Aric Toll owns and manages the Balboa Island Village Inn, a restau- rant 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." She referred to Aric's wife as "Madam Whore" and told neighbors that the owners were involved in illegal drugs and prostitution. Lemen told Ewa Cook, a bartender at the Inn, 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,