## Facts

- Teilhaber Manufacturing Co. developed and sold an industrial storage rack system marketed as the “Cue-Rack,” competing with Unarco Materials Storage.
- Unarco obtained a rack it believed was a Cue-Rack for comparative testing; the rack was actually a hybrid using Teilhaber uprights and beams made by another company.
- Unarco’s chief engineer conducted tests and prepared a preliminary test report that disputed Teilhaber’s strength and load-bearing claims.
- Unarco circulated the report to employees and distributors; some distributors relayed its contents to purchasers.
- Teilhaber alleged the report contained false and misleading statements because the testing did not reflect the actual Cue-Rack and sued for product disparagement (injurious falsehood).
- A jury found for Teilhaber and awarded $1,763,131 plus costs; the trial court denied prejudgment interest.
- Unarco appealed the liability and damages rulings; Teilhaber cross-appealed the denial of prejudgment interest.

## Issues

1. Whether the preliminary test report was constitutionally protected opinion or substantially true fact, barring product-disparagement liability.
2. Whether product-disparagement damages must be limited to narrowly itemized “special damages,” or may include general business losses proven by statistical and expert evidence.
3. Whether prejudgment interest was required on the damages award.

## Decision

- The court affirmed liability for product disparagement, holding the report was not protected opinion because it rested on false and undisclosed factual premises (testing a hybrid rack while implying it was the Cue-Rack).
- The court affirmed the damages verdict, holding that business losses could be proven through competent statistical, expert, and circumstantial evidence where identification of specific lost sales was impracticable.
- The court reversed the denial of prejudgment interest and remanded with directions to award prejudgment interest consistent with Colorado law.
- Disposition: affirmed in part, reversed in part, and remanded.

## Legal Principles

- Product disparagement (injurious falsehood) imposes liability for publishing a false statement harmful to another’s economic interests when the publisher intends or should recognize that harm is likely to result.
- Speech framed as “opinion” is actionable when it implies or depends on false, undisclosed, or misleading facts; a technical test report purporting to state empirical results may be treated as factual where its stated or implied premises are materially false.
- In product-disparagement cases, damages need not be limited to itemized losses tied to identified customers if such proof is not reasonably available; general business losses may be established through reliable expert and statistical evidence linking the publication to market harm.
- Prejudgment interest must be awarded when required by the governing Colorado statute and controlling precedent once damages are determined as capable of ascertainment by computation.

## Conclusion

The court held that a competitor’s test report about another’s product is not immunized as opinion when its conclusions are derived from undisclosed false factual premises, affirmed a substantial verdict based on statistically supported proof of business losses, and required an award of prejudgment interest on remand.


Teilhaber Mfg. Co. v. Unarco Materials Storage, 791 P.2d 1164 (Colo. App. 1989)