JUSTICE DEVINE delivered the opinion of the Court. The common law recognizes the value of a business’s reputation and the value of its commercial relations. It protects the former through actions for defamation and the latter through actions for business disparagement. In this case, the corporate plaintiff sued a former business competitor, alleging that the competitor’s disparaging remarks about the plaintiff’s products contributed to its financial demise. The plaintiff’s pleading asserted claims for defamation, slander per se, and business disparagement, but the plaintiff elected to submit only the defamation claims to the jury. The jury returned a defamation verdict in the plaintiff’s favor, awarding general damages for the plaintiff’s reputational injury and special damages for a related pecuniary loss. The trial court rendered judgment on that verdict, and the court of appeals affirmed it, concluding the evidence sufficient to support the jury’s award of general and special damages. 592 S.W.3d 147 (Tex. App.—Corpus Christi–Edinburg 2018). Because the harm in this case relates solely to the plaintiff’s commercial interests and the falsehoods disparage only the quality of the plaintiff’s products and not the character of its business, we conclude that this is not a case of defamation but rather of business disparagement—a cause of action not submitted to the jury. We further conclude that there is no evidence for either the award of general damages for the plaintiff’s reputation or the award of special damages connected to one of the allegedly defamatory remarks. We accordingly reverse the judgment of the court of appeals affirming the award of compensatory damages and render judgment for the defendant. I This case involves two building-supply companies, Valley Builders Supply, Inc., and Innovative Block of South Texas, Ltd. Both companies manufacture and sell concrete blocks and pavers to the same customer base in the Rio Grande Valley of South Texas. Valley began its business in the Rio Grande Valley in 1940. Valley had this market to itself for over sixty years. Domestic competitors were distant and transportation costs gave Valley a distinct competitive advantage. Innovative entered the market late in 2006, however, with a new concrete plant in La Feria. From that time, Valley and Innovative directly competed for customers until Valley ceased operations in 2010. According to Valley, Innovative bears much of the blame for Valley’s demise because of its false and disparaging remarks regarding the quality of Valley’s products. Describing Innovative’s sales tactics as unfair and illegal, Valley sued for damages under theories of business disparagement and defamation. Valley’s pleadings asserted that Innovative disparaged the quality of Valley’s concrete blocks by falsely accusing Valley of using “bad” aggregates in its manufacturing process. Because aggregates such as sand, gravel, or crushed stone account for over sixty percent of a concrete block’s volume, the quality of aggregates strongly influences the quality of a block. Valley’s pleadings enumerated claims for business disparagement, defamation, and slander per se under three counts. Under the business-disparagement count, Valley asserted that Innovative’s misrepresentations about the quality of its aggregate and its products caused Valley’s business failure. Valley alleged that Innovative intended to interfere with Valley’s economic interests, that Innovative’s disparagements were malicious because Innovative knew them to be false, and that Innovative’s actions caused it general and special damages reflected in the steady decline of its sales and the specific loss of one customer’s business. Under the defamation count, Valley incorporated all of the preceding allegations, additionally asserting that the statements about the low quality of its products were also defamatory and actionable per se because they injured Valley in its profession or occupation. Finally, Valley asked for the award of its actual damages, including lost benefits of prospective contracts, lost profits, injury to reputation, lost sales, and loss of business. At trial, Valley presented evidence of four instances in which Innovative’s representatives disparaged the quality of Valley’s concrete blocks. Statement One: “That is what their block looked like[,] and they’re making an inferior block.” The first of these statements was made to Stephen Stange. Stange was not a concrete-block customer. He was instead in the business of selling materials to concrete plants. Stange met with Ryan Murphy, an Innovative representative, to gauge Innovative’s interest in purchasing aggregate and other materials from his employer. During their meeting, Murphy showed Stange a picture of Valley’s “cull” pile and said, “[T]his is the kind of quality our competition is making.” Stange, however, was familiar with Valley’s plant because Valley was one of his customers. He immediately recognized the photograph to be of Valley’s culls—defective blocks that failed to meet quality standards—and corrected Murphy. Later, another Innovative representative, John Sanchez, showed Stange the same picture and parroted Murphy’s remark, suggesting that Valley was making an “inferior block.” Again, Stange did not believe the statement and communicated that to Sanchez. Murphy left Innovative not long after his meeting with Stange, but Sanchez remained with