A Cook County judge will allow a Chicago businessman to continue his defamation lawsuit against Crain Communications.
Bow Truss Coffee founder Philip Tadros is seeking $38 million from Crain’s Chicago Business in a defamation lawsuit over a July 2016 Crain’s article he called a “hit piece.” The complaint, originally filed in July 2017, now focuses on six allegedly false statements in the article giving rise to claims of defamation, false light, tortious interference with business relations and prospective economic advantage.
Crain asked Judge James O’Hara to dismiss all nine counts with prejudice, saying Tadros failed to make sufficient factual allegations. In an opinion issued Nov. 19, O’Hara denied that motion.
In addition to the company, Tadros named as defendants Keith Crain, Rance Crain, KC Crain and Christopher Crain, the family members who run the business and weekly publication, as well as editor Michael Arndt, reporter Peter Frost and former Crain’s publisher David Snyder.
One paragraph in question reads: “A review of Tadros’ operations, coupled with interviews with more than two dozen former business partners, associates, investors, vendors and clients, reveals a pattern of mismanagement, questionable accounting practices and, some say, a penchant for falling behind on bills and a knack for burning through other people’s money.”
O’Hara said the defendants aren’t “entitled to rely” on assertions the statements in the article are generally true, or that Tadros generally admitted to the “conduct and subsequent characterization” those sentences allege.
Other article excerpts, O’Hara continued, impute either an inability to hold a job or imply criminal conduct. As such, the defendants’ “contention that the statement is reasonably capable of innocent construction carries little weight.”
“Tadros has lived large,” the article asserted, “driving a Mercedes Benz G-Class, dining at expensive restaurants, holding his wedding receptions at the Four Seasons Hotel — even as some of his businesses underperformed.”
Crain’s argued that sentence was non-actionable opinion, but O’Hara cited a 1993 Illinois First District Appellate Court decision in Kumaran v. Brotman, establishing “a false assertion of fact can be libelous even if couched in the form of rhetorical hyperbole.” If the Crain’s article is taken as true, O’Hara explained, Tadros would “undoubtedly be prejudiced in his endeavor as a businessman.”
O’Hara also determined Tadros effectively showed evidence of vendors and investors canceling contracts with him and said an objectively reasonable person could conclude the magazine acted with malice to paint Tadros as a bad and perhaps criminal businessman. He said Crain’s contentions that the article didn’t harm Tadros as an individual, only his business establishments, “are erroneous.” He further noted that Tadros alleged the defendants not only knew about the accounts and investors who sought to change a business relationship, but “in fact contacted those third parties with whom Tadros later lost accounts and prospective business.”
In other court actions, Tadros has sued business partners for comments they made in the article. In the original complaint against Crain’s, Tadros said Frost interviewed him for the piece and also noted he communicated with Arndt and Snyder before publication “to address the several inaccuracies and misrepresentations.”
Tadros alleged some of the people quoted in the Crain’s piece contacted him after publication to report their remarks were taken out of context or otherwise misrepresented. He said the magazine had limited financial documents on which to base its assertions about his overall portfolio and “intentionally, or at least recklessly, jumped to unfounded conclusions based on incomplete records.”
According to Cook County court records, Tadros is represented in the action by attorneys from the Mudd Law Offices, of Chicago.
Crain Communications and other defendants are represented by the firm of Mandell Menkes LLC, of Chicago.