A manufacturer may recover for libel regarding a product attack only by proving malice, falsity, and special damages, which require naming specific customers lost to avoid being deemed general damages.
A manufacturer filed a libel action alleging that a magazine article falsely characterized its weight-reducing product as a fraudulent scheme. The plaintiff claimed the article defamed both the product and the manufacturer, causing significant business loss. The court examined whether the complaint sufficiently alleged libel against the plaintiff. While a manufacturer may recover for libel if a product is attacked by proving malice, falsity, and special damages, the court held that the complaint failed to state a cause of action. Because the plaintiff failed to name specific customers who ceased purchasing the product, the unitemized claim for damages was deemed a representation of general damages rather than special damages.
7 N.Y.2d at 441 Specifying customers for lost customer damages14 citing cases“round figures, with no attempt at itemization, must be deemed to be a representation of general damages”
- Conte v. Newsday, Inc., 703 F. Supp. 2d 126 (E.D.N.Y. 2010).published “The damage claimed is $5,000,000. Such round figures, with no attempt at itemization, must be deemed to be a representation of general damages.”
- Trump v. Trump, 2025 NY Slip Op 25118 (N.Y. Sup. Ct., New York Cty. 2025).published Round figures, with no attempt at itemization, do not state special damages ( id. at 441).
- YCF Trading Inc. v. Skullcandy, Inc., 781 F. Supp. 3d 56 (E.D.N.Y. 2025).published(holding that if lost customers “are not named, no cause of action is stated” and that “round figures, with no attempt at itemization, must be deemed to be a representation of general damages” (quoting Reps.’ Ass’n of Am…)
- Sullivan v. Aircraft Servs. Grp., Inc., No. 2:19-cv-06500 (E.D.N.Y. Mar. 3, 2025).Corp., 7 N.Y.2d at 441 (citation omitted); see Bilinski, 96 F. Supp. 3d at 51 (“Pleading damages as a round number with no attempt at itemization alleges general rather than special damages.” (citation omitted)); see also Procter & Gamble…
- LPD New York, LLC v. Adidas Am., Inc., No. 1:15-cv-06360 (E.D.N.Y. Oct. 10, 2024).Corp., 7 N.Y.2d at 441 (citation omitted); see also Bilinski, 96 F. Supp. 3d at 51 (same). 8 As Adidas argues, and LPD does not dispute, lost business value damages are special damages.
- Zaret v. Bonsey, No. 1:22-cv-07109, 2023 WL 6317956 (S.D.N.Y. Sept. 28, 2023).Corp., 7 N.Y.2d at 441, as damages must be tied to an actual lost sale, Bilinski v. Keith Haring Found., Inc., 632 F. App’x 637 , 641-43 (2d Cir. 2015) (dismissing suit in which special damages were pleaded based on the value of comparable…
- MMS Trading Co. Pty v. Hutton Toys, LLC, No. 1:20-cv-01360, 2021 WL 1193947 (E.D.N.Y. Mar. 29, 2021). (holding that if lost customers “are not named, no cause of action is stated” and that “round figures, with no attempt at itemization, must be deemed to be a representation of general damages” (quoting Reporters’ Ass’n o…)
- Kirby v. Wildenstein, 784 F. Supp. 1112 (S.D.N.Y. 1992).published Angio-Medical Corp. v. Eli Lilly & Co., 720 F.Supp. 269 (S.D.N.Y.1989) (applying New York law); Drug Research Corp. v. Curtis Publishing Co., 7 N.Y.2d 435, 440 , 199 N.Y.S.2d 33, 37 , 166 N.E.2d 319, 323 (1960).
