The article is here; the abstract:

Defamation is a moral and legal wrong that is distinct from the wrongs of insulting or offending a person, lying to a person, or unjustifiably causing emotional distress. Defamation essentially involves harm or injury to a person's reputation. And reputation is a social concept: It refers to a person's standing in some relevant audience, i.e., the group or community beyond the speaker and the person.

But from whose perspective must a statement be defamatory? This question has multiple dimensions. Is our only interest whether the person's standing is lowered in the eyes of the community? Or should we also consider the perspective of the person who claims to have been defamed? Must that person subjectively view the statement as injuring his or her own reputation? Are we also interested in the perspective of the speaker?

The perspective of the person's group or community is undoubtedly critical, but this prompts additional questions. If only a minority, or even a very small portion, of the community would lower their opinion of the person, while the majority would not, is that sufficient? Moreover, are these further questions descriptive inquiries into how (most, some, or a few) people would react, or instead normative evaluations of how (most, some, or a few) people should react? Or is the most defensible analysis a hybrid or combination of descriptive and normative features?

One possible approach to these questions about the defamatory character of a statement asks whether the statement might cause a reasonable person to lower their esteem of the person. But the reasonable person test is inadequate: It obscures critical questions, including the relative weight we should give to descriptive rather than normative perspectives, to subcommunities as opposed to larger communities, or to the varying perspectives of the plaintiff, the speaker, and the relevant community.

The most plausible approach, I will argue, is a largely descriptive perspective that focuses on the actual reactions of both the plaintiff and the subcommunity with which the plaintiff identifies. Defamation law should reject a purely normative perspective that considers only whether members of the community would be justified in lowering their esteem of the plaintiff if the false statement were true. People frequently criticize and even ostracize others for flimsy, irrational, or illegitimate reasons. Yet the resulting reputational injuries are real, and the conduct that causes them is often highly unjustifiable. However, courts should recognize a narrow normative exception and should exclude liability when providing a defamation remedy would contravene a significant public policy, such as the legal principles condemning discrimination on the basis of race or sexual preference.

Read more:

Journal of Free Speech Law: "Defamatory in Whose Eyes?," by Prof. Kenneth W. Simons - Reason