California Business Defamation Demand Letter Guide

📋 What is Business Defamation in California?

Business defamation occurs when someone makes false statements of fact about a company, product, or service that harm the business's reputation and cause economic damage. California law provides robust protections for businesses through defamation, trade libel, and slander of title claims.

Types of Business Defamation Claims

California recognizes several distinct causes of action for protecting business reputation:

📣 Trade Libel (Product Disparagement)

False statements about the quality of goods or services that cause pecuniary loss to the business

🏢 Slander of Title

False statements that cast doubt on a business's ownership of property, causing loss of sale or financing

💼 Commercial Defamation

False statements about business practices, integrity, or financial condition that harm business relationships

👥 Corporate Defamation

False statements about a corporation's conduct that injure its business reputation in the community

👍 What You Can Recover in Business Defamation Cases

General damages - Presumed harm to reputation (for libel per se)
Special damages - Lost profits, lost customers, diminished business value
Consequential damages - Costs incurred responding to defamation
Punitive damages - For malicious or reckless defamation (CC 3294)
Injunctive relief - Court orders to stop ongoing defamation

Libel vs. Slander for Businesses

📄 Libel (Written Defamation)

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Under California Civil Code Section 45, libel is defamation expressed in writing or other fixed medium. For businesses, this includes false statements in newspapers, websites, emails, letters, social media posts, Yelp reviews, or any permanent form. Libel per se (on its face) does not require proof of special damages.

🎤 Slander (Oral Defamation)

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Under Civil Code Section 46, slander is oral defamation. For businesses, slander per se includes false statements that the business is dishonest, lacks integrity, or is incompetent. These do not require proof of special damages. Other slanderous statements require proof of actual economic harm.

📦 Trade Libel Distinguished

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Trade libel focuses on products or services rather than the business itself. Unlike defamation, trade libel always requires proof of special damages (specific lost sales or customers). The plaintiff must show the defendant knew the statement was false or acted with reckless disregard for truth.

⚠ Critical: 1-Year Statute of Limitations

California has one of the shortest defamation statutes of limitations in the country. Under CCP 340(c), you must file your lawsuit within one year of the defamatory publication. For online defamation, the clock starts when the statement is first posted. Act immediately to preserve your claims.

⚖ Legal Basis

California provides comprehensive statutory and common law protections for businesses against reputational harm. These are the key legal authorities supporting your claim.

Key California Statutes

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California Civil Code Section 44 - Defamation Defined

Defamation is effected by either libel or slander. This foundational statute establishes California's recognition of defamation claims and applies to both individuals and business entities.

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California Civil Code Section 45 - Libel Defined

Libel is a false and unprivileged publication by writing, printing, picture, effigy, or other fixed representation to the eye which exposes any person to hatred, contempt, ridicule, or obloquy, or causes injury in occupation, trade, or profession.

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California Civil Code Section 45a - Libel Per Se

A libel which is defamatory of the plaintiff without the necessity of explanatory matter, such as inducement or colloquium, is said to be a libel on its face. Defamatory language not libelous on its face requires special damages.

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California Civil Code Section 46 - Slander Defined

Defines slander as oral defamation. Section 46(3) makes it slander per se to make a false statement that directly tends to injure any person in respect to his office, profession, trade, or business, either by imputing to him general disqualification or by imputing something with reference to his office, profession, trade, or business that has a natural tendency to lessen its profits.

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California Civil Code Section 48 - Privileged Publications

Establishes qualified and absolute privileges for certain communications. Businesses must consider whether the defamer may claim privilege (judicial proceedings, legislative proceedings, or fair report privilege) when evaluating claims.

