Is reporting a bad check writer defamation?

October 7, 2006 12:48 PM

Client bounces check, and threatens to sue me for defamation when I report it to an industry group.

I have a very small artisan business. A few months ago, someone ordered an large number of items, which I made and invoiced. She had over a month to pay via company check or any other nationally accepted payment methodology. After a month, she sends an check via PayPal, which won't clear for 8 days, but she wants me to ship the product immediately. I told her that it's not my policy to ship product until I've been paid.

The check didn't clear.

I posted on a very small, private, industry specific Internet forum that other artisans might want to get all the money up front before shipping anything to this particular client. I said nothing disparaging other than the truth: She'd ordered a bunch of stuff, tried to get me to ship it before she paid for it, and her check didn't clear.

Here's exactly what I posted:

Hey gang, you may want to avoid doing any business with [redacted because I can't edit this if it proves to be actionable] unless you get cash up front. She totally flaked on me after ordering custom ordering 100 bars. She didn't pay the invoice for over a month, then when she finally paid it, she paid with a check that would take 8 days to clear and wanted me to ship everything that day. (Which of course, I didn't, because I'm not stupid.) The check bounced higher than a cheerleader on a trampoline. No response from her when I've tried to contact her.

For the record, she seemed like a really nice person, and dealing with her was pleasant...except for the getting stuck with 100 bars of soap part. Just a heads up that cash on the barrelhead may be the best method of doing business with her, should you choose to do so.

She is now threatening to sue me for defamation. She put in her letter the name of one of Dallas' biggest law firms, but the letter isn't on any letterhead, it's just plain white printer paper. She doesn't reference an attorney by name, nor does she quote statues or code under which I *could* be sued for defamation. What she says, and I quote, is:

"Under US Federal Law, Texas State Law, and Canadian Common Law, your written comments are defamatory as they attack my personal reputation, expose both me and my companies to public ridicule, and have deprived me of my right to enjoy normal social contacts. In addition, your written comments have prejudiced me in my business and as a direct result of your actions; both me and my business have suffered financial loss. If the statements are not removed by October 4 (I didn't get this letter until today), my attorneys from the Dallas Texas law firm Vince and Elkins LLP will begin immediate action against you and (then she got my company name wrong.)"

She goes on for a another page and a half making up a series of events that are not born out my my email records.

So, you legal beagles; what are my options? Do you think I should spend the crazy cash it costs to call my attorneys, or will Vince Elkin laugh her out of the office if she actually tries to sue me for this? Should I press criminal charges for her non-payment and bounced check? She specifically directed that I manufacture something for her...costing me materials, time, and a production schedule shift. Note that an hour with the only attorneys I know would probably cost me the entire profit from this quarter...it's a tiny little artisan soap company. I do have business insurance, but I haven't checked the policy to see if this sort of thing is covered. I'm pretty sure it's not.

posted by dejah420 to law & government (39 comments total)

Did you try contacting her after the check didn't clear to make other payment arrangements?
posted by blind.wombat at 12:56 PM on October 7, 2006

I did. No response.
posted by dejah420 at 1:05 PM on October 7, 2006

I learned from Judge Judy, that if you are stating truth, then it isn't defamation. IANAL, I just watch bad TV.
posted by kimdog at 1:07 PM on October 7, 2006

kimdog has it -- defamation/slander/libel require that the basic claim is untrue:

Libel and slander are legal claims for false statements of fact about a person that are printed, broadcast, spoken or otherwise communicated to others. [emphasis added]

He'd have a better time pursuing this from a privacy standpoint.
posted by camcgee at 1:20 PM on October 7, 2006

He'd = She'd
posted by camcgee at 1:21 PM on October 7, 2006

Defamation is not what you committed. You publicly noted her proclivities and there really isn't anything she's going to be able to do about it. You do not need a lawyer for this level of threat. What I would suggest, however, is that you buy insurance, it's called an Umbrella policy.
posted by ptm at 1:25 PM on October 7, 2006

Call your local bar association. They'll send you off to a lawyer who will give you a 1/2 hour free consultation.
posted by dirtynumbangelboy at 1:37 PM on October 7, 2006

She's just trying to bully you. People who are serious about suing you will open their wallets to pay an attorney to write you a cease and desist letter, rather than write you themselves to threaten a suit. If she's unwilling to spend a few hundred bucks to get an attorney to write you that letter, what makes you think she'd spend thousands suing you? Further, if she doesn't have the money to pay you, she probably doesn't have the money to pay an attorney.

