Corporate Divorce in California: The Unfortunate and Common Reality of Defamation After a Corporate Divorce

So you carefully negotiated a dissolution or divorce from your former business partner in what appeared to be an amicable divorce… but then you ended up in a lawsuit. “How is that possible?” you ask. Unfortunately, it happens all the time when former business partners start competing for the same customers. Former partners often can’t help but say they’re the better choice – especially considering what they know or think they know about their ex-partner.

Defamation after a divorce is a common reality that raises numerous legal problems. Here are our “Top 5” questions/considerations when faced with a former business partner who: nothing nice to say about you:

1. Is this really slander or just an opinion? Unfortunately, you can’t sue someone for being a jerk. In California, defamation is a false statement to a third party about another person that causes damage to that person’s property, business, commerce, occupation or profession. Whether rumours, exaggerations or gossip rise to the level of a useful false statement of fact can be hotly contested. Defamation includes slander, which is usually a verbal statement, and libel, which is a statement in print or fixed media, including social media.

2. Does the alleged defamation involve an Anti-SLAPP move? In California, a defendant in a defamation suit can file a special anti-SLAPP motion, asking the court to dismiss the defamation suit, if the defendant can demonstrate that it is likely to win the defamation suit and the lawsuit is based on a “protected” activity such as speaking in a public forum on a matter of public interest, testifying in legal proceedings, or exercising your constitutional right to free speech.

3. Does procedural law apply? Aside from the truth, a powerful tool in the defense of a defamation lawsuit is procedural law. That privilege applies to a communication in a judicial or quasi-judicial proceeding by a litigant, or certain other participants, to achieve the object of the dispute and has a particular connection or logical connection with the action. To ensure that litigants have maximum freedom of access to the courts without fear of being the subject of a second lawsuit, procedural law generally protects conduct, even if it would be considered defamatory or fraudulent.

4. Was the defamation on social media and what actions can be taken to remove the posts? In addition to a defamation lawsuit, an individual who is the subject of a defamatory statement on a social media site can take action against the social media provider to remove the defamatory statement. This largely depends on each site’s rules and policies, and usually requires a takedown request.

5. Is confidentiality a problem? A defamatory statement may ensure confidentiality of the company or its customers. In such cases, careful steps must be taken to ensure that confidential information does not become available to the general public in an open defamation lawsuit. In Hurvitz v. Hoefflin, 84 Cal. app. 4^e 1232 (2000), because such steps were not taken, confidential medical information about famous celebrities became common knowledge in a defamation lawsuit between two business partners, and so the appeals court later refused to seal court records with that information.

When a seemingly straightforward corporate divorce or dissolution turns ugly afterwards, make sure you arm yourself with lawyers who know the realm of defamation. Defamation, a particularly complex area of ​​law, requires expertise and experience. If you have any questions about any of these issues, please contact us.