Cengage Advantage Books: Fundamentals of Business Law Today 10th Edition by Roger LeRoy Miller

Exercise 26

A Question of Ethics-Free Speech. Aric Toll owns and manages the Balboa Island Village Inn, a restaurant and bar in Newport Beach, California. Anne Lemen lives across from the inn. Lemen complained to the authorities about the inn's customers, whom she called "drunks" and "whores." Lemen told the inn's bartender Ewa Cook that Cook "worked for Satan." She repeated her statements to potential customers, and the inn's sales dropped more than 20 percent. The inn filed a suit against Lemen. [ Balboa Island Village Inn, Inc. v. Lemen, 40 Cal.4th 1141, 156 P.3d 339 (2007)] (See The Constitution as It Affects Business.)
1. Are Lemen's statements about the inn's owners and customers protected by the U.S. Constitution? In whose favor should the court rule? Why?
2. Did Lemen behave unethically in the circumstances of this case? Explain.