## Facts

- Fashion Boutique of Short Hills, Inc. operated a retail boutique in Short Hills, New Jersey (1983–1991) selling only Fendi-manufactured merchandise and functioning as a Fendi franchisee.
- Fendi USA, Inc. and Fendi Stores, Inc. operated Fendi’s U.S. business, including a Fifth Avenue Fendi-only store opened in October 1989.
- Fashion Boutique alleged that shortly after the Fifth Avenue store opened, its sales declined sharply and it closed in July 1991.
- Fashion Boutique attributed the decline to alleged statements by Fendi sales personnel to customers asserting that Fashion Boutique sold “fake,” inauthentic, inferior, or lower-quality Fendi merchandise, or that it would soon be shut down or close.
- Fashion Boutique supported its claims with declarations or testimony from identified customers who reported hearing specific statements at the Fifth Avenue store and altering purchasing behavior afterward.

## Issues

1. Whether the evidence created triable issues under New York law for business slander and disparagement of goods as to falsity, publication, fault (malice or its equivalent), special damages, and causation.
2. Whether Fashion Boutique could proceed on a broad “campaign of disparagement” theory or only on specifically documented, admissible instances of alleged disparagement.
3. Whether, on the summary judgment record, a reasonable jury could find liability for any of the alleged oral statements by Fendi sales staff.

## Decision

- The court granted Fendi’s motion for summary judgment in part and denied it in part.
- The court dismissed a substantial portion of the common-law claims due to insufficient proof as to one or more required elements.
- The court allowed a limited subset of claims to proceed, leaving nine specific statements as potentially actionable and reserving those instances for trial.

## Legal Principles

- Under New York law, business slander and product disparagement require proof of a false statement published to a third party, concerning the plaintiff’s business or goods, made with the requisite fault (commonly framed as malice or a heightened fault standard), and resulting in special damages.
- At summary judgment, a plaintiff may not rely on generalized allegations of a disparagement campaign; the claim must be supported by admissible evidence of particular statements to identifiable third parties.
- Vague, uncorroborated, or non-specific assertions, and statements not tied to quantifiable pecuniary loss, are insufficient to avoid summary judgment.
- Statements that can be understood as factual assertions about product authenticity/quality or business status, communicated to identified customers, and supported by evidence permitting a finding of heightened fault and resulting loss may present triable issues.

## Conclusion

The court applied New York standards for business slander and disparagement of goods and narrowed the case to nine specifically evidenced statements for trial, rejecting the remainder of the alleged disparagement theory for lack of adequate proof of required elements, including publication, fault, and special damages.


Fashion Boutique of Short Hills, Inc. v. Fendi USA, Inc., No. 91 Civ. 4544, 1998 WL 259942 (S.D.N.Y. May 21, 1998)