## Facts

- *Forbes* magazine published an article, “The Incredible Shrinking Empire,” describing the “Granada” organization and its chairman in negative financial terms.
- The article identified “Granada Foods” and “Granada BioSciences” as the two publicly traded companies in the organization and stated they were “so broke they haven’t been able to publish their 1990 annual reports.”
- Granada Biosciences, Inc. and Granada Foods Corporation sued the publisher and author for business disparagement, alleging the article contained false, disparaging statements about them that harmed their businesses and stock.
- After an earlier appeal allowed the business disparagement claims to proceed, the trial court on remand granted a no-evidence summary judgment for the defendants.
- The plaintiffs appealed, arguing they produced more than a scintilla of evidence on each element of business disparagement, including that the statements were “of and concerning” them, false, malicious, and caused special damages.

## Issues

1. Whether the plaintiffs’ claims were properly treated as business disparagement claims requiring proof of economic injury rather than as defamation claims.
2. Whether the evidence raised a genuine fact issue that the article’s statements were “of and concerning” the plaintiffs under an ordinary-reader standard.
3. Whether the plaintiffs produced more than a scintilla of evidence of falsity and disparaging meaning as to the plaintiffs.
4. Whether the plaintiffs produced more than a scintilla of evidence of malice sufficient to defeat a no-evidence summary judgment.
5. Whether the plaintiffs produced more than a scintilla of evidence of special damages (pecuniary loss) attributable to the publication.

## Decision

- The court of appeals reversed the no-evidence summary judgment for the defendants and remanded for further proceedings.
- The court held the plaintiffs presented more than a scintilla of evidence creating fact issues on the elements of business disparagement, including “of and concerning,” falsity, malice, and special damages.
- The court concluded the challenged statements and their application to the plaintiffs were issues for a fact-finder rather than resolution by summary judgment.

## Legal Principles

- Business disparagement is a distinct tort protecting economic interests and generally requires proof of: (1) publication of disparaging words, (2) falsity, (3) malice, and (4) special damages.
- The “of and concerning” requirement is assessed by how an ordinary reader would reasonably understand the publication as a whole, not by the author’s asserted intent.
- Under Texas no-evidence summary judgment practice, the motion must be denied if the nonmovant produces more than a scintilla of probative evidence on each challenged element.
- Evidence permitting an inference that the publisher knew of errors or acted with reckless disregard for truth can be sufficient, at the summary-judgment stage, to raise a fact issue on malice in a business disparagement claim.
- Special damages in business disparagement must be shown as pecuniary loss; evidence of economic harm tied to the publication may satisfy the nonmovant’s burden to avoid no-evidence summary judgment.

## Conclusion

The court held that the plaintiffs’ evidence—viewed under the ordinary-reader test and the “more than a scintilla” standard—was sufficient to require trial on whether the article falsely disparaged the plaintiffs’ businesses, was published with malice, and caused pecuniary loss, so the no-evidence summary judgment was reversed and the case remanded.


Granada Biosciences, Inc. v. Forbes, Inc., 49 S.W.3d 610 (Tex. App.—Houston [14th Dist.] 2001)