- Bilinski v. Keith Haring Found., Inc., 632 F. App'x 637 (2d Cir. 2015).unpublished (holding that if lost customers “are not named, no cause of action is stated,” and that “round figures, with no attempt at itemization, must be deemed a representation of general damages” (internal quotation marks omitte…)
- In Touch Concepts, Inc. v. Cellco P'ship, 949 F. Supp. 2d 447 (S.D.N.Y. 2013).published (considering, claim for libel on the product: "[s]uch round figures, with no attempt at itemization, must be deemed to be a representation of general damages)
Show 4 more citing cases
- Enigma Software Grp. USA, LLC v. Bleeping Comput. LLC, 194 F. Supp. 3d 263 (S.D.N.Y. 2016).published Given the pleading requirement of special damages, that allegation is far “too generalized to survive dismissal.” Kirby, 784 F.Supp. at 1116, 1118 (where plaintiff claimed defendant made false and disparaging statements about painting that…
- El Meson Espanol v. Nym Corp., 521 F.2d 737 (2d Cir. 1975).published
- Phillips v. New York Daily News, 111 A.D.3d 420 (N.Y. App. Div. 1st Dep't 2013).published
- Fashion Boutique of Short Hills, Inc. v. Fendi Usa, Inc., 314 F.3d 48 (2d Cir. 2002).published
166 N.E.2d at 322 Requirement for itemization of claimed damages8 citing casesThe damage claimed is $5,000,000. Such round figures, with no attempt at itemization, must be deemed to be a representation of general damages.
- Conte v. Newsday, Inc., 703 F. Supp. 2d 126 (E.D.N.Y. 2010).published (The damage claimed is $5,000,000. Such round figures, with no attempt at itemization, must be deemed to be a representation of general damages.)
- Bullion Trading LLC v. J.P. Morgan Chase Bank, N.A., No. 1:25-cv-05980 (S.D.N.Y. June 22, 2026).Corp. v. Curtis Publ’g Co., 166 N.E.2d 319, 322 (N.Y. 1960)); accord Pasternack v. Lab’y Corp. of Am., No. 10-cv-04426 (PGG), 2014 WL 4832299 , at *19 (S.D.N.Y.
- Erdman v. Victor, No. 1:20-cv-04162 (S.D.N.Y. June 17, 2021).Drug Research Corp. v. Curtis Publ’g Co., 166 N.E.2d 319, 322 (N.Y. 1960); accord Franklin, 21 N.Y.S.3d at 11-12 .
- Fairfax Fin. Holdings Ltd. v. S.A.C., 160 A.3d 44 (N.J. Super. Ct. App. Div. 2017).publishedSquire Records, Inc. v. Vanguard Recording Soc'y, Inc., 226 N.E.2d 542, 543 (N.Y. 1967); Drug Research Corp. v. Curtis Publ'g Co., 166 N.E.2d 319, 322 (N.Y. 1960); DiSanto v. Forsyth, 684 N.Y.S.2d 628 , 629 (App. Div. 1999); 40We will not…
- Katz v. Travelers, 241 F. Supp. 3d 397 (E.D.N.Y. 2017).publishedCo., 7 N.Y.2d 435 , 441, 199 N.Y.S.2d 33 , 166 N.E.2d 319, 322 (N.Y. 1960))) Therefore, the Plaintiffs’ prima facie tort claim fails as a matter of law and the Defendants’ motion to dismiss that claim pursuant to Rule 12(b)(6) is granted.…
- Verizon Directories Corp. v. Yellow Book USA, Inc., 309 F. Supp. 2d 401 (E.D.N.Y. 2004).published If the special damage was a loss of customers ... the persons who ceased to be customers, or who refused to purchase, must be named.... ” Drug Research Corp., 199 N.Y.S.2d 33 , 166 N.E.2d at 322 (citation omitted); see also De Marco-Stone…
- Sbrocco v. Pac. Fruit, Inc., 565 F. Supp. 15 (S.D.N.Y. 1983).published(if special damage is loss of customers they must be named; statement of damages in round figures with no attempt at itemization is insufficient)
- El Meson Espanol v. NYM Corp., 389 F. Supp. 357 (S.D.N.Y. 1974).publishedDrug Research Corp. v. Curtis Publishing Co., 7 N.Y.2d 435, 441 , 199 N.Y.S.2d 33, 37 , 166 N.E.2d 319, 322 (1960).
