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There are legal limits to what people are allowed to say to you; certain types of statements are legally classified as libel or slander, and can be subject to lawsuits. However, generally those kinds of lawsuits are based on statements made in public, such as those published in books, newspapers, or the internet. If someone has said something about you in private, to another person, it could be very difficult even to prove legally what it was that he said. He could claim that he is being misquoted. So this does not appear to be a good basis for a lawsuit.

Even if there's no question that the person who made the statement did in fact make the statement (there were witnesses, or the second person is willing to testify... usually testifying about what someone else said is considered "hearsay" and not admissible evidence, but that's not the case here for anyone who personally heard the first person make the statement, because the fact in question is "did the first person make such a statement or not?") you are not likely to recover much from such a suit unless you can show that the statement was a) untrue, b) malicious, and c) caused you actual damages. Penalties for slander are typically nominal... perhaps as much as a whole dollar.

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