Monthly Archives: June 2014

Defamation Case Study: Mitre v. HBO

Mitre v. HBO defamation lawsuit Tyrion Lannister’s trial may be over, but HBO’s still got a high-profile defamation lawsuit to conquer — the Mitre Sports v. HBO battle. Current Advantage: Mitre.

The Players In This Sports Defamation Lawsuit

Mitre Sports International

Mitre is a sport equipment manufacturer, and the exclusive soccer ball sponsor of the EPL and MLS.

Home Box Office (HBO)

HBO is a cable network that produces a program called Real Sports With Bryant Gumbel.

Back In 2008, HBO Aired A Special That Didn’t Paint Mitre In The Best Light

In 2008, HBO aired a Real Sports segment called “Childhood Lost.” A heart-wrenching tale, “Childhood Lost” highlighted the hardships of child labor in India. It began:

“We start with a sobering look at a practice that is clearly illegal, and was supposedly done away with years ago, and that’s child labor.”

Later in the broadcast, the reporter (not Gumbel) lamented:

“In the slums of India, children as young as six spend their days crouched on dirt floors stitching soccer balls together.”

Kailash Satyarth – a child rights advocate – added her sobering thoughts:

“They have no childhood. They have no freedom.”

Scenes of young children, supposedly stitching soccer balls for 5 cents an hour, added to the overall misery of the segment.

Good on HBO for exposing Mitre! Right?

Not so fast.

Today’s TV news producers aren’t exactly beholden to the whole truth and nothing but the truth. I know, I know – it’s shocking – but some TV-news producers have been known to bend the facts for ratings.

Mitre to HBO: You Egregiously Misrepresented Us; Prepare For A Defamation Battle.

Needless to say, Mitre was none too pleased with HBO’s Real Sports segment. In response, the soccer ball company alleged misrepresentation. It argued that:

  1. The children shown “working” in the streets were not working for the company; they were helping their parents – a commonplace Indian value/tradition.
  2. Some of the children on film were not even stitching, but instead engaging in other activities that looked like stitching.
  3. Some of the scenes were staged.

Mitre didn’t waste time. The sports corporation quickly filed a defamation lawsuit against HBO. It accused the cable network of:

“intentionally and maliciously [perpetrating] a hoax on Mitre and the millions of viewers who watched the initial and subsequent HBO broadcasts and who have viewed the program on YouTube and other internet sites.”

Pre-Trial Litigation Information Could Help Mitre Win

It’s been six years since Mitre v. HBO’s kick off. (Gigantic corporations, with in-house legal teams, can go at it for years; normal business defamation lawsuits wrap up much quicker.) Both parties are on the motion-and-hearing hamster wheel — and during that time, interesting facts have percolated to the surface. For example:

  1. An HBO researcher testified that she couldn’t find a kid, in the neighborhood in question, who was under the age of 14, that “could stich a football.”
  2. Mitre presented evidence that HBO had, itself, questioned whether or not the scenes of the kids sewing soccer balls was “a product of Indian society, not necessarily an evil soccer ball company looking for balls on the cheap.”
  3. Some of the children that appeared on the program have since said that they were “induced to pretend to stich Mitre balls on camera and that those scenes were staged.”

But WAIT! There’s Another Twist; HBO May Have a Point

So far, HBO has argued substantial truth. The Network also contends that despite the bluster, Mitre has yet to pinpoint a specific defamatory statement. Touche.

And HBO may have a valid point. Especially since they littered the TV segment with disclaimers. For example, at one point in the program, the anchor said he didn’t “believe that Mitre wants it to happen, but that the subcontractors are a different story altogether.”

Judge Says The Trial Must Go On

The disclaimers, however, was not enough to convince the judge to toss the defamation case. Instead he reasoned:

“Because there are no undisputed facts in the record that establish what statements, if any, are defamatory, this Court cannot make any determinations on this issue as a matter of law. Rather, it is for the jury to determine first what the gist of the Segment is, and second, whether any statements therein are defamatory.”