166 N.E.2d at 321 Interpreting defamatory language fairly rather than broadly8 citing cases“fair,' not a ‘broad’ reading”
- GM Photo, LLC v. Focus Camera, Inc., No. 1:22-cv-10339 (S.D.N.Y. Apr. 24, 2025). Co., 166 N.E.2d 319, 321 (N.Y. 1960); see also Ruder & Finn, 422 N.E.2d at 522 (distinguishing between the two theories).
- Gucci Am., Inc. v. Duty Free Apparel, Ltd., 277 F. Supp. 2d 269 (S.D.N.Y. 2003).published In order to prevail on a claim of product disparagement, the claimant must establish: “(1) the falsity of [the] statements; (2) publication to a third person; (3) malice; and (4) special damages.” Kirby v. Wildenstein, 784 F.Supp. 1112, 11…
- H.L. Hayden Co. v. Siemens Med. Sys., Inc., 672 F. Supp. 724 (S.D.N.Y. 1987).publishedDrug Research Corp. v. Curtis Publishing Co., 7 N.Y.2d 435, 440 , 199 N.Y.S.2d 33, 37 , 166 N.E.2d 319, 321-22 (1960).
- Davis v. Costa-Gavras, 619 F. Supp. 1372 (S.D.N.Y. 1985).publishedThe communication complained of will be given a “fair” rather than a “broad” interpretation, Drug Research Corporation v. Curtis Publishing Company, 7 N.Y.2d 435 , 199 N.Y.S.2d 33, 36 , 166 N.E.2d 319, 321 (1960).
- Davis v. Ross, 602 F. Supp. 504 (S.D.N.Y. 1984).published Drug Corp. v. Curtis Publishing Co., 7 N.Y.2d 435 , 199 N.Y.S.2d 33, 37 , 166 N.E.2d 319, 321 (1960).
- Mullenmeister v. Snap-On Tools Corp., 587 F. Supp. 868 (S.D.N.Y. 1984).publishedDrug Research Corp. v. Curtis Publishing Co., 7 N.Y.2d 435, 439-441 , 199 N.Y.S.2d 33, 36-37 , 166 N.E.2d 319, 321-322 (1960).
- Sharon v. Time, Inc., 575 F. Supp. 1162 (S.D.N.Y. 1983).published“fair,' not a ‘broad’ reading”
- Ladany v. William Morrow & Co., 465 F. Supp. 870 (S.D.N.Y. 1978).published“straining to reach a result quite inconsistent with a fair reading of the text”
199 N.Y.S.2d at 37 “if the special damage was a loss of customers, ... the persons who ceased to be customers, or who refused to purchase, must be named”2 citing cases
- Soter Tech., LLC v. IP Video CorporationN, 523 F. Supp. 3d 389 (S.D.N.Y. 2021).published “Special damages are pecuniary losses (including loss of sales) resulting from a defendant’s allegedly wrongful conduct.” Verizon Directories Corp., 309 F. Supp. 2d 401, 406 (E.D.N.Y. 2004) (citing Drug Research Corp. v. Curtis Publishing…
- Charles Atlas, Ltd. v. Time-Life Books, Inc., 570 F. Supp. 150 (S.D.N.Y. 1983).published “if the special damage was a loss of customers, ... the persons who ceased to be customers, or who refused to purchase, must be named”
7 N.Y.2d at 440 “the rule is that, if a product has been attacked, the manufacturer may recover in a cause of action for libel, providing he proves malice and special damages as well as the falsity of the criticism.”1 citing case
- Sleepy's LLC v. Select Comfort Wholesale Corp., 133 F. Supp. 3d 483 (E.D.N.Y. 2015).published (The rule is that, if a product has been attacked, the manufacturer may recover in a cause of action for libel, providing he proves malice and special damages as well as the falsity of the criticism.)
