Contemporary Business and Online Commerce Law 7th Edition by Henry R Cheeseman

Exercise 1

Disparagement Zagat Survey, LLC, publishes the famous Zagat series of dining, travel, and leisure guides for different cities and locations. The Zagat restaurant guide lists and ranks each reviewed restaurant from 0 to 30 for categories such as food, décor, and service. These ratings are calculated from surveys of customers of the restaurants, and the Zagat guide often quotes anonymous consumer comments.

Lucky Cheng’s is a restaurant owned by Themed Restaurants, Inc., which is located in Manhattan, New York City. Lucky Cheng’s is a theme restaurant with a drag queen cabaret where female impersonators are both waiters and performers, and customer participation contributes to the entertainment. The Zagat Survey of New York City Restaurants rated the food at Lucky Cheng’s as 9 and rated the décor and service as 15. The Zagat guide then stated:

God knows "you don’t go for the food” at this East Village Asian-Eclectic—rather you go to "gawk” at the "hilarious” "cross-dressing” staff who "tell dirty jokes”, perform "impromptu floor shows” and offer "lap dances for dessert”; obviously, it "can be exhausting”, and weary well-wishers suggest they "freshen up the menu—and their makeup.”

Themed Restaurants sued Zagat for disparagement. Zagat defended, arguing that the ratings and comments about Lucky Cheng’s restaurant that appeared in the Zagat guide were opinions and not statements of fact and were, therefore, not actionable as disparagement. Were the statements made in Zagat’s restaurant guide statements of fact or statements of opinion? Is Zagat liable for disparagement? Themed Restaurants, Inc., Doing Business as Lucky Cheng’s v. Zagat Survey, LLC, 801 N.Y.S.2d 38, Web 2005 N.Y. App. Div. Lexis 9275 (Supreme Court of New York, Appellate Division)

Step 1 of 3

Disparagement:

An act of making an untrue statement about the services, property, reputation or product of another business is called disparagement. The plaintiff has to show the followings to prove disparagement:

1. When a person has made an untrue statement about another person’s product, services, property and business reputation.

2. When a person publish an untrue statement to a third party.

3. When the person making untrue statement knew the statement made by him was not true.

4. When a person made the statement with an intention to injure the plaintiff.