Mitre Is Not A Public Figure

Under U.S. defamation law, different rules apply to different categories of plaintiffs. Normal Joes and Janes only have to prove negligence. Public figures (e.g., celebrities, famous people, politicians, etc.) however, must prove actual malice.

Actual malice is harder to prove than negligence because the plaintiff must demonstrate that the defendant knowingly lied or, at least, did an abysmal job gathering information.

Whether or not a plaintiff is labeled a public figure depends on several factors:

  1. The Jurisdiction – Different states have different rules about who qualifies as a “public figure.” For example, some states say that anybody employed by the government is a public figure – including public school teachers.
  2. Case Facts – The facts of a case can play a big role in determining whether or not an individual or business is considered a public figure for the purposes of a defamation lawsuit.
  3. Case Law – In most circumstances, a plaintiff does not want to be deemed a “public figure” because actual malice cases are harder to win than negligence-standard slander and libel lawsuits.

Big Corporations Usually Considered Public Figures in Defamation Lawsuits – But Not In This One

Nine times out of 10, multinational corporations are considered “public figures” for the purposes of a defamation lawsuit. But Mitre’s lawyers managed to wrestle a favorable status assessment out of the judge, who reasoned:

“the evidence shows that Mitre does not approach the status of being a household name or a celebrity in the community. First, Mitre has not sponsored any teams or leagues in the United States since 1999. Furthermore, Mitre’s sale and advertising of sports equipment is insufficient to make it a general purpose public figure.”

The judge also rationalized that Mitre was not a “limited-purpose” public figure because, in general, American citizens don’t feel the same way about soccer as they do baseball. As a result, “Mitre” isn’t exactly a household name in the United States – thereby disqualifying the sports company as a “public figure” for the purposes of this defamation lawsuit.

Business v. Business Defamation & Unfair Competition

business defamation unfair competitionA North Carolina jury ruled in favor of a software company that sued a competitor for unfair competition and business defamation. A product newsletter is at the center of this business-on-business lawsuit, and it serves as an “unfair competition” cautionary tale.

Software Co. v. Software Co. – A Tale of Business-on-Business Defamation

EMove Inc (“Emove”) and SMD Software Inc (“SMD”) are direct competitors. Both companies make software for the self-storage/moving industry. Several years ago, Emove did a mailer extolling the virtues of its products, and in it mentioned rival SMD.

Now, it’s not unusual for competitors to use each other in marketing materials, but there is a line that can’t be crossed. Here’s what Emove did wrong:

  1. Inflated the price of SMD’s products;
  2. Inaccurately stated what was and what wasn’t included in SMD’s services; and
  3. Inaccurately stated that SMD didn’t offer certain services when it did.

Notice how nothing on that list is an opinion? Under United States defamation law, opinion is not considered defamatory; making a false statement of fact is. If Emove had said something general like, “Our customers think we’re better than the competition” — no biggie.

In the lawsuit, SMD alleged:

  1. Defamation,
  2. Tortious Product Disparagement,
  3. False Advertising (Lanham Act violations), and
  4. Various North Carolina fair competition laws.

The jury’s verdict? Emove had to hand over $1.7 million for misleading customers about SMD via their product marketing materials.

Business-on-Business Defamation and Unfair Competition: What Are The Differences?

Defamation and unfair competition go together like strawberries and cream. Businesses clawing for market dominance do engage in disparagement schemes. But you can fight back.

1) File A Business Defamation Claim: File a business defamation lawsuit if you have a solid case. To win, you must be able to prove that:

  1. Your competitor lied about you, your product, or your company;
  2. The lie caused material harm or severe reputation harm;
  3. It was read or heard by more than one person;
  4. The statements were made negligently.

2) Allege Lanham Act Violations: The Lanham Act is the country’s chief intellectual property and business competition law.

3) Tortious Interference Claims: Tortious interference claims involve instances where one party interferes with an agreement between two other parties.

Contact a Business-on-Business Defamation Lawyer

Various state laws also apply in unfair competition lawsuits. It’s best to speak with an attorney about the specifics of your situation for a more nuanced read on your legal options.