166 N.E.2d at 323 cited at this page1 citing case
- Kirby v. Wildenstein, 784 F. Supp. 1112 (S.D.N.Y. 1992).published Angio-Medical Corp. v. Eli Lilly & Co., 720 F.Supp. 269 (S.D.N.Y.1989) (applying New York law); Drug Research Corp. v. Curtis Publishing Co., 7 N.Y.2d 435, 440 , 199 N.Y.S.2d 33, 37 , 166 N.E.2d 319, 323 (1960).
7 N.Y.2d at 435 Dye, J. In this libel action the complaint alleges that defendant Ben Pearse wrote an article entitled “Don’t Fall for the Mail Frauds ”, which appeared in the…1 citing case
- August Constr. Grp., Inc. v. DeGroat (N.Y. Sup. Ct. 2023).unpublishedNotably, special damages need not be pleaded or proven when the cause of action is for defamation per se ( id. at 435; Rinaldi v Holt, Rinehart & Winston, Inc. , 42 NY2d 369, 379 [1977]; Donati v Queens Ledger Newspaper Group , 240 AD2d 69…
Other citing cases
- LoanStreet Inc. v. Troia, No. 1:21-cv-06166, 2022 WL 3544170 (S.D.N.Y. Aug. 17, 2022).
- Alt. Electrodes, LLC v. Empi, Inc., 597 F. Supp. 2d 322 (E.D.N.Y. 2009).published
- Angio-Med. Corp. v. Eli Lilly & Co., 720 F. Supp. 269 (S.D.N.Y. 1989).published
- Fashion Boutique of Short Hills, Inc. v. Fendi USA, Inc., 75 F. Supp. 2d 235 (S.D.N.Y. 1999).published
- Bose Corp. v. Consumers Union of United States, Inc., 3 Mass. Supp. 59 (Mass. Dist. Ct. 1981).published
- Bose Corp. v. Consumers Union of U. S., Inc., 529 F. Supp. 357 (D. Mass. 1981).published
- Simmons Ford, Inc. v. Consumers Union of United States, Inc., 490 F. Supp. 106 (W.D. Mich. 1980).published
v.
Curtis Publishing Company
Lead Opinion
In this libel action the complaint alleges that defendant Ben Pearse wrote an article entitled “Don’t Fall for the Mail Frauds ”, which appeared in the March 29, 1958 issue of the Saturday Evening Post, a magazine owned, published and circulated by defendant Curtis Publishing Company. The article contains the following statements which are complained of (Complaint, par. Eleventh) :
“ The hottest gimmick in the mail-fraud field today is the alleged weight-reducing pill. Recent emphasis by medical authorities on the harmful effect of overweight has made avoirdupois a national obsession. The underlying causes of overweight are often obscure: boredom, nervousness, unrequited love are only a few. But the cure — eating less — calls for something most fat people don’t have when it comes to food: will power.
“ That’s where the gimmicks come in. Certain drugs, medical authorities agree, have the effect of deadening the appetite. Doctors often prescribe them to help obese patients stick to a diet, but they frequently have harmful side effects and generally are available only on prescription. Yet so common is the desire to get something for nothing — in this case slimness without diet — that some schemes promising this impossibility have taken in over a million dollars a year. Forty-five such schemes, not all quite so profitable, have been barred from the mails during the past two years.
“ About a year ago, the Wonder Drug Corporation, in a flood of full-page newspaper advertisements, heralded an allegedly new reducing discovery called Regimen, which required ‘ no giving up the kinds of food you like to eat.’ In the box of green, pink and yellow pills you got for three dollars, however, were instructions warning you to avoid heavy gravies, oils, thick[*438] soup, rice, spaghetti, jam, jelly, noodles, nuts, ice cream, potatoes, cake, candy, chocolate, cereal, crackers, cream, custard, bread, butter, pastry, pudding, sugar and salt.
