Yelp: Free Speech or Anonymous Defamation? What Can A Business Do About Negative Online Reviews?

customersThere you are minding your own business, trying to serve your customers well and reap the benefits of positive word-of-mouth advertising when suddenly an anonymous reviewer posts a very negative (and very anonymous) review of your business on Yelp or another online forum. You don’t know whether this is a competitor seeking to get an unfair advantage, someone with a personal beef against you, or just someone with too much time on his hands trolling cyberspace, but you know it is not a legitimate review.

What can you do about it?

This was the question a carpet cleaning service in Virginia found itself asking.  Hadeed Carpet Cleaning, Inc. in Virginia was the subject of some negative reviews on Yelp, which were posted anonymously.  Hadeed sought to sue the unknown reviewers for defamation on the theory was that they had not even been its customers, thus making their reviews untrue and defamatory.

But, because Yelp’s reviews are anonymous, Hadeed first had to get the names of the anonymous reviewers.

Hadeed issued a subpoena on Yelp under Virginia’s “unmasking” statute (Va. Code § 8.01-407.1), which allows allegedly defamed persons to try to obtain information from third-parties about the identities of anonymouspeople who made the defamatory statements over the internet.  Yelp objected to the subpoena, arguing that complying with it would result in a violation of the posters’ right under the First Amendment to speak anonymously.  Hadeed won the case and the appeal.

There is no First Amendment right to commit defamation.

In ruling in favor of Hadeed in Yelp, Inc. v. Hadeed Carpet Cleaning, Inc., 752 S.E.2d 554 (Va. Ct. App. 2014), the Virginia Court of Appeals first had to determine whether the First Amendment (which was Yelp’s defense) even applied. After all, Yelp and Hadeed are both private actors; the  First Amendment prohibits the government from engaging in action that would abridge the freedom of speech. In deciding that the First Amendment does apply, the Court cited the fact that a subpoena is a court order, which can constitute state action that is subject to the limits imposed by the First Amendment.

In its ruling, the Court also relied on another fundamental principle under the First Amendment: the First Amendment does not protect defamatory speech.

The Court reasoned as follows:

If we assume that the Yelp reviews of Hadeed are lawful, then the John Does may remain anonymous.  But if the reviews are unlawful in that they are defamatory, then the John Does’ veil of anonymity may be pierced, provided certain procedural safeguards are met.

The Court found that Virginia’s unmasking statute provided sufficient procedural safeguards to protect legitimate speech under the First Amendment. It also found that Hadeed had demonstrated that the postings on Yelp’s website may be defamatory (thus, unlawful), having shown “that it had a legitimate, good faith basis for its belief that the reviews [were] defamatory” by “establish[ing] that it had no record of having provided services to the posters.”

Bearing in mind that the defense to defamation is truth (i.e., if a factual statement is true, it is not defamatory),  the anonymous posters forfeited this defense by lying about their relationship to Hadeed.   In fact, as the Court forcefully stated, “it is clear . . . that if the Doe defendants were not customers of Hadeed, then their Yelp reviews are defamatory.” The Court explained why false statements deprive the speech of First Amendment protection:

Generally, a Yelp review is entitled to First Amendment protection because it is a person’s opinion about a business that they patronized, but this general protection relies upon an underlying assumption of fact: that the reviewer was a customer of the specific company and he posted his review based on his personal experience with the business. If this underlying assumption of fact proves false, in that the reviewer was never a customer of the business, then the review is not an opinion; instead, the review is based on a false statement of fact—that the reviewer is writing his review based on personal experience. And there is no constitutional value in false statements of fact.

Who’s Afraid of Virginia  . . . Law?

While this case is good news for Hadeed and other Virginia businesses who are victims of anonymous defamation, the decision was dependent upon a Virginia state law that specifically allows for ways to determine the identity of anonymous online users. There is no parallel federal law and, if your state does not contain a law that would allow businesses to obtain the identities of anonymous reviewers, it could be very difficult for you to figure out who to sue. In which case, you may wish to contact your legislator.

Yelp has sought review of this decision by the Virginia Supreme Court, but the Court has not yet decided whether to accept review.


fine printCovering my bases
: There is no legal advice contained in this post. Legal advice entails applying the law to specific facts. I don’t know what your facts are and any resemblance to them here is purely coincidental. Instead, this post is meant to provide general information, which may or may not be complete and accurate. If you need legal guidance, please feel free to contact me using the contact information on my firm’s web site – www.salberglaw.com.

photo credit for masked man: freedigitalphotos.net/images/Crime_g406-Hacker_p64688.html

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