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The answer is yes, she can. Even though she made a retraction, the damage has already been done. As such, she can be sued for defamation. Under Illinois law, the elements of a defamation claim are: the defendant made a false statement about the plaintiff; there was an unprivileged publication to a third party; fault by the defendant amounting to at least negligence; and the publication damaged the plaintiff.
As such, she may be pursued for defamation, and actual AND punitive damages may be part of judgment if one wins.
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