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A federal judge has refused to dismiss a defamation suit against The New York Times brought by a Philadelphia pharmaceutical sales company that says its reputation was injured when its Internet Web site was used as a graphic for an article that highlighted the risks and dangers of illicit online drug sales — even though the company’s name was never mentioned in the article. But Judge Ronald L. Buckwalter of the U.S. District Court for the Eastern District of Pennsylvania found that Franklin Pharmaceuticals cannot pursue a claim of invasion of privacy under a theory that it was portrayed in a “false light” because neither Pennsylvania nor New York law would recognize such a claim. In his six-page opinion in Franklin Prescriptions Inc. v. The New York Times Co., Buckwalter found that New York “does not have a common law tort protecting privacy against publicity that unreasonably places a person in a ‘false light.’ The cause of action simply is not available to plaintiff under New York law.” And while Pennsylvania law does provide a false light cause of action, Buckwalter predicted that the Pennsylvania Supreme Court would not allow a corporation to make a false light claim. “Although the Pennsylvania Supreme Court has not confronted this issue, it has adopted the tentative draft of Section 652 of the Restatement of Torts 2d which limits the availability of false light invasion of privacy to individuals,” Buckwalter wrote. Having adopted the tentative restatement, Buckwalter said, “the Pennsylvania Supreme Court likely would adopt the Restatement and would approve of the notion that false light invasion of privacy is limited to individuals.” Attorneys George Bochetto and Stephen E. Skovron of Bochetto & Lentz filed the suit over an Oct. 25, 2000, article in the Times headlined “A Web Bazaar Turns into a Pharmaceutical Free for All.” The article, which was published on Page 20 of a special “E-Commerce” section of the paper, discussed the negative and positive attributes of the online pharmaceutical market and highlighted the risks and dangers of illicit online businesses. Although Franklin Pharmaceuticals was never mentioned in the text of the article, its Web site was the only Web site pictured with the article. No caption accompanied the picture explaining whether Franklin Pharmaceuticals’ business was an illegal operation or a legitimate one. The suit alleged that the picture insinuated that Franklin is one of the “dangerous, illicit, unregulated, ‘unscrupulous,’ and ‘cloak and dagger’ ” Web site businesses that sell controlled pharmaceuticals at below-market prices and sometimes without requiring a doctor’s prescription. Bochetto and Skovron contend that the combination of such an insinuation and the absence of any explanation that Franklin’s business is legitimate gives rise to false light and defamation claims. Attorney Carl A. Solano of Schnader Harrison Segal & Lewis in Philadelphia moved to dismiss the entire suit, arguing that since the article discussed both legitimate and illegitimate businesses, it would be unfair to assume that readers drew any negative inferences from the picture. But Buckwalter found that Franklin Pharmaceuticals had alleged a valid claim of defamation under either Pennsylvania or New York law. “Plaintiff has alleged defendants, through innuendo, made false statements about plaintiff which are defamatory in nature and were published to a third party. Further, plaintiff has alleged that a third party reading the article would understand plaintiff’s business to be illicit or dangerous in nature,” Buckwalter wrote. “The court also finds plaintiff has sufficiently addressed defendants’ degree of liability by suggesting the defamatory mistake would have been avoided if defendants employed standard journalistic research rather than acting with reckless disregard,” Buckwalter wrote. Buckwalter also rejected Solano’s argument that the defamation claim was flawed because it did not allege specific damages. “The court believes plaintiff only had to allege general damages and that plaintiff did so by stating the article has harmed plaintiff’s reputation within the Philadelphia metropolitan area, the national pharmaceutical and medical communities, and plaintiff’s customer base,” Buckwalter wrote.

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