Elements You Must Prove

False statement of fact - The statement must be provably false, not mere opinion
Publication - The statement was communicated to a third party
Concerning the plaintiff - The statement is reasonably understood to refer to your business
Fault - At minimum, negligence regarding falsity (actual malice for public figures)
Damages - Either presumed (per se) or proven special damages

Trade Libel: Additional Elements

💰 Special Damages Required

Unlike defamation per se, trade libel always requires proof of specific economic losses

🔍 Knowledge or Recklessness

Must prove defendant knew statement was false or acted with reckless disregard for truth

📦 Product/Service Focus

Claim focuses on disparagement of goods/services rather than business reputation

🔗 Causation

Must prove the false statement was a substantial factor in causing economic harm

⚠ Anti-SLAPP Considerations (CCP 425.16)

California's anti-SLAPP statute allows defendants to file a special motion to strike defamation claims arising from protected speech. If the defendant's statement was made in connection with a public issue or matter of public interest, you must demonstrate a probability of prevailing. If the motion succeeds, you may be required to pay the defendant's attorney fees. Consult with an attorney before filing suit.

✅ Evidence Checklist

Gather these documents before sending your demand letter. Click to check off items as you collect them.

📄 The Defamatory Statement

✓ Screenshots/copies of the false statement
✓ URL and date of online publications
✓ Archived versions (Wayback Machine)
✓ Witness statements for oral defamation

🔍 Proof of Falsity

✓ Documents proving the statement is false
✓ Business records contradicting claims
✓ Expert opinions if applicable
✓ Third-party verification of facts

💰 Damages Documentation

✓ Lost customer records and communications
✓ Revenue comparisons before/after
✓ Lost contract or deal documentation
✓ Remediation costs (PR, advertising)

👥 Defendant Information

✓ Full legal name and address
✓ Evidence of malice or recklessness
✓ Prior relationship or disputes

🔒 Preserve Digital Evidence

Online defamation can be deleted at any time. Use the Wayback Machine (archive.org) to capture web pages. Screenshot all social media posts with visible timestamps and URLs. Consider hiring a digital forensics expert to authenticate and preserve evidence for litigation.

💰 Calculate Your Damages

Business defamation damages can be substantial, especially when you can prove specific economic losses and malicious intent.

Category	Description
General Damages	Presumed damages for libel per se - harm to reputation that does not require specific proof
Special Damages	Specific economic losses: lost profits, lost customers, lost business opportunities
Lost Business Value	Diminished goodwill and enterprise value caused by reputational harm
Mitigation Costs	PR campaigns, reputation management services, advertising to counter defamation
Punitive Damages	Awarded under CC 3294 for malicious, oppressive, or fraudulent conduct
Attorney Fees	Potentially recoverable if defendant's conduct was especially egregious or in contract cases

💰 Libel Per Se: Presumed Damages

When defamation is "on its face" harmful to business reputation (libel per se), California law presumes damages without requiring proof of specific economic loss. This includes statements that a business is fraudulent, dishonest, incompetent, or engaged in illegal conduct.

📊 Sample Damages Calculation

Example: False Statements About Restaurant Food Safety

Lost revenue (6 months decline x $15,000/month) $90,000

Lost catering contracts (documented) $45,000

Reputation management/PR campaign $25,000

General damages (presumed harm) $100,000

Punitive damages (malicious conduct) $250,000

POTENTIAL TOTAL RECOVERY $510,000

💡 Proving Special Damages

For trade libel or defamation per quod, you must prove specific economic losses. Keep meticulous records: customer cancellation emails, lost contract documentation, revenue decline, and any expenses incurred to repair your reputation. Work with a forensic accountant if damages are substantial.

📝 Sample Language

Copy and customize these paragraphs for your business defamation demand letter.

Opening Paragraph

I am writing on behalf of [BUSINESS NAME] regarding defamatory statements you published on [DATE]. Your false statements have caused significant harm to our business reputation and have resulted in substantial economic damages. We demand immediate retraction, removal, and compensation as detailed below.

Identifying the Defamatory Statement

On [DATE], you published the following statement on [PLATFORM/MEDIUM]: "[EXACT QUOTE OF DEFAMATORY STATEMENT]." This statement is demonstrably false. [EXPLAIN WHY THE STATEMENT IS FALSE AND PROVIDE FACTUAL EVIDENCE]. Your statement constitutes defamation per se under California Civil Code Sections 45 and 46, as it directly injures our business in respect to its trade and profession.

