## Facts

- Benzo Gas Motor Fuel Co., a Missouri corporation, produced and sold a benzol-gasoline motor fuel mixture marketed as “Benzo Gas” in the Kansas City area.
- National Refining Co. refined and marketed gasoline and operated numerous filling stations in Kansas City.
- National’s president prepared a leaflet as part of an “educational campaign” aimed at motorists, criticizing benzol or benzol-gasoline mixtures and favoring straight gasoline.
- The leaflet was distributed to motor-fuel users in the Kansas City area and contained statements asserting that benzol mixtures were harmful to motors, caused excessive carbon, increased operating costs/repairs, and were dangerous or inferior.
- Benzo Gas alleged the leaflet’s statements were false, made maliciously, and intended to discourage purchase of Benzo Gas and injure its business and product reputation.
- Benzo Gas claimed loss of sales and injury to business standing after the leaflet’s circulation.
- The case was filed in Missouri state court for libel, removed to federal court on diversity grounds, and tried to a jury.
- The jury awarded Benzo Gas $10,000 in actual damages and $15,000 in punitive damages; judgment was entered on the verdict.
- National appealed, challenging liability, evidentiary rulings, instructions, and the sufficiency of proof of falsity, malice, and damages.

## Issues

1. Whether disparaging statements about a competitor’s product in a leaflet distributed to customers were actionable as libel per se, rather than protected opinion or mere competitive “puffing.”
2. Whether there was sufficient evidence for a jury to find the challenged statements false in the sense ordinary readers would understand them.
3. Whether the evidence permitted a finding of malice supporting punitive damages.
4. Whether the trial court committed reversible error in refusing a directed verdict and in its evidentiary and instructional rulings.

## Decision

- The court of appeals affirmed the judgment for Benzo Gas.
- It held the leaflet contained statements that were largely factual and verifiable, published “of and concerning” Benzo Gas’s product, and capable of injuring Benzo Gas in its business.
- It found substantial evidence supporting the jury’s findings on falsity, malice, and resulting injury.
- It upheld punitive damages as supported by evidence from which the jury could infer malicious publication.
- It found no prejudicial error in the challenged trial rulings and declined to disturb the damage awards as excessive.

## Legal Principles

- False statements of fact that disparage a competitor’s product and tend to injure the competitor in its trade or business may be actionable as libel, including as libel per se under applicable state law.
- Statements framed as “educational” or competitive advertising are not protected when they assert verifiable facts that are false and injurious.
- Publications imputing to a manufacturer or merchant that it sells a product injurious to the public may be actionable per se, permitting recovery without proof of special damages where state law so provides.
- Malice for punitive damages may be inferred from evidence such as knowledge of falsity, reckless disregard for truth, or a targeted campaign intended to damage a competitor’s business.

## Conclusion

The Eighth Circuit sustained a jury verdict for business defamation where a petroleum company distributed a leaflet making false, factual claims that a rival’s motor fuel was harmful and unsafe, concluding the publication was actionable per se and that the evidence supported compensatory and punitive damages.


National Refining Co. v. Benzo Gas Motor Fuel Co., 20 F.2d 763 (8th Cir. 1927)