To win a defamation case, a plaintiff must show four things: 1) a false statement purporting to be fact; 2) publication or communication of that statement to a third person; 3) fault; and 4) damages, or some harm caused to the person or entity who is the subject of the statement.
Since the U.S. Supreme Court's 1964 decision in New York Times v. Sullivan, defamation claims have been limited by First Amendment concerns. Thus, for instance, public officials and public figures (people who are famous) must show that statements were made with actual malice to recover in an action for defamation. Actual malice means that a statement was made with knowledge that it was false or with reckless disregard of whether or not it was false. In addition, a plaintiff must show actual malice by "clear and convincing" evidence rather than the usual burden of proof in a civil case, preponderance of the evidence.
A private person suing about a matter of private concern need only show negligence, meaning that the defendant knew the statement was false, or would have known if she or he had exercised reasonable care.
Defamation claims are also subject to a number of privileges. The types and limits of these privileges will vary from state to state.
An absolute privilege is a complete defense to a defamation claim. For instance, statements made by witnesses during a judicial proceedings are subject to absolute privilege. The reason is that those statements are subject to sanctions. Statements made during legislative debates are also protected by an absolute privilege.
Statements may also be protected by a qualified privilege. For instance, a parent's statement to her or his children warning them not to associate with certain kids is likely protected by a qualified privilege.