Trade Libel Claim

Your false statements about our [PRODUCTS/SERVICES] constitute trade libel (product disparagement) under California law. You stated that [FALSE CLAIM ABOUT PRODUCT/SERVICE], which you knew to be false or published with reckless disregard for the truth. As a direct result, we have lost [NUMBER] customers and [DOLLAR AMOUNT] in revenue, as documented in the enclosed records.

Damages Paragraph

As a direct and proximate result of your defamatory statements, [BUSINESS NAME] has suffered the following damages: lost revenue of approximately $[AMOUNT]; loss of [NUMBER] customer accounts; a cancelled contract with [CLIENT NAME] valued at $[AMOUNT]; and reputation management costs of $[AMOUNT]. Additionally, we are entitled to presumed damages for the harm to our business reputation, as well as punitive damages for your malicious conduct under California Civil Code Section 3294.

Demand for Action

We hereby demand that within [14/30] days of this letter, you: (1) permanently remove the defamatory statements from all platforms; (2) publish a retraction and apology in the same medium and with comparable prominence to the original defamatory statement; (3) cease and desist from making any further false statements about [BUSINESS NAME]; and (4) pay compensation in the amount of $[AMOUNT] for damages suffered. Failure to comply will result in the immediate filing of a civil lawsuit, where we will seek the full extent of damages available under California law, including punitive damages and attorney fees.

🚀 Next Steps

What to do after sending your demand letter and understanding the litigation process for business defamation in California.

Immediate Actions

📌 Preserve All Evidence

Before sending your demand letter, ensure all defamatory content is preserved. Use web archiving services, take certified screenshots, and consider hiring a digital forensics expert. Defendants often delete content after receiving a demand letter.

If They Remove the Statement

Document the removal - Screenshot showing the content is gone, with date and time
Assess remaining damages - You may still pursue damages for harm already caused
Negotiate retraction/apology - A public correction can help restore reputation
Settle damages claim - Removal doesn't eliminate your right to compensation

If They Don't Respond or Refuse

Days 1-14

Wait for response deadline. Document any continued publication or new defamation.

Days 15-30

Consult litigation attorney. Evaluate anti-SLAPP risk and case strength.

Filing Lawsuit

File in California Superior Court. Prepare for anti-SLAPP motion if applicable.

Discovery

Subpoena records, take depositions, prove damages through documentary evidence.

⚠ Anti-SLAPP Warning

Under CCP 425.16, defendants in California defamation cases may file a special motion to strike your complaint if the defamation relates to a matter of public interest. If successful, you could be ordered to pay their attorney fees (often $20,000-$50,000+). Before filing suit, your attorney should evaluate your probability of prevailing to avoid this risk.

Litigation Timeline

File Complaint
File defamation lawsuit in Superior Court within 1-year statute of limitations. Pay filing fees ($435+ depending on amount demanded).
Anti-SLAPP Motion (If Filed)
Defendant has 60 days to file. You must show probability of prevailing. Motion heard within 30 days.
Discovery Phase
Exchange documents, interrogatories, depositions. Prove falsity, publication, fault, and damages.
Trial or Settlement
Most cases settle. If tried, jury determines damages. Punitive damages require separate finding of malice.

Need Legal Help?

Business defamation cases involve complex evidentiary issues and anti-SLAPP considerations. Get a 30-minute strategy call with a business litigation attorney.

Book Consultation - $125

California Resources

California Courts Self-Help: selfhelp.courts.ca.gov - Forms and filing information
State Bar Lawyer Referral: calbar.ca.gov - Find a qualified attorney
California Civil Code: leginfo.legislature.ca.gov - Full text of defamation statutes
Anti-SLAPP Statute: CCP 425.16 - Review before filing litigation