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tortliabilitytrialverdict

tortliabilitytrialverdictwill

Related Cases

Teilhaber Mfg. Co. v. Unarco Materials Storage, a Div. of Unarco Industries, Inc., 791 P.2d 1164

Facts

Teilhaber Manufacturing Company developed the Cue-Rack and began competing with Unarco, which sought to test the Cue-Rack by obtaining a hybrid rack composed of Teilhaber’s uprights and beams from another manufacturer. Unarco then published a preliminary test report that disputed Teilhaber’s claims about the Cue-Rack's strength and weight-bearing capacity. Teilhaber sued Unarco for product disparagement, claiming the statements in the report were false.

Teilhaber developed and produced the 'Cue–Rack,' an industrial storage rack, and began competing with Unarco, which also produced an industrial storage rack.

Issue

The main legal issues were whether Unarco's statements in the report constituted product disparagement and whether those statements were protected by the First Amendment.

The main legal issue(s) or question(s) the court needed to resolve.

Rule

The court adopted the Restatement (Second) of Torts sections regarding liability for false statements that harm another's interests, requiring proof of a false statement published to a third party with intent to cause harm.

Restatement (Second) of Torts §§ 623(A) and 624 (1976), which we here adopt, provide: '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 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 to its truth or falsity.'

Analysis

The court found that the pivotal fact that the test was not conducted on a Cue-Rack furnished by Teilhaber was undisclosed, rendering the opinions in the report unprotected by the First Amendment. The jury had sufficient evidence to support a finding of liability for product disparagement, as the statements were based on false facts.

However, not all forms of opinion are entitled to such protection. An opinion will support a defamation action if the language is defamatory and the underlying defamatory facts which provide a basis for the opinion are false and are not disclosed in context.

Conclusion

The court affirmed the jury's verdict in favor of Teilhaber but reversed the trial court's denial of prejudgment interest, remanding for a determination of such interest.

The judgment is affirmed in part, reversed in part, and remanded for a determination of prejudgment interest, and entry of an amended judgment.

Who won?

Teilhaber Manufacturing Company prevailed in the case because the jury found that Unarco's report contained false statements that harmed Teilhaber's business interests.

The jury returned a verdict in favor of Teilhaber for $1,763,131 plus costs.

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