Innovative as its sales manager until he was terminated in October 2009. Statement Two: “Valley was producing bad product[,] and they used bad materials.” Sanchez was a key witness for Valley. He testified that Innovative’s president, David Riegert, was “on a mission” to put Valley out of business—so much so that he advised Innovative’s sales team to tell customers that Valley’s product was inferior and that Valley used bad aggregate to manufacture its blocks. Sanchez came to disagree with these tactics, going so far as to admonish Riegert in an email that Innovative should exercise more care in what it said about Valley’s products: [An Innovative salesperson] told a customer that Valley Block was using bad product and that they use bad materials. [Another salesperson] told them that they were using bad materials. We cannot be telling customers that Valley Block uses bad materials. We don’t know if they do[,] but we need to be careful. Sanchez could not remember the name of the customer to whom these disparaging remarks were made. Statement Three: “Valley Block uses low[-]quality aggregates to manufacture pavers.” Sanchez further testified that Riegert’s misleading sales tactics continued in his correspondence to customers. In responding to a customer complaint concerning the quality of Innovative’s pavers, Riegert gratuitously accused Valley and another competitor of using low-quality materials: Thank you for your telephone call regarding your recent purchase of pavers for your TXDOT project on 1 Mile East in Mercedes, TX. We are sorry to hear that the pavers lacked the quality you have come to expect from us. We strive to use better aggregates since our competition such as Pavestone and Valley Block use low quality aggregates to manufacture pavers. According to Sanchez, Innovative “did not have a clue” as to whether Valley was actually using low-quality aggregates at the time Riegert sent the letter. Statement Four: “Valley Block received a load of bad aggregate.” The fourth and final statement was made to Cynthia Hinojosa, a Valley customer and co-owner of J&C Ram Masonry. Hinojosa testified that, although she could not remember who, an Innovative representative once told her that Valley had gotten “a load of bad aggregate.” Believing that she could not risk buying from Valley because of the purported bad load, Hinojosa switched her business from Valley to Innovative for a particular project. After that project, Hinojosa attempted to return her business to Valley, but due to scheduling issues, she had to continue buying from Innovative. Valley presented two experts at trial to quantify the damages it sustained from Innovative’s allegedly disparaging and defamatory statements. Ignacio Garza, a certified public accountant, was asked to calculate the profits Valley lost as a result of Innovative’s statement to Hinojosa about Valley’s “load of bad aggregate.” Because Hinojosa’s company never again purchased from Valley following Innovative’s “bad aggregate” comment, Garza used Innovative’s gross sales to Hinojosa’s company as the basis for calculating Valley’s loss. He broke down those sales by year, multiplying annual sales by what he estimated to be Valley’s profit margin for those years. After doing the math, he concluded that Valley would have recorded a profit of $93,528, had Hinojosa not switched her business to Innovative. Dr. Kenneth Lehrer, a forensic economist, was the next expert to testify on Valley’s behalf. Lehrer was asked to “estimate, as best as possible, the general damages that came about to Valley . . . by the loss of reputation through the statements of others.” To provide that estimate, Lehrer turned to a statistical analysis of Valley’s business losses over what he deemed to be the relevant period, analyzing those losses under what he described as the Quasi-Monte Carlo methodology. This methodology involved selecting random variables and averaging out projected losses to produce a range of business losses Valley may have sustained from 2007 to 2015. Lehrer ultimately concluded that Valley’s total losses attributable to the defamatory statements were somewhere between $1.5 and $1.66 million. At the conclusion of Valley’s case, Innovative moved for a directed verdict on the defamation claim, arguing that Valley’s allegations and evidence supported, at best, only a claim of business disparagement. The trial court denied the motion. At the subsequent charge conference, the parties again argued the distinction between defamation and disparagement—that is, the legal difference between defaming a business’s reputation, on the one hand, and disparaging the business’s products or services on the other. Innovative objected to the submission of the defamation charge, offering business disparagement as the appropriate charge. Valley, however, elected to submit its case as defamation, and the trial court denied Innovative’s objections. The jury returned a verdict for Valley, finding each of the four statements defamatory and awarding general damages of $1.8 million for Valley’s reputational injury and special damages of $93,528 for its lost profits. The jury also awarded $10 million in exemplary damages. Innovative moved for judgment notwithstanding the verdict, while Valley moved the court to accept the jury’s verdict. The trial court denied Innovative’s motion, granted Valley’s, and rendered judgment on the verdict, awarding Valley $1,803,528 in compensatory damages[1] and $937,056 in exemplary damages.