in the form of pecuniary loss as a result of the publication of the challenged statements.
Until now, this court has not had the opportunity to consider
Typically, to establish special damages in a commercial disparagement action, a plaintiff must show, where feasible, a specific loss of sales to identifiable customers. See id. at § 633(2)(a) & comment c, at 355 (“pecuniary loss may be established by . . . proof of the conduct of specific persons . . . . The most usual manner in which a third person’s reliance upon disparaging matter causes pecuniary loss is by preventing a sale to a particular purchaser”); W.L. Prosser & W.P. Kee-ton, Torts, supra at § 128, at 972 (plaintiff ordinarily “must identify the particular purchasers who have refrained from dealing with him, and specify the transactions of which he claims to have been deprived”); 2 R.D. Sack, Defamation § 13:1.4[F], at
An exception to the requirement of specific lost sales has been recognized in circumstances where a false statement has been “widely disseminated,” and it would be impossible to identify particular customers who chose not to purchase a plaintiff’s goods or services. See Restatement (Second) of Torts,
As explained in the Restatement (Second) of Torts, supra, “[w]idely disseminated [commercial disparagement] may . . . cause serious and genuine pecuniary loss by affecting the conduct of a number of persons whom the plaintiff is unable to identify and so depriving him of a market that he would otherwise have found. When this can be shown with reasonable certainty, the rule requiring the identification of specific purchasers is relaxed and recovery is permitted for the loss of the market.” See Rite Aid Corp. v. Lake Shore Investors, 298 Md. 611, 625-626 (1984) (“Pecuniary loss may be established by proof of the conduct of specific persons, or proof that the loss has resulted from the conduct of a number of persons whom it is impossible to identify”). See also Fashion Boutique of Short Hills, Inc. v. Fendi USA, Inc., supra at 240-241 (where alleged disparaging statements made to nine identifiable customers, no evidence of widespread dissemination necessary to satisfy narrow exception to law of special damages); Charles Atlas, Ltd. v. Time-Life Books, Inc., 570 F. Supp. 150, 155-156 (S.D.N.Y. 1983) (plaintiff need not identify specific lost customers where plaintiff sells product only through mail orders, rendering it virtually impossible to identify those who did not order product because of disparaging article). This exception “is most plainly applicable when disparaging remarks appear in a publication that is distributed to a general audience, leaving the plaintiff unable to identify specific customers who were lost or specific individuals who might have become customers, but did not, because of the negative information communicated by the defendant.” Vascular Solutions, Inc. v. Marine Polymer Techs., Inc., supra at 66 (Lipez, J., concurring in part and dissenting in part). See Charles Atlas, Ltd. v. Time-Life Books, Inc., supra.
“The widespread dissemination exception is rooted in
HipSaver contends that, as the second largest manufacturer of hip protectors in the United States, it felt the full brunt of the words in the challenged statements that hip protectors “are not effective.” As a consequence, HipSaver suffered special damages because it lost sales and its annual revenues decreased as a result of the article’s widespread dissemination, over the Internet and in print, to a large number of individuals who are impossible to identify. Further, HipSaver asserts that it incurred the expense of implementing measures that were reasonably necessary to counteract publication of the article, such as commencing this litigation and paying for advertising to mitigate the perceived harm.
We begin by pointing out that HipSaver has not elicited any information from its customers to determine whether their purchasing decisions were influenced by the article, and Goodwin has been unable to identify any existing or potential customers of HipSaver who decided not to do business with the company as a result of the article’s publication. Therefore, because Hip-Saver has not shown a specific loss of sales to identifiable customers, we focus on the “widespread dissemination” exception to this requirement.
In light of the fact that the article appeared in the most widely circulated medical journal in the world, both in print and on the Internet, it cannot be disputed that there was widespread dissemination of the challenged statements. HipSaver claims that it
Goodwin acknowledged that HipSaver had not examined whether there was any material change in the size of its customer base from before the publication of the article until after its publication. Nonetheless, Goodwin performed his own analysis of monthly sales from 2003 until approximately July of 2009, and he observed a decline in company sales beginning sometime in 2007. In Goodwin’s view, it was “obvious” that this decline was attributable to the article because “[i]t’s a well-known fact that clinical studies are a major asset to the value and sales of a company and if it’s a negative clinical study that’s published then it impacts negatively on the company as well.” However, Goodwin presented no evidence to substantiate this “well-known fact.” Prior to the publication of the article, at least twelve other
Even assuming that Goodwin’s “well-known fact” is true, he has not eliminated other causes for HipSaver’s pecuniary loss. Several years prior to the publication of the article, in 2004 and 2005, HipSaver had sued its largest competitor, J.T. Posey Company (Posey), for false advertising in which Posey essentially had asserted that “HipSaver was no good and Posey was great.” Goodwin testified that although HipSaver lost customers as a result of Posey’s false advertising, the negative impact on its sales had ended by September, 2005, long before the publication of the article in July, 2007. At the same time, Goodwin acknowledged that, by the end of 2005, HipSaver had been “completely frozen out of every private sector nursing home and health care facility chain and every private distribution chain.” Further, by January of 2007, HipSaver had been “frozen out of all the major catalog distributors and resellers of hip protectors,” and still had “no ability to access the private health care distribution and facility chains.” Based on this evidence, HipSaver has not eliminated the impact of the false advertising by Posey as a cause of its lost sales after publication of the article.
