disparagement under Pennsylvania law, the plaintiff must prove:
1) that the disparaging statement of fact is untrue or that the
disparaging statement of opinion is incorrect; 2) that no
privilege attaches to the statement; and 3) that the plaintiff
suffered a direct pecuniary loss as the result of the
disparagement. Menefee v. Columbia Broad. Sys., Inc., 458 Pa. 46,
329 A.2d 216 (1974). A commercial disparagement action is meant
to compensate a vendor for pecuniary loss suffered because
statements attacking the quality of its goods have reduced their
marketability. Swift Bros. v. Swift & Sons, Inc., 921 F. Supp. 267,
276 (E.D.Pa. 1995).
1. Duffy's alleged statement to Zeneca
Plaintiff claims that Duffy's alleged statement to Zeneca
constituted commercial disparagement. Pennsylvania law requires
a plaintiff to show that it suffered a direct pecuniary loss as
a result of the disparagement. Menefee, 329 A.2d at 220,
Plaintiff fails to make out this essential element of commercial
disparagement because plaintiff submitted no such evidence of
damages caused by Duffy's alleged statement. Plaintiff makes only
unsupported assertions in its summary judgment response brief
that, as a result of Duffy's defamatory communications, Zeneca
ceased doing business with plaintiff. Pl. Resp. at 13. As I
discussed in the analysis of the Lanham Act claim, the mere fact
that Zeneca is no longer plaintiff's customer is not evidence
that Duffy's statement caused that loss. Plaintiff has failed to
find a witness or documents to support that nexus. Moreover,
plaintiff has not presented evidence to controvert the deposition
testimony of Tom Lyons of Zeneca, which states that there was
nothing that defendant ever said that influenced Zeneca's
decision to create its own system and not renew its license with
plaintiff. Lyons Depo. at 9-10. As a matter of law, without proof
of pecuniary loss resulting from Duffy's alleged statement,
plaintiff cannot recover under the law of commercial
disparagement. By pointing to the absence of evidence in the
record of this essential element of the claim, defendants have
met their burden under Celotex, and I will grant summary judgment
in their favor on this issue.
2. Slide shown at client conference
Plaintiff argues that the slide, shown to representatives from
numerous pharmaceutical companies, commercially disparaged
plaintiff and caused plaintiff to lose business. As stated above,
Pennsylvania law requires plaintiff to show a direct pecuniary
loss as a result of the commercial disparagement. Menefee, 329
A.2d at 220.
As with the Lanham Act claim, plaintiff does not offer evidence
that the slide caused any damage to plaintiff. The record lacks
any evidence of a causal relationship between the slide being
shown and a business loss to plaintiff.
I find that because plaintiff can offer no evidence of any
nexus between the slide show and the decrease in profits, there
is no genuine issue of material fact to go to a jury on the issue
of whether this slide resulted in any damage to the plaintiff. I
grant defendants' motion for summary judgment as to the slide
shown at the client conference, under commercial disparagement.
Finally, plaintiff claims that Duffy's alleged oral statements
and the slide show defamed plaintiff. Under Pennsylvania law, to
prevail in a defamation action, the plaintiff has the burden of
proving 1) the defamatory character of the communication; 2) its
publication by the defendant; 3) its application to the
plaintiff; 4) an understanding by the reader or listener of its
defamatory meaning; 5) an understanding by the reader or listener
of an intent by the defendant that the statement refer to the
plaintiff; 6) special harm resulting to the plaintiff from its
publication; 7) abuse of a conditionally privileged occasion.
42 Pa.Cons.Stat.Ann. § 8343(a)(1)-(7) (1998).
It is for the court to determine whether the statement at issue
is capable of a defamatory meaning. Corabi v. Curtis Publ. Co.,
441 Pa. 432, 273 A.2d 899 (1971). A statement is defamatory if it
"tends so to harm the reputation of another as to lower him [or
her] in the estimation of the community or to deter third persons
from associating or dealing with him [or her]." U.S. Healthcare,
898 F.2d at 923. The court should assess "the effect the
[statement] is fairly calculated to produce, the impression it
would naturally engender, in the minds of the average persons
among whom it is intended to circulate." Corabi, 273 A.2d at 907.
Once a court determines that the statement is capable of
defamatory meaning, one of the requirements under the
Pennsylvania defamation statute is that the plaintiff prove that
it suffered special harm. 42 Pa.Cons.Stat.Ann. § 8343(a)(6).