[2] Innovative later settled the exemplary-damages award but appealed the compensatory-damages award, which the court of appeals affirmed. 592 S.W.3d at 164. The appellate court concluded that the statements at issue were defamatory and that the expert testimony was reliable and sufficient to sustain the damages. Innovative appealed, and we granted its petition for review. II Innovative argues again that the communications at issue are not actionable as defamation because they do not defame Valley itself but rather only disparage Valley’s products. Innovative submits that Valley’s complaint amounts to, at most, business disparagement because Valley’s suit is based on an economic injury to its business rather than an injury to its reputation. Tellingly, Innovative argues that Valley’s damages model was predicated entirely on pecuniary loss—the lost profits occasioned by Innovative’s product disparagement—which is the hallmark of a business- disparagement claim. Valley responds that Innovative’s disparaging remarks portrayed it as an incompetent concrete-block producer and were thus defamatory per se because the communications reflected adversely on Valley’s fitness to conduct its business. At the very least, Valley submits that Innovative’s disparaging remarks and false depiction of Valley’s cull pile were reasonably capable of having a defamatory meaning. The threshold issue, then, is whether Valley’s allegations and proof in this case support an action for defamation, business disparagement, or both. The torts of defamation and business disparagement are alike in that “both involve harm from the publication of false information.” In re Lipsky, 460 S.W.3d 579, 591 (Tex. 2015). But there are important differences between the two, largely explained by the interests the respective torts seek to protect. Id. Defamation serves to protect one’s interest in character and reputation, whereas disparagement protects economic interests by providing a remedy for pecuniary losses from slurs affecting the marketability of goods and services. Id. The different interests each tort protects are reflected in their respective elements. To state a defamation claim, a plaintiff must show (1) the publication of a false statement of fact to a third party, (2) that was defamatory concerning the plaintiff, (3) with the requisite degree of fault, at least amounting to negligence, and (4) damages, in some cases. Id. at 593. A defamatory statement is one that “tends [] to harm the reputation of another as to lower him in the estimation of the community or to deter third persons from associating or dealing with him.” RESTATEMENT (SECOND) OF TORTS § 559 (AM. L. INST. 1977); see also Hancock v. Variyam, 400 S.W.3d 59, 63 (Tex. 2013) (defining defamation “as the invasion of a person’s interest in her reputation and good name”). In contrast, the tort of business disparagement encompasses falsehoods concerning the condition or quality of a business’s products or services that are intended to, and do in fact, cause financial harm. See RESTATEMENT (SECOND) OF TORTS § 629. Its elements are more stringent than those of defamation because business disparagement protects against pecuniary loss. Hurlbut v. Gulf Atl. Life Ins., 749 S.W.2d 762, 766 (Tex. 1987). The publication of a disparaging statement concerning the product of another is actionable when (1) the statement is false, (2) published with malice, (3) with the intent that the publication cause pecuniary loss or the reasonable recognition that it will, and (4) pecuniary loss does in fact result. See Forbes, Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167, 170 (Tex. 2003) (listing elements as the publication of false and disparaging information with malice, and without privilege, causing special damages). The Restatement identifies proof of falsity, fault, and damages as points of distinction between the two actions.[3] See RESTATEMENT (SECOND) OF TORTS § 623A cmt. g. Comparing their respective elements reveals where the torts differ: Defamation “seeks to protect reputation interests,” whereas business disparagement “seeks to protect economic interests against pecuniary loss.” Waste Mgmt. of Tex., Inc. v. Tex. Disposal Sys. Landfill, Inc., 434 S.W.3d 142, 155 (Tex. 2014). Because business disparagement, unlike defamation, is solely concerned with economic harm, proof of special damages is a “fundamental element of the tort.” Id. That special damages are fundamental to business disparagement makes a plaintiff’s injury a useful proxy for determining when the tort is actionable. Thus, if the gravamen of the plaintiff’s claim is for special damages (e.g., an economic injury to the plaintiff’s business), rather than general damages to its reputation, then the proper cause of action may be for business disparagement. Yet the nature of a plaintiff’s injury is no more than a proxy. Even though defamation’s principal purpose is to provide a remedy for reputational harm (a noneconomic injury), plaintiffs may nevertheless recover special damages as well. Lipsky, 460 S.W.3d at 593. The torts thus overlap to the extent that both permit plaintiffs to recover for pecuniary loss. See id. Where the torts meaningfully diverge, then, is not in the nature of the injury but instead in the nature of the alleged falsehoods. This is consistent with the understanding that defamation redresses