In sum, HipSaver had the burden of proving that, as a direct
4. Conclusion. HipSaver has failed to demonstrate that it had a reasonable expectation of proving all the essential elements of a cause of action for commercial disparagement. Accordingly, the decision and order of the Superior Court judge granting summary judgment to Kiel is affirmed.
So ordered.
The tort of “commercial disparagement” also is known as “injurious falsehood,” “disparagement of property,” “slander of goods,” and “trade libel.” First Act Inc. v. Brook Mays Music Co., 429 F. Supp. 2d 429, 432 n.l (D. Mass. 2006). For purposes of this decision, we use the terms “commercial disparagement” and “injurious falsehood” interchangeably.
HipSaver sued only Kiel because, as lead author, he assumed full responsibility for the integrity of the clinical trial and the accuracy of the data.
We acknowledge the amicus brief submitted by Massachusetts General Hospital, Brigham and Women’s Hospital, McLean Hospital, Spaulding Rehabilitation Hospital, Dana-Farber Cancer Institute, Boston Medical Center, and Massachusetts Eye and Ear Infirmary.
According to HipSaver, a “hip protector” provides padding to both hips, and there are no “one-sided” hip protectors on the market. For the sake of simplicity, we shall refer to the one-sided device that was studied in the clinical trial as a “hip protector,” recognizing that such a device has not been designed for single hip usage.
We shall refer to these quoted statements from the conclusion of the article and the related abstract, which are the basis of HipSaver’s claim for commercial disparagement, as the “challenged statements.”
The line between commercial disparagement and defamation often is dif
Notwithstanding many similarities between the torts of commercial disparagement and defamation, it has been recognized that “[fjrom the beginning, more stringent requirements were imposed upon the plaintiff seeking to recover for [commercial disparagement] in three important respects — falsity of the statement, fault of the defendant and proof of damage.” Restatement
HipSaver’s contention that the design of the clinical trial was flawed was predicated on the opinions of two experts, Dr. Vivian K. Dullien, a management consultant to the health care industry and quality engineer for clinical studies, and Dr. Paul J. Lupinacci, a statistician with experience designing clinical trials. Dullien was expected to testify that the purported results of the clinical trial were invalid because of, among other things, “the flawed design; a high degree of noncompliance, with the authors failing to account for
Kiel stated that, as of the date of the JAMA article (July 25, 2007), the results of thirteen randomized controlled trials had been published. Eight of those thirteen studies, including Kiel’s clinical trial, “did not demonstrate a statistically significant reduction in hip fracture incidence” due to the use of hip protectors. In contrast, Kiel continued, data from the other studies “indicated that for residents in institutional care, where hip fracture rates are high, hip protectors appeared to reduce the incidence of hip fractures.”
According to Kiel, “[a]n efficacy study uses all available means to test
Given our conclusion that HipSaver has not satisfied its burden of proving that the challenged statements are false, we need not also decide whether those statements constituted “fact,” “opinion,” or a combination of both. See Restatement (Second) of Torts § 623A comment e, at 340 (1977) (“The common law rule has been that the injurious statement might be one of fact or one of opinion”). In the defamation context, an expression of “pure opinion” is not actionable. King v. Globe Newspaper Co., 400 Mass. 705, 708 (1987),
During his deposition testimony on November 24, 2009, Edward L. Goodwin, the president and chief executive officer of HipSaver, stated that HipSaver’s largest domestic competitor was J.T. Posey Company, which was approximately twelve times larger than HipSaver. Goodwin estimated that J.T. Posey’s share of the domestic market for hip protectors was approximately fifty per cent, whereas HipSaver’s share of the same market was approximately thirty-five per cent.
“A communication is defamatory if it tends so to harm the reputation of another as to lower him in the estimation of the community or to deter third persons from associating or dealing with him.” Ravnikar v. Bogojavlensky, 438 Mass. 627, 630 (2003), quoting Restatement (Second) of Torts § 559 (1977). “The test whether a publication is defamatory is whether, in the circumstances, the writing discredits the plaintiff ‘in the minds of any considerable and respectable segment in the community.’ ” Draghetti v. Chmielewski, 416 Mass. 808, 811 (1994), quoting Tropeano v. Atlantic Monthly Co., 379 Mass. 745, 751 (1980).