I wouldn't lose any sleep over it.
posted by MegoSteve at 1:45 PM on October 7, 2006

As others have said, don't lose any sleep over it. If posting comments about people bouncing checks, not paying for merchandise, etc. were an actionable offense, eBay feedback would be the source of endless lawsuits. So long as you are telling the truth and can prove it, she doesn't have a leg to stand on.

I had the same thing happen to me recently, but luckily I was only stuck with 50 bars of soap in a scent my family loves. Guess what everyone's getting for Xmas. :D
posted by Orb at 2:04 PM on October 7, 2006

if she can't pay you for the soap, how's she going to pay for a lawyer? ... (and you'd better believe any check a lawyer gets from her is going to clear before that lawyer does anything)

don't reply ... wait until you actually get served with something ... and i don't think you will
posted by pyramid termite at 2:08 PM on October 7, 2006

Did she write Vinson and Elkins as "Vince and Elkins" or did you?
posted by grouse at 2:14 PM on October 7, 2006

Also, she definitely owes you money and doesn't have a leg to stand on. Read Texas Penal Code §32.41, send her the notice, and if she doesn't pay up within 10 days, she's committed a crime as I read it (except I don't understand what it means to send a check through PayPal). Report her to the county attorney. And if that doesn't work you can always take her to small claims court. The JP will not be impressed by her defamation claims. It seems like you have an open-and-shut case, so a lawyer would really be overkill for an amount like this. (Although my aunt works at Thompson and Knight, and she's really smart.)
posted by grouse at 2:25 PM on October 7, 2006

Did she write Vinson and Elkins as "Vince and Elkins" or did you?

She did. The part in quotes was exactly as she typed it, except where I annotated a comment. I was very confused trying to find the law firm she was talking about at first.

And yes, every attorney I've ever met at TK is a genius...and their billables aren't ashamed to show it. Which is why when I *really* need a lawyer, they're the firm I've used...but I don't just give them a ring on a whim to discuss the weather and crazy people. ;)

Thanks for all the help and the calm responses. Being the temperamental sort, I was so angry that I was prepared to jump on my horse and ride off in all directions.

As it stands, I reckon I'll just leave the horse tied to the rail, and get back to tending the fields...or pots, as the case may be.
posted by dejah420 at 2:40 PM on October 7, 2006

What MegoSteve said- she's trying to scare you.

What's with the reference to Canadian Common Law? Is she Canadian?

Even if she is willing to sue, I imagine she would have a dificult time obtaining counsel to pursue this. Suing someone for defamation where the facts are easily ascertainable (bank records will back you up) is not something very many lawyers are going to be interested in.
Vinson and Elkins are (in)famous for acting as counsel to Enron. Law firms are always on the lookout for new clients, but I doubt V&E would be that desperate.
posted by ambrosia at 2:41 PM on October 7, 2006

If you care at all about getting the money you really should chat with your county attorney. Prosecuting for bad checks is what they do.
posted by grouse at 2:45 PM on October 7, 2006

Just to emphasize something from above: under US law, the truth can never be defamatory. You have a Constitutional right to speak the truth even if it causes damage to others. There are a small number of extremely limited exceptions to this (e.g. government secrets, judicial gag orders), but none of them apply here.

Also, opinions are never defamatory, as long as it's clear to any reader that what you're saying is an opinion. You have a Constitutional right to express your opinion.

I don't see anything in what you posted that's actionable. Everything there is opinion except for the claim that she bounced a check, which I assume you can prove if need be.