dignitary harm, while business disparagement redresses commercial harm. Id. at 591. Dignitary harm and commercial harm are not the same, of course, which is why “[i]mpugning one’s reputation is possible without disparaging its commercial interests and vice versa.” Id. III Although Valley asserted claims for both business disparagement and defamation, it submitted only the defamation claim to the jury. Innovative objected and moved for a directed verdict as to that claim, asserting that there was no evidence of harm to Valley’s reputation. The trial court denied the motion and submitted Valley’s requested defamation charge. Valley maintains that defamation was the correct charge because Innovative’s disparaging comments about the quality of its products were defamatory per se and that its false statement about a bad load of aggregate was defamatory per quod. Defamation claims are of two types, per se and per quod. Hancock, 400 S.W.3d at 64. When defamation is per se, the communication is actionable in and of itself without proof of actual damages. Lipsky, 460 S.W.3d at 593. A statement is defamatory per se when it falls within one of the categories that the common law considers so obviously harmful to reputation that the jury may presume the existence of general damages. Id. General damages are awarded fornoneconomic harm, such as the embarrassment, humiliation, or loss of respect caused by the defamatory publication. Id. Defamation per quod, on the other hand, is “[d]efamation that either (1) is not apparent but is proved by extrinsic evidence showing its injurious meaning, or (2) is apparent but not a statement that is actionable per se.” BLACK’S LAW DICTIONARY 526 (11th ed. 2019); see also Hancock, 400 S.W.3d at 63–64 (discussing the distinction between per quod and per se). Defamation per quod is actionable on allegations and proof of special damages. See Waste Mgmt. of Tex., 434 S.W.3d at 160 (upholding awards of special and exemplary damages while holding evidence of general damages to reputation legally insufficient); Hancock, 400 S.W.3d at 71 (observing that special damages such as the loss of a business referral might support a defamation claim upon proof). Special damages are never presumed because they represent the specific pecuniary harm caused by the defamatory statement. Lipsky, 460 S.W.3d at 593. Defamation per se and per quod are not separate causes of action. The distinction between them rests on a rule of evidence, and their difference lies in the proof necessary to establish an injury. See Arant v. Jaffe, 436 S.W.2d 169, 176 (Tex. App.—Dallas 1968, no writ). Whether a communication is defamatory is in the first instance a legal question for the court. Hancock, 400 S.W.3d at 66. A statement is defamatory only if it is reasonably capable of a defamatory meaning. Id. (citing Musser v. Smith Protective Servs., Inc., 723 S.W.2d 653, 655 (Tex. 1987); see also RESTATEMENT (SECOND) OF TORTS § 614, cmt. b (noting that it is for the court to decide “whether the communication was reasonably capable of conveying the particular meaning, or innuendo, ascribed to it by the plaintiff” and “whether that meaning is defamatory in character”). A defamatory statement is a statement of fact about a person that tends to diminish the plaintiff’s reputation. See Hancock, 400 S.W.3d at 63. Defamation law also extends to corporations. It is “well settled that corporations, like people, have reputations and may recover for harm inflicted on them.” Waste Mgmt. of Tex., 434 S.W.3d at 149. Even so, a corporation has no reputation in the personal sense of an individual. It does, however, have standing in the industry in which it operates and thus may sue for defamatory statements directed at its professional reputation and practices. See W. PAGE KEETON, ET. AL., PROSSER & KEETON ON THE LAW OF TORTS § 111, at 779 (5th ed. 1984). The four statements about which Valley complains concern Valley’s product. In these communications, Innovative refers to Valley’s concrete blocks and aggregate as “inferior,” “bad,” and “low quality.” Innovative maintains that these statements are not actionable as defamation because they do not defame Valley itself but rather only disparage Valley’s products. Valley responds that the remarks portray it as an incompetent concrete-block producer and are thus defamatory per se because they reflect adversely on Valley’s fitness to conduct its business, one of the categories of defamation the common law views as so obviously hurtful to reputation that general damages are presumed. While the torts of defamation and disparagement protect different interests, they may overlap in some fact situations, “particularly in cases of disparagement of the plaintiff’s business or product.” RESTATEMENT (SECOND) OF TORTS § 623A, cmt. g. Our decision in Lipsky acknowledges that the torts are not mutually exclusive, observing that “a plaintiff may have a claim for defamation, or for business disparagement, or both.” Lipsky, 460 S.W.3d at 591. In that opinion, we included examples of business disparagement that were not strictly speaking defamatory, including one quite similar to the statements in this case—a publication “that says the plaintiff’s wood products are inferior and will not stand up.” Id. at 591 n.10 (quoting 3 DAN B. DOBBS, ET AL., THE LAW OF TORTS § 656, at 618–19 (2d ed. 2011)). The Restatement explains that although it may be possible to imply