Since Yelp launched in 2004, thousands of unhappy customers have aired their grievances there anonymously. However, Hadeed Carpet Cleaning of Alexandria, Virginia pushed back, bringing a defamation suit against several of its negative reviewers and claiming that their Yelp submissions were completely fabricated. The company is arguing the reviewers were not actual customers, and has subpoenaed Yelp to reveal the identities of the posters.

The Virginia Court of Appeals agreed, holding that the San Francisco company must reveal the identities of the defendants. The court examined the Dendrite standard as well as a Virginia statute, and ultimately followed the latter. The Dendrite standard requires “those claiming defamation to provide sufficient evidence to support that claim before the court will force anonymous speakers to reveal their identities.” The lawyers for Yelp argued that this standard, which is followed in several other states, is appropriate. However, the court held the Virginia statute, Code § 8.01-407.1, was the correct standard. This statute has less stringent requirements, requiring the party claiming defamation “need only show that the speech may be illegal or give rise to a tort claim, such as defamation, or that the party has a ‘good faith basis’ to believe so” [emphasis added]. The court held that Hadeed, which conducted a review of its customer records but could not identify the negative reviewers, had met this standard, ascribing to the company “a legitimate, good faith basis” for believing the reviews were fabricated.

The court defended its ruling, stating in dictum that “there is no constitutional value in false statements.” While the court recognized the value in anonymous, critical speech, it also wrote that “defamatory speech is not entitled to constitutional protection.” If the negative defendants were not customers, the court continued, the reviews are defamatory speech.  Yelp argued that Hadeed had not fulfilled the statutory requirements for the subpoena: “They don’t say that the substance is false…They say, well, we can’t be sure this person is a customer. No one with this pseudonym from this city is in our customer database. Well, of course! It’s a pseudonym. They haven’t shown anything that really would lead any person to believe that this isn’t a customer.” But the court disagreed, holding that Hadeed nevertheless had a “legitimate, good faith basis” for believing the reviewers had not been customers.

The ruling is raising eyebrows across the country. Matt Zimmerman, a staff attorney at the Electronic Frontier Foundation, claims the ruling “creates a much lower standard than virtually all other courts who have dealt with this issue.” Yelp attorneys maintain the suit is a strategic lawsuit against public participation (SLAPP), which “aim[s] to intimidate people with litigation so they don’t speak out.” The ruling also highlighted the difference in state-by-state consumer speech protections: while California’s online commenters are protected by “one of the strongest anti-SLAPP laws in the country,”  “Virginia doesn’t have any anti-SLAPP laws.”

Zimmerman worries about the ramifications the Virginia ruling, warning of a “chilling effect” by leading “people [to] think that legitimate criticisms are a dangerous thing.” Regardless of whether the reviews are actually defamatory, the threat of lawsuit and the subsequent cost of hiring an attorney will caution people against criticizing companies with a history of litigation, or those that are well-funded. The Virginia Supreme Court will have an opportunity to weigh in, as Yelp already plans to appeal.

–Torrey Samson

Image Source

One Response to Anonymous Yelp-ers Face a New Challenge

  1. Erin Frankrone says:

    Online reviews from Yelp and similar companies are my bread-and-butter for evaluating companies that provide a range of services. This post made me consider the effect that a negative review on Yelp has on my consumer choices. I find that the effect does not depend on the contents of the negative, potentially defamatory, post, but rather it depends on the number of negative posts compared to the total number of posts.

    This relative evaluation suggests that a higher barrier exists for companies given the legal standard explained above. If potential consumers consider the relative number of complaints rather than the absolute number of complaints, then there is a low incentive for companies to attempt to prove defamation in any instance unless they can prove that claim for a critical number of reviews. While there may be some legitimate instances of defamation by non-customers, it may often border on conspiracy theory for a company to claim that a critical number of negative reviewers are engaging in defamatory speech. Thus, the legal standard above seems to filter out many unfounded claims.