08:14, April 07 390 0 abajournal.com

2017-04-07 08:14:06
Taft Stettinius didn’t defame gaming business in its client newsletter, appeals court rules

Taft Stettinius & Hollister won’t have to face a defamation suit over statements it made about a gaming firm in an emailed client newsletter, an Illinois appeals court has ruled.

The appeals court ruled that the law firm’s statements were substantially true and agreed to toss the suit, the Indiana Lawyer reports. The March 31 opinion by the Appellate Court of Illinois, First Judicial District, is here (PDF).

The plaintiff, Universal Gaming Group, is a company that owns and operates video game machines. Taft Stettinius & Hollister has clients that compete with the Universal Gaming Group.

At issue was the law firm newsletter’s description of a settlement agreement that the UGG had reached with the Illinois Gaming Board. The settlement agreement made no finding of wrongdoing, although it recited allegations of misconduct by an employee accused of failing to properly identify a referring “finder” of a possible location of a gaming terminal. The agreement required the payment of a $50,000 fine for the employee’s alleged conduct and additional training for people who find video game locations for the company.

The company claimed that the newsletter’s description falsely asserted that the UGG’s sales agents acted outside Illinois gaming laws, and other video game operators had “struggled” with such conduct. The email was sent to the UGG’s competitors and to businesses that were potential locations for video games, the UGG had alleged.

Partly at issue was this statement by the law firm: “So, for the scores of terminal operators that have struggled with UGG’s sales agents in the past, this settlement agreement apparently means those individuals have found religion and will not act outside the [Illinois Gaming Board’s] rules and policies.” The law firm also advised its clients “not to engage in this type of behavior with the thought that the punishment will not be overly severe. … Please continue doing the right thing, and educate your sales agents about the rules and policies that apply to them.”

The UGG had pointed out that there was no finding that its employees had failed to comply with gaming regulations and alleged the newsletter suggested otherwise. The appeals court was not persuaded. Although the settlement made no finding of any violation, it also made no finding that the employee had not violated the regulations, the appeals court said.

In addition, the appeals court said, statements that the UGG agents had “found religion” and that companies should not “engage in this type of behavior” amounted to statements of opinion that weren’t actionable.

The appeals court also tossed claims for commercial disparagement and violation of the Illinois Uniform Deceptive Trade Practices Act.

Cezar Froelich, chairman of Taft’s Chicago office, told the Indiana Lawyer that the case hasn’t spurred the law firm to make any formal changes to its policies on lawyer blogs and newsletters. But it might have affected the lawyers who write the articles.

“Is the firm and practicing partners a little bit more careful?” Froelich said. “Sure, it’s just human nature.”