Yelp lawsuit: user faces $750K defamation suit, must amend review

Yelp lawsuit: business owner and client take online battle offline

Jane Perez contracted Dietz Development to do some work in her townhome, and claimed damage was done to her home, work wasn’t completed that she was charged for, the contractor trespasses, and worst of all, jewelry came up missing during the construction project. As most consumers do, Perez turned to Yelp and Angie’s List to review the company harshly, for which she is now facing a $750,000 defamation suit, and according to The Washington Post, a Virginia judge has ordered her to alter her negative Yelp review after the police asserted that her claims did not check out.

Dietz Development alleges that Perez’s Yelp review has cost them new customers, and in addition to the judge’s injunction for Perez to edit the post to remove inaccuracies, the contractor has been granted a hearing next week, and a judge will consider another injunction against Perez, potentially limiting her from publishing similar reviews elsewhere.

Threats to Yelp’s business model

Yelp has not addressed the lawsuit on their blog or website, but sources say they believe similar lawsuits based on Strategic Lawsuits Against Public Participation (SLAPP) could interfere with Americans’ First Amendment right to free speech.

Yelp, however, is immune from what site users say about each other under the Communications Decency Act, so their concern is focused on user rights, not in fear of being sued themselves, but in fear of altered user behavior which could be limited by SLAPP suits and diminish their user base, threatening their business model. For this reason, it is foreseeable that the company will continue fighting to protect their users and remain concerned about these types of lawsuits.

The small business’ role

Increasingly, online reviews can make or break a company in nearly any industry, with Yelp at the forefront of the reviews industry, and as users flock to review sites to vent, complain, praise, or criticize, this lawsuit reveals that because the judge did not order all reviews to be removed, rather amended, the courts are willing to protect free speech, but are willing to compromise the same way offline speech is standardized.

With restaurants relying on high scores that correlate with how busy they are every night, and independent retailers relying on rave reviews to generate new business, more lawsuits of this nature will likely pop up, given how integral they are for an increasing number of businesses.

These newly charted territories present a slippery slope. Free speech is important, as is accuracy, so reviewers should take note that judges are not internet ignorant, and rants, especially inaccurate rants, are subject to scrutiny, and possibly defamation suits. As President Roosevelt said, “great power involves great responsibility,” which reviewers should mind, but he also said, “speak softly and carry a big stick; you will go far,” which businesses should mind.