Special harm requires proof of a specific monetary or
out-of-pocket loss as a result of the defamation. See Restatement
(Second) of Torts, § 575 (1976 Main Vol). A plaintiff can be
relieved of the requirement of proving special damages, however,
where spoken words constitute defamation (slander) per se.
Clemente v. Espinosa, 749 F. Supp. 672, 677 (E.D.Pa. 1990).
Whether the words allegedly used by a defendant were defamatory
per se is also a question for the court. Fox v. Kahn, 421 Pa. 563,
221 A.2d 181 (1966).
Defamation per se can be either "words imputing (1) criminal
offense, (2) loathsome disease, (3) business misconduct, or (4)
serious sexual misconduct." Clemente, 749 F. Supp. at 677. A
statement is defamatory per se as an accusation of business
misconduct if it "`ascribes to another conduct, characteristics
or a condition that would adversely affect his fitness for the
proper conduct of his lawful business.'" Id. at 677-78 (quoting
Restatement (Second) of Torts § 573 (1977)). The statement must
be more than mere general disparagement. It must be of the type
that would be particularly harmful to an individual engaged in
the plaintiff's business or profession. Id. at 678. A statement
which is simply an expression of a negative opinion is not
defamatory. Walker v. Grand Cent. Sanitation, Inc., 430 Pa. Super. 236,
634 A.2d 237 (1993), appeal denied, 539 Pa. 652,
651 A.2d 539 (1994).
1. Duffy's alleged statement to Zeneca
Plaintiff avers that Duffy made defamatory statements on
Zeneca. The only evidence of those statements is an e-mail from
Duffy to Vicciardo, which bears restating:
I described to her the problems we encountered with
Simulate when they did a project for BMS including
the fact that they changed file specs without
informing BMS and then tried to blame us for all
their conversion problems (which later proved to be
Simulates [sic] problem). I also informed her that
since then I have learned that Simulate left Glaxo
with a non-functioning system.
Beck Decl. at Exhibit E.
As a threshold matter, I find that Duffy's alleged statement to
the Zeneca representative is capable of a defamatory meaning. I
find, in particular, that the allegation that Duffy told the
Zeneca representative that plaintiff "changed the file specs
without informing BMS and then tried to blame [Scott-Levin] for
all their conversion problems . . . ." if actually said, would
tend to harm the reputation of plaintiff so as to constitute
Once the court determines that the statement is capable of
defamatory meaning, the plaintiff must prove special harm as a
result of the alleged defamation. In this case, however,
plaintiff argues that the alleged statement constitutes
defamation per se, which relieves plaintiff of the burden of
proving special damages normally required under the law.
Clemente, 749 F. Supp. at 677.
Assuming arguendo that Duffy's alleged statement to the Zeneca
representative does constitute defamation per se,*fn9 relieving
plaintiff of the burden of proving special damages, plaintiff's
claim would still fail because plaintiff has not shown general
damages — proof that one's reputation was actually affected by
the slander or that one suffered personal humiliation. Walker, at
246, 634 A.2d at 242.
At common law, if a plaintiff's claim was for defamation per
se, he or she did not have to prove any actual harm; damages were
presumed. Restatement (Second) of Torts § 621. Presuming damages
left juries in the awkward position of awarding damages without
any criteria with which to measure harm.*fn10 Concern over juries
considering impermissible factors such as the defendant's wealth
or the unpopularity of the views expressed loomed large. See
David A. Anderson, Reputation, Compensation, and Proof, 25 Wm. &
Mary L.Rev. 747, 749 (1984) ("[a] number of evils flow from the
anomaly of presumed damages.").
The Restatement (Second) of Torts, however, remedied this
problem by requiring a plaintiff in a defamation per se action to
make a showing of general damage, i.e., proof of reputational
harm. Restatement (Second) of Torts § 621. In the Walker case,
the Pennsylvania Superior Court held that Section 621 of the
Restatement (Second) of Torts accurately states the law of
Pennsylvania in requiring a showing of general damages in
defamation per se cases.*fn11 See also Pyle v. Meritor Sav.
Bank, 1996 WL 115048, *3 (E.D.Pa. 1996) ("In a defamation per se
case . . . a plaintiff must prove general damages from a
defamatory publication and cannot rely upon presumed damages.");
Protocomm Corp. v. Fluent, Inc., 1994 WL 719674, *11 (E.D.Pa.
1994) ("In Pennsylvania, a complainant who pleads slander per se.
