Abstract
Speech used to intentionally mislead others to gain a tangible benefit while causing harm to the one deceived or to others is generally labeled “fraud.” This term is used in both legal and nonlegal contexts. Where speech used to defraud satisfies the elements of a tort or a crime, it becomes “actionable fraud.” Categories of actionable fraud include common law deceit, securities fraud, and wire fraud. But taken together, these laws address harmful dishonesty in an inconsistent manner. While they broadly prohibit deceiving individual victims, they often allow deceiving the public at large. As a result, it is often lawful to intentionally spread harmful, false, or misleading messages to the public. Moreover, because such publicly disseminated false speech is often not actionable fraud, it is protected speech under the First Amendment. This gap in the law, whereby one is prohibited from defrauding one person but permitted to defraud millions, gives a green light to those who stand to benefit from the largest and most harmful schemes to deceive. These include, for instance, the fossil fuel industry’s campaign of climate change denial and former President Donald Trump’s stolen election lie. This Article builds on prior scholarship by exploring why current law largely fails to address schemes to defraud the public. It further explores the myriad ways fraud on the public causes economic harm, harm to human health and life, and environmental damage. The Article then argues that this gap in the law should be closed and posits possible ways to do so consistent with the First Amendment. The Article answers critics who claim that imposing such speech restrictions will allow those in power to determine the “truth” and impose it on the public by noting that those in power are already doing this precisely because the law allows it. Those with the public megaphone frequently disseminate self-serving falsehoods and manipulate the public into buying into falsehoods as “truth.” Accordingly, the Article concludes it is urgent we find solutions to this problem that carefully balance free speech rights against the harm from intentional falsehoods spread to the public.
Repository Citation
Wes Henricksen,
On the Legality of Defrauding the Public,
107 Marq. L. Rev. 1043
(2024).
Available at: https://scholarship.law.marquette.edu/mulr/vol107/iss4/6