‘1 Last June, after an investigation by postal inspectors, officials of the Wonder Drug Corporation voluntarily signed an ‘ affidavit of discontinuance, ’ agreeing to stop soliciting orders through the mail — after taking in $200,000 in six months, according to-inspectors’ estimates. Nevertheless, Begimen is still obtainable over the counter in some retail stores, where postal authorities have no jurisdiction. However, the Federal Trade Commission, which has responsibility concerning deceptive advertising when the mails are not used, has Begimen under investigation.
‘1 Why all this red tape in dealing with questionable schemes í The reason is that Congress has always been leary of interfering with the secrecy or speedy delivery of the mails. In 1868, to break up the many notorious lotteries flourishing at the time, Congress declared it unlawful to use the mails for ‘ lotteries and guessing games.’ In codifying the postal laws four years later, the unlawful list was extended to include mail concerning schemes ‘ intended to deceive and defraud the public.’ But even tpday the Postmaster General himself can’t open a letter <or refuse to deliver it, without following certain judicial or administrative procedures.
“ The judicial course is to instigate criminal charges in a Federal court, and successful prosecution will not only stop the fraud but will also punish the defrauder with a prison sentence or fine or both. Administrative action is designed to stop the fraud without imposing criminal penalties. The offender is entitled to an open hearing before an impartial examiner, but if a fraud order is issued, mail addressed to him is returned unopened to the sender, marked ‘ Fraudulent. ’
1 ‘ Because of the time element, the Post Office Department generally relies on administrative rather than court action, at least when only nominal sums are involved. A fraud order can be processed in about six months under the Federal Administrative Procedure Act, and in a matter of weeks if the firm cited voluntarily signs a discontinuance affidavit. A criminal action, on the other hand, usually takes much longer, as it did with a mail-order nursery in Bloomington, Illinois
[*439] According to the complaint, the plaintiff is the manufacturer and a distributor of ‘ ‘ Regimen ’ ’, and, as stated in the briefs, Wonder Drug is a distributor.
It is further alleged that the article concerned the plaintiff; that it is “ false and defamatory as to the product Regimen and the plaintiff ’ ’; that hospital and clinical studies on obese persons had established that patients under no calorie restrictions and taking Regimen lost substantially the same amount of weight as those patients under a 1,000-calorie restriction and taking Regimen; that the published matter gave the impression, as it was intended to, that plaintiff is a swindler and engaged in obtaining money by false pretenses, misrepresentation and fraud, and is engaged in conducting a racket; that the defendants acted with knowledge of the article’s falsity, with malice, and with intent to injure plaintiff’s reputation and business; and that the article has caused drug jobbers, wholesalers, retail chain stores and others to cancel orders for, and refuse to sell, Regimen, has prompted various communications media to refuse Regimen advertising, and has caused grave injury and prejudice to plaintiff’s name and business reputation, all to the tune of $5,000,000.
The sufficiency of the pleading depends in part on whether the article, when fairly read, concerns the plaintiff. That it concerns the Wonder Drug Corporation is obvious, but nowhere does it mention the plaintiff with particularity. The complaint sets forth the connection between the alleged libel and the Drug Research Corporation in abbreviated form, pursuant to rule 96 of the Rules of Civil Practice. But the form of the allegation does not foreclose defendant from impeaching the sufficiency of the complaint on the ground that the pleading, taken as a whole, clearly removes the plaintiff from the reach of the alleged libel (Corr v. Sun Print. & Pub. Assn., 177 N. Y. 131 [1904]; Fleischmann v. Bennett, 87 N. Y. 231 [1881]). In short, rule 96 is not available to supply a deficiency in what might otherwise be a good cause of action.
