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Suing Customers Who Give Bad Reviews

A case here in Northern Virginia raises some interesting questions about where the lines between defamation and freedom of speech cross each other, and how much protection should be given to what people say online:

Angered by what she thought was shoddy work on her home, Fairfax resident Jane Perez did what has become the go-to form of retail vengeance in the Internet age: She logged on to Yelp and posted scathing reviews of the D.C. firm that did the job.

Perez ticked off a list of accusations, including damage to her home, an invoice for work the contractor did not perform and jewelry that disappeared. She closed one post by fuming, “Bottom line do not put yourself through this nightmare of a contractor.”

The contractor’s response to her one-star takedown? Fight back.

Christopher Dietz filed a $750,000 Internet defamation lawsuit against Perez last month, saying the postings on Yelp and others on Angie’s List were false and sent customers fleeing. He is also asking a Fairfax County court for a preliminary injunction to keep her from writing similar reviews. A hearing will be held Wednesday.

Lawyers say it is one of a growing number of defamation lawsuits over online reviews on sites such as Yelp, Angie’s List and Trip­Advisor and over Internet postings in general. They say the freewheeling and acerbic world of Web speech is colliding with the ever-growing importance of online reputations for businesses, doctors, restaurants, even teachers.

It’s snark vs. status.

No one keeps track of how many suits are filed over online reviews, and lawyers say the numbers are still small but are getting larger. Most of the suits fail because juries and the courts have sided with free speech and the rights of the reviewers to express their opinions.

With 84 million visitors a month and 33 million reviews, Yelp especially has become a legal battleground given that the reputations of restaurants, nail salons, dry cleaners and other businesses can be made or shredded in a few keystrokes. For instance, a Chicago plastic surgeon sued after a Yelp reviewer said he gave her “Frankenstein breasts.”

Perez, a retired captain in the armed services, said she never fathomed that her Yelp review could land her in court. It has left her reeling and potentially facing thousands of dollars in legal bills to defend herself.

“I don’t want to see what happened to me happen to anyone else,” Perez said.

Nevertheless, she stands by her reviews, sayingthat everything she wrote was truthful about the work Dietz did on the townhouse, where she lives with her dog.

Some reviewers and free-speech advocates, including Perez, see the cases as free-speech issues: They say the lawsuits are heavy-handed attempts to stifle critical — but valuable — consumer information that has forced businesses to be held accountable.

On the other side, business owners such as Dietz say they are forced to take extreme legal measures because the Internet has made defamation that much more damaging. A single false post can live virtually forever on a site and reach millions, causing untold harm.

Lawyers say such cases are a cautionary tale for a new era: Those who feel targeted by defamation on the Web are more likely to file suit, and judges and juries are more likely to take such claims seriously than in years past, raising the legal stakes over vitriolic reviews, nasty blog comments and Facebook feuds.

“As the Internet has matured, more and more people are feeling the sting of negative posts against them, and the public and jurors are getting more educated about the impacts this speech can have,” said Aaron Morris, a lawyer who handles Internet defamation cases.

So, what exactly happened between Perez and Dietz?

Perez hired Dietz’s company, Dietz Development, when she moved to the area and needed cosmetic work done on her newly purchased Fairfax home, according to the lawsuit. Dietz, a high school friend, was to paint, refinish floors, perform electrical and plumbing work, and do other tasks in June 2011.

But things quickly spiraled out of control, Perez wrote in her Yelp post.

“I was . . . left with damage to my home and work that had to be reaccomplished for thousands more than originally estimated,” Perez wrote. She alleges that Dietz “was the only one with a key” when jewelry disappeared from her home and that he trespassed on her property, prompting her to call the police, among other issues in dispute.

Dietz says that he completed the job, that he did not damage the home, that Perez never paid him and that she demanded that he perform work beyond what was part of their agreement, according to the lawsuit. Perez denies those accusations.

Dietz also says Perez’s comments about the missing jewelry and trespassing amount to false accusations that he committed crimes. County court records show that Dietz has not been charged on either accusation.

In Virginia, someone can be found liable for defamation if he states or implies a false factual statement about a person or business that causes harm to the subject’s reputation. Opinions are generally protected by the First Amendment.

