## Facts

- A Columbia Business School professor conducted a research project testing how New York City restaurants respond to customer complaints.
- He sent letters to numerous restaurants, including plaintiffs’ establishments, falsely stating that his wife became severely ill from food poisoning after dining there and that the incident “ruined their anniversary.”
- Plaintiffs alleged the letters falsely accused them of serving contaminated food, triggering internal investigations, discarded food, operational disruption, and contact with the Department of Health.
- Some individual plaintiffs claimed physical and psychological symptoms allegedly caused by stress from the letters.
- Plaintiffs asserted tort claims including intentional infliction of emotional distress (IIED), libel/libel per se, negligent and fraudulent misrepresentation, negligence, and punitive damages.
- In two companion actions, the trial court dismissed some claims but allowed portions of IIED, a libel per se claim (Da Nico/164 Mulberry action), and misrepresentation claims (Chez Josephine action) to proceed; defendants appealed.

## Issues

1. Whether allegations of deceptive complaint letters to restaurants stated a claim for IIED at the pleading stage.
2. Whether the letter accusing a restaurant of causing food poisoning stated a claim for libel per se, including whether pleading defects existed as to publication.
3. Whether restaurants adequately pleaded negligent and fraudulent misrepresentation based on reliance on the fabricated complaint.
4. Whether punitive damages were available on the pleaded facts.

## Decision

- The appellate court largely affirmed the refusal to dismiss claims for:
  - IIED (as pleaded in the surviving portions of the complaints).
  - Libel per se in the 164 Mulberry (Da Nico) action.
  - Negligent and fraudulent misrepresentation in the Chez Josephine action.
- The court modified the orders to dismiss all claims for punitive damages and otherwise affirmed.

## Legal Principles

- IIED requires conduct so extreme and outrageous as to exceed all bounds of decency; whether that threshold is met may be for the factfinder when allegations plausibly describe deliberate, targeted deception likely to cause serious personal and business distress.
- A statement that tends to injure a business in its trade or profession may constitute libel per se; accusing a restaurant of serving tainted food causing serious illness can qualify because it directly attacks sanitary standards central to the business.
- Dismissal of defamation may be inappropriate where pleaded facts support a plausible basis for third-party publication or where factual disputes exist concerning dissemination of the accusation.
- Fraudulent and negligent misrepresentation may be adequately pleaded where a defendant makes specific false factual representations directly to identifiable recipients, a privity-like or special relationship is plausibly alleged, reliance is alleged, and resulting economic loss is pleaded.
- Punitive damages require more than intentional wrongdoing; absent allegations of sufficiently wanton, morally culpable conduct directed at the public generally or equivalent aggravating factors, punitive damages are not available.

## Conclusion

The court permitted claims arising from fabricated food-poisoning complaint letters to proceed for IIED, libel per se (as to one restaurant), and misrepresentation (as to others), but held the alleged conduct did not meet New York’s demanding standard for punitive damages.


164 Mulberry St. Corp. v. Columbia Univ., 4 A.D.3d 49, 771 N.Y.S.2d 16 (1st Dep’t 2004)