liberal notice pleading rules and proceed with our analysis.
Defendants argue that the alleged statements are not disparaging as a matter of law because they describe the popularity of WHAT's programming, not its quality. Defendants emphasize the language from Menefee quoted above ("the existence or extent of another's property in land, chattels or intangible things, or upon their quality "), and cite Menefee, Testing Systems, Inc. v. Magnaflux Corp., 251 F. Supp. 286 (E.D.Pa. 1966), and The American Heritage Dictionary of the English Language to illustrate that "popularity is not synonymous with quality." Defs.' Mem. at 10.
KBT has clearly pled statements that are commercially disparaging under Pennsylvania law. First, in Menefee, the statement held to be disparaging was that the plaintiff radio talk show host had been fired "'because of poor ratings garnered by his nighttime talk show.'" 329 A.2d at 217. Defendants attempt to distinguish the case by noting that the plaintiff in Menefee alleged that the defendants had falsely conveyed that he was "unable" and "incapable" of earning satisfactory ratings. The Menefee court did not emphasize the precise wording of the plaintiff's allegations, however, and KBT could just as easily have framed its allegations in a similar manner in this case. See also Swift Bros. v. Swift & Sons, Inc., 921 F. Supp. 267, 270 (E.D.Pa. 1995)(assuming statement that plaintiff "had retired or moved to Chicago and that [his business] was no longer in existence" to be disparaging).
We are also persuaded by the policy underlying the tort. Trade disparagement is designed to compensate a vendor for pecuniary loss incurred as a result of slurs affecting the marketability of his goods. Zerpol Corp. v. DMP Corp., 561 F. Supp. 404, 408 (E.D.Pa. 1983); see also Swift Bros., 921 F. Supp. at 276 ("a claim of commercial disparagement emphasizes the direct harm to the plaintiff's reputation (and hence sales) caused by the alleged false statement"). Here, the marketability of KBT's product--WHAT's air time--is plainly affected by statements purporting to report WHAT's ratings. Indeed, from an advertiser's perspective, the quality of WHAT's air time is synonymous with WHAT's popularity because the value of the station's time is determined by the number of listeners. Thus, in the marketability sense, statements that falsely underreport a station's ratings clearly cast doubt on the quality of the station's time. We therefore conclude that Plaintiff has adequately pled commercially disparaging statements.
Defendants claim that KBT has failed to allege that the challenged statements are not privileged. They contend further that the statements are covered by a conditional privilege because Defendants are "in the business [of] providing audience listening reports to licensed subscribers." Defs.' Mem. at 12. KBT concedes that the word "privilege" does not appear in any allegation, but argues that it has "'set forth sufficient information to outline [this element] of [its] claim or to permit inferences to be drawn that [this element exists].'" Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993)(quoting 5A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1357, at 340 (2d ed. 1990)).
A conditional privilege attaches to a commercially disparaging statement when the statement involves some interest of the person who publishes it, some interest of the person to whom it is published or some other third person, or a recognized interest of the public. Guardian Life Ins. Co., 943 F. Supp. at 527; Sugarman v. RCA Corp., 639 F. Supp. 780, 787 (M.D.Pa. 1985). Once a defendant has shown a particular communication to be conditionally privileged, the burden shifts to the plaintiff to show an abuse of that privilege. Guardian Life Ins. Co., 943 F. Supp. at 527 (citations omitted). Abuse is indicated when the publication is the result of malice, i.e. "a wrongful act done intentionally or without excuse or generated from reckless or wanton disregard of another's rights." Id. (citations omitted); see also Zerpol Corp., 561 F. Supp. at 409 (listing as fourth element of trade libel claim that "the publisher either knows that the statement is false or acts in reckless disregard of its truth or falsity").
In this case, KBT alleges that Defendants published reports based on data they knew to have been complied in an unreliable and racially biased manner. KBT alleges further that Defendants wilfully published such misleading information for the express purpose of under-reporting the extent of WHAT's listening audience. Even assuming that Defendants' statements enjoy a conditional privilege, these allegations plainly state KBT's claim that Defendants acted with malice in publishing the reports. See Compl., P 34. KBT has therefore adequately pled that no privilege attaches to the allegedly disparaging statements. See U.S. Healthcare, 898 F.2d at 924.
C. Special Damages
To state a claim for trade disparagement, KBT must plead special damages. See Swift Bros., 921 F. Supp. at 276; Forum Publications, Inc. v. P.T. Publishers, Inc., 700 F. Supp. 236, 243 (E.D.Pa. 1988); Fed. R. Civ. P. 9(g)("When items of special damage are claimed, they shall be specifically stated."). As the court in Forum Publications explained, even under the liberal federal rules of pleading,
'"it [is] ... necessary for the plaintiff to allege either the loss of particular customers by name, or a general diminution in its business, and extrinsic facts showing that such special damages were the natural and direct result of the false publication. If the plaintiff desires to predicate its right to recover damages upon general loss of custom, it should ... [allege] facts showing an established business, the amount of sales for a substantial period preceding the publication, and amount of sales subsequent to the publication, facts showing that such loss in sales were the natural and probable result of such publication, and facts showing the plaintiff could not allege the names of particular customers who withdrew or withheld their custom."'
Id. at 244 (quoting Testing Systems, 251 F. Supp. at 291 (citation omitted))(emphasis added).
The only allegation of damage contained in Count I is that "as a result of the false and fraudulent reports, plaintiffs did suffer and continue to suffer lost revenues from a reduction in advertising contracts on [WHAT] and from the refusal of new prospective advertisers to do business with plaintiffs." Compl., P 35. We agree with Defendants that such an allegation falls well short of KBT's pleading burden under Rule 9(g). We have highlighted the disjunctive construction of the paragraph quoted above, however, to make clear that KBT's burden is not quite as stringent as Defendant contends. We grant KBT twenty (20) days leave to amend Count I to comply with the standard as articulated in Forum Publications.
D. Allegations of Time
Defendants argue that KBT's trade disparagement claim is deficient because KBT fails to allege when the statements were made. See Fed. R. Civ. P. Rule 9(f)("For the purpose of testing the sufficiency of a pleading, averments of time and place are material and shall be considered like all other averments of material matter."). KBT responds that its allegation that Defendants' reports are published "quarterly" is sufficient. We disagree. KBT must plead the dates of the allegedly disparaging statements with sufficient specificity to allow Defendants to raise applicable defenses such as the statute of limitations. See Simcox v. National Rolling Mills, Inc., 1990 U.S. Dist. LEXIS 6757, 1990 WL 74356, *2 (E.D.Pa. June 4, 1990); see generally 5 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1309, at 698-99 (2d ed. 1990)). The Complaint must also be amended in this regard within the twenty (20) days leave we grant today.
Count Two: Intentional Interference with Prospective Business Relationships
In order to state a claim for intentional interference with prospective business (or contractual) relations under Pennsylvania law, a plaintiff must allege:
(1) a prospective contractual relation;