This is a good article: Libel and Defamation in Cyberspace. Perhaps you should forward it to her.
posted by Steven C. Den Beste at 2:54 PM on October 7, 2006

Not only would I not respond to this bs, I would post another comment listing her spelling errors and her threats to sue at the drop of a hat. Even more reason not to do business with her and the rest of the industry ought know it.
posted by JohnnyGunn at 3:12 PM on October 7, 2006

I can indeed prove that the check did not clear. (I was going to post a scan of the report from PayPal, but that may actually be a violation of privacy laws.) Thanks for that article Steven.
posted by dejah420 at 3:12 PM on October 7, 2006

She's trying to scare you, and owes you money. Take action to collect your money. A "very small artisan" type of setup can't afford to eat being screwed out of a really big order like that.
posted by Justinian at 3:14 PM on October 7, 2006

The reason I didn't pursue criminal charges initially is because I think I'd have a hard time proving a loss. Soap isn't really perishable. The kind that she ordered is probably my most popular seller, and I can still sell the soap. The soap never left my possession.

It inconvenienced me, to rearrange my production schedule to meet her deadline, but as material loss goes, I didn't suffer a loss because I wouldn't ship the product until the check cleared. (Which it didn't, so I still have the soap.)
posted by dejah420 at 3:44 PM on October 7, 2006

You don't have to prove a loss. You (or really the county attorney since they would be prosecuting) just have to prove that her check bounced and she didn't otherwise pay you when informed of this.
posted by grouse at 3:52 PM on October 7, 2006

"Soap isn't really perishable. The kind that she ordered is probably my most popular seller, and I can still sell the soap."

I'm not a lawyer, but I don't think that matters, as long as you made it specifically in response to her order. You spent time producing this product for her order that you could have spend fulfilling orders for paying customers.\

"It inconvenienced me, to rearrange my production schedule to meet her deadline..."

In that case, the only way you didn't suffer a loss is if your time is worthless.

That said, if I were in your situation, I wouldn't pursue anything either -- unless she did actually try to sue you. Then I'd countersue for court costs and other damages.
posted by CrayDrygu at 3:57 PM on October 7, 2006

(I was going to post a scan of the report from PayPal, but that may actually be a violation of privacy laws.)

Really? I say go for it. Right now, you've summarized or otherwise interpreted the occurrence, leaving you open to accusations that you may have made subtle errors in fact in your original posting. Posting this proof will make it absolutely clear what your allegation is and that it is true: because it represents the proof of your allegation.
posted by ikkyu2 at 3:59 PM on October 7, 2006

I see your point ikkyu2, but I disagree. I'm fairly sure that I'd be in violation of the PayPal merchant privacy laws if I posted a jpg of the PayPal "check bounced" message, which would identify not only her directly, but her business as well. I'm not trying to use askmefi to prove a case that *I* was wronged, but was instead asking if I need to worry about her threat to sue me for defamation.
posted by dejah420 at 4:08 PM on October 7, 2006

and have deprived me of my right to enjoy normal social contacts. In addition, your written comments have prejudiced me in my business and as a direct result of your actions; both me and my business have suffered financial loss.

Wow, so she's losing money already from a single posting you made to a forum? And she's lost all her friends and ability to socialize? She's sounds like a douchebag and she's seriously trying to bully you with this BS.
posted by wackybrit at 5:17 PM on October 7, 2006

As someone who is not a lawyer, but has been involved with business credit organizations:

Reporting something that actually happened, as people have said above, is not a problem. Want to go a step further? Take the bounced check to small claims/conciliation court and get a judgment, or if it can be done in your jurisdiction, call the sheriff and see if they'll press charges. Then you're not just reporting something that happened to you, you're reporting a matter of public record in the court system.

But--one thing you should be careful about. I would be very careful about telling other people things like "you may want to avoid doing any business with this person", because that could edge into anti-trust territory.

I'm not going to say definitely whether what you said is anti-trust, a lawyer with business credit experience would have to tell you that for sure.
posted by gimonca at 5:43 PM on October 7, 2006

As you have heard from many commenters, the truth cannot be defamatory.

There is also the fact that a communication that is made in good faith for a legitimate business reason enjoys a qualified privilege in many states. That means that there cannot be a claim for even an erroneous report if there was a reasonable basis for the statement made and if reasonable care was taken to ensure that it was accurate.

