The controversy began after the Aquarium told the public to avoid lobster because lobster fishing poses a risk to the endangered North Atlantic right whale. The Maine lobster industry employs roughly 6000 people and catches a whopping 80 percent of the “lobster landings.”

The Aquarium maintains a program called Seafood Watch, which assigns ratings to different species of seafood, “based on environmental impact and sustainability.” It gives a “red” rating to seafood that “comes from sources that don’t align with [Seafood Watch’s] guiding principles.” It gave a red rating to lobster. The reason was that lobster fishing was all wrong for the right whale:

“For many years, the Aquarium has raised concerns about the impact of fishing on the North Atlantic right whale, which is found primarily in the waters of the North Atlantic Ocean. The North Atlantic right whale is listed as an endangered species under the Endangered Species Act and is protected under the Marine Mammal Protection Act. According to the Aquarium, one threat to the North Atlantic right whale is the risk of entanglement in fishing gear, including the buoy lines lobstermen use to mark the placement of their lobster traps.”

The industry noted that the Aquarium previously gave a “yellow” rating, and since then the industry has implemented major reforms to protect whales. However, the Aquarium then changed the rating to red and issued a press release that recommended that consumers “[a]void American lobster caught by trap from Georges Bank and the Gulf of Maine stocks due to risks to the critically endangered North Atlantic right whale and insufficient measures for reducing these risks.”

While the press release did not name any companies, the litigants presented evidence of a sharp decline in sales. For example,  Bug Catcher, Inc. estimated that it lost about 20% of its business after the Aquarium issued the “red” rating.

The industry sued for group libel.

We have repeatedly discussed group libel cases. They routinely fail. Indeed, the group defamation rule (rejecting such claims) goes back to the 1700s in England. R v. Alme & Nott (1699) 91 Eng. Rep. 790; 3 Salk. 224 (KB) (per curiam).

Such lawsuits are very difficult to maintain.  In Neiman-Marcus v. Lait (1952), a New York federal district court addressed a defamation claim arising from the publication of the book “U.S.A. Confidential.” The author wrote that “some” models and “all” saleswomen at the Neiman-Marcus department store in Dallas were “call girls.” It also claimed that “most” of the salesmen in the men’s store were “faggots.” The store had nine models, 382 saleswomen and 25 salesmen. The court found the size of the group of women was too big to satisfy a group libel standard. However, the size of the group of salesmen was viewed as sufficiently small to go to trial.

There have been rare wins under the exception to the group defamation rule. For example, in Ball v. Taylor, the U.S. Court of Appeals for the Eighth Circuit allowed about 100 employees to sue over a statement about disability fraud. However, the statement was accompanied by a document that specifically identified each individual employee by name and address.

The case is reminiscent of the Oprah litigation in Texas Beef Group v. Winfrey, 201 F.3d 680 (5th Cir. 2000). The case was based on a show involving Oprah Winfrey called the “Dangerous Food” show, which dealt with “Mad Cow Disease.” Winfrey discussed the new-variant CJD in Britain. After hearing from various experts about the dangers of Mad Cow Disease, Oprah said she would not eat ground beef. Showing the power of Oprah, the court reported that “following the April 16, 1996, broadcast of the “Dangerous Food” program, the feed cattle market in the Texas Panhandle dropped drastically. In the week before the show aired, finished cattle sold for approximately $61.90 per hundred weight. After the show, the price of finished cattle dropped as low as the mid-50’s; the volume of sales also went down. The cattlemen assert that the depression continued for approximately eleven weeks.” The industry sued but lost before a Texas jury.

These cases are often brought not as group libel but, as with Oprah, as a “product disparagement” action. That is akin to defaming a product like beef.

Group libel is tough outside of small groups like the salesmen at one Neiman Marcus store.

In this case, the Aquarium moved to dismiss on the grounds that the statements were (1) about the Gulf of Maine/Georges Bank area lobster industry at large, not “of and concerning” the plaintiffs specifically, and (2) constituted non-actionable scientific opinion, rather than defamatory assertions of fact. It also asked for dismissal under Maine’s anti-SLAPP statute, arguing that its rating and statements constituted protected petitioning activity.

The district court ruled against dismissal and wrote an interesting opinion on why group libel is viable in this case. It noted that, under the Second Restatement of Torts Section 564A, there is an exception to group defamation when “the circumstances of publication reasonably give rise to the conclusion that there is particular reference to [a] member [of the group].” The appellate court noted the four-point reasoning of the district court:

First, “the industry-wide nature of the Statements necessarily implicated each and every member of the Plaintiff group.” Id. at *47-48. Second, the Statements were not “the type of hyperbolic statements that undergird the group defamation rule” but instead “purported to be based upon scientific data.” Id. at *48. Third, the Statements “included a call to action” directing consumers to avoid purchasing American lobster. Id. Fourth, and finally, certain of the plaintiffs’ customers had specifically referenced the Report as influencing their decision to stop purchasing the plaintiffs’ lobster. Id.

The First Circuit, however, rejected that analysis. The panel ruled that this case not only did not meet the “of and concerning” requirement but raised serious free speech concerns:

“we are mindful that — as the Aquarium and amici point out — a broad reading of the “of and concerning” requirement may raise constitutional concerns to the extent that it deters speech on public matters. See, e.g., Emerito Estrada Rivera-Isuzu de P.R., Inc. v. Consumers Union of U.S., Inc., 233 F.3d 24, 28 (1st Cir. 2000). “[S]peech on public issues occupies the ‘highest rung of the h[ie]rarchy of First Amendment values.'” Connick v. Myers, 461 U.S. 138, 145 (1983) (quoting NAACP v. Claiborne Hardware Co., 458 U.S. 886, 913 (1982)).”

I found both the district court opinion and the appellate opinion to be some of the best discussions of the group defamation rule in years.

Here is the opinion: Maine Lobster opinion