So basically what you’ve got here is a home renovation project that, at least according to the homeowner went bad. The number of times that a case like this has crossed my desk in the past 20-odd years is too high to count at this point, and you can always count on the fact that there are going to be some high emotions at some point. The homeowners are going to be annoyed because they think, often quite legitimately, that their primary possession has been damaged and that they’re going to have to spend more money to get what they had originally paid for to begin with. The contractors just want to get paid and typically don’t take kindly to people disparaging their work (although the admitted crooks among this class of businessmen probably don’t care about such things.) Added in to this little tale, of course, is the fact that these two people are apparently friends, or at least they used to be. Doing business with a friend can always be a dangerous thing when things go wrong, because then it becomes far more likely that neither side is going to view the issue rationally.

In any event, the legal issues here are pretty simple. Dietz has the burden of proving that Perez knowingly made false statements of fact when she posted the reviews in question. In some cases, that’s simply not going to be possible. To the extent she made comments that basically boil down to saying that she wasn’t satisfied with Dietz’s work, that’s a matter of opinion that simply can’t be the basis of a defamation action. Absent some evidence that she had made contemporaneous statements indicating she was in fact satisfied with the work, there’s simply no way to prove or disprove a statement like that. The other allegations regarding damages to the home and the fact that there was jewelry missing at a time when he was one of the people who had a key to the house, are questions of fact that ultimately can only be decided by a jury assuming both of these parties are willing to spend the, likely, tens of thousands of dollars in legal fees it would take to bring this case to trial.

This isn’t a unique case. A quick Google search reveals similar lawsuits, or threats of lawsuits, being filed by a Pilates studio, a doctor, a moving company, and a plastic surgeon, and that’s just based on the first page of Google results. The linked article mentions two other cases where businesses had successfully obtained judgments against a people who had posted accusations on line, including a California company that had been accused of stealing money and a Florida woman who was called a “crook” and a “liar” in an online forum. Those cases strike me as being different from the Virginia case, though, because the accusations include specific allegations of criminal conduct that not only damage a business but also the personal reputations of the people involved. When you’re talking about customers who post negative reviews about a business online, though, it strikes me that you’re talking about something very different and that we ought to be very careful about allowing businesses to use the power of the Courts, and the costs of litigation, to stifle negative reviews.

Another thought occurs. While businesses, and yes even individuals, need to be vigilant about protecting their online reputations in an era where people consult Google on a regular basis to find everything from a good local restaurant to a CPA, there’s such a thing as being too aggressive. Sending threatening letters from attorneys to everyone who writes a negative review about your business will do nothing more than give you the reputation of being an overly aggressive bully and, most likely, will end up online itself. By and large, businesses can afford these lawsuits far more easily than members of the public but they can’t afford the damage to their reputation if they become known as bullies.

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About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May, 2010 and also writes at Below The Beltway. Follow Doug on Twitter | Facebook

Comments

  1. Dave Schuler says:

    I’ve also seen at least one instance of one of my clients getting a bad review on Yelp from his wife’s divorce attorney (with whom she was having an affair).

    I’ve recommended to my clients that they maintain at least some level of awareness of their businesses’ Internet reputations and be prepared to take remedial action, if necessary. IMO building a good Internet reputation is probably more effective than getting satisfaction by taking somebody who gave you a bad review to court.

    In only a minor digression big public relations firms now have whole departments or even divisions devoted to social media. That’s probably where the future of the business is.

    Like or Dislike: Thumb up 1 Thumb down 0

  2. JWH says:

    The main thing that jumped out at me was the theft accusation. If somebody accuses me of poor work in an online review, then I might not like it, but I have to take my lumps. But if somebody accuses me of a breach of professional ethics, or of committing crimes … then I really would feel that I need to contest it in court.

    When all is said and done, I would rather have “JWH Accused of Theft, Responds with Lawsuit” out there rather than “JWH Accused of Theft.”

    That said, I’d like to see states, if they haven’t already, create some mechanism that tests these defamation suits early on. Yes, I know that’s why we have motions to dismiss, but even prevailing on one of these motions (and running through the appeals) can make an individual defendant broke … and there’s little to no guarantee of recovering attorney’s fees from the plaintiff.

    Like or Dislike: Thumb up 3 Thumb down 0

  3. Anderson says:

    @JWH: Yah, that’s the thing, JWH. Most people can’t afford to win a lawsuit.

    Voltaire: “I was ruined only twice in my life: once when I lost a lawsuit, and once when I won one.”

    Like or Dislike: Thumb up 2 Thumb down 0

  4. OzarkHillbilly says:

    Doing business with a friend can always be a dangerous thing when things go wrong, because then it becomes far more likely that neither side is going to view the issue rationally.

