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Court Gives Yelp Zero Stars

Anonymous internet reviewers beware – particularly if what you post is harmful to a business’s reputation; and more importantly, untrue. The Virginia Supreme Court is currently considering a case that could have major implications with regard to unmasking the identity of anonymous internet reviewers who post false and defamatory comments about businesses.

In Yelp, Inc. v. Hadeed Carpet Cleaning, Inc., the Virginia Court of Appeals affirmed the trial court’s decision to enforce a subpoena directed to Yelp, Inc. (“Yelp”) that requested the identification of the authors of certain reviews that the plaintiff claimed were false and defamatory toward his carpet cleaning business.

As of October 19, 2012, Yelp’s website displayed over 80 reviews of Hadeed Carpet Cleaning, Inc. (“Hadeed”); a number of which were critical of Hadeed. Seven of the negative reviews did not match anyone in Hadeed’s customer database. For example, one reviewer was listed as being from Haddonfield, New Jersey, despite the fact that Hadeed does not conduct business in New Jersey.

Thus, on July 2, 2012, Hadeed filed a complaint, alleging that the seven negative reviewers falsely represented that they were Hadeed customers (which they are required to be by Yelp’s Terms of Service), and posted comments that were defamatory to Hadeed’s reputation. A day later, Hadeed issued a subpoena to Yelp seeking the identity of the authors of After Yelp objected to the subpoena on two separate occasions, the trial court issued an order enforcing the subpoena. Despite the court’s ruling, Yelp refused to comply with the order.

Thus, the trial court held Yelp in civil contempt. On appeal, Yelp argued that the trial court’s decision was erroneous because, (1) it violated the First Amendment by ordering Yelp to identify the anonymous authors; and (2) the trial court did not have subpoena jurisdiction over Yelp, a non-party foreign corporation.

The Virginia Court of Appeals weighed the importance of First Amendment protections for anonymous speech against a business’s right to protect its reputation. It reasoned that if it assumed the reviews were lawful (i.e., truthful), the reviewers may remain anonymous. If the reviews were false and defamatory, however, the reviewers’ anonymity may be pierced (provided procedural safeguards were met) because defamatory speech is not entitled to constitutional protection.

Because it was not possible to determine if the reviews were defamatory without knowing who posted the reviews, the court next determined the constitutionality of Virginia’s unmasking standard for identifying persons communicating anonymously over the internet – which Yelp argued violated the First Amendment. The court declined to declare the statute unconstitutional, then determined that Hadeed had complied with the statute in all respects. As such, the court affirmed the trial court’s decision to hold Yelp in contempt for failing to comply with the trial court’s order. The court also rejected Yelp’s argument that the trial court did not have subpoena jurisdiction over Yelp because Yelp was registered to do business in Virginia, and Yelp’s registered agent was served with the subpoena.

The Virginia Supreme Court must now decide whether it will affirm the lower courts’ holdings, and potentially open the floodgates to litigation over anonymous internet reviews; or whether it will reverse, thereby keeping the floodgates closed, and letting potentially defamatory reviews persist.

The Court of Appeals noted the importance that anonymous speech has played throughout the history of this country. It is unquestionably an important right that courts should be cognizant of impeding upon.

The importance of false and defamatory remarks posted solely to harm a business’s hard-earned reputation (perhaps posted by that business’s competitors) however, is not the type of anonymous speech that deserves protection.

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