The Appellate Division saw in the statement ‘ ‘ However, the Federal Trade Commission, which has responsibility concerning deceptive advertising when the mails are not used, has Regimen under investigation ’ ’ a connection with the plaintiff because Wonder Drug Corporation is not mentioned in this context.[*440] This is straining to reach a result quite inconsistent with a fair reading of the text. Libelous language must be tested by a “ fair ”, not a “ broad ”, reading (cf. Tracy v. Newsday, 5 N Y 2d 134 [1959]). This is so because the law of libel imposes restraints on the right of free speech (Julian v. American Business Consultants, 2 N Y 2d 1 [1956]); and, too, always present is the possibility of resort to penal sanctions (Penal Law, §§ 1340-1349, 1937). The article in its entirety is at variance with the construction that it was written of and concerning the plaintiff. When so read, it effectively negatives the short-form allegation that the article libels the plaintiff. It is one thing to save an ineptly worded pleading by construing it liberally (Civ. Prac. Act, § 275), yet quite another to supply elements essential to the cause of action.
The only theory remaining is that the article contains matter libelous of the product, Regimen, and that it thereby constitutes a libel on the plaintiff manufacturer. The rule is that, if a product has been attacked, the manufacturer may recover in a cause of action for libel, providing he proves malice and special damages as well as the falsity of the criticism. Of course, if the accusation impeaches the integrity or business methods of the corporate manufacturer itself, no special damages need be shown (New York Soc. for Suppression of Vice v. Macfadden Pubs., 260 N. Y. 167 [1932]; First Nat. Bank of Waverly v. Winters, 225 N. Y. 47 [1918]) as the direct accusation constitutes a libel per se. In this regard, corporations enjoy the same right, that is, to plead general damages, as do individuals. Such generality, however, is not available to this plaintiff in the setting of this case. On its face, the complained of article is written of and concerning the deceptive business activities of Wonder Drug Corporation in promoting the sale of the product Regimen. This is a far cry from an alleged defamation of the integrity and business methods of the plaintiff, which, if it can be shown at all, must be shown by extrinsic facts.
Giving the pleading its most favorable construction, namely, that it states a libel on the product, it nonetheless must be dismissed for failure to allege special damages. A libel of the plaintiff’s product is not necessarily a libel of the plaintiff. Paragraphs “ Sixteenth ”, “ Seventeenth ” and “ Eighteenth ” set forth allegations of general damage. But “ ‘special damage[*441] must be fully and accurately stated. If the special damage was a loss of customers * * * the persons who ceased to be customers, or who refused to purchase, must be named * * *. [I]f they are not named, no cause of action is stated.’ ” (Reporters’ Assn. of America v. Sun Print. & Pub. Assn., 186 N.Y. 437, 442 [1906]).
The damage claimed is $5,000,000. Such round figures, with no attempt at itemization, must be deemed to be a representation of general damages (see Seelman, Law of Libel and Slander in the State of New York [1933], p. 388). It is an established rule in New York that a libel on the product is actionable by the manufacturer only if special damages are alleged (Marlin Fire Arms Co. v. Shields, 171 N. Y. 384 [1902]), with the afore-mentioned exceptions not relevant here.
Accordingly, the orders of the courts below should be reversed, with costs, and the motion to dismiss the complaint granted, with leave to serve an amended complaint alleging special damage. The questions certified are answered in the negative.
Dissent
(dissenting). As the Appellate Division majority held, this entire article read as a whole in its ordinary meaning is naturally and proximately injurious to plaintiff and damaging to its credit and reputation (Samson United Corp. v. Dover Mfg. Co., 233 App. Div. 155, 156, citing 52 L. R. A. 526). If this pill manufactured by plaintiff does not reduce weight at all, as the article says, then no manufacturer could have produced it'without intending that it be sold under false pretenses (cf. Marlin Fire Arms Co. v. Shields, 171 N. Y. 384, 389, 390). Therefore, the complaint alleges a libel against plaintiff as well as against its product, and so no allegation of special damages is necessary.
The order should be affirmed, with costs.
Judges Fuld, Burke and Foster concur with Judge Dye; Chief Judge Desmond dissents in an opinion in which Judges Froessel and Van Voorhis concur.
Order reversed, with costs in all courts, and case remitted to Special Term for further proceedings in accordance with the opinion herein. Questions certified answered in the negative.