    I look at this from the other side of the coin: When I do side work (rarely) it is only for friends. In construction, especially in small jobs like the one in the post, things can never go so wrong they can’t be made right, as long as you know what you are doing. Short of burning down their house, in which case you obviously didn’t know what you were doing.

    If a friend comes to me and says they are not happy with something, I know they are not out to f me, and I want my friends to be happy and will do what ever it takes to make it so.

    One other thing, do not, in any circumstance, pay off a contractor before a job is fully and completely done to your satisfaction. If a piece of trim is missing over the door? Hold back the cost of the door. Paying them off removes all incentive for them to come back. He can be the most honest man in the world, and really mean to come back as soon as possible, but something will always come up. And then it will be weeks before you see him, and you have to call him repeatedly and then he starts avoiding your calls and then you start getting angry…..

    Just hold back the cost of the door. He will return the next day with the piece of trim he was short, and finish the job in 15 mins. And you will quite happily cut him that last check.

    Like or Dislike: Thumb up 3 Thumb down 0

  5. John Burgess says:

    Over at Popehat, Ken White has a large assortment of cases (and threatened cases) where businesses look at lawsuits as a means to salvage their reputations. Usually, they end up doing more harm to that reputation thanks to the Streisand effect.

    Lo! An example appears today…

    If This Be Censorious Asshattery, Let Michael Farris Make The Most Of It

    Sure, actually cases of defamation and libel should be prosecuted, but there seem to be a lot of business owners who fall in the “delicate teacup” column.

    Like or Dislike: Thumb up 0 Thumb down 0

  6. Tsar Nicholas says:

    Meh. Trade libel for multiple decades has been on the books as a viable cause of action. Other similar business torts too. The dichotomies and the interrelationships between those torts and the 1st Amendment already have been the subject of thousands of reported case decisions. The Internet merely is an added medium through which business tort claims might accrue.

    That said, however, we really need fundamental tort and lawsuit reforms. Shakedown and speech chilling lawsuits have become in and of themselves a cottage industry which costs time and effort, vast sums of money, not to mention opportunity costs, and, ultimately, growth and jobs.

    We need hard damages caps. We need to eliminate class and other representative actions. Punitive damages should be eliminated. We need fee shifting against those who lose in court. We need to preempt a whole host of claims. We need mandatory arbitration.

    We need to drain the legal fever swamps and to help get the country back on track.

    Don’t hold your breath, however. The ATLA and the CTLA and allied groups are key puppet masters of the Democrat Party. And there are far too many Democrats in Congress and elsewhere for any real reforms to occur.

    Like or Dislike: Thumb up 1 Thumb down 7

  7. CSK says:

    It’s my understanding that, under First Amendment law, the two worst things you can do are accuse someone of committing a crime (in the absence of evidence) and to accuse someone of being mentally ill, because both unfounded accusations can ruin a person’s reputation, which the courts regard as a tangible asset.

    If you publicly accuse someone of stealing your jewels, you had better be prepared to prove it.

    There was the case of a New Jersey literary agent who was accused by some posters on an online forum of being incompetent, and she sued the forum and the posters. I don’t know how that turned out, but she claimed that the posters who had accused her of incompetence had effectively ruined her reputation, and thus her agenting business.

    Like or Dislike: Thumb up 1 Thumb down 0

  8. C. Clavin says:

    Never do work for friends or family.

    Like or Dislike: Thumb up 2 Thumb down 0

  9. Without having seen the reviews themselves, from the descriptions I’ve read it’s unclear to me that Perez actually accused Dietz of committing a crime. If all she said is that things went missing from her home during a period when he was the only person other than her that had access to the home, then I’d argue that’s a step removed from actually accusing him of committing a crime. But, yea, I’d agree that this is probably among the more serious allegations against her.

    More broadly, I still have to suspect there’s something more going on between these two.

    Like or Dislike: Thumb up 1 Thumb down 0

  10. Neil Hudelson says:

    On the flip side, a positive review can be great for the reviewer.

    Six months ago I booked a hotel through hotels.com. When I arrived it looked nothing what I expected…it looked like a roach motel.

    But my stay was one of the most pleasant I had ever had. The staff went out of their way to please. The rooms were comfortable, and had small perks–like a small shoe shine and shaving kit–that cost almost nothing but made the stay just a little more pleasurable.

    I left a great review.

    Just this past week I stayed there again. My room was upgraded to a suite, and in my room was a 6 pack from the local microbrew with a note “Thank you for the review.”

