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Frivolous defamation lawsuits

By Scott Tibbs, June 4, 2010

The New York Times reports that when a college student annoyed with a Michigan towing company created a Facebook group to criticize them, the company retaliated with a $750,000 defamation lawsuit, claiming that it has lost business.

The Times reported that the group had 800 members in two days. As of Tuesday evening, the group had 12,871 members. The disproportionate response from T&J Towing has backfired, giving the company national media attention and inflaming opposition to their practices. T&J Towing has shot itself in the foot.

Basically, T&J Towing is trying to blackmail its critics into silence with the threat of financial ruin. Expecting a college student to pay $750,000 for griping about the company on Facebook is a laughably disproportionate response and has backfired big time.

T&J Towing's frivolous lawsuit is a "strategic lawsuit against public participation" (SLAPP) designed to intimidate critics into silence. Some states have laws against such lawsuits, though the laws obviously vary from state to state. It should surprise no one that two members of Congress are trying to pass a federal law against SLAPP.

I oppose this for the same reason I oppose federal efforts to implement tort reform. Regardless of the merits of preventing SLAPP, it should be the states, not the federal government, that set policies to protect the free exchange of ideas and legitimate public criticism of bad company practices. We should not be immediately looking for a federal solution to a problem that can be solved through the state legislature.

Ultimately, if a company wants to have a good public image, then they should conduct business in a courteous and professional manner. If a company deals with the public properly, then the occasional disgruntled customer will not cause damage to the company's reputation when he complains online. Perhaps T&J Towing should consider that business model instead of mafia-like intimidation tactics.