And this has nothing to do with antitrust, even edgingly.

Since you have business insurance, though, it is a good idea to contact your agent, even if you are not sure about coverage. Many companies require that you notify them when you have reason to believe that someone may make a claim. A notification like this would not constitute a "claim" that would affect premiums, for most policies.

But there is probably a 90% chance that this will go no further.
posted by yclipse at 8:12 PM on October 7, 2006

Ah, I just learned about this in Business Law I.

In defamation suits, truth is a great defense. She can't exactly sue you for defamation if it's the truth. She's totally bullshitting you.

If anything, you're the one who probably has grounds to sue. Didn't she have some sort of contractual obligation to pay for the goods she ordered?

Good luck!
posted by roomwithaview at 8:23 PM on October 7, 2006

"Vince and Elkins" is hilarious. She's an idiot. But quite possibly unhinged as well. I'd let it go -- there are probably no assets to sue for, and you'll just waste time pursuing this. Consider the fact that she got so bent out of shape by your simply posting the truth the best revenge. Drive her even crazier by not responding at all.
posted by words1 at 10:02 PM on October 7, 2006

She doesn't have enough money to pay you.

She doesn't have enough money to get a real law firm to send a notice on their letterhead.

She's doesn't have the intelligence to even get the spelling of a law firm right.

I wouldn't lose sleep over it. But I would certainly sue to get my money from her.
posted by madman at 11:25 PM on October 7, 2006

She wrote the check and it bounced. Now she's threatening to sue you, and that's ridiculous.

Call the police and press criminal charges. Once that happens it will be almost impossible for her to successfully sue you for anything, especially if she's convicted.
posted by delmoi at 3:55 AM on October 8, 2006

she sounds so crazy she would have probably eaten the damn soap anyway
posted by matteo at 6:57 AM on October 8, 2006

And this has nothing to do with antitrust, even edgingly.

I must politely but strongly disagree. As someone who's been involved in B2B credit and collections, it sounds to me like the sort of situation we were always warned against.

I've been a member of industry credit groups where this was most definitely a concern. At scheduled meetings, the opening greeting was always accompanied by a reminder about what you could or could not say. Online forums are unlikely to have any special dispensation. In a nutshell: you can't get together and tell other business owners who they should sell to, or how. You have to stick to reporting the facts and let other companies make their own decisions.
posted by gimonca at 8:10 AM on October 8, 2006

For the record though, I didn't tell anyone not to do business with her, what I suggested was they get cash up front, and then relayed my experience as to why that was my opinion.

And I'm not in competition with her, my competition would be the people to whom I relayed the situation.
posted by dejah420 at 8:29 AM on October 8, 2006

what I suggested was they get cash up front

Right, which could be telling other business owners how to run their business.

my competition would be the people to whom I relayed the situation

Exactly--this is where you want to avoid the appearance of anti-competitive behavior.

That's where there's a small possibility that an aggressive attorney on the other side could make your life miserable. The facts sound like they're mostly in your favor right now, don't give the other side any ammo.

If anybody actually makes an issue of it, don't talk to me at that point, talk to an attorney. I have "in the trenches" experience, not law school experience.
posted by gimonca at 10:52 AM on October 8, 2006

The real question is: Why aren't you threatening to sue?

Report her to the county attorney.
posted by spaltavian at 7:19 PM on October 8, 2006

Whatever you do, make sure that you fully document everything that has already happened and keep documenting things that happen with this turkey. Cover yourself in case she does try to drag you into court.
posted by drstein at 1:46 PM on October 9, 2006

Bit of a follow up:

I heard from VE, who said, in part, "we have no record of representation..." of the person who claimed that VE were drawing up a defamation suit.

The papers for the bounced check are being filed with appropriate authorities.

Thanks for all the great advice, gang!
posted by dejah420 at 11:10 PM on October 9, 2006

Good. Please to be letting us know when roasting of turkey has commenced.
posted by grouse at 7:41 AM on October 10, 2006