By IT-Lex Intern Joey Chindamo (LinkedIn)
In case anyone reading this doesn’t know, Yelp is an online directory service of local businesses that is integrated with social networking functions and user-generated reviews. A visitor could look up, say, their favorite restaurant and rate it on a five-point scale and write a review of the food. Businesses do not own their own Yelp listing pages.
It is because of these user-generated reviews that Yelp came under fire in California and Illinois courts recently. We’ll first look to the California trial court in Demetriades v. Yelp, Inc. In that case, the plaintiff, James Demetriades, alleged untrue or misleading advertising and unfair business practices against Yelp. Demetriades alleged that Yelp had falsely represented its comment filtering system.
The court highlighted the statements in question:
“Each statement includes subjective language (‘most trusted,’ ‘remarkable filtering process,’ ‘most trustworthy,’ ‘most established sources,’ ‘less trustworthy,’ ‘rest assured,’ ‘most unbiased and accurate information you will be able to find,’ ‘always working to do as good a job as possible.’)”
Amid many back-and-forth procedural and technical legal arguments made by the parties, the court found in favor of Yelp and granted the company’s two motions to strike. Of note was the court’s reasoning. The court first focused on the applicability of the commercial speech exception and found that Demetriades had failed to show that the alleged misrepresentations were statements of fact instead of opinions and puffery.
“A review of the statements shows that these are typical representations made by a business about its product and are not actionable representations of fact. . . These statements cannot be considered statements of fact sufficient to invoke the commercial speech exception because they are simply not misrepresentations of fact.”
Next, the court found that Demetriades had failed to show the public interest exception applied. The court pointed to the obvious:
“[T]his action is not brought solely in the public interest. Plaintiff’s own opposition establishes his intense personal interest in this case because Plaintiff’s claims were spurred in part by negative reviews posted by an anonymous user and the filtering of allegedly proper reviews. Plaintiff repeatedly states that he has a significant financial interest in these same restaurants whose reviews have been negatively affected by Yelp’s filter. . . Plaintiff himself has shown that he has an intensely personal and financial interest in the review filtering process and its resultant reviews for his own restaurants. Therefore, the public interest exception does not apply.”
With plaintiff Demetriades on the ropes, the court delivered the final blow, finding that Demetriades did not even have standing to bring the suit in the first place. The alleged injury suffered was to the plaintiff’s limited liability company, not to the plaintiff himself. Not inclined to consider veil-piercing, the court said:
“The injury is therefore derivative in nature and was only to the LLC. As such, Plaintiff has no standing as an individual because he has suffered no separate and individual injury in fact or lost money. Therefore, his claims fail.”
Winner: Yelp, by knockout.
Days later, an Illinois appellate court affirmed a trial court’s dismissal of a plaintiff’s petition for discovery against Yelp. In Brompton Building, LLC v. Yelp, Inc., the plaintiff wanted the identity of an anonymous Yelp poster, only known as Diana Z., who, the plaintiff claimed, defamed and tortiously interfered with the plaintiff’s prospective economic advantage. The opinion includes the text of that anonymous Yelp poster’s posting, but we would be doing our loyal Lexies a disservice without posting some particularly salient excerpts here:
“On May 6th, 2011 I was issued a card in the mail that claimed my rent was late. I paid my rent prior to the first, however Beal claimed that they did not receive my check until the 6th (after the 5th they issue a late fee). This is a TOTAL lie!!!
. . .
I called Beal yesterday, and the woman on the phone was one of the rudest individuals that I have ever spoken to in my entire life! I purposely used my, ‘Hi, Im [sic] really sweet and soft spoken’ voice to ensure that I don’t [sic] immediately spew my anger onto this woman in a murderous rage.
. . .
Instead of being level-headed, this woman kept remarking ‘CLEARLY YOU ARE NOT
COMPREHENDING WHAT I AM SAYING. IT DOES NOT MATTER WHEN IT WAS SENT.’ The only thing I didnt [sic] understand was how she could be such a **** when I was talking to her in my sweet old lady voice. NOBODY talks to me like that when I use my old lady voice. NOBODY!!!
. . .
Lastly, my interaction with Beal has made me a better person in the following ways:
I actually enjoy talking with my HR department.
I look forward to moving to a worse neighborhood.
I feel as if I personally contributed to the profits seen my local grocery stores [sic] alcohol department.
The thought of Beal or Brompton Building, LLC makes me want to run a [sic] five marathons.
Contracting herpes doesn’t seem as horrible.”
Displeasure puts it mildly.
Like in Demetriades, the court found problems with the initial cause of action. Similarly, the court decided that Diana Z.’s post, when viewed in its entirety, consisted of opinions, not facts. But most concerning, and again similar to the Demetriades case, was that even if the comments were somehow prohibited, they were not made about Brompton Building, LLC, the plaintiff.
“Although at the time of the posting Brompton, not Beal, was managing the property, there are extremely limited references to Brompton throughout the posting, and those references are not defamatory. A statement ‘will receive first amendment protection from defamation suits if it cannot be reasonably interpreted as stating actual facts about the plaintiff.’” (quoting Maag v. Illinois Coalition for Jobs, Growth and Prosperity, 368 Ill. App. 3d 844, 851 (2007)).”
Finally, the court disregarded the plaintiff’s tortious interference count, finding that it had not been properly preserved for appeal.
Both of these cases raise concerns. While it never says so explicitly, the California court’s opinion in Demetriades creates a reasonable inference that had the plaintiff brought the suit properly—i.e., in the name of his limited liability company rather than in his own name—things may have turned out differently. Is this an occasion to blame his lawyer? Should he or she have known better? Meanwhile, the Illinois appellate court in Brompton Building focused on the fact that the comments did not directly implicate the plaintiff. If they had, would Yelp have been liable then?
Judging from the rest of the legal analysis in both opinions, the answer is likely, “No.” Both courts found the user-created postings to be devoid of “statements of facts,” regardless of who brought the suit or who was implicated in the postings. Until a user-generated post consists of statements of facts that rise to the level of defamation, or until Yelp itself deceptively advertises its service with statements of facts, Yelp will likely escape liability for the content generated through its comment service, and local businesses will have little recourse to combat bad publicity. (For the sake of comparison, here’s what happens when someone sues the commenter themselves, and not Yelp, over a negative review).
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