Negative Online Reviews – Free Speech or Defamation?
Business review websites such as Angie’s List or Yelp are increasingly a venue for anonymous posters to wreak havoc on the reputations of contractors and other businesses with negative and often defamatory reviews. Although these venues seem safe and anonymous, Internet posters should be aware of the sometimes harsh legal consequences of their reviews. If posts are untrue, a contractor or business that finds itself the target of online reviews may be able to successfully sue the poster for defamation.
However, because the laws governing defamation actions vary from jurisdiction to jurisdiction, you should consult an attorney to identify the avenues of redress available should you discover that your company is a target of a potentially defamatory online review. Defamation is generally defined as false statements of fact; whereas, comments that are clearly and solely composed of opinions are not considered defamatory and are generally constitutionally protected. In most cases, a claim for defamation arises when an individual intentionally publishes a false statement resulting in some harm to the subject of the statement.
Statutes, court procedures and case law protecting both anonymous online posters, as well as the targets of their defamatory posts, vary widely from state to state and, given the ubiquitous nature of the Internet, comments posted by an individual in one location may give rise to a legal action elsewhere. New Jersey, Pennsylvania, Maryland, Delaware and Virginia have adopted laws defining procedures that parties must follow to subpoena identifying information about anonymous Internet posters. Although these procedures vary from state to state, generally these laws require a party seeking a poster’s information to provide advance notice that the poster’s identification is being sought and confirm that: (a) there is a good faith basis for requesting the identification — sometimes requiring identification of the statement(s) that are allegedly defamatory; (b) the information is necessary to advance the defamation or similar case; (c) other reasonable efforts have been taken to identify the poster; and (d) the individual or entity to whom the subpoena is directed is likely to have access to the information requested.
The laws also require the recipient of the subpoena to provide advance notice to the anonymous poster whose identity is being sought so that the anonymous individual may object to disclosure of the information. Some states require that a party support the request with sufficient facts to demonstrate that the defamation action is likely to succeed on its merits. Finally, in some states, courts are required to balance the anonymous poster’s constitutional right to anonymous speech with the party’s right to seek redress from the poster for damages stemming from defamatory remarks. Therefore, while courts have endeavored to generally protect anonymous Internet posters’ first amendment rights, in the case of clearly defamatory comments, the hurdles to unmask the anonymous poster can be overcome.
In the case of Yelp, Inc. v. Hadeed Carpet Cleaning, Inc., the Commonwealth of Virginia recognized the right of a party who has brought a defamation suit to ascertain the identity of an anonymous online poster and has specifically enacted legislation to govern the process of obtaining such information. Hadeed filed a defamation lawsuit against the authors of critical posts against the company, naming the defendants in the lawsuit “John Does” because the posters’ true identities could not be determined by their Yelp usernames. During the course of that lawsuit, Hadeed served a subpoena upon the popular business review website, Yelp, requesting the identity of the “John Doe” defendants (i.e.: the posters of negative comments about the company). Yelp objected to the subpoena and refused to provide the posters’ identifying information to Hadeed for use in its defamation case. Accordingly, Hadeed asked the court to issue an order enforcing the subpoena. Yelp still refused to comply with the subpoena; so, the court held Yelp in contempt of court and assessed monetary sanctions against Yelp for its refusal to provide the subpoenaed information. Yelp subsequently appealed the court’s order, contempt charge, and sanctions arguing that the first amendment protected the website’s users’ anonymity and anonymous speech. However, the Virginia Court of Appeals upheld the lower court’s decision and determined that the freedom to speak with anonymity is not absolute, that defamatory speech is not constitutionally protected and subsequently ordered Yelp to produce the identity of the anonymous posters.
Subsequently, in Dietz Development, LLC v. Perez, a Virginia homeowner posted defamatory statements about a residential contractor on the popular business-rating website — Angie’s List. The contractor responded to the post with similarly defamatory comments about the homeowner and filed a defamation suit claiming $750,000 in lost reputation and business contracts. After a year of litigation in a Virginia Circuit court and a week-long trial, a jury determined that both the homeowner and contractor had both defamed each other; accordingly, neither side was awarded any money.
As more of these types of cases go to trial, awards of monetary damages for anonymous defamatory online posts are inevitable. Moreover, based upon the logic and developing case law upon which the Virginia courts have based their decisions, subpoenas such as those in the Yelp and Dietz cases may very well be upheld in neighboring states.
Accordingly, contractors should be cautious when posting reviews of a client or competitors or responding negatively to a review initially directed at them. While reviews that are opinion based are not necessarily actionable, those containing untruthful allegations may be subject to a defamation claim.
Should you find that you or your company has been the target of anonymous and potentially defamatory remarks, resist the urge to strike back and, instead, engage an attorney who can: (1) carefully review, document and preserve the negative reviews as evidence; (2) negotiate with website providers to remove the post(s) and aid in identifying the anonymous online poster. Moreover, you should instruct your employees not to post negative reviews of clients or competitors, or respond to negative reviews, such that the posts may be construed to represent your company’s position. Finally, before pursuing a defamation claim, you should consider and weigh the effect of the negative review on your business versus any potential negative publicity associated with pursuing a previous client or competitor in court.