Online Reviews and Defamation

Jump To:

Online reviews of businesses and professionals on sites like Yelp are standard practice these days. The explosion of easily searchable information on everything from your local coffee shop to a dentist to perform your root canal can be very beneficial for consumers and businesses alike. Consumers can find out what they need to know before they decide where to take their business, while businesses get publicity for their brand and services that consumers can easily find.

Negative reviews can alert consumers of issues, and alert business owners on areas they need to improve. However, significant litigation has arisen over negative reviews that business owners claim to be defamatory. Reviewers argue that their statements are protected by their right to free speech. Where is the line? At what point can a negative review subject the author to liability for defamation?

Defamation Basics

While defamation is governed by state law, it generally consists of a false and unprivileged publication which tends to injure a party in its occupation. Libel is a form of defamation and covers false statements communicated in writing or in print that injure another person's reputation or business. Since there are no special rules that apply to the Internet or social media, traditional defamation analysis applies to online content as it would to any other written publication.

Defamatory Statements v. Opinion and Hyperbole

The main issue that arises in these cases is whether or not the published statement is false. As anyone who has perused an online review site knows, reviews are often couched in terms of opinion, with a dose of hyperbole for good measure.

Take the case of Bently Reserve LP v. Papaliolios, which arose from Papaliolios's negative Yelp review of an apartment building. A California appeals court clarified that in determining whether a statement expresses or implies a provably false assertion of fact, the court will look to the totality of the circumstances. The court found that Papaliolios's statements could reasonably be interpreted as defamatory. Although he used some hyperbole and name-calling, such as calling his landlord a "sociopathic narcissist" who "celebrates making the lives of tenants hell," he also asserted specific facts about the building at issue, including alleged activities by the plaintiffs that “likely" contributed to the deaths of three tenants. The court rejected Papaliolios's argument that the use of the word "likely" insulated him from liability and noted that Papaliolios's statement was presented as a "first-hand experience."

The case reached the Court of Appeal after Papaliolios filed an anti-SLAPP (Strategic Lawsuit Against Public Participation) motion under California law. Anti-SLAPP motions allow defendants to move to dismiss a case brought against them on the basis that it would chill speech on an issue of public interest. Twenty-nine other states and territories have enacted anti-SLAPP laws. Had Papaliolios been successful, he would've been able to dismiss the case without having to proceed to trial. However, the court found that plaintiffs had made the requisite minimal showing as to the merits of their libel claim, so Papaliolios's anti-SLAPP motion was properly denied.

The Problem of Anonymous Users

The courts are also dealing with the issue of anonymous users. In the case of Yelp, Inc. v. Hadeed Carpet Cleaning, Hadeed served a subpoena on Yelp seeking the identity of seven anonymous Yelp reviewers who had written negative reviews of the carpet cleaning service. Hadeed alleged that it couldn't match the reviews with its customer database, and therefore believed that the reviewers were not, in fact, actual customers. Hadeed further alleged that the reviews were defamatory because they falsely stated that Hadeed provided poor service to each reviewer.

The Virginia Court of Appeals recognized that anonymous speech is protected by the First Amendment, and "an Internet user does not shed his free speech rights at the login screen." However, the right is not absolute. If the reviews were lawful, then the reviewers could remain anonymous, the court noted. Ultimately, however, the court found that Hadeed established a legitimate, good faith basis for its belief that the reviews were defamatory because it had no record of providing services to these posters. If the reviewer is not, in fact, a customer, then the review cannot be an opinion; the review is based on a false statement of fact, held the court. The subpoena was therefore proper, and Yelp was required to comply with it.

Concluding Thoughts

The number of defamation cases arising from online reviews continues to increase, as the value of online reviews is critical to any business. While there are no special rules that apply to the Internet or social media when it comes to defamation, how the courts apply traditional defamation rules to online behavior and anonymous users will be important to monitor.