    (By the way, if you are staying in Seattle and you need a cheap place to stay near the interestate with great restaurants all around, check out the Georgetown Inn. It’s nothing special, but they treat you right).

    Like or Dislike: Thumb up 2 Thumb down 0

  11. Bennett says:

    Although it is not relevant to theses legal proceedings, Yelp has a shady history when it comes to negative reviews. Both my small business and another I work for have been contacted by Yelp, asking us to purchase “premium” services. This service was basically Yelp deleting negative comments for you in return for money. I declined and nothing happened, but the day after the other guys said no, several new bad reviews mysteriously appeared overnight.

    Like or Dislike: Thumb up 3 Thumb down 0

  12. JWH says:
  13. OzarkHillbilly says:

    @C. Clavin: Always do work for friends and family. They are friends. They are family.

    Like or Dislike: Thumb up 0 Thumb down 0

  14. grumpy realist says:

    If putting down negative reviews opens one to libel, what about the case in which the merchant pays people to post positive reviews? Can we consider that unacceptable as well?

    (My feeling is that if you get miffed about one, you should get equally miffed about the other.)

    Like or Dislike: Thumb up 1 Thumb down 0

  15. Jib says:

    @Bennett: I have heard this a lot. My biz is working with local small biz dealing with the brave new post-yellow pages world. We advise that they leave yelp alone and concentrate on social / search sites. I am not saying there is a fire at yelp but there sure is a hell of a lot of smoke.

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  16. OzarkHillbilly says:

    @OzarkHillbilly: Mind you, I am old school. Taking care of family? Friends?

    In the olden days, nothing more need be said.

    I understand that in today’s world…. f*ck U.

    Like or Dislike: Thumb up 0 Thumb down 0

  17. @C. Clavin:

    As a general rule, I try to abide by this. I don’t have much immediate family in this area so that’s not an issue, and the only thing I’ve ever helped a friend with was a driving violation that ended with them getting the same disposition any other person in their position would have.

    In my experience, though, I’ve found that friends who go into business together find that things turn very, very bad if said business venture goes sour.

    Like or Dislike: Thumb up 1 Thumb down 0

  18. Dave Anderson says:

    @Doug Mataconis: That is two very different things — do a job for a friend and going into business with a friend. I do two things that make me non-beer money amounts of money — data geekery and soccer refereeing. In both cases, I have a skill set that is fairly unusual, so when a friend needs someone to go throw a data set, or to ref their kid’s brand new Catholic league game, giving me a call means their search costs are low, and the implied social trust means the odds of me bullshitting them are low. And if I can’t or won’t do it, they know that the people I tell them to call are reasonably competent. These are one-off interactions based on a fairly substantial base of social trust, and they are not our usual interactions. I did the same recently on a minor plumbing problem at my house — a guy I ref with is a master plumber, so I gave him a call, and he spent 20 minutes fixing the issue that would have taken me 3 hours to do.

    The difference between using a friend for a job and going into business with a friend is the consistency of the interaction. The business relationship becomes the dominant and most frequent interaction, not the bullshitting with beers while watching the kids play.

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  19. Fog says:

    Bennett brings up a good issue. Call me a cynic, but when I saw TV ads for (oops, better be careful here…) a site I’ll call “Andy’s List,” my first thought was extortion. “Nice little business you have there, it would be a shame if someone slagged it…”

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  20. john personna says:

    For what it’s worth, I think the most important thing in the world of online products and reviews is the little stack graph showing the numbers of 5’s, 4’s … and 1’s.

    If you have a distribution like the one linked, you shouldn’t worry about the nastiness of the “1’s”

    On the other hand, if you have a bad distribution … you need to reorganize and begin again.

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  21. Salvage says:

    VA has no anti-SLAPP law. If a ruling is made that she did not in fact accuse the plaintiff of any crime, and that her statements could not be construed as constituting an accusation of a crime, wouldn’t a typical anti-SLAPP law apply in this case?

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  22. Laurence Bachmann says:

    @Doug Mataconis: If it is a “step removed” from accusing the contractor of a crime, it is a step only a lawyer would recognize. The woman’s intent is clear: to damage his reputation for honesty. It is disingenuous to suggest otherwise. Why else insert information about missing jewelry in a review about construction work? I am all for her saying anything she likes about the contractor’s workmanship and reliability. But any normal person (lawyers not included) who reads “jewelry missing–only contractor around” is going to draw just one conclusion. And if was innocent I would sue her ass.

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