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Innovative Block of South Texas Ltd.

The firm won a complete victory from the Texas Supreme Court in Innovative Block of South Texas Ltd. v. Valley Builders Supply. In a unanimous opinion, the Court reversed a $1.8 million-dollar compensatory damages verdict and rendered a take-nothing judgment in our client’s favor.

The lawsuit involves two lightweight block manufacturers in South Texas, Valley and our client Innovative. Valley claimed that Innovative’s false and disparaging statements about the quality of Valley’s block caused Valley to go out of business. Valley alleged that Innovative falsely accused Valley of using “bad” aggregates in its manufacturing process and that Innovative provided misleading photos and descriptions of Valley’s block. Valley submitted only a defamation claim to the jury and prevailed. The Corpus Christi court of appeals affirmed.

The Texas Supreme Court heard the case as one of the first Zoom arguments held before the Court in spring 2020, and held in an opinion issued later that summer that the disparaging remarks about the quality of Valley’s products did not necessarily impugn Valley’s character or reputation and therefore were not defamatory per se. The Court found no evidence to support an award of general damages for harm to Valley’s reputation because Valley’s damages expert based his opinion on unreliable data and conflated general and special damages. The Court further held that the pecuniary loss for which special damages were sought may be cognizable as business disparagement but not as defamation.