Think Before You Yelp!

Patrick Burns, Esquire
January 14th, 2014
By: Patrick Burns, Esquire

Online business review websites, such as Yelp and Angie’s List, have become a popular resource when deciding whether to enlist the services of a particular business. In fact, the success and failure of a business can depend on online reviews. It should come as no surprise there have been a number of cases nationwide that allege defamatory postings on Yelp. See, e.g., Yelp, Inc. v. Hadeed Carpet Cleaning, Inc., No. 00116-13-4, 2014 Va. App. LEXIS 1 (Va. Ct. App. Jan. 7, 2014); Sanders v. Walsh, 219 Cal. App. 4th 855 (2013); Wilkerson v. RSL Funding, L.L.C., 388 S.W.3d 668 (Tex. App. Houston 1st Dist. 2011). However, such cases do not prevent negative reviews of businesses, if truthful. On the other hand, individuals should think twice before posting a negative review that contains inaccuracies. Any inaccuracy a business deems harmful could result in a lawsuit with expensive consequences.
This is not to say any inaccurate posting will result in a lawsuit or judgment. To succeed in a defamation action, the plaintiff must show the “defendant has published a false factual statement that concerns and harms the plaintiff or the plaintiff’s reputation.” Hyland v. Raytheon Tech. Servs. Co., 277 Va. 40, 46 (2009). Additionally, it must be proven “the defendant knew that the statement was false or, believing that the statement was true, lacked a reasonable basis for such belief, or acted negligently in failing to determine the facts on which the publication was based.” Id. Defamation suits can be relatively easy to file, but challenging to win. Website postings are subject to Federal and State freedom of speech protection. In addition, statements of opinion cannot form the basis of a defamation suit as an objective determination of the truth or falsity of such statements cannot be made. See Lewis v. Kei, 281 Va. 715, 726 (2011).
Hadeed Carpet Cleaning, Inc., an Alexandria-based business, brought such a defamation suit against seven unnamed defendants regarding a series of negative Yelp postings. The language in the reviews Hadeed asserts is false and, therefore, defamatory includes: excessive charges for services, damages to customers’ rugs and charges for work never performed. Hadeed alleges the individuals responsible for the posts were never customers and posted the reviews for the sole purpose of injuring Hadeed’s business.
Although a complaint was filed, Hadeed could not proceed with the case until it learned the identity of the Yelp reviewers in question, which Yelp refused to release. In response, Hadeed issued a subpoena duces tecum that Yelp attempted to quash, citing the First Amendment and jurisdictional issues. On January 7, 2014, the Court of Appeals of Virginia affirmed the Circuit Court’s ruling to enforce the subpoena pursuant to Virginia Code § 8.01-407.1. Yelp, Inc., 2014 Va. App. LEXIS at *43. Therefore, the identity of the individuals must be released and Hadeed can proceed forward with the lawsuit.
While there is no way to predict if Hadeed Carpet Cleaning will succeed in its defamation suit, the case should serve as a cautionary tale to encourage accuracy of online business reviews. This case has been pending since July 2012 and there is no end in sight. Regardless of the outcome, the case will certainly cause a headache for the individuals that posted the reviews in question. Thus, think before you Yelp and refrain from posting business reviews with factual inaccuracies.

Disclaimer

This blog and the information provided has been prepared by Bancroft, McGavin, Horvath & Judkins, P.C. (“BMHJ”) for information purposes only and is not intended nor to be construed as legal advice. This blog may contain the opinions of the members and associates of this firm on various legal issues and is not legal advice. Read More