In the defamation context, a plaintiff who is shown to be a public official or public figure must prove “actual malice” in order to recover for defamation. See New York Times Co. v. Sullivan, 376 U.S. 254, 279-280 (1964). See also Murphy v. Boston Herald, Inc., 449 Mass. 42, 48 (2007); Stone v. Essex County Newspapers, Inc., 367 Mass. 849, 867 (1975); Restatement (Second) of Torts, supra at § 580A. By contrast, a plaintiff who is deemed to be a private figure may recover for defamation by proving the negligent publication of a defamatory falsehood. See Gertz v. Robert Welch, Inc., 418 U.S. 323, 347 (1974). See also Jones v. Taibbi, 400 Mass. 786, 797-799 (1987); Reilly v. Associated Press, 59 Mass. App. Ct. 764, 769 n.3 (2003); Restatement (Second) of Torts, supra at § 580B. In Flotech, Inc. v. E.I. Du Pont de Nemours Co., 627 F. Supp. 358, 365 (D. Mass. 1985), aff’d, 814 F.2d 775 (1st Cir. 1987), the court stated that the elements of the First Amendment’s “public figure” doctrine (that is to say, proof of “actual malice”) were equally applicable to a commercial disparagement action. See First Act Inc. v. Brook Mays Music Co., 429 F. Supp. 2d 429, 432-433 (D. Mass. 2006).
Here, the motion judge determined that HipSaver was a limited public figure for purposes of this case because it had directly injected itself into the debate over the efficacy of hip protectors by advertising its product and sponsoring its own research. See Bowman v. Heller, 420 Mass. 517, 522, cert, denied, 516 U.S. 1032 (1995) (whether plaintiff is public figure is question of
More specifically, HipSaver has alleged, among other things, that Kiel ignored or failed to disclose information suggesting that the use of a one-sided hip protector in the clinical trial may have caused participants to fall more frequently on the side with the padded hip, that such an outcome raised ethical concerns, and that this perceived design flaw skewed the results of the clinical trial on which the challenged statements were based.
We comment briefly on two other arguments presented by HipSaver. First, HipSaver has asserted that because Kiel failed to disclose in the research grant application his financial ties to pharmaceutical companies that manufacture drugs to promote bone density, which purportedly gave rise to a conflict of interest, he must have published the challenged statements with reckless disregard for their truth or falsity. However, HipSaver has not presented any evidence either to show that bone density drugs compete with hip protectors in the marketplace, or to prove that Kiel’s research on such drugs biased or otherwise impacted his ability to conduct a clinical trial on hip protectors. Moreover, the clinical trial was not a study on the efficacy of hip protectors as compared to the efficacy of bone density drugs in reducing the incidences of hip fractures in nursing home residents.
Second, HipSaver has asserted that when Kiel responded to an electronic mail message from Goodwin on April 20, 2003, and accused Goodwin of being a “scam artist,” it highlighted Kiel’s readiness to make statements without any factual foundation. Although this intemperate personal comment may have reflected Kiel’s dislike for Goodwin, it was not evidence of Kiel’s attitude toward the truth or falsity of the challenged statements.
Kiel has not addressed this element of a commercial disparagement claim.
We are aware that a more “modem view” has been recognized in some jurisdictions. This view permits a plaintiff, who can show neither a loss of specific sales nor a widespread dissemination of a false disparaging statement, to prove special damages by showing that he has suffered a general decline in business or lost growth opportunity, also described as the loss of a present or prospective advantage. See Advanced Training Sys., Inc. v. Caswell Equip. Co., 352 N.W.2d 1, 7-8 (Minn. 1984); Patel v. Soriano, 369 N.J. Super. 192, 248 (App. Div. 2004). See also Porous Media Corp. v. Pall Corp., 110 F.3d 1329, 1339 (8th Cir. 1997). Such a plaintiff must eliminate other possible explanations for the decline, leaving only the defendant’s statements to third parties as the reason for the loss. See Advanced Training Sys., Inc. v. Caswell Equip. Co., supra. See also Amerinet, Inc. v. Xerox Corp., 972 F.2d 1483, 1503-1504 (8th Cir. 1992), cert, denied, 506 U.S. 1080 (1993); Patel v. Soriano, supra at 249. This approach has not been espoused in the Restatement (Second) of Torts, supra at § 633. In the circumstances of this case, where HipSaver has not satisfied other essential elements of its cause of action for commercial disparagement, we leave for another day the issue whether this method for determining special damages should be added to our jurisprudence.
Goodwin also pointed to a change in Medicare’s reimbursement policies to substantiate HipSaver’s claim that its loss of sales was attributed to the publication of the article. Beginning around October, 2008, the Medicare program stopped reimbursing acute care hospitals for medical care associated with hip fractures sustained by their patients. HipSaver expected that these hospitals would purchase its hip protectors as a means of preventing hip fractures among their patients and avoiding substantial medical costs that no longer would be reimbursed. Whether the change in Medicare’s reimbursement policies would have led to a growth in sales for HipSaver’s product is wholly speculative.
Although a plaintiff in a commercial disparagement action may recover “the expense of measures reasonably necessary to counteract the publication,” Restatement (Second) of Torts § 633(l)(b) (1977), the plaintiff first must prove all the essential elements of the tort. See Advanced Training Sys., Inc. v. Caswell Equip. Co., 352 N.W.2d 1, 8 (Minn. 1984) (“Efforts to mitigate damages in tort are not compensable unless plaintiff proves a tort, and where special damages are an essential element of plaintiff’s action, they must be proved before mitigation expenses may be considered”). Because HipSaver has not done that here, it is not entitled to recover mitigation expenses.