In a ruling that hinged on who received some sensitive emails, the Illinois Supreme Court ruled Thursday that project44 may move forward with its defamation lawsuit against rival visibility provider FourKites.
“We plan to continue on the merits of the case,” Jennifer Coyne, general counsel for project44, told FreightWaves.
The dispute began with emails sent to project44 executives in May 2019, alleging accounting improprieties and ties to organized crime at project44. The first email, from “Ken Adams,” accused the company of financial wrongdoing and mafia connections, while the second, from “Jason Short,” criticized project44’s technology.
Project44 denied the claims and sued FourKites for defamation and civil conspiracy in April 2020.
During pre-suit discovery, project44 found that both emails were accessed from IP addresses linked to FourKites India. Additionally, the phone number associated with the Ken Adams account matched the CEO’s number listed in Securities and Exchange Commission documents for FourKites.
What’s the holdup?
In Illinois, defamation claims require proof of false statements, publication to a third party and harm to reputation. Defamation can be categorized as “per se” or “per quod,” with per se not requiring proof of actual damage.
FourKites attempted to dismiss project44’s lawsuit in 2020, arguing the emails lacked publication and didn’t meet per se defamation criteria.
Project44 appealed the dismissal, and an appellate court decided in project44’s favor.
The court emphasized a corporation’s concern for its reputation among employees, reinstating the defamation suit. The case went to the Illinois Supreme Court in January this year for review and to clarify the state’s defamation laws in the matter.
The review
The Illinois Supreme Court focused on when sending emails constitutes publication to a third party and if there was tangible harm to reputation.
FourKites argued the recipients at project44 were akin to the company itself, disputing the publication claim. Scott Gilbert, an attorney for FourKites, emphasized the influence of executive leadership on a company’s reputation.
Project44 attorney Douglas Albritton likened the emails to corporate sabotage, asserting they aimed to disrupt project44’s workplace.
Both sides debated who qualifies as the company versus a third party.
FourKites questioned the time lapse between emails and complaints to prove reputational harm, while project44 cited defamation per se law, claiming proof of actual harm was unnecessary.
The ruling
On Thursday, the court outlined the requirements for a defamation claim, emphasizing the need for false statements, unprivileged publication to a third party and damage.
FourKites argued they weren’t published to third parties since they were sent to project44’s leadership.
The court rejected that argument, noting that communication among corporate employees can constitute publication for defamation purposes, even if they’re managerial-level employees.
It affirmed that corporations and their employees have separate identities and interests, making communication to corporate employees publication to third parties.
The court also addressed concerns about reputational harm, stating that in defamation per se cases, proof of actual damage to reputation isn’t required.
Additionally, the court clarified that qualified privilege remains a defense against defamation, but its application arises after establishing the elements of defamation, including publication.
Ultimately, the court ruled in favor of project44, finding that the Circuit Court erred in dismissing the complaint. It affirmed the appellate court’s decision to reverse that dismissal and remanded the case for further proceedings.
“The Court clearly understood the harm such defamatory content can cause even when sent only to an organization’s own leadership team and Board members,” Coyne said. “This decision holds competitors accountable for attempted sabotage by anonymously sending harmful falsehoods to corporate decisionmakers.”
FreightWaves reached out to FourKites but did not hear back by publication deadline.