. . must prove general damages to recover compensation."). This
conforms with Pennsylvania's tendency to adopt the Restatement
with respect to defamation. Walker, 634 A.2d at 244 (citing
Agriss v. Roadway Express, Inc., 334 Pa. Super. 295, 483 A.2d 456,
473 (1984) ("First, to adopt section 569 is in line with
Pennsylvania's general tendency to follow the Restatement rule in
defamation law.")). See also Rosenbloom v. Metromedia, Inc.,
403 U.S. 29, 37, 91 S.Ct. 1811, 29 L.Ed.2d 296 (1971)
("Pennsylvania's libel law tracks almost precisely the
Restatement (First) of Torts provisions on the subject.").
Pennsylvania is not alone in adopting the Restatement (Second)
of Torts on the issue of general damages. See Arthaud v. Mutual
of Omaha Ins., 170 F.3d 860, 862 (8th Cir. 1999) ("Missouri
courts require a showing of actual damages in all defamation
cases."); United Ins. Co. of America v. Murphy, 331 Ark. 364,
961 S.W.2d 752, 756 (1998) (Arnold, C.J.,) ("From the date of this
opinion forward, we hold that a plaintiff in a defamation case
must prove reputational injury in order to recover damages.");
Ryan v. Herald Ass'n., Inc., 152 Vt. 275, 566 A.2d 1316 (1989);
Marchiondo v. Brown, 98 N.M. 394, 649 P.2d 462 (1982).
I find the reasoning set out by the Pennsylvania Superior Court
in Walker persuasive and convincing, and hold that plaintiff must
show general damages where the alleged defamation is per se.
In this case, plaintiff has not produced any evidence of
general damages. There is no testimony from Zeneca's
representatives that their opinion of plaintiff was negatively
affected by Duffy's alleged statement, no evidence that the words
were repeated to anyone other than Mary Jo Newtown, no evidence
that plaintiff suffered humiliation (if indeed a corporation can
suffer so), and no evidence that the statement affected the
business relationship between plaintiff and Zeneca. Plaintiff has
not produced evidence of general damages so as to permit recovery
under defamation per se.
For the above reasons, I find that defendants are entitled to
summary judgment because there is no genuine issue of material
fact regarding an essential element of the plaintiff's defamation
2. Slide shown at client conference
Plaintiff also claims that the slide shown at the client
conference was defamatory. Under Pennsylvania law, the fourth
element of a defamation claim is that the reader or listener
understand the defamatory meaning. 42 Pa.Cons.Stat.Ann. §
8343(a)(4). Plaintiff fails to satisfy this essential element.
As I discussed in the Lanham Act analysis, plaintiff offers
only one conference attendee out of eighty-one who even connected
the slide with plaintiff. That one attendee was not able to
recall what the slide said about plaintiff, beyond the fact that
there was a dictionary definition used. There is simply not
that any person in the audience understood the slide as
defamatory. Although the issue of what the audience understood is
normally an issue for the jury, Gordon v. Lancaster Osteopathic
Hosp. Ass'n, 340 Pa. Super. 253, 489 A.2d 1364 (1985), there is no
evidence that anyone understood the slide to say anything
defamatory about plaintiff. There is insufficient evidence to go
to the jury on this essential element of defamation.
Plaintiff also fails to prove the sixth element of a defamation
claim — special harm. 42 Pa.Cons.Stat.Ann. § 8343(a)(6). The
slide shown at the conference cannot constitute defamation per
se. The slide did not facially defame plaintiff. The only text on
the slide was the Webster's Dictionary definition of the word
"simulate." Although the absence of plaintiff's name in the slide
is not dispositive, Cosgrove Studio & Camera Shop, Inc. v. Pane,
408 Pa. 314, 182 A.2d 751, 753 (1962), the link between an
assertion of plaintiff's business misconduct and the dictionary
definition of "simulate" is simply too attenuated to support a
claim of defamation per se.
Because plaintiff does not make out a claim of defamation per
se, it must prove special damages, that is, specific pecuniary
loss, as a result of the slide's projection. While special
damages need not be established with a mathematical certainty,
they do require a showing of a specific item of damage resulting
from the publication. Fogel v. Forbes, Inc., 500 F. Supp. 1081
As stated above, the document showing a decline in sales is not
evidence of causation. Plaintiff has offered no more than
plaintiff's president's self-proclaimed unsubstantiated belief
that the decline in business can be attributed to the defendants
actions. Stiffler Depo. (Vol.I) at 80-81. The plaintiff, being
unable to prove special harm or special damage, cannot establish
an essential element of defamation under Pennsylvania law.
Summary judgment is granted as to the slide under defamation.
For the reasons explained above, I will grant defendants'
motion for summary judgment as to all claims.