incompetence in nearly every case in which the quality of a business’s product is disparaged, something more direct may be required to impugn a business’s reputation. RESTATEMENT (SECOND) OF TORTS § 623A, cmt. g. One court, after conducting an early survey of similar cases, explained the relationship between defamation and comments regarding a business’s products: [W]here the publication on its face is directed against the goods or product of a corporate vendor or manufacturer, it will not be held libelous per se as to the corporation, unless by fair construction and without the aid of extrinsic evidence it imputes to the corporation fraud, deceit, dishonesty, or reprehensible conduct in its business in relation to said goods or product. Nat’l Ref. Co. v. Benzo Gas Motor Fuel Co., 20 F.2d 763, 771 (8th Cir.), cert. denied, 275 U.S. 570 (1927). Our cases make a similar point by emphasizing that defamatory communications about a corporation’s reputation are those directed at the character of the owner rather than the underlying business. See Waste Mgmt., 434 S.W.3d at 150 n.35 (citing cases). And we are in accord with those cases and commentaries that require a fair imputation of corporate dishonesty or other reprehensible conduct in connection with the disparaged goods and services to sustain a separate claim for defamation per se. See, e.g., Lipsky, 460 S.W.3d at 594–95 (sustaining a natural- gas company’s defamation action after the defendant falsely accused the company of contaminating an aquifer during fracking operations); Waste Mgmt., 434 S.W.3d at 147, 156–62 (sustaining a waste-disposal company’s defamation action after the defendant falsely accused the company of evading environmental rules and ignoring sound environmental practices); Bell Publ’g Co. v. Garrett Eng’g Co., 170 S.W.2d 197, 199–201, 207 (Tex. 1943) (sustaining engineering firm’s defamation action after defendant falsely stated that no one in the firm held an engineering degree). Because the disparaging remarks about the quality of Valley’s products do not necessarily impugn Valley’s character or reputation, Innovative’s alleged statements are not defamatory per se and general damages are therefore not presumed. IV But even though reputational harm is not presumed here, Valley may nevertheless be entitled to general damages if there is evidence of an actual injury to its reputation. The jury found such an injury, awarding $1.8 million for the harm to Valley’s reputation caused by Innovative’s remarks about its products. The only evidence supporting that award is the testimony of Dr. Kenneth Lehrer. Lehrer’s testimony focused on the Quasi-Monte Carlo methodology, which he used to quantify the possible harm done to Valley’s reputation as a percentage of Valley’s business losses during the years it competed with Innovative. The trial court conducted a Daubert hearing in which Lehrer testified about the basis of his opinion and methodology. See Daubert v. Merrell Dow Pharmaceuticals Inc., 509 U.S. 579 (1993). Lehrer first testified about the original Monte Carlo method, which in broad strokes is “doing something millions of times to come up with the most probable outcome.” Monte Carlo simulations are used to predict a range of values when a precise value is difficult to calculate. The method, as explained to the court, essentially requires a computer to run millions of possible, randomized scenarios to produce a range of likely values for the number in question. For example, the method may be used to estimate the number, intensity, and location of all forest fires in the United States in a given year. A Monte Carlo analysis of the question would require inputting massive amounts of data from previous forest fires into a computer, and the computer would produce a range of the most likely scenarios. Lehrer testified that smaller questions—for example, whether a forest fire will happen within a particular county—may be answered using the “Quasi-Monte Carlo” method. Unlike the Monte Carlo method, the Quasi-Monte Carlo method uses a smaller data set to answer a smaller question. Lehrer purported to use the Quasi- Monte Carlo method to calculate a range of possible damages resulting from Innovative’s defamatory statements. But instead of running the scenario millions of times, as in a full Monte Carlo analysis, Lehrer ran the scenario twice.[4] Lehrer began with $5.135 million, the amount he estimated to be Valley’s lost profits over the years in question. To calculate the percentage of those losses attributable to Innovative’s statements, Lehrer created two estimates—one on the “high end” and one on the “low end.” Each estimate included four scenarios. On the low end, he hypothesized that the alleged statements caused 15, 20, 35, or 50percent of Valley’s losses. On the high end, he randomly substituted 15, 20, 40, and 60 percent. Lehrer acknowledged at trial that these numbers had no basis in any underlying data from the case. Lehrer then multiplied those percentages in the low and high end by Valley’s total losses—$5.153 million—to produce eight different dollar amounts as depicted below: Low-End Estimate
Percentage of total losses attributable to the alleged defamationTotal lossesDollar amount of losses attributable to the alleged defamation Scenario A15%$5,153,000$772,950 Scenario B20%$5,153,000$1,030,600 Scenario C35%$5,153,000$1,803,550 Scenario D50%$5,153,000$2,576,500 High-End Estimate
